Karnataka High Court
Mr. Pradeep Agarwal vs Badrinarayan Ladda on 26 March, 2024
Author: M. Nagaprasanna
Bench: M. Nagaprasanna
1
Reserved on : 01.03.2024
Pronounced on : 26.03.2024
IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
DATED THIS THE 26TH DAY OF MARCH, 2024
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.104206 OF 2022 (GM-RES)
BETWEEN:
MR. PRADEEP AGARWAL
S/O. PHOOLCHAND AGARWAL,
AGED ABOUT 58 YEARS,
MANAGING DIRECTOR
M/S. PHOOLCHAND EXPORTS LTD.,
AVAILABLE AT M/S PHOOLCHAND EXPORTS LTD.,
NO.67, BAJAJ BHAVAN,
NARIMAN POINT, MUMBAI.
...PETITIONER
(BY SRI C.V.NAGESH, SR.COUNSEL FOR
SRI. MRUTYUNJAYA S. HALLIKERI, ADVOCATE)
AND:
BADRINARAYAN LADDA
MAJOR IN AGE,
PROPRIETOR - M/S. SRINIDHI ROAD LINES,
NO.345, KIRAN NIVAS,
1ST FLOOR, OPPOSITE AIR STATION,
HOSAPETE.
...RESPONDENT
(BY SRI.K.L.PATIL, ADVOCATE)
2
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO A) ISSUE A
WRIT OR DIRECTION OF APPROPRIATE NATURE OR AN ORDER
REVERSING AND SETTING ASIDE THE ORDER DATED 30-08-2012
PASSED IN CC NO. 2033/2012 ON THE FILE OF THE ADDL. CIVIL
JUDGE AND JMFC AT HOSPET, ORDERING THE REGISTRATION OF
CASE AND ISSUANCE OF PROCESS TO THE PETITIONER ACCUSED
NO. 2 FOR OFFENSES WHICH ARE MADE PENAL UNDER SECTIONS
406, 409, 415, 418 AND 420 OF THE INDIAN PENAL CODE WHICH
ORDER IS PRODUCED AT ANNEXURE-A AND ETC.,
THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 01.03.2024, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The petitioner is before this Court calling in question proceedings in C.C.No.2033 of 2013 pending before the Additional Civil Judge (Junior Division) & JMFC, Hospet. The petitioner is accused No.2.
2. Facts, in brief, adumbrated, are as follows:-
The petitioner is the Managing Director of a company by name M/s.Phoolchand Exports Limited engaged in the business of trading iron ore, inter alia. The respondent is the proprietor of one M/s Srinidhi Road Lines, Hospet, which is said to be one of the 3 constituents of M/s.Phoolchand Exports Limited in connection with business activities. In furtherance of the business activities, the proprietor of the establishment of the respondent issues a cheque for a sum of `51,25,000/- in favour of the petitioner. The cheque gets dishonoured for want of sufficient funds, when the petitioner presented the same for its realization. Upon compliance with all legal requirements, the petitioner files a private complaint invoking Section 200 of the Cr.P.C. for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 ('the Act' for short) before the Metropolitan Magistrate at Mumbai, as the transaction had happened at Mumbai. After a full blown trial, the respondent comes to be acquitted of the offence in C.C.No.2579 of 2004 in terms of its order dated 22-04-2008. The petitioner then calls this in question before the High Court of Bombay, which is said to be pending consideration. The issue in the case at hand does not concern those proceedings.
3. On a contention that the dishonoured cheque was one of those issued by the establishment by way of security and that had been misused by the petitioner, the respondent files a private 4 complaint invoking Section 200 of the Cr.P.C. before the JMFC at Hospet, alleging certain offences, on 23.11.2004. The private complaint is numbered as P.C.R.No.305 of 2004. The learned Magistrate refers the matter for investigation under Section 156(3) of the Cr.P.C. and the Police after investigation file a 'B' report on 20th July, 2009. A protest petition comes to be filed by the respondent, the concerned Court takes cognizance of the offence and registers a criminal case in C.C.No.2033 of 2012. Questioning the order of taking cognizance by the learned Magistrate, the petitioner was before this Court in Criminal Petition No.11538 of 2013. An interim order of stay of further proceedings was granted and was in operation. The said criminal petition comes to be disposed of on 20-02-2017 not on merits, but for its non- prosecution as there was no representation on behalf of the petitioner. Five years passed by, the petitioner claims that he was not aware of what had happened before this Court. Only when non-bailable warrant was issued against the petitioner in the aforesaid criminal case, he became aware of the order of the coordinate bench, dismissing the criminal petition for its non- 5 prosecution. It is then the subject writ petition is preferred seeking quashment of further proceedings in C.C.No.2033 of 2012.
4. Heard Sri C.V.Nagesh, learned senior counsel appearing for the petitioner and Sri K.L. Patil, learned counsel appearing for the respondent.
5. The learned senior counsel, Sri C.V. Nagesh appearing for the petitioner would submit that the proceedings before the concerned Court suffers from various legal lacunae. It is his contention that the company is not made as a party. The petitioner is arrayed as the accused without making the company a party; the learned Magistrate has not applied his mind while passing an order under Sections 190 and 204 of the Cr.P.C. at the time of issuing summons to the accused; the accused did reside beyond the territorial jurisdiction of the learned Magistrate and as such, compliance with Section 202 of the Cr.P.C. was mandatory; that having not been done, the entire proceedings are vitiated; the order of the learned Magistrate taking cognizance is erroneous as it neither rejects the 'B' report nor accepts it, but takes cognizance of the offence; it is hit by such procedural infirmity that would vitiate 6 entire proceedings. He has sought to place reliance upon various judgments which would bear consideration during the course of the order.
6. The complainant was served and unrepresented throughout. Paper publication was also taken upon the complainant but even then, he remained unrepresented. The matter was dictated on 11-08-2023 and was posted for further dictation on the next day. It is later, the learned counsel for the complainant appears and submits that he has filed vakalath on the previous day. Therefore, his submissions were also taken note of, notwithstanding the fact that service on the complainant had been held sufficient by an order of this Court.
7. The learned counsel, Sri K.L. Patil appearing for the respondent would submit that the petitioner along with other accused had filed separate writ petitions which come to be dismissed for non-prosecution. The only remedy available to the petitioner was to seek recalling of the said order and not to prefer another writ petition. He would submit that the subject writ petition is not maintainable. He would further contend that the 'B' 7 report filed by the police had been rejected and it is for the petitioner to come out clean in a full blown trial along with other accused. All the contentions that the petitioner is now wanting to urge are always open for him to urge before the concerned Court. He would seek dismissal of the petition even on its merits.
8. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.
9. The afore-narrated facts are not in dispute. The genesis of the issue is a transaction between the petitioner and the respondent/complainant. The complainant issues a cheque in favour of the petitioner which gets dishonor and dishonouring leads to the petitioner initiating proceedings against the complainant in C.C.No.2579 of 2004. The respondent gets acquittal in the said proceedings. The acquittal is called in question before the High Court of Bombay. The issue in the case at hand is not with regard to the acquittal of the respondent in the aforesaid criminal case. During the pendency of proceedings before the learned Magistrate, for an offence punishable under Section 138 of the Act, the 8 respondent registers a private complaint in P.C.R.No.305 of 2004 before the JMFC, Hospet. This is referred for investigation by the learned Magistrate and it then becomes a crime in Crime No.69 of 2004 for offences punishable under Sections 406, 409, 415, 418 and 420 of the IPC. The Police file a 'B' report. The complainant then appears before the Court, his sworn statement is recorded and the following order is passed on 30.08.2012:
"Heard the learned counsel for the complainant, perused the complaint averments, sworn statements and documents produced by the complainant.
On going through the above mentioned materials, documents at this stage it is prima facie shown that there exists sufficient material to proceed against the accused persons.
Hence, I proceed to pass following ORDER Office is directed to register case as C.C. in Register No.III. Register case against accused No.1 to 6 for the offence punishable under Section 406, 409, 415, 418, 420 of IPC.
Issue summons to the accused No.1 to 6.
R/by: 25-10-2012."
The learned Magistrate takes cognizance of the offence as afore- quoted and issues summons to accused Nos.1 to 6 in terms of his order dated 30-08-2012. The aforesaid order depicts that the learned Magistrate has neither rejects 'B' report nor accepts it, but has taken cognizance of the offence. This is the first rung of illegality in the entire proceedings. It runs counter to the judgment 9 rendered by the coordinate bench of this Court in the case of DR. RAVIKUMAR v. MRS. K.M.C. VASANTHA1, wherein it is held as follows:
"5. The procedure followed by the Learned Magistrate is not in accordance with law. It is well recognized principle of law that, once the Police submit 'B' Summary Report and protest petition is filed to the same, irrespective of contents of the protest petition, the Court has to examine the contents of 'B' Summary Report so as to ascertain whether the Police have done investigation in a proper manner or not and if the Court is of the opinion that the investigation has not been conducted properly, the Court has got some options to be followed, which are,-
i) The court after going through the contents of the investigating papers, filed u/s 173 of Cr. P.C., is of the opinion that the investigation has not been done properly, the court has no jurisdiction to direct the Police to file the charge sheet however, the Court may direct the Police for re or further investigation and submit a report, which power is inherent under section 156(3) of Cr. P.C., but before taking cognizance such exercise has to be done. This my view is supported by the decisions of the Hon' ble Apex Court in a decision reported in between Abhinandan Jha v. Dinesh Mishra [AIR 1968 S.C. 117.] (para 15) and also Full Bench decision of Apex Court in between Kamalapati Trivedi v. State of West Bengal [(1980) 2 SCC 91.] (second head note.)
ii) If the court is of the opinion that the material available in the 'B' Summary Report makes out a cognizable case against the accused and the same is sufficient to take cognizance, and to issue process, then the court has to record its opinion under Sec. 204 of Cr. P.C., and the Court has got power to take cognizance on the contents 1 ILR 2018 KAR 1725 10 of 'B' Summary Report and to proceed against the accused, by issuance of process.
iii) If the court is of the opinion that the 'B' Summary Report submitted by the Police has to be rejected, then by expressing its judicious opinion, after applying its mind to the contents of 'B' report, the court has to reject the 'B' Summary Report.
iv) After rejection of the 'B' Summary Report, the court has to look into the private complaint or Protest Petition as the case may be, and contents therein to ascertain whether the allegations made in the Private complaint or in the Protest Petition constitute any cognizable offence, and then it can take cognizance of those offences and thereafter, provide opportunity to the complainant to give Sworn Statement and also record the statements of the witnesses if any on the side of the complainant as per the mandate of Sec. 200 Cr. P.C.
v) If the court is of the opinion that the materials collected by the police in the report submitted under section 173 of Cr. P.C. are not so sufficient, however, there are sufficient materials which disclose that a cognizable offence has been committed by the accused, the court can still take cognizance of the offence/s under Section 190 read with 200 Cr. P.C. on the basis of the original complaint or the protest petition as the case may be.
After taking cognizance and recording sworn statement of the complainant and statements of witnesses if any and also looking into the complaint/Protest Petition and contents therein, if the Magistrate is of the opinion that, to ascertain the truth or falsity of the allegations further inquiry is required and he thinks fit to post pone the issue of process he can still direct the investigation under section 202 of Cr. P.C., to be made by a Police officer or by such other officer as he thinks fit, to investigate and submit a report, for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused. In the above eventuality, care should be taken that, the case shall not be referred to the Police under section 156(3) of Cr. 11 P.C., once the magistrate takes cognizance and starts inquiring into the matter himself.
vi) After taking such report under section 202 of Cr. P.C., and looking to the entire materials on record, if the magistrate is of the opinion that there are no grounds to proceed against the accused, then the Magistrate is bound to dismiss the complaint or the Protest Petition u/s. 203 of Cr. P.C. as the case may be.
vii) If in the opinion of the Magistrate there are sufficient grounds to proceed against the accused, on examination of the allegations made in the Protest Petition or in the complaint, as the case may be and also after perusal of the sworn statement, then he has to record his opinion judiciously, and issue summons to the accused by exercising power u/s. 204 of Cr. P.C. But, none of these procedures have been followed by the Learned Magistrate. On the other hand, as could be seen from the records, the Learned Magistrate even without rejecting the 'B' Summary Report and without taking cognizance of the offences, but after going through the contents of the Protest Petition has directly provided opportunity to the complainant to give her sworn statement. On the basis of the contents of the Protest Petition, and after relying upon the contents of the Protest Petition and the sworn statement, the Learned Magistrate has rejected the 'B' Summary Report which virtually amounts to putting the horse behind the Cart.
6. Of course, the contents of the Protest Petition before taking cognizance can only be used for a limited purpose of ascertaining whether the investigation done by the Police is proper and correct. Therefore, the Learned Magistrate has committed a serious error in not passing any orders on the 'B' Summary Report before taking cognizance on the basis of the Protest Petition.
7. Issuance of summons to the accused will have a serious repercussion, i.e., calling upon a person to the Court is also a very serious act of the Court. Therefore, the procedure contemplated as noted above has to be very scrupulously and meticulously followed by the Court. The Magistrate has to 12 explore all the options as noted above in accordance with law at right stages, which has not been done in this particular case. The Learned Magistrate has relied upon the contents of the Protest Petition and the sworn statement for the purpose of rejecting the 'B' Summary Report, which is not proper and correct. He has to pass orders on the 'B' Summary report before taking cognizance on the Protest Petition for the reasons already narrated in the earlier paragraphs of this judgment.
8. The Learned Counsel for the petitioner has relied upon many rulings as to how the contents of the Protest Petition and the sworn statement of the complainant and statements of his witnesses have to be considered. There is no need to consider those rulings in view of the fact that the Learned Magistrate, has committed the above said serious procedural irregularities and defects which are incurable in nature, and on which ground itself the order is not sustainable."
If the afore-mentioned order is considered on the bedrock of the guidelines laid down by this Court in the case of RAVIKUMAR (supra), it would run foul of the same as it is in blatant violation of the known procedure to issue summons to the accused on a 'B' report after registering the criminal case.
10. The second submission of the learned senior counsel is that, the company is not made a party to the proceedings. The company ought to have been made as an accused in the complaint. The complaint is only against 6 accused and not the company. Therefore, the very complaint before the learned Magistrate was 13 not maintainable. The averment in the complaint is entirely against the company and the petitioner has acted on behalf of the company
- M/s.Phoolchand Exports Limited. The issue whether the complaint would be maintainable without the company being made a party, need not detain this Court for long or delve deep into the matter. It is now well settled principle of law be it for offences punishable under Section 138 of the Act or the IPC, there can be no vicarious liability unless the company is made a party. The Apex Court in the case of SHARAD KUMAR SANGHI v. SANGITA RANE2 has held as follows:
"9. The allegations which find place against the Managing Director in his personal capacity seem to be absolutely vague. When a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegation to constitute the vicarious liability. In Maksud Saiyed v. State of Gujarat [Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668: (2008) 2 SCC (Cri) 692], it has been held, thus:(SCC p. 674, para 13) "13. Where a jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. The Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is the Company. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the 2 (2015) 12 SCC 781 14 complaint petition, even if given face value and taken to be correct in its entirety, would lead to the conclusion that the respondents herein were personally liable for any offence. The Bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute.
Statutes indisputably must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability."
... ... ...
11. In the case at hand as the complainant's initial statement would reflect, the allegations are against the Company, the Company has not been made a party and, therefore, the allegations are restricted to the Managing Director. As we have noted earlier, allegations are vague and in fact, principally the allegations are against the Company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened under certain statutes. It has been so held by a three-Judge Bench in Aneeta Hada v. Godfather Travels and Tours (P) Ltd. [Aneeta Hada v. Godfather Travels and Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] in the context of the Negotiable Instruments Act, 1881.
... ... ...
13. When the company has not been arraigned as an accused, such an order could not have been passed. We have said so for the sake of completeness. In the ultimate analysis, we are of the considered opinion that the High Court should have been well advised to quash the criminal proceedings initiated against the appellant and that having not been done, the order is sensitively vulnerable and accordingly we set aside the same and quash the criminal proceedings initiated by the respondent against the appellant."
15The Apex Court holds that the proceedings against the Managing Director for offence under the IPC cannot be maintained unless the company has been arrayed as a party to the complaint. It is an admitted fact that the company is not arrayed as a party to the proceedings in this case. Therefore, the very complaint was not maintainable much less, taking cognizance and issuing of summons. This is the second rung of illegality in the entire proceedings.
11. The third submission of the learned senior counsel is that, the learned Magistrate has not applied his mind while issuing summons to the accused. The learned Magistrate is undoubtedly acting under Section 190 of the Cr.P.C. or under Section 204 of the Cr.P.C., which are the provisions for issuing summons. The order issuing summons is as extracted hereinabove, which does not bear even a semblance of application of mind. The issue whether the learned Magistrate has to apply his mind prior to issuing summons also need not detain this Court for long or delve deep into the matter. A co-ordinate bench of this Court in MALLIKARJUNA v. STATE OF KARNATAKA3 has held as follows:
3
ILR 2018 KAR 354 16 "11. Section 190 of the Criminal Procedure Code, in fact, imposes a responsibility on the Magistrate before taking cognizance to comply with the said provision. Section 190 of the Code reads as under:
"190. Cognizance of offences by Magistrates. -(1) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under sub-section (2), may take cognizance of any offence--
(a) upon receiving a complaint of fact which constitute such office,
(b) upon a police report of such facts;
(c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.
(2) The Chief Judicial Magistrate may empower any Magistrate of the second class to take cognizance under sub-
section (1) of such offences as are within his competence to inquire into or try."
On a meticulous understanding of the above said provision, it makes it clear that the Magistrate has no jurisdiction to take cognizance even upon receiving a complaint or any police report on facts which does not constitute any offence. There fore, whenever a Magistrate has to take cognizance of any offence, he has to apply his judicious mind, meticulously read the contents of the police report or the contents of the private complaint filed by the parties, ascertain whether the facts narrated therein constitute any offence, and only thereafter specifically mentioning the said offences, the Magistrate has to take cognizance and proceed with the further proceedings. In the absence of any such facts, constituting any offence, the Magistrate has no jurisdiction to take cognizance and proceed further.
12. The Judicial Magistrates, who are empowered to summon the accused under Section 204 of the Code of Criminal 17 Procedure, should always keep it in mind that summoning the accused is a serious matter and the criminal law cannot be set into motion as a matter of course. The summoning order must reflect that the Magistrate has applied his judicious mind to the facts of the case and the law applicable thereto. The order of summoning the accused need not be a speaking order and a detailed one. But, it should not suffer from any infirmity or illegality. Where reasons are not assigned, however short it may be, for coming to the conclusion that it is a fit case for issuance of summons, such summoning order would become bad in law. The Magistrates, while issuing process, are not required to meticulously examine and evaluate the materials on record. However, he is only required to record reasons, however short, or brief it may be, which indicate the application of mind by the Magistrate. That is all expected from him at that stage. The expression "opinion" and "sufficient ground"
under Section 204 gives an indication that before issuing process, the Magistrate should show that on what material, at least, he has formed his opinion that it is a fit case to issue process. Without applying his judicious mind and without even looking to the facts of the case, mechanically, issuing process only on the basis of the operative portion of the charge sheet or the complaint does not amount to application of mind by a Magistrate.
13. Looking to the above facts and circumstances and the legal infirmities found in the above said case, I am of the opinion that the Learned Magistrate, without applying his judicious mind, has mechanically passed an order taking cognizance of the offences and the same is bad in law. All further proceedings, which has taken place in pursuance of that, is vitiated by a serious irregularity which cannot be cured. Hence, there is no other go for this Court but to quash the proceedings."
Much earlier to the judgment rendered by the co-ordinate bench of this Court, the Apex Court in SUNILL BHARTI MITTAL v. CBI4 has held as follows:
4
(2015) 4 SCC 609 18 "51. On the other hand, Section 204 of the Code deals with the issue of process, if in the opinion of the Magistrate taking cognizance of an offence, there is sufficient ground for proceeding.
This section relates to commencement of a criminal proceeding. If the Magistrate taking cognizance of a case (it may be the Magistrate receiving the complaint or to whom it has been transferred under Section 192), upon a consideration of the materials before him (i.e. the complaint, examination of the complainant and his witnesses, if present, or report of inquiry, if any), thinks that there is a prima facie case for proceeding in respect of an offence, he shall issue process against the accused.
52. A wide discretion has been given as to grant or refusal of process and it must be judicially exercised. A person ought not to be dragged into court merely because a complaint has been filed. If a prima facie case has been made out, the Magistrate ought to issue process and it cannot be refused merely because he thinks that it is unlikely to result in a conviction.
53. However, the words "sufficient ground for proceeding"
appearing in Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect."
In the light of the afore-quoted judgments of the Apex Court and that of the co-ordinate bench of this Court, permitting further proceedings to continue against the petitioner would become an abuse of the process of law.
19
12. In the teeth of the aforesaid lacunae, the contention of the learned counsel for the respondent is required to be noticed and considered. It is his contention that a petition under Section 482 of the Cr.P.C. is not maintainable. It is an admitted fact that the petitioner along with others had preferred Criminal Petition No.11538 of 2013. This comes to be rejected by the following order:
"ORDER The petitioners and their counsel is absent. No representation even though the matter called twice since morning. Hence, the petition is dismissed for non- prosecution."
It is not a decision on merits. It is a dismissal for non-prosecution. If it were to be a case decided on its merits and a second petition is sought to be preferred on the very same cause of action, it would have been a circumstance altogether different. Even when a petition is dismissed on merits, the Apex Court holds that on a changed circumstance, the second petition would become maintainable. Reference being made to the judgment of the Apex Court in ANIL KHADKIWALA v. STATE (GOVERNMENT OF NCT 20 OF DELHI)5 becomes apposite. The Apex Court in the said judgment has held as follows:
"NAVIN SINHA, J.-- The application preferred by the appellant under Section 482 CrPC to quash the summons issued in Complaint Case No. 3403/1/2015 was dismissed [Anil Khadkiwala v. State (NCT of Delhi), 2017 SCC OnLine Del 12781] by the High Court opining that since the earlier Criminal MC No. 877 of 2005 for the same relief had already been dismissed [Anil Khadkiwala v. State, Criminal MC No. 877 of 2005, order dated 31-1-2008 (Del)] , the second application was not maintainable.
2. Respondent 2 filed a complaint under Section 142 read with Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the Act") against the appellant who was the Director of M/s ETI Projects Ltd., the Company in question. It was alleged that the accused person had issued cheques dated 15-2-2001 and 28-2-2001, which were dishonoured upon presentation. The appellant had preferred Criminal MP No. 1459 of 2005 for quashing the same. He took the defence, without any proof that he had already resigned from the Company on 20-12-2000 and which was accepted by the Board of Directors on 20-1-2001. The application was dismissed on 18-9- 2007 after noticing the plea of resignation, solely on the ground that the cheques were issued under the signature of the appellant.
3. The appellant then preferred a fresh application under Section 482 giving rise to the present proceedings. The High Court noticing the reliance on Form 32 issued by the Registrar of Companies, under the Companies Act, 1956, in proof of resignation by the appellant prior to the issuance of the cheques, issued notice, leading to the impugned order of dismissal subsequently.
... .... ....
7. The complaint filed by Respondent 2 alleges issuance of the cheques by the appellant as Director on 15-2-2001 and 28-2- 2001. The appellant in his reply dated 31-8-2001, to the statutory 5 (2019) 17 SCC 294 21 notice, had denied answerability in view of his resignation on 20-
1-2001. This fact does not find mention in the complaint. There is no allegation in the complaint that the cheques were post-dated. Even otherwise, the appellant had taken a specific objection in his earlier application under Section 482 CrPC that he had resigned from the Company on 20-1-2001 and which had been accepted. From the tenor of the order of the High Court on the earlier occasion it does not appear that Form 32 issued by the Registrar of Companies was brought on record in support of the resignation. The High Court dismissed the quashing application without considering the contention of the appellant that he had resigned from the post of the Director of the Company prior to the issuance of the cheques and the effect thereof in the facts and circumstances of the case. The High Court in the fresh application under Section 482 CrPC initially was therefore satisfied to issue notice in the matter after noticing the Form 32 certificate. Naturally there was a difference between the earlier application and the subsequent one, inasmuch as the statutory Form 32 did not fall for consideration by the Court earlier. The factum of resignation is not in dispute between the parties. The subsequent application, strictly speaking, therefore cannot be said to a repeat application squarely on the same facts and circumstances.
8. In Mohan Singh [Supt. and Remembrancer of Legal Affairs v. Mohan Singh, (1975) 3 SCC 706: 1975 SCC (Cri) 156:
AIR 1975 SC 1002], it was held that a successive application under Section 482 CrPC under changed circumstances was maintainable and the dismissal of the earlier application was no bar to the same, observing: (SCC pp. 709-10, para 2) "2. ... Here, the situation is wholly different. The earlier application which was rejected by the High Court was an application under Section 561-A of the Criminal Procedure Code to quash the proceeding and the High Court rejected it on the ground that the evidence was yet to be led and it was not desirable to interfere with the proceeding at that stage. But, thereafter, the criminal case dragged on for a period of about one-and-a-half years without any progress at all and it was in these circumstances that Respondents 1 and 2 were constrained to make a fresh application to the High Court under Section 561-A to quash the proceeding. It is difficult to see how in these circumstances, it could ever be contended that what 22 the High Court was being asked to do by making the subsequent application was to review or revise the order made by it on the earlier application. Section 561-A preserves the inherent power of the High Court to make such orders as it deems fit to prevent abuse of the process of the court or to secure the ends of justice and the High Court must, therefore, exercise its inherent powers having regard to the situation prevailing at the particular point of time when its inherent jurisdiction is sought to be invoked.
The High Court was in the circumstances entitled to entertain the subsequent application of Respondents 1 and 2 and consider whether on the facts and circumstances then obtaining the continuance of the proceeding against the respondents constituted an abuse of the process of the Court or its quashing was necessary to secure the ends of justice. The facts and circumstances obtaining at the time of the subsequent application of Respondents 1 and 2 were clearly different from what they were at the time of the earlier application of the first respondent because, despite the rejection of the earlier application of the first respondent, the prosecution had failed to make any progress in the criminal case even though it was filed as far back as 1965 and the criminal case rested where it was for a period of over one-and-a-half years."
9. In Harshendra Kumar D. v. Rebatilata Koley [Harshendra Kumar D. v. Rebatilata Koley, (2011) 3 SCC 351:
(2011) 1 SCC (Civ) 717: (2011) 1 SCC (Cri) 1139: 2011 Cri LJ 1626], this Court held: (SCC p. 362, paras 26-27) "26. Criminal prosecution is a serious matter; it affects the liberty of a person. No greater damage can be done to the reputation of a person than dragging him in a criminal case. In our opinion, the High Court fell into grave error in not taking into consideration the uncontroverted documents relating to the appellant's resignation from the post of Director of the Company. Had these documents been considered by the High Court, it would have been apparent that the appellant has resigned much before the cheques were issued by the Company.
27. As noticed above, the appellant resigned from the post of Director on 2-3-2004. The dishonoured cheques 23 were issued by the Company on 30-4-2004 i.e. much after the appellant had resigned from the post of Director of the Company. The acceptance of the appellant's resignation is duly reflected in the Resolution dated 2-3-2004. Then in the prescribed form (Form 32), the Company informed to the Registrar of Companies on 4-3-2004 about the appellant's resignation. It is not even the case of the complainants that the dishonoured cheques were issued by the appellant. These facts leave no manner of doubt that on the date the offence was committed by the Company, the appellant was not the Director; he had nothing to do with the affairs of the Company. In this view of the matter, if the criminal complaints are allowed to proceed against the appellant, it would result in gross injustice to the appellant and tantamount to an abuse of process of the court."
10.Atul Shukla [Atul Shukla v. State of M.P., (2019) 17 SCC 299] is clearly distinguishable on its facts as the relief sought was for review/recall/modify the earlier order [Surendra Singh v. State of M.P., 2018 SCC OnLine MP 1425] of dismissal in the interest of justice. Consequently, the earlier order of dismissal was recalled. It was in that circumstance, it was held that in view of Section 362 CrPC the earlier order passed dismissing the quashing application could not have been recalled. The case is completely distinguishable on its own facts.
11. The Company, of which the appellant was a Director, is a party-respondent in the complaint. The interests of the complainant are therefore adequately protected. In the entirety of the facts and circumstances of the case, we are unable to hold that the second application for quashing of the complaint was not maintainable merely because of the dismissal of the earlier application.
12. The impugned order [Anil Khadkiwala v. State (NCT of Delhi), 2017 SCC OnLine Del 12781] of the High Court is set aside. The appeal is allowed and the proceedings against the appellant alone are quashed."
The aforesaid judgment follows a three Judge bench decision of the Apex Court in the case of SUPERINITENDENT AND 24 REMEMBRANCER OF LEGAL AFFAIRS, WEST BENGAL v. MOHAN SINGH6, wherein it is held as follows:
"2. ... .... ... It is difficult to see how in these circumstances, it could ever be contended that what the High Court was being asked to do by making the subsequent application was to review or revise the order made by it on the earlier application. Section 561-A preserves the inherent power of the High Court to make such orders as it deems fit to prevent abuse of the process of the Court or to secure the ends of justice and the High Court must, therefore, exercise its inherent powers having regard to the situation prevailing at the particular point of time when its inherent jurisdiction is sought to be invoked. The High Court was in the circumstances entitled to entertain the subsequent application of Respondents 1 and 2 and consider whether on the facts and circumstances then obtaining the continuance of the proceeding against the respondents constituted an abuse of the process of the Court or its quashing was necessary to secure the ends of justice. The facts and circumstances obtaining at the time of the subsequent application of Respondents 1 and 2 were clearly different from what they were at the time of the earlier application of the first respondent because, despite the rejection of the earlier application of the first respondent, the prosecution had failed to make any progress in the criminal case even though it was filed as far back as 1965 and the criminal case rested where it was for a period of over one and half years. It was for this reason that, despite the earlier order dated December 12, 1968, the High Court proceeded to consider the subsequent application of Respondents 1 and 2 for the purpose of deciding whether it should exercise its inherent jurisdiction under Section 561-A. This the High Court was perfectly entitled to do and we do not see any jurisdictional infirmity in the order of the High Court. Even on the merits, we find that the order of the High Court was justified as no prima facie case appears to have been made out against Respondents 1 and 2."6
(1975) 3 SCC 706 25 In the aforesaid cases, the Apex Court clearly holds that a second petition even after dismissal of the first petition on its merits would become maintainable on changed circumstances.
13. The decision in Criminal Petition No. 11538 of 2013 rendered by the co-ordinate bench is not the one that is rendered on merits but dismissal for its non-prosecution. Dismissal of the petition for non-prosecution can by no stretch of imagination be held to be a decision dismissing the petition on merits. Therefore, the petitioner ought to have filed an application seeking recalling of the order and restoration of proceedings to file, does not bar the second petition i.e., the subject petition preferred on the same cause of action. What is to be seen is, whether the proceedings if permitted to continue would result in patent injustice or become an abuse of the process of law.
14. In the light of the aforesaid findings that the proceedings if permitted to continue do become an abuse of the process of law and results in miscarriage of justice as legal lacunae galore in the entire proceedings. A complaint that is not even maintainable without the company being made a party is taken forward by 26 issuance of summons. The learned Magistrate neither rejects nor accepts the 'B' report but issues summons to accused Nos.1 to 6. The order of the learned Magistrate does not even bear a semblance of application of mind. It is on this score, the entire proceedings are vitiated with reference to petitioner/accused No.2.
15. For the aforesaid reasons, I pass the following:
ORDER
(i) Writ Petition is allowed.
(ii) Proceedings in C.C.No.2033 of 2012 pending before the Additional Civil judge and J.M.F.C., Hospet stand quashed qua the petitioner/accused No.2.
(iii) It is made clear that the observations made in the course of the order are only for the purpose of consideration of the case of petitioner under Section 482 of Cr.P.C. and the same shall not bind or influence the proceedings against any other accused in the said crime.
Sd/-
JUDGE Bkp/CT:MJ