Calcutta High Court (Appellete Side)
Sprite Investment Private Limited & Ors vs The State Of West Bengal & Anr on 11 February, 2020
Form No.J(1)
IN THE HIGH COURT AT CALCUTTA
Criminal Appellate Jurisdiction
Present:
The Hon'ble Justice Madhumati Mitra
C.R.R. No.3624 of 2013
Sprite Investment Private Limited & Ors.
-Versus-
The State of West Bengal & Anr.
Advocate for the Petitioners : Mr. Sandipan Ganguly,
Mr. Ayan Bhattacharjee,
Mr. Cedric Fernandez,
Mr. Apalak Basu.
Advocate for the Opposite party no.1 : Mr. Sourav Chatterjee,
Mr. Satadru Lahiri,
Mr. Soumyojyoti Nandi,
Mr. Safdar Azam.
Judgment on : 11.02.2020
Madhumati Mitra, J. :
This is an application under Section 397/401 read with Section 482 of the Code of Criminal Procedure filed by the petitioners praying for quashing of the proceedings of Complaint Case No.C/4906 of 2013 under Sections 420, 406/120B of the Indian Penal Code pending before the Learned Judicial Magistrate, 7th Court, Alipore, including all orders passed in connection with the said proceedings.
1
The present petitioners are the accused of the proceedings mentioned above. Opposite party no.2, Ruia Sons Private Limited is a company duly incorporated under the provisions of Companies Act, 1956, having its registered office at 5, Russell Street, Kolkata-700 071, Police Station- Park Street and represented by its authorized representative Mr.Ashok Kumar Goenka.
A petition of complaint being no.C/4906 of 2013 was initiated by the opposite party no.2 before the Court of Learned Chief Judicial Magistrate, Alipore, Kolkata, against the present petitioners under the provisions of Sections 403,405,406,415,418,420/120B of the Indian Penal Code. On the basis of that petition of complaint, the Learned Chief Judicial Magistrate, Alipore, Kolkata, took cognizance of the offences alleged vide order dated July 1, 2013, and transferred the case to the Learned Judicial Magistrate, 7th Court, Alipore, Kolkata, for disposal. Learned Judicial Magistrate, 7th Court, Alipore, examined the complainant/opposite party no.2 under Section 200 of the Code of Criminal Procedure, thereafter, the Learned Magistrate opined that there was prima facie case for proceeding against the petitioners for commission of the alleged offences punishable under Sections 420,406 and 120B of the Indian Penal Code. Learned Magistrate, vide order dated July 15, 2013, issued process against the present petitioners to face trial for commission of alleged offences.
The petition of complaint has been annexed to the present revisional application. Annexure 'P-1' at pages 37 to 104 are the copies of the petition 2 of complaint, summons addressed to the present petitioners and the annexed documents.
It was alleged in the said petition of complaint that the petitioners and the complainant were known to each other since long and the complainant was in urgent need of financial accommodation. Accused no.1, Sprite Investment Private Limited is a company incorporated under the provisions of Companies Act and accused no.2 and 3 are the Directors of accused no.1 Company. The complainant approached accused no.1 to renew an Inter Corporate Deposit (hereinafter referred to as ICD) of Rs.5 Crores. Accused no.1 agreed to provide such financial accommodation of Rs.5 Crores to the complainant company in the form of ICD, on condition that the complainant company would have arranged to pledge equity shares of Dunlop India Limited, a group company of the complainant doubled the amount of the value of ICD. Being unaware of the real intention of the accused, the complainant agreed to such condition. Accordingly, on April 6, 2011, a loan agreement was executed between the complainant being the 'borrower' and the accused no.1 and its Director as 'lender'. Accused gave a loan of Rs.5 Crores in the form of an ICD. The said loan was for a period of 189 days. The rate of interest on the said ICD was fixed at 16.50% per annum to be payable on quarterly basis. The said loan amount was due for payment on October 11, 2011. The loan agreement was executed at the registered office of the complainant company.
3
On 6th April, 2011, the complainant company through one of its group company, Wealth Overseas Pte Limited entered into a pledge agreement with the accused no.1 for pledging 18,52,000 number of shares of Dunlop India Limited owned by Wealth Overseas Pte Limited as a security towards repayment of the ICD. That pledge agreement was executed at 46, Syed Amir Ali Avenue, Kolkata-700 017. Complainant company issued receipt of said ICD on 6th April, 2011, enclosing therein, the demand promissory note in favour of the accused no.1 with a promise to pay the entire amount given as loan together with interest.
On the request of the accused, the complainant company also handed over three (3) post dated cheques to the accused no.1 and out of three cheques two cheques were for payment of interest amounting to Rs.18,71,507/- (Rupees Eighteen Lakh Seventy One Thousand Five Hundred and Seven) and Rs.19,73,219/- (Rupees Nineteen Lakh Seventy Three Thousand Two Hundred and Nineteen) respectively and one cheque was issued towards the principal amount of Rs.5 Crores. Accused company accepted those three cheques.
On July 13, 2011, the complainant paid a sum of Rs 18,71,507/- to the accused being the amount covered under the cheque towards interest.
Due to volatile market condition, the complainant caused to be pledged through Wealth Overseas Pte Limited, further 13,76,000 shares of Dunlop India Limited on different dates with the accused no.1, till mid 4 August, 2011, an aggregate of 32,28,000 shares of Dunlop India Limited were pledged with the accused company. A letter dated August 20, 2011, was sent to the accused no.1 avowing volatile market condition and requested the accused not to sell any shares and to wait till the market was stabilized. The complainant had caused to be pledged further shares in favour of the accused no.1 again towards its commitment in favour of the accused no.1. The complainant had assured to pledge further shares in favour of the accused no.1 again towards its commitment. On August 20, 2011, the accused without the knowledge and consent, and without prior intimation to the complainant and with ulterior motive, malafide intention invoked the entire pledged shares entrusted with them viz one being 19,50,000 shares of Dunlop India Limited and another being 12,78,000 shares of Dunlop India Limited before expiry of the date for repayment and misappropriated the entire proceeds for its own benefit. It has been alleged in the petition of complaint, the total realized value of such entire pledged shares was of Rs.9,60,33,000/- (Rupees Nine Crores Sixty Lakhs Thirty Three Thousand) which is much more of the total amount of ICD and interest payable thereon. The accused by such acts of omission and commission caused wrongful loss to the complainant to the tune of Rs.6,06,78,560/- (Rupees Six Crores Six Lakhs Seventy Eight Thousand Five Hundred and Sixty) and wrongful gain for themselves. The complainant through its solicitor wrote letter to the accused on various dates and demanded the shares pledged with it that had been illegally and wrongfully realized and the three (3) cheques, since the accused had already realized the due loan amount long back along with the excess amount for its benefit. 5 A purported reply letter dated 5th October, 2011, was sent to the complainant company by the accused. On October 19, 2011, the accused in spite of receipt of such correspondence with ulterior motive and malafide intention to cheat the complainant presented the cheque of Rs.19,73,219/- (Rupees Nineteen Lakh Seventy Three Thousand Two Hundred and Nineteen) lying in the custody of the accused for encashment with its banker. On October 24, 2011, the said cheque was returned to the accused, dishonoured with the endorsement 'drawers signature differs'. On 11th November, 2011, a notice under Section 138 of the Negotiable Instruments Act was sent to the complainant. The accused suppressing all materials facts started proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act against the complainant company and its Director in the court of Learned Metropolitan Magistrate, Borivali, Mumbai.
It has been specifically alleged by the complainant that the accused had the intention since the inception to acquire the share of the Dunlop India Limited, and therefore, the accused in conspiracy and connivance with each other invoked the pledged shares much before the due date without prior knowledge, consent and approval of the complainant and thereby committed breach of trust. It is also the allegation of the complainant that the accused by realizing the shares pledged or entrusted to it before the due date have committed criminal breach of trust. According to the complainant, in terms of Clause 7 of the agreement, it was incumbent to the accused to forward the amount in excess realized by invocation of the pledged shares to 6 the complainant after appropriating the proceeds of such realization towards payment of ICD and interest payable thereon.
Learned Counsel appearing for the petitioners while making his submissions in favour of quashing of the criminal proceedings pending against the petitioners has submitted that the continuance of the present proceedings against the petitioners would be a gross abuse of the process of the Court. The proceedings pending before the Learned Magistrate have been assailed by the Learned Counsel for the petitioners on various grounds.
Learned Counsel for the petitioners has argued that the allegations contained in the petition of complaint do not prima facie disclose the commission of any offence. In support of his contention, he has submitted that admittedly there was a loan transaction between the parties and on the basis of that loan agreement the accused company gave an ICD of Rs.5 Crores for the period from 06.04.2011 to 11.10.2011 and the rate of interest was fixed at 16.50% per annum.
He has further submitted that the said loan agreement was executed on 06.04.2011 and on the same date, the complainant pledged shares of its group companies namely Dunlop India Ltd. to the tune of Rs.10 Crores as per the loan agreement. It is the specific contention of the Learned Counsel for the petitioners that in the month of August, 2011 the value of the shares pledged fell sharply and the complainant failed to deposit additional securities by way of additional pledge of shares as per agreement. Learned 7 Counsel has also submitted that the petitioner no.1 company rightly invoked the shares into their beneficiary account and sold the pledged shares to recover the amount due in terms of the aforesaid agreement. Learned Counsel for the petitioners has invited the attention of the Court to the loan agreement dated 06.04.2011 and forcefully submitted that the petitioner no.1 acted in terms of the agreement between the parties. According to his contention, the alleged acts do not come within the purview of commission of alleged offences. He has also argued that the proceedings started by the complainant are the counterblast to the criminal action initiated by the petitioners for dishonor of the cheques issued by the complainant. Learned Counsel for the petitioners has further contended that the averments in the petition of complaint have clearly disclosed a dispute of civil and commercial nature and the ingredients of the alleged offences under Section 406/420 of the Indian Penal Code are totally absent. He has vigorously argued that if all the allegations made in the petition of complaint are taken to be true, in spite of the said facts, do not constitute the offences alleged under Sections 420/406 of the Indian Penal Code, so as to infer any fraudulent or dishonest inducement having been made by the petitioners pursuant to which the complainant parted with the money. He has also submitted that the complainant voluntarily entered into the loan agreement and pledged the shares in question in terms of that agreement. He has also submitted that the allegation of invoking of pledged shares in violation of the terms of agreement may give rise to civil dispute only.
8
Learned Counsel for the petitioners has also contended that the petitioner nos.2 and 3 are the directors of the accused company and the petition of complaint did not contain any specific averment as to the role played by the petitioner nos.2 and 3 in the commission of alleged offences of cheating and criminal breach of trust. It has been submitted on behalf of the petitioners that the Indian Penal Code does not contain any provision for attaching vicarious liabilities on the part of the Directors when the accused is the company.
During the course of his submissions, the Learned Counsel for the petitioners has drawn the attention of the Court to the cause title of the petition of complaint and specifically contended that all the accused reside outside the territorial jurisdiction of Learned Magistrate and the Learned Magistrate issued process against them without complying with the mandatory provisions as contained in Section 202(1) of the Code of Criminal Procedure.
In support of his submissions, the Learned Counsel for the petitioners has placed his reliance on the following decisions:-
1) Sunil Kumar Vs. Escorts Yamaha Motors Ltd & Ors. reported in (1999)8 SCC 468, (1999) SCC (Cri)1466,
2) Mahindra & Mahindra Financial Services Ltd & Anr. Vs. Rajiv Dubey reported in (2009)1 SCC 706, (2009) 1 SCC (Cri) 321,
3) Eicher Tractor Ltd & Ors. Vs. Harihar Singh & Anr. reported in (2008) 16 SCC 763, (2010) 4 SCC (Cri) 425, 9
4) Sunrise Sports India Pvt. Ltd. & Anr. Vs State of West Bengal Anr. reported in (2008) SCC Online Cal 339, (2008) 4 CHN 400,
5) S.K. Alagh Vs State of Uttar Pradesh & Ors. reported in (2008) 5 SCC 662, (2008) 2 SCC (Cri) 686,
6) Maharashtra State Electricity Distribution Company Ltd & Anr. Vs Datar Switchgear Ltd. & Ors. reported in (2010) 10 SCC 479, (2011) 1 SCC (Cri) 68,
7) Mohammed Ibrahim & Ors Vs State of Bihar & Anr reported in (2009) 3 SCC (Cri) 929, (2009) 8 SCC 751,
8) S.S. Binu and Ors Vs State of West Bengal & Ors reported in 2018(5) CHN (Cal) 562.
On the other hand, Learned Counsel for the opposite party/complainant has refuted the contentions as well as the submissions made by the Learned Counsel for the petitioners. It is the specific contention of the opposite party/complainant that there are specific and sufficient averments in the petition of complaint which clearly disclose the essential ingredients of the alleged offences punishable under Section 420/406 of the Indian Penal Code and the involvement of the accused in the commission of alleged offences.
Learned Counsel for the opposite party/complainant has contended that in the petition of complaint, the complainant described the entire facts wherefrom, it can be easily ascertained that the accused petitioners had dishonest or fraudulent intention from the very inception of the agreement 10 for loan and to sell the pledged shares in violation of the terms of the agreement and misappropriated the sale proceeds at Rs.6,06,78,560/-. In support of his contention, the Learned Counsel has invited the attention of the Court to the agreement of loan and pledge agreement and forcefully contended that both the agreement contained the signatures of the borrower and the witnesses and no one signed on the agreement of loan and agreement of pledge on behalf of Sprite Investment Private Limited. According to his contention, the acts of the petitioners clearly indicate their malafide intention.
It is the specific contention of the Learned Counsel for the opposite party/complainant that the facts narrated in the petition of complaint prima facie disclose the commission of the alleged offences and it is not a fit case to exercise inherent power under Section 482 of the Code of Criminal Procedure by the High Court.
Learned Counsel for the opposite party/complainant has cited the following decisions in support of his submissions:
1) Mohd. Allauddin Khan Vs. State of Bihar and Anr. reported in 2019 (6) SCC 107,
2) Chilakamarthi Venkateswarlu & Anr. Vs. State of Andhra Pradesh & Anr. reported in 2019 SCC Online SC 948,
3) Central Bureau of Investigation Vs. Ravi Shankar Srivastava, IAS and Anr. reported in 2006 (7) SCC 188, 11
4) Rajesh Bajaj Vs State NCT of Delhi & Anr. reported in 1999 (3) SCC 259,
5) Gurudas Purakait Vs State of West Bengal & Anr. reported in 2009 SCC Online CAL 2795,
6) Mahavir Prashad Gupta & Anr. Vs. State of National Capital Territory of Delhi & Anr. reported in 2000 (8) SCC 115,
7) State of M.P. Vs. Awadh Kishore Gupta & Ors. reported in 2004(1) SCC 691,
8) State of Karnataka Vs. M.Devendrappa & Anr. reported in 2002 (3) SCC 89,
9) Royal Medical Trust & Anr. Vs. Union of India & Anr. reported in 2017 (16) SCC 605,
10) State of Orissa Vs. Sudhansu Sekhar Misra & Ors. reported in AIR 1968 SC 647.
The petitioners being the accused company and its Directors have approached under Section 482 of the Code of Criminal Procedure for quashing of the criminal proceedings pending against them.
From the materials placed on record as well as from the submissions made by Learned Counsel for the parties, it appears that on the basis of the petition of complaint filed by the complainant Learned Magistrate issued process against the present petitioners/accused to face trial for commission of alleged offences punishable under Sections 420/406/120B of the Indian Penal Code.
12
It is the specific contention of the Learned Counsel for the petitioners that the continuance of the criminal proceedings pending against the present petitioners would be an abuse of the process of the Court. Learned Counsel for the petitioners has laid emphasis on certain grounds viz. 1) the allegations set out in the petition of complaint do not constitute the alleged offences under Section 420/406 of the Indian Penal Code; 2) the criminal proceedings initiated against the petitioners are the counterblast to the proceedings started against the complainant under Section 138 of the Negotiable Instruments Act, as it appeared from the averments of the petition of complaint; 3) the petitioner nos.2 & 3 being the Directors of the petitioner no.1 company cannot be prosecuted for the alleged commission of offences by the company as the Directors cannot be held to be vicariously liable for any offence committed by the company; 4) the alleged facts do not constitute an offence and at best the alleged facts may give rise to civil dispute arising out of commercial transaction between the parties; 5) Learned Magistrate has failed to conduct an inquiry under Section 202(1) of the Code of Criminal Procedure before issuance of process against the accused as they reside outside the territorial jurisdiction of the Learned Magistrate and as such the proceedings against the petitioners cannot be continued.
For the sake of brevity and convenience and to avoid repetition, ground nos.1,2,3 and 4 are taken up together for consideration. 13
It is true that quashing of criminal proceedings by the High Court in exercise of inherent power under Section 482 of the Code of Criminal Procedure is an exception. It can be exercised ex debito justitia to do real and substantial justice. At the time of quashing of the proceedings under Section 482 of the Code of Criminal Procedure, the Court must be of the opinion that the continuance of the proceedings would be an abuse of the process of the Court.
In order to form an opinion in this regard, the complaint has to be read as a whole. If on perusal of the entire complaint, it reveals that the averments of the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the petitioners/accused then the question of quashment of proceedings comes. In the present case, the complainant narrated the entire situation how the complainant suffered wrongful loss due to the acts of omission and commission on the part of the accused. It was also alleged that the accused had invoked the pledged shares of Dunlop India Limited even before expiry of the due date for repayment and misappropriated the entire sale proceeds of Rs.9,60,33,000/- (Rupees Nine Crore Sixty Lakh Thirty Three Thousand) which was in far excess of the total amount of ICD of Rs.5,00,00,000/- (Rupees Five Crores) and interest payable thereon. It was the specific allegation in the petition of complaint that in spite of realization of the entire pledged share to the tune of Rs.9,60,33,000/-, the accused presented the cheques of Rs.19,73,219/- lying in their custody for 14 encashment with its banker though the accused realized the entire loan amount along with interest on August 20, 2011.
From paragraph 13 of the petition of complaint, it appears that the accused presented the cheques for encashment on 19th October, 2011 that is after the alleged realization of the amount by invoking the entire pledged share.
The contention of the Learned Counsel for the petitioners is that the petition of complaint was filed on 27th August, 2013, after initiation of the proceedings under Section 138 of the Negotiable Instruments Act, for dishonor of the cheque issued by the complainant. Issuance of cheques in terms of the agreement of loan is an admitted fact. Learned Counsel for the complainant/opposite party has contended that three cheques were issued as per the agreement by the complainant and out of the three cheques, two were issued for payment of interest and 3rd cheque covered the entire loan amount of Rs.5,00,00,000/- (Rupees Five Crores). According to his contention the entire pledged shares of Dunlop India Limited were invoked by the accused/petitioners in contravention of the pledged agreement and the realized amount which was much more than the loan amount including interest. Learned Counsel has further contented that the presentation of the cheque for encashment with its banker by the accused company clearly indicated the commission of offence of cheating. Learned Counsel for the petitioners in support of his contention has forcefully submitted that the complaint case initiated by the complainant is nothing but a counterblast to 15 the proceedings initiated by the petitioner company under Section 138 of the Negotiable Instruments Act for dishonor of the cheque. He has placed his reliance in this regard on the decision of Sunil Kumar Vs. Escorts Yamaha Motors Ltd & Ors (Supra) and Mahindra & Mahindra Financial Services Ltd & Anr. Vs. Rajiv Dubey (Supra). On the contrary, the Learned Counsel for the complainant/opposite parties has strongly relied on the decision of our Apex Court in Criminal Appeal No.1082 of 2019 of Chilakamarthi Venkateswarlu & Anr. Vs. State of Andhra Pradesh & Anr (Supra) and in the decision of Central Bureau of Investigation Vs. Ravi Shankar Srivastava, IAS and Anr (Supra) and has vigorously contented that in a proceedings instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive.
Initiation of proceedings under Section 138 of the Negotiable Instruments Act, against the complainant prior to filing of the complaint against the present petitioners/accused persons does not ipso facto prove or establish that the subsequent proceedings is a counterblast to the earlier proceedings initiated under Section 138 of the Negotiable Instruments Act. Each case has to be judged on its own merit. In the present case, the opposite party/complainant has described how the complainant company was cheated and suffered loss. The essential elements of the alleged offences under Sections 420/406 of the Indian Penal Code are prima facie present in the allegations contained in the petition of complaint. 16
While dealing with an application under Section 482 of the Code of Criminal Procedure, the High Courts should not assume the jurisdiction and function of the Trial Court and delve deep into the disputed facts.
A specific plea has been taken on behalf of the petitioners that petitioners no.2 and 3 being the Directors of the company cannot be held responsible for the acts of the company. In support of this contention, Learned Counsel for the petitioners has cited the decisions of S.K. Alagh Vs State of Uttar Pradesh & Ors. (Supra), Maharashtra State Electricity Distribution Company Ltd & Anr. Vs Datar Switchgear Ltd & Ors. (Supra).
Admittedly, present petitioner no.2 and 3 are the Directors of the accused company. From the decisions relied on by the Learned Counsel for the petitioners, it is clear that in absence of any specific averment in the complaint demonstrating the role of the Directors in commission of the alleged offences, the Directors of the Company cannot be prosecuted for the alleged offences. At the same time, it is true that the business of a company is conducted by its Directors. Now, I have to see as to whether there are any specific averments in the petition of complaint regarding the involvement of present petitioner nos.1 and 2 in the commission of alleged offences. In this connection paragraphs 17 and 20 of the petition of complaint may be mentioned. There are specific averments in paragraphs 17 and 20 that the accused in conspiracy and connivance with each other by invoking pledged shares much before the due date without prior knowledge, consent and 17 approval of the complainant have committed criminal breach of trust and they in conspiracy and connivance with each other induced the complainant to part with valuable property of the complainant thereby causing wrongful loss to the complainant. As such the contention of Learned Counsel for the petitioners that there is no specific allegation against petitioner nos.2 and 3 is not correct. I do not find force in the submissions made by the Learned Counsel for the petitioners regarding quashment of proceedings against petitioner nos.2 and 3.
Another plea has been taken on behalf of the petitioners that the alleged facts do not constitute the offences in respect of which processes were issued against the petitioners to face trial. According to the contention of the petitioners the alleged disputes arose out of a commercial transaction and are purely civil in nature.
It cannot be denied that the offence of cheating may take place in the course of commercial and civil transaction. Nature of transaction and the intention of the person against whom the allegation is made that he induced the victim/complainant are to be construed to see whether there was alleged commission of the offence of the cheating or not. In the instant case, there are specific averments in the petition of complaint which prima facie indicate that the commission of the alleged offences. As such the contention of the Learned Advocate for the petitioners that the averments of the petition of complaint reveal the factum of loan transaction which is purely civil in nature cannot be accepted at this stage.
18
The last contention of the Learned Counsel for the petitioners is that all the petitioners reside beyond the territorial jurisdiction of the Learned Magistrate and issuance of process by the Learned Magistrate without complying with the provision of Section 202 of the Code of Criminal Procedure is not lawful. In support of the above contention, the Learned Counsel for the petitioners has placed his reliance on the decision of S.S. Binu and Ors Vs State of West Bengal & Ors (Supra).
In paragraph 100(III) of the said judgment has been held as under:-
"III. When an order of issuing summon is issued by a learned Magistrate against an accused who is residing at a place beyond the area in which he exercises his jurisdiction without conducting an enquiry under Section 202 Cr.P.C., the matter is required to be remitted to the learned Magistrate concerned for passing fresh orders uninfluenced by the prima facie conclusion reached by the Appellate Court."
Again in paragraph 100(I) of the said judgement our Division Bench has observed as under:-
"I. According to the settled principles of law, the amendment of sub- section (1) of Section 202 Cr.P.C. by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005, is aimed to prevent innocent persons, who are residing outside the territorial jurisdiction of the Learned Magistrate concerned, from harassment by unscrupulous persons from false complaints. The use of expression "shall", looking to the intention of the legislature to the context, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate." 19
The petition of complaint was filed before the Learned Chief Judicial Magistrate, South 24 Parganas, on July 1, 2013. Learned Chief Judicial Magistrate, after taking cognizance transferred the same to the Learned Judicial Magistrate, Alipore, for disposal in accordance with Law. From order dated July 15, 2013 it transpires that complainant was examined by the Learned Magistrate under Section 200 of the Code of Criminal Procedure and thereafter considering the statement of the complainant the Learned Magistrate was of the opinion that there was sufficient ground to proceed against the accused persons for commission of the alleged offences.
On 9th October, 2013, the petitioners approached under Section 482 Cr.P.C. for quashing of the proceedings on various grounds. It has been specifically pleaded by the petitioners that the proceedings pending against the petitioners are liable to be quashed for non-compliance with the mandatory provisions of Section 202 of the Code of Criminal Procedure as the accused persons reside outside the territorial jurisdiction of the Learned Magistrate.
In this connection, Learned Counsel for the complainant/opposite party has invited the attention of the Court to paragraphs 28 and 29 of the decision of Royal Medical Trust & Anr. Vs. Union of India & Anr. (Supra) for proper appreciation both the said paragraphs are reproduced as under:
"28. It is well settled in law that the ratio of a decision has to be understood regard being had to its context and factual exposition. The ratiocination in an authority is basically founded on the interpretation of the statutory provision. If it is based on a particular fact or the decision of the 20 Court is guided by specific nature of the case, it will not amount to the ratio of the judgment. Lord Halsbury in Quinn v. Leathem [Quinn v. Leathem, 1901 AC 495 : (1900-03) All ER Rep 1 (HL)] has ruled: (AC p. 506) "... every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found."
29. A three-Judge Bench in Union of India v. Dhanwanti Devi [Union of India v. Dhanwanti Devi, (1996) 6 SCC 44] , while adverting to the concept of precedent under Article 141 of the Constitution, has opined thus: (SCC pp. 51-52, paras 9-10) "9. Before adverting to and considering whether solatium and interest would be payable under the Act, at the outset, we will dispose of the objection raised by Shri Vaidyanathan that Hari Krishan Khosla case [Union of India v. Hari Krishan Khosla, 1993 Supp (2) SCC 149] is not a binding precedent nor does it operate as ratio decidendi to be followed as a precedent and is per se per incuriam. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates--(i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions 21 which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. It would, therefore, be not profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observation found therein. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi, ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason, and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi.
10. Therefore, in order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and therefore, Judges are to employ an intelligent technique in the use of precedents."
Learned Counsel for the petitioners has also cited the decision of State of Orissa Vs. Sudhansu Sekhar Misra & Ors. (Supra) and has forcefully contended that the decision of S.S. Binu and Ors Vs State of West Bengal & Ors. (Supra) has no manner of application in the present case.
22
I have gone through the provisions of Section 202(1) of the Code of Criminal Procedure as well as the decisions relied on by the Learned Counsel for the parties.
It appears that the petitioners are residing outside the territorial jurisdiction of the Learned Magistrate who issued the process. It is true that at the time of issuance of process under Section 204 of the Code of Criminal Procedure, Learned Magistrate did not make necessary inquiry as contained in sub-Section (1) of Section 202 of the Code of Criminal Procedure. The petitioners raised that ground at the earliest by way of preferring the present revisional application.
Non-compliance with the mandatory provisions as contained in Section 202(1) of the Code of Criminal Procedure cannot be considered to be a ground for quashing the proceedings pending against the petitioners. However, at the same time it cannot be ignored that the process under Section 204 Cr.P.C. was issued without taking care of that provisions.
Having regards to the facts and circumstances of the case and considering the materials placed on record, I do not find any cogent ground to quash the proceedings pending against the petitioners. However, in view of the principle laid down by our High Court in the decision of S.S. Binu and Ors. Vs State of West Bengal & Ors. (Supra) the case is remitted to the Learned Magistrate for passing fresh order after complying with the mandatory provisions of Section 202(1) of the Code of Criminal Procedure. 23
Thus, the criminal revisional application is disposed of. Before parting with the case, I would like to clarify that the observations as made in this judgment should not be taken as an expression of any opinion regarding the merit of the criminal proceedings pending before the Learned Magistrate. Learned Magistrate shall proceed with the case and dispose of the same in accordance with law, with utmost expedition.
Urgent photostat certified copy of this order, if applied for, shall be supplied expeditiously after complying with all necessary legal formalities.
(Madhumati Mitra, J.) 24