Orissa High Court
Mr. R. Seshasayee vs State Of Odisha on 3 September, 2025
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No. 460 of 2017
(An application under Section 482 of the Code of Criminal
Procedure)
1. Mr. R. Seshasayee
2. Dr. T.T. Ram Mohan
3. Mr. Ajay Hinduja
4. Mr. Sushil C.Tripathi
5. Mr. Ashok Kini
6. Mrs. Kanchan Chitale
7. Mr. Vijay Vaid
8. Mr. Romesh Sobti
9. Mr.Yashodhan M. Kale
10. IndusInd Bank Ltd.
represented through Mr.
Manikantan Iyer,
East Zone Operational Head and
constituted attorney of IndusInd
... Petitioners
Bank Ltd., Pune.
-versus-
1. State of Odisha
2. M/s. Sushant Minerals Pvt. Ltd.
represented by its Financial
Coordinator Mr. Sushanta Kumar
Mall
3. Inspector-in-Charge, Barbil ... Opposite Parties
Police Station
CRLMC No.460 of 2017 Page 1 of 70
For Petitioners : Mr. S.K. Padhi, Senior Advocate
with Mr. Piyush Panda, Advocate
For Opposite Parties : Mr. Udit Ranjan Jena, AGA
(for O.P. Nos.1 & 3)
Mr. Saswat Kumar Acharya, Advocate
and Mr. Jaish Joshi, Advocate
(for O.P. No. 2)
--------------------------------------------------------------------------------
CORAM:
HON'BLE MISS JUSTICE SAVITRI RATHO
JUDGMENT
3rd September, 2025 Savitri Ratho, J. This application has been filed with a prayer to quash the entire proceeding arising out of 1CC No.39 of 2016 filed against the petitioners in the file of the learned Judicial Magistrate First Class (in short "JMFC"), Barbil, the consequential actions pursuant to the order dated 06.12.2016 passed therein and to quash the order dated 06.12.2016 and all consequential action taken on the FIR, if any, by the IIC Barbil in pursuance of the order dated 06.12.2016 passed by the learned J.M.F.C. Barbil in ICC Case No 39 of 2016.
2. In the complaint petition, Petitioner No. 1 Mr. R. Seshasayee has been described to be the Chairman of IndusInd Bank (in short "the Bank"); Petitioners No. 2 to 7, the Directors of the Bank; Petitioner No. 8 Mr. Ramesh Sobti is described to be the CRLMC No.460 of 2017 Page 2 of 70 Managing Director of the Bank; and Petitioner No. 9 Mr. Yashodhan M. Kale the Alternate Director of the Bank. The Bank is arrayed as an accused, but it has not been represented by anybody in the complaint petition. It appears that the status of Petitioners No. 1 to 9 had changed, by the time the CRLMC was filed which is apparent from the cause title of the CRLMC. BACKGROUND
3. Opposite party No. 2 had filed Consumer Complaint No 328 of 2012 against the IndusInd Bank in respect of the same occurrence, before the National Consumer Disputes Redressal Commission, New Delhi, which was dismissed on 12.12.2014 as not maintainable observing that it was open to the complainant to seek remedy before the appropriate forum. Copy of the order is Annexure 8 to the CRLMC.
4. In 2013, 1CC No.05 of 2013 had been filed by Opposite party No 2, against three officers of the Bank-Ashok Kumar Sahoo, Laxman Kumar Patro and Somnath Dutta alleging commission of offences under Sections 465, 468 , 471, 417, 427, 120-B, 409/34 of the I.P.C. It was stated in the complaint that the Bank had made 16 forward contracts within the contractual period of one year without any request or confirmation by the complainant, in absence of CRLMC No.460 of 2017 Page 3 of 70 foreign buyers contract and without any stamped forward contract of the complainant. It was alleged that the Bank had made the forward contract dated 21.09.2011 without any request, authority or documentary evidence. The signatures of the complainant had been forged and the application for forward contract had been fabricated. Accused No. 1 Ashok Kumar Sahoo and Accused No.2 Laxman Kumar Patro had connived together to fabricate and manipulate documents and Accused No. 3 Somnath Dutta was the abettor of the documents. The complaint was sent under Section - 156 (3) Code of Criminal Procedure (in short "the Cr.P.C") to the IIC, Barbil Police Station to register a case and carry out investigation. Pursuant to such direction, Barbil P.S. Case No.35 of 2013 was registered on 04.03.2013 against those officers. This corresponds to G.R. Case No.128 of 2013 in the file of the learned JMFC, Barbil. Subsequently, investigation was taken up by the EOW, Bhubaneswar and chargesheet dated 26.09.2017 has been filed under Sections 467, 471, 418 , 120- B, 201 of the IPC against Laxman Kumar Patra, Ashok Kumar Sahoo, Somnath Datta and Rudranarayan Pati.
The complaint petition is Annexure 2 to the CRLMC. CRLMC No.460 of 2017 Page 4 of 70
5. In the month of November, 2013, while investigation was pending in Barbil P.S. Case No.35 of 2013, the Opposite Party No.2 filed 1CC No.58 of 2013 against the present Petitioners No. 1 to 9 in the Court of the learned JMFC Barbil alleging commission of offences punishable under Sections 411 read with Section 120- B IPC by them . It was alleged in the complaint that the three employees of the Bank- accused in 1CC Case No. 5 of 2013 which was under investigation in Barbil P.S Case No. 35 of 2013 had committed offences under Sections 465, 468 , 471, 417, 427, 120- B, 409/34 of the I.P.C. The proceeds of the misappropriation which was stolen property under Section 410 IPC was illegally retained by the bank which was functioning under the accused Directors. The complainant had requested the Directors to admit that the proceeds are stolen property or submit reasons for any contrary view, but they had not replied. From this it was evident that they were admitting that the property which had been transferred from the account of the complainant to the treasury of the Bank was stolen property for which they had committed the offences under Section 411 IPC read with Section 120 B of the IPC. The stolen property had been retained illegally under the guidance and supervision of the Directors for which they have committed the CRLMC No.460 of 2017 Page 5 of 70 offences of Section 411 IPC and 120 B IPC. Copy of the complaint is Annexure 3 to the CRLMC.
6. The complaint was dismissed on 22.08.2014 by the learned JMFC, Barbil Order dated 22.08.2014 is extracted below : -
"The case record is put up today for order, perused the complaint petition, initial statement of the complainant, evidence of witness U/s. 202 of CrPC and all the connected documents filed on behalf of the complainant from which I am not prima facie satisfied that there is a case u/s. 411/120(B) of IPC is well made out against the accused persons. Law is well settled that cognizance is always take against the offence not to the offender and while taking cognizance the court has to prima facie satisfied that whether there is an offence is well made out or not. In the present case after going through the complainant petition, initial statement of the complainant, evidence of the witness u/s. 202 of CrPC and other connected materials, I found there is no sufficient material is available which reveals that is a case U/s. 411/120(B) of IPC or even any other offences under other section of law is well made out. Hence, cognizance of offence U/s.411/120(B) of IPC is not taken accordingly the present case is dropped from my General File"CRLMC No.460 of 2017 Page 6 of 70
7. Criminal Revision No.17/12 of 2014 was filed by the complainant, challenging order dated 22.08.2014. The Criminal Revision was dismissed by the learned Additional Sessions Judge, Champua on 26.04.2016. Relevant portion of the Order dated 26.04.2016 passed in Criminal Revision No.17/12 of 2014 is extracted below.
"5. I have already heard the counsels .Perused the record , the complaint of the complainant- petitioner along with initial statement of the complainant Susanta Kumar Mall and evidence recorded under Section - 202 Cr.PC of witnesses namely Manas Ranjan Sahoo , Pradeep Kumar Sahoo and Shuvendra Kumar Mishra . It reveals from the complaint that the opp.parties who are alleged to be the accused persons are the directors of IndusInd Bank which is a private bank and having its branch office at Barbil and the Zonal Office at Calcutta and registered office at Pune .Record further reveals that prior to the present complaint the complainant- petitioner has filed a complaint bearing
1.C.C case No. 5 /2013 before the Court of learned J.M.F.C Barbil against the employees of the said bank namely Ashok Kumar Sahoo , Laxman Patra and Somnath Dutta for the selfsame cause of action that they committed the offences under Section- 465, , 471, 417, 427, 120-B, 409/34 of the I.P.C which is under investigation by the Barbil Police vide Barbil P.S. CRLMC No.460 of 2017 Page 7 of 70 Case No 35 dtd 04.03.2013 under the direction of the J.M.F.C ,Barbil. In the present case all the accused persons shown in the complaint petition are the members of Board of Directors of the said bank. They have no personal involvement in the present complaint as alleged by the complainant-petitioner. Perused the order dtd. 22.08.2014 passed by the learned J.M.F.C., Barbil which reveals that after going through the complaint petition, initial statement of the complainant, statements of the witnesses U/s. 202, Cr.P.C. and other connected papers, as he has not found any prima facie material U/s.411/120-B of I.P.C. against the alleged accused-opp. parties, he refused to take cognizance against them. Learned counsel for the petitioner argued that the judicial order passed by the learned Court below does not indicate any reason for non-taking cognizance and, as such, the order needs to be set aside. On the other hand, learned counsel for the opp. party supported the order passed by the learned Court below and in support of his submission he cited a decision reported in (2008) 5 Supreme Court Cases 668, Maksud Saiyed Vrs. State of Gujarat and others, wherein it has been held that "B. Criminal Law - Vicarious liability of Directors for the charges leveled against the Company- Untenability of
-Absence of requisite allegation with regard to correct statutory provision- Held, the Penal Code does not contain any provision for attaching vicarious liability CRLMC No.460 of 2017 Page 8 of 70 on the part of the Managing Director or the Directors of the Company when the accused is a Company- Magistrate should have examined whether the complaint made the Directors personally liable - Penal Code 1860, Ss 120-B". The principles of the above cited decision squarely applicable in the facts and circumstances of this case. In the present case the learned Court below has well considered the materials available on record that these alleged accused-opp. parties were not personally liable for any alleged offences as they are the Board of Directors. On perusal of records and in view of the principles decided in the aforementioned decision. I find that the learned Court below is perfect in not taking cognizance of the offence U/s.411/120-B of I.P.C. against the opp. parties and I do not find any infirmity in the order passed by him which he has passed after due consideration of the evidence available before him and, as such, I confirm the same. Hence, ordered."
Copy of this order is Annexure 6 to the CRLMC. (The complaint case number has been incorrectly mentioned as 1CC No 58 of 2014 in place of 1CC No 58 of 2013 in the order dated 26.04.2016 )
8. The order passed in Criminal Revision No.17/12 of 2014 was not challenged, but the complainant-opposite party No.2 filed 1CC No.39 of 2016 in the Court of the learned JMFC, Barbil against the petitioners alleging commission of offences punishable CRLMC No.460 of 2017 Page 9 of 70 under Sections 409/411/120(B) of the IPC. A petition was also filed / prayer was made under Section - 156(3) of the Cr.P.C to send the complaint to the police for investigation. It has been stated in the complaint petition that FIR No. 35 (4) dated 04.03.2013 was registered by the Police against the employees of the bank and investigation was pending, but no police has not registered any case in respect of evidence gathered subsequently. It was stated that in the complaint that earlier Case No 58 of 2013 had been filed without accusing the Company which was dismissed. In revision, the Additional Sessions Judge found that the case was dismissed on the ground that the Company was not an accused, hence the fresh complaint is submitted. It was stated also stated in the complaint petition as follows : -
"11. That this case is bing made on same set of cats with the earlier case of No. 58 of 2013 , for the purpose of limitation , the limitation period should be excluded from dated
05.11.2013 to 26.04.2016 in terms of Section - 470(1) of CRPC. It is because this fresh complaint is made on same set of facts which was in the case of 56 2013 .further to the accused persons were informed on the offence vide letter dated 22.03.2013 by the complainant and in terms of section
- 469(1 ) (c) of CRPC.That further to out of alleged charges , sever charge is under Section 409 of IPC .and period of CRLMC No.460 of 2017 Page 10 of 70 limitation should be applied to the sever offence and accordingly the period of limitation is not applicable in terms of section 468 of CRPC"......
Copy of the complaint petition is Annexure 1 to the CRLMC.
9. On 06.12.2016, the learned J.M.F.C., Barbil, took up the petition filed under Section - 156 (3) Cr.P.C for hearing and after perusing the complaint petition observed that it reveals commission of offences under Sections 409/411/120-B IPC which were heinous in nature and hence he sent the complaint petition to the I.I.C., Barbil Police Station to register a case and treat the complaint as FIR. Order dated 06.12.2016, passed by the learned JMFC, Barbil is extracted below: - .
"The learned advocate for the complainant is present and files the process fees worth of Rs.30/- and the copies of complaint petition. All the defects have been removed. The petition u/s.156(3) of the CrPC filed on 1.08.2016 is taken up for hearing. Heard perused the complaint petition. The complaint petition reveals that there is the commission of offences punishable u/s.409/411/120-B IPC. All the offences alleged are heinous in nature. Hence I feel it proper to send the complaint petition to police for investigation u/s.156(3) of CrPC. Hence, the prayer petition u/s.156(3) of CrPC is allowed.CRLMC No.460 of 2017 Page 11 of 70
Send the complaint petition to the IIC, Barbil P.S. with a direction to register the case petition to the complain petition as FIR and cause investigation thereinto. Send the extract of this order to the IIC, Barbil PS for investigation and necessary action. Put up on 8.03.2017 awaiting report."
10. It has been mentioned in the list of dates filed on behalf of the petitioner on 07.05.2025, that during pendency of this CRLMC, C.S. No.278 of 2022 has been filed in the Court of the learned Civil Judge (Senior Division)-Cum-Commercial Court, Bhubaneswar by the Opposite party No. 2 and CMP No.1007 of 2024 arising out of that suit is pending before this Court.
PREVIOUS ORDERS PASSED BY THIS COURT
11. By order dated 05.05.2017, notice had been issued to the Opposite Parties and the records of 1CC Case No. 39 of 2016 had been called for. It had also been directed that "All further proceedings arising out of any order passed in 1CC No 39 of 2016 of the court of the JMFC Barbil shall remain stayed till next date of listing."
12. Thereafter this CRLMC was listed on different dates and adjourned and the interim dated 05.05.2017 extended. On 15.01.2018, this Court observed that in order to appreciate the CRLMC No.460 of 2017 Page 12 of 70 contention raised, it is necessary to go through the records of 1.C.C No 58 of 2013 (disposed of) of the Court of the JMFC, Barbil and adjourned the matter extending the interim order.
13. Thereafter this CRLMC was again adjourned on some dates and the interim order extended. On 11.04.2023, it was listed alongwith CRLMC Nos. 1356 of 2019, CRLMC No 1729 of 2019, CRLMC No 1730 of 2019 and CRLMC No 1731 of 2019 and was adjourned to 03.06.2023, and interim orders passed earlier were extended till the next date.
14. On 22.09.2023 all the matters were adjourned to 09.10.2023 and interim order passed earlier was extended till the next date.
15. On 09.10.2023, 8.11.2023, 15.11.2023, 23.11.2023 24.11.2023, 5.12.2023, 12.12.2023, 20.11.2024, 28.12.2024, 20.01.2025 and 05.02.2025, the CRLMC adjourned and interim order extended.
16. On 12.03.2025, this CRLMC was directed to be listed on 03.04.2025 along with CRLMC No. 1356 of 2019, CRLMC No. 1729 of 2019, CRLMC No. 1730 of 2019 and CRLMC No. 1731 of 2019 observing that further adjournments would not be granted. On 03.04.2025, the matter was adjourned to 22.04.2025. CRLMC No.460 of 2017 Page 13 of 70
17. On 22.04.2025 this CRLMC and CRLMC No. 1356 of 2019, CRLMC No. 1729 of 2019, CRLMC No. 1730 of 2019 and CRLMC No. 1731 of 2019 were adjourned to 07.05.2025.
18. On 07.05.2025, CRLMC No. 1356 of 2019, CRLMC No.1729 of 2019, CRLMC No. 1730 of 2019 and CRLMC No. 1731 of 2019 were delinked from this CRLMC by a common order passed in those CRLMCs and directed to be listed on 15.05.2025. The following order was passed in this CRLMC :-
"1. Note of submissions is submitted by Mr. S.K.Padhi, learned senior counsel for the petitioner. The same is taken on record. Copy of the same has been served on Mr. Krutibash Mohapatra, learned counsel appearing on behalf of Mr. Saswat Kumar Acharya, learned counsel for opposite party No.2. He prays for an adjournment after vacation. Mr. S.K. Padhi objects to the prayer for adjournment.
2. Considering the fact that the CRLMC is of the year 2017 and has suffered a number of adjournments and it had been agreed by the learned counsel that the matter shall be taken up today, I am not inclined to adjourn the matter after vacation. But in view of the prayer of Mr Mohapatra learned counsel No.2 for adjournment, the case is adjourned to 15.05.2025, to be taken up at 2:00 PM.
3. It is made clear that further adjournment shall not be granted.CRLMC No.460 of 2017 Page 14 of 70
4. Interim order passed earlier shall continue till the next date."
19. On 15.05.2025, this CRLMC was heard and judgment was reserved while CRLMC No. 1356 of 2019, CRLMC No 1729 of 2019, CRLMC No. 1730 of 2019 and CRLMC No. 1731 of 2019 which had been delinked from this CRLMC, but listed were adjourned to 23.06.2025. CRLMC No. 1356 of 2019 has been filed by Somnath Datta, CRLMC No. 1729 of 2019 has been filed by Rudranarayan Pati, CRLMC No. 1730 of 2019 has been filed by Laxman Kumar Patra and CRLMC No.1731 of 2019 has been filed by Ashok Kumar Sahoo.
SUBMISSIONS
20. I have heard Mr. S.K.Padhi, learned Senior Counsel for the petitioners, Mr. Saswat Kumar Acharya learned counsel for the Opposite Party No. 2 and Mr Udit Ranjan Jena learned Additional Government Advocate. I have perused the Annexures to the CRLMC which includes the complaint petitions, orders passed in by the learned JMFC, Barbil, the learned Additional Sessions Judge Barbil. I have also gone through the trial court records in 1.CC No. 39 of 2016 and ICC No 56 of 2013 and perused the written notes of submission filed by the learned counsel for the petitioners and the CRLMC No.460 of 2017 Page 15 of 70 learned counsel for the Opposite Party No. 2 and read the decisions relied on by them.
The trial court records in 1CC No 56 of 2013 reveal that the case had been directed by the learned JMFC Barbil, to be put up the case on 08.03.17 awaiting report. On 08.03.2017, no report had been received for which the case had been adjourned to 05.08.2017. But before that, on 20.05.2017, on receiving letter dated 08.05.2017, the records were sent to this Court. ON BEHALF OF THE PETITIONERS.
21. Mr. S.K. Padhi, learned Senior Counsel for the petitioners has submitted that the learned JMFC, Barbil vide order dated 22.08.2014 after going through the complaint petition and the statements recorded in the enquiry under Section - 202 Cr.P.C and other materials in 1CC No.58 of 2013, was not inclined to take cognizance of the offences under Sections 411 and 120(B) of I.P.C. against Petitioners No. 1 to 9 and had dropped the proceeding against them holding that as the the Court did not find sufficient material revealing a case U/s. 411/120(B) of IPC or even any other offences under other section of law against them. Opposite Party No.2 had preferred CRLREV No.17/12 of 2014. Relying on the decision in Maksud Saiyed Vrs. State of Gujarat and others: CRLMC No.460 of 2017 Page 16 of 70
(2008) 5 Supreme Court Cases 668, the learned Additional Sessions Judge, Champua dismissed the Criminal Revision on 26.04.2016. This order has not been challenged, so it has attained finality. Instead of challenging the order passed in Criminal Revision No. 17/12 of 2014 which had confirmed the order of dismissal of the complaint by the learned JMFC Barbil, the Opposite Party No. 2 filed 1CC No.39 of 2016 against the present petitioners, alleging commission of offences punishable under Sections 409/411/120(B) of the IPC on the self-same facts, documents and allegations. The learned J.M.F.C., Barbil, instead of perusing / verifying the earlier orders passed in 1CC Nos.5 of 2013 and 1CC No. 58 of 2013 or the order of the learned Additional Sessions Judge, Champua, erroneously and mechanically directed the Police to register an FIR and cause investigation thereto in exercise of power under Section 156(3) of Cr.P.C. Hence, the criminal proceeding against the petitioners is liable to be quashed.
He has also submitted that the Petitioners No. 1 to 9 were the Directors, Managing Director and Alternate Director of the Company at the relevant time, residing in Maharashtra. In the absence of any specific allegation against them, they cannot be held vicariously liable for any act of their subordinate officers. CRLMC No.460 of 2017 Page 17 of 70 Assuming for a moment that the officers of the Bank have erroneously transferred any amount belonging to the Complainant to the Bank, there is no allegation that the Petitioners had any role to play. The complaint has been filed to pressurize the Petitioners to direct for return of the money which the Complainant has alleged was illegally transferred to the Bank from its account with the allegations that that the petitioners have not taken any steps to return the amount to the complainant inspite of his request. This does not make out any offence against them and at best can be the subject matter of a civil dispute and a civil suit has already been filed by the Complainant. In support of the prayer for quashing of the impugned order and the proceedings, he has relied on the following decisions: -
i) Maksud Saiyed vs. State of Gujrat : (2008) 5 SCC 668 (Paragraphs 13 & 15)
ii) Keki Hormusji Gharda vs. Mehervan Rustom Irani and another : (2009) 6 SCC 475 (Paragraph 17)
iii) Maharashtra State Electricity Distribution Company Limited vs. Datar Switchgear Limited : (2010) 10 SCC 479 (Paragraphs 27, 28)
iv) S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla : (2005) 8 SCC 89 (Paragraph 8)
v) Sharon Michael vs. State of Tamil Nadu : (2009) 3 SCC 375 (Paragraph 16) CRLMC No.460 of 2017 Page 18 of 70
vi) S.K. Alagh vs. State of Uttar Pradesh : (2008) 5 SCC 662 (Paragraph 19)
vii) Pooja Ravinder Devidasani vs. State of Maharashtra :
(2014) 16 SCC (Paragraph 17 to 21)
viii) Babubhai vs. State of Gujarat : (2010) 12 SCC 254 (Paragraphs 20 and 21)
ix) Kunti Devi : Urmila Chauhan @ Sudha : 2003 (1) OLR-223 (Paragraphs 10 and 11)
x) T.T. Antony Vrs. State of Kerala and Others: (2001) 6 SCC 181, (Paragraphs 18 and 19)
xi) GHCL Employees Stock Option Trust vs. India Infoline Ltd.: (2013) 4 SCC 505 (Paragraphs 12, 13 and 18 to
22)
xii) Priyanka Shrivastava v. State of Uttar Pradesh : (2015) 6 SCC 287 (Paragraphs 31 and 33)
xiii) Kailashben Mahendrabhai Patel vs. State of Maharashtra : 2024 INSC 737 (Criminal Appeal No.4003 of 2024 (Paragraphs 14 and 16) 2OnLine SC 3960
xiv) Shaileshbhai Ranchhodbhai Patel vs. State of Gujarat :
2024 SCC Online 5569 ( Criminal Appeal No.1885 of 2013 (Paragraphs 7 and 8) FOR THE OPPOSITE PARTY NO. 2
22. Mr. Acharya, learned counsel for the opposite party No.2 has submitted that 1CC No.58 of 2013 had been filed alleging that the present petitioners who are the directors of IndusInd Bank Ltd. had committed the offences under Section 411 and Section- 120 B CRLMC No.460 of 2017 Page 19 of 70 of the IPC, without arraying the Bank as an accused. The earlier complaint had been dismissed by the learned JMFC, Barbil and affirmed by the learned Revisional Court on technical grounds for non-joinder of necessary parties in as much as IndusInd Bank Ltd. has not been made Party in the said Complaint case. Therefore, I.C.C. No.39 of 2016 was filed curing this defect by arraying the Indusland Bank as an accused. He has submitted that the officer(s) or director(s) of the company are also criminally liable along the company if the offence committed involved with their criminal intent and therefore, mens rea of the company is the mens rea of the directors. On account of subsequent events, the Directors are also guilty of the offence under Section 409 IPC which is an additional offence. Accordingly, the learned J.M.F.C. Barbil after satisfying himself about the role of the present petitioners has passed the order impugned. He has further submitted that the allegations against the persons accused in I.C.C. No.5 of 2013 is different from the allegations made in 1CC No 58 of 2013 and the allegations in I.C.C. No.39 of 2016 against the petitioners is different, because of subsequent events and because the Bank has been arrayed as an accused. As it is the settled position of law that if the event causing offence(s) are different, then, separate F.I.R. is maintainable, CRLMC No.460 of 2017 Page 20 of 70 therefore the subsequent complaint was maintainable and the submissions of the learned counsel for the petitioners to the contrary is liable to be rejected. He has also submitted that as direction has been issued to the police for registering a case and conducting investigation, instead of waiting for the result of such investigation, the proceedings should not be quashed. He has relied on the following decisions in support of his submissions:-
i) Nirmal Singh Kahlon vs State of Punjab : (2009) 1 SCC 441
ii) Babubhai vs. State of Gujarat : (2010) 12 SCC 254
iii) Pramatha Nath Talukdar and Surendra Mohan Basu vs. Saroj Ranjan Sarkar : AIR 1962 SC 876
iv) Madhao vs. State of Maharashtra : (2013) 5 SCC 615
v) Sunil Bharti Mittal vs. CBI : (2015) 4 SCC 609
vi) Neeharika Infrastructure vs. State of Maharashtra : 2021 SCC OnLine SC 315\ STATUTORY PROVISIONS
23. The provisions of Sections 409, 411 and Section 120-B of the IPC which are relevant for deciding this CRLMC are extracted below :-
"Section 409- Criminal breach of trust by public servant, or by banker, merchant or agent. Whoever, CRLMC No.460 of 2017 Page 21 of 70 being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine."
"Section 411- Dishonestly receiving stolen property. Whoever dishonestly receives or retains any stolen property, knowing or having reason to believe the same to be stolen property, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both."
"Section 120B- Punishment of criminal conspiracy (1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
(2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence CRLMC No.460 of 2017 Page 22 of 70 punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both."
JUDICIAL PRONOUNCEMENTS
24. Apart from the decisions cited by the learned counsel for the parties, some other decisions which are relevant for deciding this application are necessary to be discussed. RELIED ON BY LEARNED COUNSEL FOR THE PETITIONER.
Vicarious Liability
i) In Maksud Saiyed Vrs. State of Gujarat & Ors. (2008) 5 SCC 668, the Supreme Court has held as follows :
"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 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 CRLMC No.460 of 2017 Page 23 of 70 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.."
ii) In the case of Keki Hormusji Gharda v. Mehervan Rustom Irani, (2009) 6 SCC 475, the Supreme Court has held as follows :
"17. The Penal Code, 1860 save and except in some matters does not contemplate any vicarious liability on the part of a person. Commission of an offence by raising a legal fiction or by creating a vicarious liability in terms of the provisions of a statute must be expressly stated. The Managing Director or the Directors of the Company, thus, cannot be said to have committed an offence only because they are holders of offices. The learned Additional Chief Metropolitan Magistrate, therefore, in our opinion, was not correct in issuing summons without taking into consideration this aspect of the matter. The Managing Director and the Directors of the Company should not have been summoned only because some allegations were made against the Company."CRLMC No.460 of 2017 Page 24 of 70
iii) In the case of Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd., (2010) 10 SCC 479, the Supreme Court has held as follows: -
"27. A bare perusal of the complaint shows that the gravamen of the allegation is that a fabricated document containing the offending endorsement was tendered in evidence before the Arbitral Tribunal on behalf of MSEB by Accused 6, who was in charge of Shirpur Section. It is evident from the afore extracted paragraphs of the complaint that other accused have been named in the complaint because, according to the complainant, MSEB, Accused 1 was acting under their control and management. It bears repetition that the only averment made against Appellant 2 is that Appellant 1 i.e. MSEB was acting under the control and management of Appellant 2 along with other three accused. There is no denying the fact that Appellant 2 happened to be the Chairman of MSEB at the relevant time but it is a settled proposition of law that one cannot draw a presumption that a Chairman of a company is responsible for all acts committed by or on behalf of the company. In the entire body of the complaint there is no allegation that Appellant 2 had personally participated in the arbitration proceedings or was monitoring them in his capacity as the Chairman of MSEB and it was at his instance that the subject interpolation was made in Ext. C-64.
28. At this stage, we may refer to the extract of a Board resolution, pressed into service by the respondents in support CRLMC No.460 of 2017 Page 25 of 70 of their plea that Appellant 2 was responsible for the conduct of business of Appellant 1. The said resolution merely authorises the Chief Engineer to file counter-claim before the Arbitral Tribunal in proceedings between Appellant 1 and Respondent 1. It rather demonstrates that it was the Chief Engineer who was made responsible for looking after the interest of Appellant 1 in those proceeding."
iv) In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89, it has been held by the Supreme Court as follows:
"8. The officers responsible for conducting the affairs of companies are generally referred to as directors, managers, secretaries, managing directors, etc. What is required to be considered is: Is it sufficient to simply state in a complaint that a particular person was a director of the company at the time the offence was committed and nothing more is required to be said. For this, it may be worthwhile to notice the role of a director in a company. The word "director" is defined in Section 2(13) of the Companies Act, 1956 as under:
"2. (13) 'director' includes any person occupying the position of director, by whatever name called;"
There is a whole chapter in the Companies Act on directors, which is Chapter II. Sections 291 to 293 refer to the powers of the Board of Directors. A perusal of these provisions shows that what a Board of Directors is empowered to do in relation to a particular company depends upon the roles and functions assigned to directors as per the memorandum and CRLMC No.460 of 2017 Page 26 of 70 articles of association of the company. There is nothing which suggests that simply by being a director in a company, one is supposed to discharge particular functions on behalf of a company. It happens that a person may be a director in a company but he may not know anything about the day-to- day functioning of the company. As a director he may be attending meetings of the Board of Directors of the company where usually they decide policy matters and guide the course of business of a company. It may be that a Board of Directors may appoint sub-committees consisting of one or two directors out of the Board of the company who may be made responsible for the day-to-day functions of the company. These are matters which form part of resolutions of the Board of Directors of a company. Nothing is oral. What emerges from this is that the role of a director in a company is a question of fact depending on the peculiar facts in each case. There is no universal rule that a director of a company is in charge of its everyday affairs. We have discussed about the position of a director in a company in order to illustrate a the point that there is no magic as such in a particular word, be it director, manager or secretary. It all depends upon the respective roles assigned to the officers in a company. A company may have managers or secretaries for different departments, which means, it may have more than one manager or secretary. These officers may also be authorised to issue cheques under their signatures with respect to affairs of their respective departments. Will it be b possible to prosecute a secretary of Department B regarding CRLMC No.460 of 2017 Page 27 of 70 a cheque issued by the secretary of Department A which is dishonoured? The secretary of Department B may not be knowing anything about issuance of the cheque in question. Therefore, mere use of a particular designation of an officer without more, may not be enough by way of an averment in a complaint. When the requirement in Section 141, which extends the liability to officers of a c company, is that such a person should be in charge of and responsible to the company for conduct of business of the company, how can a person be subjected to liability of criminal prosecution without it being averred in the complaint that he satisfies those requirements. Not every person connected with a company is made liable under Section 141. Liability is cast on persons who may have something to do with the transaction complained of. A person who is in charge of and responsible for conduct of business of a company would naturally know why the cheque in question was issued and why it got dishonoured."
v) In Sharon Michael v. State of T.N., (2009) 3 SCC 375, the Supreme Court has held as follows:
"16. The first information report contains details of the terms of contract entered into by and between the parties as also the mode and manner in which they were implemented. Allegations have been made against the appellants in relation to execution of the contract. No case of criminal misconduct on their part has been made out before the CRLMC No.460 of 2017 Page 28 of 70 formation of the contract. There is nothing to show that the appellants herein who hold different positions in the appellant Company made any representation in their personal capacities and, thus, they cannot be made vicariously liable only because they are employees of the Company."
vi) In S.K. Alagh v. State of U.P., (2008) 5 SCC 662, the Supreme Court has held as follows:
"19. As, admittedly, drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offence committed by the Company itself. (See Sabitha Ramamurthy v. d R.B.S. Channabasavaradhya: (2006) 10 SCC 581¹)."
vii) The case of Pooja Ravinder (supra) relates to an case under the Negotiable Instruments Act where Section 141 provides for vicarious liability, hence it is not necessary to be discussed. Second FIR / complaint
viii) In Babubhai v. State of Gujarat, (2010) 12 SCC 254, the Supreme Court has held as follows:
CRLMC No.460 of 2017 Page 29 of 70
"20. Thus, in view of the above, the law on the subject emerges to the effect that an FIR under Section 154 CrPC is a very important document. It is the first information of a cognizable offence recorded by the officer in charge of the police station. It sets the machinery of criminal law in motion and marks the commencement of the investigation which ends with the formation of an opinion under Section 169 or 170 CrPC, as the case may be, and forwarding of a police report under Section 173 CrPC. Thus, it is quite possible that more than one piece of information be given to the police officer in charge of the police station in respect of the same incident involving one or more than one cognizable offences. In such a case, he need not enter each piece of information in the diary. All other information given orally or in writing after the commencement of the investigation into the facts mentioned in the first information report will be statements falling under Section 162 CrPC.
21. In such a case the court has to examine the facts and circumstances giving rise to both the FIRs and the test of sameness is to be applied to find out whether both the FIRs relate to the same incident in respect of the same occurrence or are in regard to the incidents which are two or more parts of the same transaction. If the answer is in the affirmative, the second FIR is liable to be quashed. However, in case, the contrary is proved, where the version in the second FIR is different and they are in respect of the two different incidents/crimes, the second FIR is permissible. In case in respect of the same incident the accused in the first FIR CRLMC No.460 of 2017 Page 30 of 70 comes forward with a different version or counterclaim, investigation on both the FIRs has to be conducted."
ix) In Kunti Devi & Others Vrs. Urmila Chauhan alias Sudha, 2003 (1) OLR-223., this Court has held as follows:
"In the case at hand are discussed in the foregoing paragraphs, on the basis of the F.I.R. lodged by the complainant-wife, after investigation, the police submitted the Charge Sheet against her husband and father-in-law and cognizance was taken thereon. The Informant, the present complaint being not satisfied lodged a protest petition to include the present petitioners as accused persons, but the learned Magistrate on consideration of merits rejected the protest petition. The informant again has filed the present complaint against the present set of accused persons who are the mother-in-law, brother and married sister of her husband and on the basis of the initial statement. the learned Magistrate has taken cognizance and issued process against the present petitioners. A perusal of the complaint petition. the initial statement along with the protest petition filed earlier and the materials on record it transpires that the entire allegations were duly considered by the learned Magistrate who found no prima facie case to proceed against the present petitioners and accordingly dismissed the protest petition. Again on the basis of self-same set of facts with little modification here and there the present complaint has been filed. A perusal of the complaint petition and the CRLMC No.460 of 2017 Page 31 of 70 initial statement recorded by the learned Magistrate disclosed a good prima facie case against the husband and the father-in-law against whom process was issued, but the allegations against the present petitioners are more or less repetition of the earlier complaint petition and the statement in the F.I.R. The protest petition having been rejected mostly on the self-same fact, on merits. I am of the considered opinion that the learned Magistrate erred in law in entertaining the second complaint taking cognizance of the offence and issuing process against the present petitioners. It is the settled position of law that the judicial process should not be an Instrument of oppression or harassment and the learned Magistrate exercising the discretion has to take all relevant facts and circumstances into consideration before issuing process against an accused person, otherwise the legal process would be an instrument of harassment at the instance of unscrupulous persons.
11. The conspectus of the decision of the Apex Court discussed in the earlier paragraphs of this judgment unerringly lays down that even though there is no absolute bar for entertainment of a second complaint on the same facts, but it would only be entertained in exceptional circumstances, where the previous order was passed in an incomplete record or on a misunderstanding of the nature of the complaint or it was manifestly absurd, unjust or foolish or new facts which could not with reasonable diligence have been brought on record in the previous proceeding, have been brought on record. If on full consideration of the CRLMC No.460 of 2017 Page 32 of 70 available materials in the earlier proceeding the learned Magistrate felt inappropriate to proceed against the present petitioners, on a subsequent complaint being filed. it is impermissible to issue a process. The dismissal of the earlier protest petition was on merit and on full consideration of facts and circumstances of the case and as such, the second complaint almost on the self-same set of facts was not maintainable and, therefore, ought not to have been entertained by the learned Magistrate.
In such view of the matter, the Criminal Misc. Case is allowed, the impugned order of cognizance and issuance of process against the present petitioners are quashed."
x) In T.T. Antony vs. State of Kerala and others : (2001) 6 SCC 181, the Supreme Court has held as follows:-
"18. Sub-section (1) of Section 154 of Cr.P.C. contains four mandates to an officer-in-charge of police station. The first enjoins that every information relating to commission of a cognizable offence if given orally shall be reduced to writing and the second directs that it be read over to the informant; the third requires that every such information whether given in writing or reduced to writing shall be signed by the Informant and the fourth is that the substance of such formation shall be entered in the station house. diary. It will be apt to note here a further directive contained in sub- section (1) of Section 157 of Cr. P.C. which provides that immediately on receipt of the information the officer of the CRLMC No.460 of 2017 Page 33 of 70 Police Station shall send a report of every cognizable offence to a Magistrate empowered to take cognizance of the offence and then proceed to investigate or depute his subordinate officer to investigate the facts and circumstances of the case. Sub-section (2) entitles the informant to receive a copy of the Information, as recorded under sub-section (1), free of cost. Sub-section (3) says that in the event of an officer in charge of a police station refusing to record the information as postulated under sub-section(1), a person aggrieved thereby may send the substance of such information in witing and by post to the Superintendent of Police concerned who is given an option either to investigate the case himself or direct the investigation to be made by a police officer subordinate to him, in the manner provided by Cr.P.C., if he is satisfied that the information discloses the commission of a cognizable offence. The police officer to whom investigation is entrusted by the Superintendent of Police has all the powers of an officer in charge of the police station in relation to that offence.
19. An information given under sub-section (1) of Section 154 of Cr.P.C. is commonly known as First Information Report (F.I.R.) though this term is not used in the Code. It is a very important document. And as its nick name suggests it is the earliest and the first information of a cognizable offence recorded by an officer in charge of a police station. It sets the criminal law into motion and marks the commencement of the investigation which ends up with the formation of opinion under Section 169 or 170 of Cr.P.C., as CRLMC No.460 of 2017 Page 34 of 70 the case may be and forwarding of a police report under Section 173 of Cr.P.C. It is quite possible and it happens not infrequently that more information's that one are given to a police officer in charge of a police station in respect of the same incident involving one or more than one cognizable offence. In such a case he need not enter every one of them in the station house diary and this is implied in Section 154 of Cr.P.C. Apart from a vague information by a phone call or a cryptic telegram, the information first entered in the station house diary, kept for this purpose, by a police officer in charge of a police station is the First Information Report F.I.R. postulated by Section 154 of Cr. P.C. All other information's made orally or in writing after the commencement of the investigation into the cognizable offence disclosed from the facts mentioned in the First Information Report and entered in the station house diary by the police officer or such other cognizable offenses as may come to his notice during the investigation, will be statements falling under Section 162 of Cr. P.C. No such information/statement can properly be treated as an F.I.R. and entered in the station house diary again, as it would in effect be a second FIR and the same cannot be in conformity with the scheme of the Cr. P.C. Take a care where an FIR mentions cognizable offence under Section 307 or 320 I.P.C. and the investigating agency learns during the investigation or receives a fresh information that the victim died, no fresh FIR under Section 302 I.P.C. need be registered which will be irregular; in such a case alternation of the provision of CRLMC No.460 of 2017 Page 35 of 70 law in the first FIR is the proper course to adopt. Let us consider a different situation in which H having killed W, his wife, informs the police that she is killed by an unknown persons that W is killed by his mother or sister, H owns up the responsibility and during investigation the truth is detected; it does not require filing of fresh FIR against II-the read offender-who can be arraigned in the report under Section 173(2) or 173(8) of Cr.P.C., as the case may be. It is of course permissible for the Investigating officer to send up a report to the concerned Magistrate even earlier that Investigation is being directed against the person Suspected to be the accused."
Civil Wrong / Issue of Process
xi) In GHCL Employees Stock Option Trust v. India Infoline Ltd., (2013) 4 SCC 505, it has been held by the Supreme Court as follows:
"12. From a bare perusal of the complaint and the allegations made therein, we do not find in any of the paragraphs that the complainant has made specific allegations against Respondents 2 to 7. In Para 2 of the complaint, it is alleged that Respondents 2 to 6 are looking after the day-to-day affairs of the Company. With whom the complainant or its authorised representative interacted has also not been specified. Although in Para 11 of the complaint it is alleged that the complainant on numerous occasions met Accused 2 to 7 and requested to refund the amount, but again CRLMC No.460 of 2017 Page 36 of 70 the complainant has not made specific allegation about the date of meeting and whether it was an individual meeting or collective meeting. Similarly, in Para 17 of the complaint, there is no allegation that a particular Director or Managing Director fabricated the debit note. In the entire complaint there are a bald and vague allegations against Respondents 2 to 7.
13. There is no dispute with regard to the legal proposition that the case of breach of trust or cheating are both a civil wrong and a criminal offence, but under certain situations where the act alleged would predominantly be a civil wrong, such an act does not constitute a criminal offence."
"18. From a bare perusal of the order passed by the Magistrate, it reveals that two witnesses including one of the trustees were examined by the complainant but none of them specifically stated as to which of the accused committed breach of trust or cheated the complainant except general and bald therein. While ordering issuance of summons, the learned Magistrate concluded as under:
"The complainant has submitted that Accused 2 to 6 are the Directors of the Company and Accused 7 is the Secretary of the Company and were looking after the day-to-day affairs of the Company and were also responsible for conduct and business of Accused 1 and sometime or the other have interacted with the complainant .I have heard arguments on behalf of the complainant and perused the record. From the allegations raised, documents placed on record and the b evidence led by the witnesses, prima facie an offence under Sections 415, 409/34/120-B is made out. Let all the accused hence be summoned to face trial CRLMC No.460 of 2017 Page 37 of 70 under the aforesaid sections on PF/RC/Speed Post/courier for 2-12-2008,"
19. In the order issuing summons, the learned Magistrate has not recorded his satisfaction about the prima facie case as against Respondents 2 c to 7 and the role played by them in the capacity of Managing Director, Company Secretary or Directors which is sine qua non for initiating criminal action against them. Recently, in Thermax Ltd. v. K.M. Johny while dealing with a similar case, this Court held as under:
"38. Though Respondent 1 has roped all the appellants in a criminal case without their specific role or participation in the alleged offence with the sole purpose of settling his dispute with the appellant Company by initiating the criminal prosecution, it is pointed out that Appellants 2 to 8 are the ex- Chairperson, ex-Directors and senior managerial personnel of Appellant 1 Company, who do not have any personal role in the allegations and claims of Respondent 1. There is also no specific allegation with regard to their role.
39. Apart from the fact that the complaint lacks necessary ingredients of Sections 405, 406, 420 read with Section 34 IPC, it is to be noted that the concept of 'vicarious liability' is unknown to criminal law. As observed earlier, there is no specific allegation made against any person but the members of the Board and senior executives are joined as the persons looking after the management and business of the appellant Company."
20. As stated above, the decisions relied upon by the counsel for the appellant and the respondents need not be discussed as the law has been well settled by those decisions as to the power and duty of the Magistrate while issuing summons in a complaint case.
CRLMC No.460 of 2017 Page 38 of 70
21. In the instant case the High Court has correctly noted that issuance of summons against Respondents 2 to 7 is illegal and amounts to abuse of process of law. The order of the High Court, therefore, needs no interference by this Court.
22. For the aforesaid reasons, we find no merit in these appeals, which are accordingly dismissed."
xii) In the case of Priyanka Srivastava v. State of U.P., (2015) 6 SCC 287, the Supreme Court has held as follows:
"31. We have already indicated that there has to be prior applications under Sections 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an application under Section 156(3) be supported by an affidavit is so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already stated that the veracity of the same can also be verified by the learned Magistrate, regard being had to the nature of allegations of the case. We are compelled to say so as a number of cases pertaining to fiscal sphere, matrimonial dispute/family disputes, commercial CRLMC No.460 of 2017 Page 39 of 70 offences, medical negligence cases, corruption cases and the cases where there is abnormal delay / laches in initiating criminal prosecution, as are illustrated in Lalita Kumarils are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR."
"33. At this juncture, we may fruitfully refer to Section 32 of the SARFAESI Act, which reads as follows:
"32. Protection of action taken in good faith. No suit, prosecution or other legal proceedings shall lie against any secured creditor or any of his officers or manager exercising any of the rights of the secured creditor or borrower for anything done or omitted to be done in good faith under this Act."
In the present case, we are obligated to say that the learned Magistrate should have kept himself alive to the aforesaid provision before venturing into directing registration of the FIR under Section 156(3) CrPC. It is because Parliament in its wisdom has made such a provision to protect the secured Creditors or any of its officers, and needless to emphasise, the legislative mandate has to be kept in mind." Quashing FIR after filing of charge-sheet
xiii) In Kailashben Mahendrabhai Patel vs. State of Maharashtra:
2024 INSC 737, the Supreme Court has held as follows:
"16. It is submitted on behalf of the respondent that after investigation, charge sheet has already been filed and that this Court should not interfere with the judgment of the High Court. The chargesheet is on record and we have examined CRLMC No.460 of 2017 Page 40 of 70 it carefully, it simply reproduces all the wordings of the complaint. There is nothing new even after investigation, the allegations made in the FIR/complaint are exactly the allegations in the charge sheet. Even otherwise, the position of law is well entrenched. There is no prohibition against quashing of the criminal proceedings even after the charge sheet has been filed. In Anand Kumar Mohatta v. State (NCT of Delhi ) : (2019) 11 SCC 706.
"14. First, we would like to deal with the submission of the learned Senior Counsel for Respondent 2 that once the charge-sheet is filed, petition for quashing of FIR is untenable. We do not see any merit in this submission, keeping in mind the position of this Court in Joseph Salvaraj A. v. State of Gujarat...
15. Even otherwise it must be remembered that the provision invoked by the accused before the High Court is Section 482 CrPC and that this Court is hearing an appeal from an order under Section 482 CrPC....
16. There is nothing in the words of this section which restricts the exercise of the power of the Court to prevent the abuse of process of court or miscarriage of justice only to the stage of the FIR. It is settled principle of law that the High Court can exercise jurisdiction under Section 482 CrPC even when the discharge application is pending with the trial court. Indeed, it would be a travesty to hold that proceedings CRLMC No.460 of 2017 Page 41 of 70 initiated against a person can be interfered with at the stage of FIR but not if it has advanced and the allegations have materialised into a charge-sheet. On the contrary it could be said that the abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge-sheet after investigation. The power is undoubtedly conferred to prevent abuse of process of power of any court."
Similar view is taken by this Court in Joseph Salvaraj A. v. State of Gujarat; (2011)7 SCC 59; A.M. Mohan v. State : 2024 SCC Online SC 339; Mamta Shailesh Chandra v. State of Uttarakhand : (2024) SCC Online 136".
xiv) In Shaileshbhai Ranchhodbhai Patel vs. State of Gujarat :
2024 SCC OnLine 5569, the Supreme Court has held as follows:
"7. The question of law involved in these two appeals as to whether quashing of the FIR should have been refused for no other reason than that the investigating officer has filed the charge-sheet is no longer res integra. Decisions of this Court to such effect are legion. We may profitably refer to the decisions of this Court in Ruchi Majoo v. Sanjeev Majoo³, Anand Kumar Mohatta vs State (Govt. of NCT of Delhi) Home Department and Abhishek vs. State of Madhya Pradesh.
8. On the authority of the aforesaid decisions, law seems to be well-settled that the High Court under Section 482, Cr.CRLMC No.460 of 2017 Page 42 of 70
PC. retains the power to quash an FIR, even after charge- sheet under Section 173(2) thereof is filed, provided a satisfaction is reached, inter alia, that either the FIR and the charge-sheet read together, even accepted as true and correct without rebuttal, does not disclose commission of any offence or that continuation of proceedings arising out of such an FIR would in fact be an abuse of the process of law as well as of the Court given the peculiar circumstances of each particular case."
RELIED ON BY LEARNED COUNSEL FOR THE OPPOSITE PARTY No.2 Second FIR
i) In the case of Nirmal Singh Kahlon v. State of Punjab, (2009) 1 SCC 441, the Supreme Court has held as follows:
"67. The second FIR, in our opinion, would be maintainable not only because there were different versions but when new discovery is made on factual foundations. Discoveries may be made by the police authorities at a subsequent stage. Discovery about a larger conspiracy can also surface in another proceeding, as for example, in a case of this nature. If the police authorities did not make a fair investigation and left out conspiracy aspect of the matter from the purview of its investigation, in our opinion, as and when the same surfaced, it was open to the State and/or the High Court to direct investigation in respect of CRLMC No.460 of 2017 Page 43 of 70 an offence which is distinct and separate from the one for which the FIR had already been lodged."
ii) In the case of Babubhai v. State of Gujarat, (2010) 12 SCC 254, the Supreme Court has held as follows:
"21. In such a case the court has to examine the facts and circumstances giving rise to both the FIRs and the test of sameness is to be applied to find out whether both the FIRs relate to the same incident in respect of the same occurrence or are in regard to the incidents which are two or more parts of the same transaction. If the answer is in the affirmative, the second FIR is liable to be quashed. However, in case, the contrary is proved, where the version in the second FIR is different and they are in respect of the two different incidents/crimes, the second FIR is permissible. In case in respect of the same incident the accused in the first FIR comes forward with a different version or counterclaim, investigation on both the FIRs has to be conducted."
"42. Thus, it is evident that in exceptional circumstances, the court in order to prevent the miscarriage of criminal justice, if considers necessary, may direct for investigation de novo wherein the case presents exceptional circumstances."
iii) In the case of Pramatha Nath Talukdar v. Saroj Ranjan Sarkar, 1961 SCC OnLine SC 155, the Supreme Court has held as follows:
CRLMC No.460 of 2017 Page 44 of 70
"23. It will be noticed that in the test thus laid down the exceptional circumstances are brought under three categories: (1) manifest error, (2) manifest miscarriage of justice, and (3) new facts which the complainant had no knowledge of or could not with reasonable diligence have brought forward in the previous proceedings. Any exceptional circumstances coming within any one or more of the aforesaid three categories would fulfil the test. In Ram Narain v. Panachand Jain [AIR 1949 Patna 256] it was observed that an exhaustive list of the exceptional circumstances could not be given though some of the categories were mentioned. One new category mentioned was where the previous order of dismissal was passed on an incomplete record or a misunderstanding of the nature of the complaint. This new category would perhaps fall within the category of manifest error or miscarriage of justice." Issue of process
iv) In the case of Madhao v. State of Maharashtra, (2013) 5 SCC 615, the Supreme Court has held as follows:
"19. Where a Magistrate chooses to take cognizance he can adopt any of the following alternatives:
(a) He can peruse the complaint and if satisfied that there are sufficient grounds for proceeding he can straightaway issue process to the accused but before he does so he must comply with the requirements of Section 200 and record the evidence of the complainant or his witnesses.CRLMC No.460 of 2017 Page 45 of 70
(b) The Magistrate can postpone the issue of process and direct an enquiry by himself.
(c) The Magistrate can postpone the issue of process and direct an enquiry by any other person or an investigation by the police."
v) In the case of Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609, the supreme court has held as follows:
"42. No doubt, a corporate entity is an artificial person which acts through its officers, Directors, Managing Director, Chairman, etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so.
43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision.
52. A wide discretion has been given as to grant or refusal of process and it must be judicially exercised. A person ought CRLMC No.460 of 2017 Page 46 of 70 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."
Quashing of FIR / complaint
vi) In the case of Neeharika Infrastructure (P) Ltd. v. State of Maharashtra, (2021) 19 SCC 401, the Supreme Court has held as follows:
"13.12. The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. During or after investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure.CRLMC No.460 of 2017 Page 47 of 70
13.13. The power under Section 482 CrPC is very wide, but conferment of wide power requires the Court to be cautious. It casts an onerous and more diligent duty on the Court. 13.14. However, at the same time, the Court, if it thinks fit, regard being had to the parameters of quashing and the self- restraint imposed by law, more particularly the parameters laid down by this Court in R.P. Kapur and Bhajan Lal, has the jurisdiction to quash the FIR / complaint. 13.15. When a prayer for quashing the FIR is made by the alleged accused, the Court when it exercises the power under Section 482 CrPC, only has to consider whether or not the allegations in the FIR disclose the commission of a cognizable offence and is not required to consider on merits whether the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR."
OTHER RELEVANT JUDICIAL PRONOUNCEMENTS.
Application of mind The Supreme Court in the case of Pepsi Foods Ltd. v. Special Judicial Magistrate : (1998) 5 SCC 749, has held as under: -
"28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The CRLMC No.460 of 2017 Page 48 of 70 order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. b He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused."The learned Magistrate, in our opinion, shall have kept the said principle in mind."
In the case of Punjab National Bank v. Surendra Prasad Sinha: 1993 Supp (1) SCC 499, the Supreme Court has held that:
"6. It is also salutary to note that judicial process should not be an instrument of oppression or needless harassment. The complaint was laid impleading the Chairman, the Managing Director of the Bank by name and a host of officers. There lies responsibility and duty on the Magistracy to find whether the concerned accused should be legally responsible for the offence charged for.CRLMC No.460 of 2017 Page 49 of 70
Only on satisfying that the law casts liability or creates offence against the juristic person or the persons impleaded then only process would be issued. At that stage the court would be circumspect and judicious in exercising discretion and should take all the relevant facts and circumstances into consideration before issuing process lest it would be an instrument in the hands of the private complaint as vendetta to harass the persons needlessly. Vindication of majesty of justice and maintenance of law and order in the society are the prime objects of criminal justice but it would not be the means to wreak personal vengeance. Considered from any angle we find that the respondent had abused the process and laid complaint against all the appellants without any prima facie case to harass them for vendetta."
Vicarious Liability The facts in the case of Anil Khandelwal Etc vs Phoenix India and another: 2025 INSC 1069, decided recently by the Supreme Court are similar to the facts of the present case. The petitioners therein were the Chairman and Managing Director, Deputy General Manager and Chief Manager (BCMS). The complainant had taken credit facilities from the Bank of Baroda (in short "the Bank") and defaulted in payment. Bank initiated proceedings under the provisions of Securitization and CRLMC No.460 of 2017 Page 50 of 70 Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "SARFAESI Act"). As per the Bank, the outstanding recoverable dues as on the date of initiation of proceedings under the SARFAESI Act were to the tune of Rs.5,09,31,422/- (Rupees Five Crores Nine Lakhs Thirty-One Thousand Four Hundred Twenty-Two only) along with interest) As the complainant did not clear the dues after receipt of notice under Section 13(2) of the SARFAESI Act, the Bank sent a possession notice under Section 13 (4) of the SARFAESI Act where the outstanding amount had been mentioned as Rs.56,15,9,294/- (Rupees Fifty-Six Crore Fifteen Lakh Nine Thousand Two Hundred Ninety-Four only) instead of Rs.5,61,59,294/- (Rupees Five Crore Sixty-One Lakh Fifty-Nine Thousand Two Hundred Ninety-Four only). The Bank claims that the said discrepancy arose solely on account of a clerical error Without seeking any clarification from the Bank in regard to this discrepancy, respondent No.1-firm issued a legal notice dated 23rd July, 2007 to the appellants herein, namely the Chairman and Managing Director, the Deputy General Manager, and the Chief Manager of the Bank, alleging defamation on the ground that the Bank had maliciously issued the possession notices reflecting an unrealistic and false CRLMC No.460 of 2017 Page 51 of 70 outstanding amount of more than Rs. 50 crores. The Bank, in response, promptly issued a clarificatory letter dated 7th August, 2007 expressing regret for the clerical error that occurred in mentioning the amount in the possession notice pasted on the premises of the complainant -firm. But the latter filed a criminal Complaint No. 6353 of 2007 before the Magistrate, Bhiwandi for the offences under Sections 499, 500 and 501 of the IPC alleging inter-alia that, by raising the aforesaid exaggerated demand and pasting the possession notice on the premises of respondent No.1- firm with fictitious outstanding amount, the Bank and its officials had defamed respondent No. 1-firm (complainant) thereby harming its reputation and future business prospects. Process was issued against the petitioners. Their applications under Section- 482 Cr.P.C to quash the proceedings were dismissed by the Bombay High Court. While quashing the proceedings, the Supreme Court referred to its earlier decisions in Maksud Saiyed v. State of Gujarat (2008) 5 SCC 668 and Punjab National Bank v. Surendra Prasad Sinha 1993 Supp (1) SCC 499 and held as follows :-
"17. In this regard, we are benefitted of the judgment of this Court in the case of Aneeta Hada v. Godfather Travels and CRLMC No.460 of 2017 Page 52 of 70 Tours (P) Ltd.: (2012) 5 SCC 661 , wherein it was held that prosecution of the directors or officers of a company can be maintained only when the company itself is arraigned as an accused and additionally, the directors or officers must have acted in a manner that directly connects his/her conduct to the company's liability. In the absence of the company being impleaded as an accused, its directors or officers cannot be fastened with vicarious liability for offences attributable to the company."
"19. We may further observe that the learned Magistrate as well as the High Court have assumed that the appellants herein were responsible for the day-to-day affairs of the Bank and thereby the process of issuance of the so-called defamatory notice can be attributed to the appellants.
20. Suffice it to say that the appellants have been summoned in capacity of the officers of the Bank for 11 the offences punishable under the IPC. However, there is no concept of vicarious liability of the officers or directors for the offences under the IPC as is provided under special Penal Statutes such as The Negotiable Instruments Act, 1881, The Food Safety and Standards Act, 2006, The Drugs and Cosmetics Act, 1940, etc. which specifically creates such liability."
"22. Accordingly, before any officer of a Bank or a body corporate can be prosecuted for an offence under the IPC on the allegation of having acted on behalf of the institution, it is incumbent upon the complainant to produce unimpeachable material indicating the precise role of the officer in the commission of the alleged offence. Mere bald assertions of CRLMC No.460 of 2017 Page 53 of 70 vicarious liability, without foundational facts to show active participation, authorization, or deliberate omission on the part of the officer, are insufficient to justify issuance of process in such a situation. The law does not permit automatic prosecution of directors or officers merely because of their designation or official status."
"24. Hence, in the absence of any specific statutory provision under the IPC creating vicarious liability, coupled with the lack of concrete allegations or material demonstrating the individual role or culpability of the appellants for the alleged defamatory notice, their prosecution cannot be sustained. To permit continuation of criminal proceedings merely on the basis of their official designation in the Bank would amount to a misuse of judicial process, contrary to the settled principles laid down by this Court. Accordingly, the appellants have been wrongly impleaded, and the proceedings against them are liable to be quashed." Exercise of power under Section 482 of the Cr.P.C .
In the case Ch. Bhajan Lal (supra), the Supreme Court has given the categories of the cases by way of illustration, where power under Section 482 of the Cr.P.C could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, which are as under :
CRLMC No.460 of 2017 Page 54 of 70
"(1) Where the allegations made in the first information report of the complaint even if they are taken at their face value and accepted their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the Fit or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned under which a criminal proceeding is instituted to the institution CRLMC No.460 of 2017 Page 55 of 70 and continuance of the proceedings and /or where there is a specific provision in the Code of the Act concerned, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding in manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for arresting vengeance on the accused and with a view to spite him due to private and personal grudge.
In the case of Kailashben Ranchhodbhai (supra), the Supreme Court has held :-
" 8.....the duty of the High Court, when its jurisdiction under Section 482 CrPC or Article 226 of the Constitution is invoked on the ground that the Complaint/FIR is manifestly frivolous, vexatious or instituted with ulterior motive for wreaking vengeance, to examine the allegations with care and caution is highlighted in a recent decision of this Court in Mohammad Wajid v. State of U.P: (2023) 20 SCC 219"
2023 SCC Online SC 951 :
"34. At this stage, we would like to observe something important. Whenever an accused comes before the Court invoking either the inherent powers under Section 482 of the Code of Criminal Procedure (CrPC) or extraordinary jurisdiction under Article 226 of the Constitution to get the FIR or the criminal proceedings quashed essentially on the ground that such proceedings are manifestly frivolous or vexatious or instituted with the ulterior motive for wreaking vengeance, then in such circumstances the CRLMC No.460 of 2017 Page 56 of 70 Court owes a duty to look into the FIR with care and a little more closely. We say so because once the complainant decides to proceed against the accused with an ulterior motive for wreaking personal vengeance, etc., then he would ensure that the FIR/complaint is very well drafted with all the necessary pleadings. The complainant would ensure that the averments made in the FIR/complaint are such that they disclose the necessary ingredients to constitute the alleged offence. Therefore, it will not be just enough for the Court to look into the averments made in the FIR/complaint alone for the purpose of ascertaining whether the necessary ingredients to constitute the alleged offence are disclosed or not. In frivolous or vexatious proceedings, the Court owes a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection try to read in between the lines. The Court while exercising its jurisdiction under Section 482 of the CrPC or Article 226 of the Constitution need not restrict itself only to the stage of a case but is empowered to take into account the overall circumstances leading to the initiation/registration of the case as well as the materials collected in the course of investigation. Take for instance the case on hand. Multiple FIRs have been registered over a period of time. It is in the background of such circumstances the registration of multiple FIRS assumes importance, thereby attracting the issue of wreaking vengeance out of private or personal grudge as alleged."
In Achin Gupta v. State of Haryana : 2024 INSC 369, the Supreme Court has held as follows:-
CRLMC No.460 of 2017 Page 57 of 70
"20. It is now well settled that the power under Section 482 of the Cr. P.C. has to be exercised sparingly, carefully and with caution, only where such exercise is justified by the tests laid down in the Section itself. It is also well settled that Section 482 of the Cr. P.C. does not confer any new power on the High Court but only saves the inherent power, which the Court possessed before the enactment of the Criminal Procedure Code. There are three circumstances under which the inherent jurisdiction may be exercised, namely (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of Court, and iii) to otherwise secure the ends of justice.
21.... As noted above, the inherent jurisdiction under the Section, although wide, yet should be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the Section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts exist. The authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has the power to prevent such abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers, the court would be justified to quash any proceeding if it finds that the initiation or continuance of it amounts to abuse of the process of court CRLMC No.460 of 2017 Page 58 of 70 or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto."
ISSUES FOR ADJUDICATION
25. In view of the facts of the case, the submissions of the learned counsel and the statutory provisions, the following questions need to be answered while deciding this CRLMC:
i) Whether the second complaint - 1.C.C. No. 39 of 2016 is maintainable in view of the finality of the earlier judicial proceedings in Criminal Revision No. 17/12 of 2014 arising out of I.C.C. No. 58 of 2013, where the allegations were similar if not identical?
ii) Whether the filing of I.C.C. No. 39 of 2016 amounts to an abuse of the process of law, being based on the same cause of action, facts, and occurrence as the earlier complaint?
iii) Whether exercise of power by the learned JMFC, Barbil under Section 156(3) Cr.P.C. directing registration of an FIR CRLMC No.460 of 2017 Page 59 of 70 and investigation is sustainable in view of the facts of the case?
iv) Whether the non-joinder of the present petitioner No.1, i.e., IndusInd Bank Ltd, in the earlier complaint could justify re-litigation on the same facts and issues through a fresh complaint?
v) Whether in view of the nature of allegations, the complaint was maintainable against Petitioners No. 1 to 9, who were the Directors of the Bank?
vi) Whether this is a fit case for exercise of power under Section - 482 of the Cr.P.C for quashing the proceedings?
vii) Whether the FIR can be quashed, if investigation has been completed in the meanwhile?
ANALYSIS AND REASONING Maintainability of Second Complaint.
26. The Supreme Court in T.T. Antony (supra) has held that once an FIR has been investigated and concluded, a second FIR on the same facts is not maintainable where the version in the second FIR is different and they are in respect of the two different incidents/crimes, the second FIR is permissible. The complaint of CRLMC No.460 of 2017 Page 60 of 70 the accused in respect of the same incident in the first FIR comes forward with a different version or counterclaim, is also maintainable and investigation into both the FIRs are required.
27. A second complaint on the same facts, can only be entertained in exceptional circumstances, where the previous order was passed in an incomplete record or on a misunderstanding of the nature of the complaint or it was manifestly absurd, unjust or foolish or new facts which could not with reasonable diligence have been brought on record in the previous proceeding, have been brought on record. But if the on full consideration of the available materials in the earlier proceeding the learned Magistrate felt inappropriate to proceed against the accused, on a subsequent complaint being filed it cannot issue process.
28. There is no dispute about the fact that the learned JMFC, Barbil, had vide order dated 22.08.2014 in 1.C.C. No. 58 of 2013, did not find any material to proceed against petitioners No.1 to 9 and hence had dropped the proceedings. This order had been confirmed on 26.04.2016 by the learned Additional Sessions Judge by who dismissed Criminal Revision No. 17/12 of 2014 by a reasoned order. Merely because the Company was arrayed as an CRLMC No.460 of 2017 Page 61 of 70 accused in the subsequent complaint and some extra allegations added, will not improve the situation in view of the principle of "finality of litigation" which prohibits re-opening of the case having self same facts, cause of action, and occurrence. Filing another complaint by arraying the company as an accused cannot improve the case of the complainant or create liability of the Managing Director, Directors or Alternate Director. The criminal process cannot be used to harass an accused by re-adjudicating decided issues through successive complaints on the same set of facts.
29. After a careful perusal of the order dated 22.08.2014 passed by the learned JMFC Barbil in 1.CC No.58 of 2013 and order dated 26.04.2016, passed by the learned Additional Sessions Judge, Champua in Crl. Revision No. 17/12 of 2014, (where the complaint case number has been incorrectly mentioned as 1CC No 58 of 2014 in place of 1CC No 58 of 2013), I do not find that the reason for dismissal is not because the Bank had not been arrayed as an accused but on merits after considering the allegations against the Petitioners No. 1 to 9. So the plea of the Complainant in the 1CC No.39 of 2016, paragraph 11 of which has been extracted CRLMC No.460 of 2017 Page 62 of 70 earlier in this judgment and in the submissions of Mr. Acharya learned counsel for the petitioner are without any basis. The learned JMFC should, therefore, have been more careful while exercising power under Section 156 (3) Cr.P.C. and should have gone through the earlier orders when it had been stated in the complaint petition that an earlier complaint had been dismissed. Exercise of power under Section- 156 (3) of the Cr.P.C
30. As it has been settled in a catena of decisions, it is no longer res integra that while exercising jurisdiction under Section 156(3) or Section 200 of the Code of Criminal Procedure, the learned Magistrate is required to apply his/ her mind and not issue process or direct for investigation by the police mechanically. Even if the Company is an accused, as the IPC does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company the learned Magistrate should have considered if the second complaint against the Directors was maintainable and an investigation was necessary when the earlier complaint had been dismissed with reasons and the dismissal confirmed by the learned Additional Sessions Judge. CRLMC No.460 of 2017 Page 63 of 70
31. As stated earlier, 1CC No.58 of 2013 had not been dropped because the Bank had not been arrayed as an accused nor was Crl. Revision No. 17/12 of 2014 dismissed on technical grounds, as submitted by the learned counsel for the complainant. But without going through the earlier orders. Allegations regarding Section 409 of the IPC were available in the complaint though the offence had not been specifically mentioned. But the learned JMFC without going through the earlier orders exercised power under Section 156 (3) of the Cr.P.C mechanically which is vulnerable and, therefore, liable for interference.
Vicarious Liability
32. As held in the case of Maksud Saiyed (supra), Keki Hormusji Gharda (supra), S.M.S. Pharmaceuticals Ltd. (supra) and Anil Khandelwal (supra), an individual(s) who has committed any offence requiring mens rea can be made an accused, along with the company, if there is sufficient evidence of his / her active role coupled with criminal intent so as to make them personally liable or as part of a conspiracy. But vicarious liability will not be attracted in absence of such provision in the statute.
CRLMC No.460 of 2017 Page 64 of 70
33. As the IndusInd 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. Merely because the bank has been arrayed as an accused in the second complaint, it will not improve the situation as because the Director have not committed any offence in their individual capacity. Where the statutory regime itself provides for vicarious liability, by specifically incorporating such a provision in the statute (as in the case of the Negotiable Instruments Act) and allegations attracting the provision of vicarious liability are available in the complain, the Directors can be arrayed as accused. The IPC does not contain any such provision, hence the subsequent complaint making the self same allegations against the Directors but by arraying the Bank as an accused, is misconceived as well as vexatious. Quashing of FIR after filing of chargesheet
34. As decided in the cases referred to above quashing of FIR is permissible even after filing of chargesheet, if the FIR even accepted as true and correct without rebuttal, does not disclose commission of any offence; or that continuation of proceedings arising out of such an FIR would in fact be an abuse of the process CRLMC No.460 of 2017 Page 65 of 70 of law as well as of the Court. So even if FIR may have been registered by the police, since the complaint itself was misconceived, the order directing for registration of FIR and investigation can be set aside.
35. It has been decided by the Supreme Court in the case of Anand Mohanta (supra) that the High Court can exercise jurisdiction under Section 482 Cr.P.C. even when the discharge application is pending with the trial court and that abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge-sheet after investigation. It has been further held that it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced and the allegations have materialised into a charge-sheet. Exercise of power under Section 482 of the Cr.P.C to prevent abuse of process of law.
36. The concept of abuse of process of law arises when legal proceedings are initiated with a mala fide intent, primarily to harass, intimidate, or exert undue pressure on the opposite party, particularly after the failure of earlier legal remedies. But there is no gainsaying the fact that power under Section 482 Cr.P.C. is to be CRLMC No.460 of 2017 Page 66 of 70 exercised sparingly, with caution and only when such exercise is justified by the facts and circumstances of the case.
37. In the case of Ch Bhajan Lal (supra), the Hon'ble Supreme Court enumerated illustrative categories wherein criminal proceedings may be quashed, including cases where the proceedings are manifestly attended with mala fide and are maliciously instituted with an ulterior motive to achieve a private objective. In the present case, the complainant, having failed to obtain relief in the earlier complaint and in subsequent revision challenging the dismissal of the complaint, has sought to reopen the same issue by filing a fresh complaint based on identical facts and allegations. The averment in the plaint and the submission of the learned counsel for the complainant that the earlier complaint had been dropped on technical grounds is misconceived and baseless. This conduct clearly reflects an attempt to circumvent the binding judicial findings rendered in the earlier proceedings and amounts to abuse of the process of Court.
38. In the case of Priyanka Srivastava (supra), it was observed by the Supreme Court that a number of cases (complaints) pertaining to fiscal sphere, matrimonial dispute / family disputes, commercial offences, medical negligence cases, corruption cases and the cases CRLMC No.460 of 2017 Page 67 of 70 where there is abnormal delay/laches in initiating criminal prosecution, as are illustrated in Lalita Kumari's are being filed. Therefore, the Court gave a direction for giving a direction that an application under Section 156(3) Cr.P.C be supported by an affidavit so that the person making the application should be conscious and also endeavour to see that no false affidavit is made as because if the affidavit is found to be false, he will be liable for prosecution in accordance with law. In the present case, the allegations even if accepted to be true, do not make out any offence against the Directors.
CIVIL DISPUTE
39. The allegations in the complaint relate to an alleged unauthorized transfer of funds by some officers of the Bank. As regards the present petitioners, the allegation in the first complaint as well as the subsequent impugned complaint is that they did not return the money of the complainant after being informed by the complainant that it was stolen or misappropriated. This is not sufficient to proceed against them. As held by the Supreme Court in the case of Sunil Bharti Mittal (supra), Directors cannot be held criminally liable solely by virtue of their positions unless there is CRLMC No.460 of 2017 Page 68 of 70 material indicating their active role in the offence. In the present case, the dispute, at best, pertains to civil liability or breach of contract, which is already the subject of a pending civil suit. Hence, Criminal proceedings cannot be used as a tool to realize money, which should be the subject matter of a civil dispute. CONCLUSION
40. In view of the above discussion, I am satisfied that this is a fit case where in exercise of power under Section 482 of the Cr.P.C, the order dated 06.12.2016 passed in 1CC case No 39 of 2016 by the learned JMFC, Barbil; the proceedings in 1.C.C Case No. 39 of 2016 and any action taken pursuant to order dated 06.12.2016 by the learned JMFC Barbil, are liable to be quashed.
41. It is accordingly ordered that order dated 06.12.2016 passed in 1CC case No 39 of 2016 by the learned JMFC, Barbil sending the complaint to the Barbil Police Station and directing the IIC Barbil Police Station to register a case and conduct investigation and the further proceedings in 1CC Case No. 39 of 2016 are quashed.
42. All pending interim applications stand disposed of. CRLMC No.460 of 2017 Page 69 of 70
43. Quashing of the proceedings in 1CC Case No. 39 of 2016 should not have any effect on CRLMC No. 1356 of 2019, CRLMC No. 1729 of 2019, CRLMC No. 1730 of 2019 and CRLMC No. 1731 of 2019 which arise out of a separate complaint - 1CC No.5 of 2013, filed against the officers of IndusInd bank, who were posted at Barbil at the relevant time, which shall be decided on their own merit.
44. Copy of the judgment along with the records of complaint cases be returned to the trial Court forthwith.
...........................
(Savitri Ratho) Judge Orissa High Court, Cuttack.
Dated, the 3rd September, 2025/RKS Signature Not Verified Digitally Signed Signed by: RANJAN KUMAR SETHI Reason: Authentication Location: ORISSA HIGH COURT Date: 18-Sep-2025 20:56:08 CRLMC No.460 of 2017 Page 70 of 70