TMI Blog2009 (9) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... he extent that it directs issuance of processes against the two accused-petitioners, be sustained and the same shall, accordingly, stand set aside and quashed. - CRIMINAL PETITION NO. 274 OF 2008 - - - Dated:- 3-9-2009 - I.A. ANSARI, J. Ms. M. Hazarika, M. Sharma and P. Upadhyay for the Petitioner. U. Bhuyan, B. Chakraborty, I. Ahmed and A. Hazarika for the Respon-dent. JUDGMENT 1. This is an application, made under section 482 of the Code of Criminal Procedure, 1973, seeking to set aside the order, dated 7-8-2008, passed by a learned Judicial Magistrate, Guwahati, in C.R. Case No. 7889 of 2007, whereby the learned Judicial Magistrate, having taken cognizance of offences under sections 420 and 409, read with section 34, of the Indian Penal Code, 1860, directed issuance of process to, amongst others, the present accused-petitioners, petitioner No. 1 being accused No. 1 and petitioner No. 2 being accused No. 2 in the complaint case aforementioned. 2. I have heard Ms. M. Hazarika, learned senior counsel for the accused-petitioners, and Mr. U. Bhuyan, learned counsel, appearing on behalf of the complainant-opposite party. 3. Before entering into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instructions of accused No. 2, namely, the managing director of the accused company. The complainant was further asked by accused No. 4 to pay Rs. 1,00,000 within five days to be able to take back the vehicle. Having been left with no alternative, the complainant on 28-3-2006, paid Rs. 1,00,000. However, the complainant was asked to wait for some more time on the ground that certain formalities were required to be completed. Eventually the complainant was served with a letter, dated 8-6-2006, issued by the branch manager of the accused company, whereby the complainant was asked to pay the balance dues within a period of three days and take delivery of the vehicle or else, the vehicle would be disposed of. When the complainant went to bring the vehicle, he came to learn that the accused had already sold the vehicle by holding auction. The accused have, thus, resorted to "cheating" for making wrongful gain and, in the process, caused wrongful loss to the complainant inasmuch as they induced the complainant to enter into a fresh agreement, but they auctioned the vehicle. 5. Appearing on behalf of the accused-petitioners, it has been submitted by Ms. Hazarika, learned senior coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complainant avoided receipt of the said notice. Hence, instead of making repayment and obtaining the vehicle, the complainant, after the vehicle had already stood sold by auction, lodged the present complaint making false and frivolous allegations. 6. It is also contended by Ms. Hazarika that the dispute, if any, between the parties concerned is a dispute of civil nature and the action taken, on the basis of the complaint, in question, is abuse of the process of law. Hence, the complaint may be quashed so far as the accused company ( i.e., petitioner No. 1) and its managing director ( i.e., petitioner No. 2) are concerned. 7. Controverting the submissions made on behalf of the accused-petitioners, Mr. Bhuyan, learned counsel, has submitted that the facts stated in the complaint, if considered in their correct perspective, clearly show that the accused persons, named in the complaint, had committed offences under sections 420 and 409, read with section 34, of IPC. This apart, accused petitioner No. 2, according to Mr. Bhuyan, being the managing director of the accused company, is liable for prosecution for the offences aforementioned inasmuch as the accused company ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, other-wise also, not sustainable in law. 10. Laying down the scope of interference by the High Court in matters of quashing of FIR or complaint, the Apex Court, in the leading case of State of Haryana v. Bhajan Lal [1992] Supp. (1) SCC 335, 378 observed as follows: "102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under article 226 of the inherent powers under section 482 of the Code, which we have extracted and reproduced above, we give the following categories of cases by way of illustration, wherein such power could be exercised either to prevent abuse of the process of the any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines of rigid formulae and to give an exhaustive list of myriad kinds of cases, wherein such power should be exercised : (1) Where the allegations made in the First Information Report or the complaint, even if they are taken at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction on the Court to act according to its whim or caprice." (p. 379) [Emphasis supplied] 12. It is clear from a close reading of the principles laid down in the case of R.P. Kapur ( supra ) and Bhajan Lal s case ( supra ) that broadly speaking, quashing of a First Information Report or a complaint is possible ( a ) when the allegations made in the First Information Report or the complaint, even if taken at their face value and accepted in their entirety as true, do not prima facie constitute any offence or make out a case against the accused; ( b ) when the uncontroverted allegations made in the FIR or complaint and evidence collected in support of the same do not disclose the commission of any offence and/or make out a case against the accused; and ( c ) when the allegations made in the FIR or complaint are so absurd and inherently improbable that on the basis of such absurd and inherently improbable allegations, no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. 13. Having clarified the position of law with regard to the quashing of complaint, what, now, needs to be pointed out is the difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming into possession of the property, the offence of "cheating" is one, wherein the accused has dishonest intention from the very commencement of the transaction. 17. In the light of the distinction, which exist between an offence of "criminal breach of trust" and an offence of "cheating", it becomes clear that if a person is accused of having committed an offence of "criminal breach of trust", he cannot, on the same facts and in the same breath, be accused to have committed the offence of "cheating" too. In the present case, the learned Magistrate has taken cognizance of offences under both penal provisions, namely, sections 420 and 409 of IPC. Having taken cognizance of both the offences aforementioned, the learned Magistrate has, accordingly, directed issuance of processes. This reflects non-applica- tion of mind inasmuch as the accused must know as to whether he is summoned to defend himself against the accusation of "criminal breach of trust" or "cheating", for, he cannot be, in one and the same breath, be accused of having committed both the said offences. 18. Coupled with the discussions held above, though prosecution of a corporate body, in the light of the law, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Pharmaceuticals Ltd. s case ( supra ), was rendered on a reference being made for determination of the following questions : "( a )Whether for purposes of section 141 of the Negotiable Instruments Act, 1881, it is sufficient if the substance of the allegation read as a whole fulfil the requirements of the said section and it is not necessary to specifically state in the complaint that the persons accused was in charge of or responsible for, the conduct of the business of the company? ( b )Whether a director of a company would be deemed to be in charge of and responsible to, the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary? ( c )Even if it is held that specific averments are necessary, whether in the absence of such averments the signatory of the cheque and or the managing director or joint managing director, who, admittedly, would be in charge of the company and responsible to the company for conduct of its business, could be proceeded against?" (p. 567) 22. As the three-Judge Bench, in S.M.S. Pharmaceuticals Ltd. s case ( supra ), has answered the question ( c ) in the affirmat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the conduct of the business of the company, liable for the offence along with the company. The proviso to the sub-section (1) of section 141 contains an escape route for persons, who are, otherwise, liable if such a person can prove that the offence was committed without his knowledge or that the offence was committed despite the fact that he had exercised all due diligence to prevent commission of the offence. The relevant observations, made at paragraph 5, in this regard, read as under : "5. The normal rule in the cases involving criminal liability is against vicarious liability, that is, no one is to be held criminally liable for an act of another. This normal rule is, however, subject to exception on account of specific provision being made in statutes extending liability to others. Section 141 of the Act is an instance of specific provision which in case an offence under section 138 is committed by a company, extends criminal liability for dishonour of cheque to officers of the company. Since the provision creates criminal liability, the conditions have to be strictly complied with. The conditions are intended to ensure that a person, who is sought to be made vicariously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for day-to-day functioning of the company. These are matters which form part of resolutions of board of directors of the company. Nothing is oral. What emerges from this is that the role of a director in a company is 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 every day affair. We have discussed about the possession of a director in a company in order to illustrate the point that there is no magic as such in a particular work, be it director, manager or secretary. It all depend upon 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 department. Will it be possible to prosecute a Secretary of Department-B regarding 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s wholly inapplicable to the facts of the present case. 28. Be that as it may, what, now, needs to be pointed out is that in terms of the agreement, in question, executed by the parties concerned, the accused company was, admittedly, authorised to take possession of the vehicle if there was default in making repayment of the loan amount. It is also not in dispute that the accused company was also authorised, in terms of the agreement, in question, to dispose of the vehicle for realisation of its dues. In the light of these admitted facts, when the contents of the complaint, in question, are scrutinised, it clearly transpires that even according to the complainant, complete repayment of loan, in terms of the agreement, had not taken place. In fact, there is not even a whisper in the complaint that repayment had been made by the complainant consistent with the terms of the loan. Hence, the fact that there was default on the part of the complainant in honouring the terms of the agreement, in question, is not in dispute. In such circumstances, the accused petitioners cannot be said to have cheated the complainant inasmuch as the agreement, whereunder the complainant had received th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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