TMI Blog2008 (10) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... branch is said to be an independent entity. Respondent No. 3 who has been arrayed as accused No. 3 in the FIR was the Branch Manager of the company at Chennai. Indisputably, all interactions and transactions by and between the appellant and the company, if any, were made by the complainant only with the respondent No. 3. HELD THAT:- The allegations contained in the FIR, do not disclose an offence against the respondent Nos 1 and 2. They have in their individual capacity been charged for commission of offences of cheating, criminal breach of trust and forgery. As there had never been any interaction between the appellant and them, the question of any representation which is one of the main ingredients for constituting an offence of cheating, as contained in Section 415 of the IPC, could not arise. Similarly, it has not been alleged that they were entrusted with or otherwise had dominion over the property of the appellant or they have committed any criminal breach of trust. So far as allegations in regard to commission of the offence of forgery are concerned, the same had been made only against the respondent No. 3 and not against the respondent No. 2. Sending a copy th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the respondents as the contents of the first information report disclose an offence of cheating, criminal breech of trust and forgery. (2) While admittedly the investigation was not even complete, the High Court could not have relied upon the documents furnished by the defendants either for the purpose of finding out absence of mens rea on the part of the applicants or their involvement in the case. (3) Respondent Nos. 1 and 2 herein being high ranking officers of M/s. Shares and Securities Ltd., a company dealing in shares, were vicariously liable for commission of the offence being in day to day charge of the affairs thereof. (4) An offence of forgery being a serious one and in view of the fact that the respondent No. 2 forwarded a letter purporting to authorize the accused No. 3 to transfer shares to the National Stock Exchange, he must be held to have the requisite intention to commit the said offence along with the respondent No. 3. (5) In any view of the matter, the respondent No. 3 being not an applicant before the High Court, the entire criminal prosecution could not have quashed by the High Court. 4. Ms. Indu Malhotra, learned senior counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch power could be exercised either to prevent abuse of the process of 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 or 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 their face value and accepted in 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 F.I.R. 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 FIR 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. ... 5. Where the allegations made in the FIR or compla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocedural Code, however exhaustive, cannot expressly provide for all time to come against all the cases or points that may possibly arise, and in order that justice may not suffer, it is necessary that every court must in proper cases exercise its inherent power for the ends of justice or for the purpose of carrying out the other provisions of the Code. It is well established principle that every Court has inherent power to act ex debito justitiae to do that real and substantial justice for the administration of which alone it exists or to prevent abuse of the process of the Court. In Sunita Jain v. Pawan Kumar Jain and Ors. (2008)2SCC705 , it is stated : In exercising its jurisdiction under Section 561-A the High Court would not embark upon an enquiry as to whether the evidence in question is reliable or not. That is the function of the trial Magistrate, and ordinarily it would not be open to any party to invoke the High Court's inherent jurisdiction and contend that on a reasonable appreciation of the evidence the accusation made against the accused would not be sustained. In State of Orissa and Anr. v. Saroj Kumar Sahoo (2005)13SCC540 , this Court stated the law, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sections 420, 406 IPC. After inquiry, the police filed a report stating that the case was essentially of a civil nature and no offence was made out. The complainant brought the matter to the Superintendent of Police. As per the directions of the Superintendent of Police, the case was investigated by the Crime Branch and a fresh report was filed under Section 173 IPC. On receipt of the report, the Magistrate took cognizance of the offences under Sections 420 and 406 IPC. Thereupon, the appellant/accused filed an application for discharge and the accused was discharged by the Magistrate. The complainant filed a revision before the Sessions Court and the revision was dismissed. On further revision by the complainant, the High Court set aside the order of the Magistrate and directed the trial of the criminal case on merits. This was challenged on the ground that the second revision was not maintainable. A Bench consisting of three Judges of this Court held: ...though the revision before the High Court under Sub-section (1) of Section 397 is prohibited Sub-section 3 thereof, inherent power of the High Court is still available under Section 482 of the Code and as it is paramoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Courts is to see that a person who is apparently innocent is not subjected to persecution and humiliation on the basis of a false and wholly untenable complaint. 11. In the aforementioned backdrop, we may now examine as to whether the FIR lodged by the appellant makes out any case for proceeding against the respondent. 12. We may, for the said purpose, notice the ingredients of Section 420 and 406 of the Indian Penal Code. The ingredients of Section 420 of the Indian Penal Code are as follows: i) Deception of any persons; ii) Fraudulently or dishonestly inducing any person to deliver any property; or iii) to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. Section 406 of the Indian Penal Code reads, thus: 406. Punishment for criminal breach of trust. -Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. In Popular Muthiah v. State represented by Inspector of Police (2006)7SCC296 , it was opined: While exercising its appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulties, became the Directors of the said M/s. RSR Securities Ltd. It also stands admitted that the respondent No. 3 resigned from the post of Branch Manager on or about 25.10.2002. 17. The records before us also show that Demat Fixed Accounts were being operated by Sridhar, brother of the appellant. It does not appear that any transaction involving purchase and sale of any share was entered into by and between the appellant and the company at any point of time, although the accounts of the RSR Securities had been opened for trading in shares. 18. Apparently, the First Information Report does not contain any allegation against the appellant No. 1. 19. The principal allegations therein are only against the third respondent which may be enumerated hereinafter: (1) He, without the knowledge and consent of the complainant with mala fide intention, operated the account maintained in her name. (2) He promised to take over the liabilities of the company's account R- 14 and at his instance only the appellant and her husband resigned from the company and he and Mr. Sridhar became the Directors. (3) Accused No. 3 promised to pay a sum of ₹ 9.57 lacs being the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst Information, a notice was issued by the appellant against the respondents herein on 15.10.2002, whereas the address of respondent Nos. 1 and 2 were shown as 404, Embassy Centre, Nariman Point, Mumbai - 400 021 and 302, Veena Chambers, 21, Dalal Street, Fort, Mumbai - 400 001 respectively. However, in the complaint petition, they were shown to be residents of Chennai. 23. In the aforementioned factual backdrop, we although do not agree with the approach of the High Court, concur with its conclusion. The allegations contained in the First Information Report, therefore, do not disclose an offence against the respondent Nos 1 and 2. They have in their individual capacity been charged for commission of offences of cheating, criminal breach of trust and forgery. 24. As there had never been any interaction between the appellant and them, the question of any representation which is one of the main ingredients for constituting an offence of cheating, as contained in Section 415 of the Indian Penal Code, did not and could not arise. 25. Similarly, it has not been alleged that they were entrusted with or otherwise had dominion over the property of the appellant or they have co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ralyse the functioning of such company. It need not be impressed that for prosecution for offences under the Penal Code the complainant has to make out a prima fade case against the individuals concerned, regarding their acts and omissions which constitute the different ingredients of the offences under the Penal Code. It cannot be overlooked that there is a basic difference between the offences under the Penal Code and acts and omissions which have been made punishable under different Acts and statutes which are in nature of social welfare legislations. For framing charges in respect of those acts and omissions, in many cases, mens rea is not an essential ingredient; the concerned statue imposes a duty on those who are in charge of the management, to follow the statutory provisions and once there is a breach or contravention, such persons become liable to be punished. But for framing a charge for an offence under the Penal Code, the traditional rule of existence of mens rea is to be followed. In Hira Lal Hari Lal Bhagwati v. CBI, New Delhi 2003CriLJ3041 , it has been held: 32. Likewise the ingredients of Section 420 of the Indian Penal Code are also not made out. There is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. 529) it is said that penal statutes must be construed strictly. At page 530 of the said treatise, referring to U.S. v. Wiltberger (1820) 2 Wheat (US) 76, it is observed, thus: The distinction between a strict construction and a more free one has, no doubt, in modern times almost disappeared, and the question now is, what is the true construction of the statute? I should say that in a criminal statute you must be quite sure that the offence charged is within the letter of the law. This rule is said to be founded on the tenderness of the law for the rights of individuals, and on the plain principle that the power of punishment is vested in the Legislature, and not in the judicial department, for it is the Legislature, not the Court, which is to define a crime and ordain its punishment. In Tuck v. Priester (1887) 19 QBD 629 which is followed in London and County Commercial Properties Investments v. Attn Gen. (1953) 1 WLR 312, it is stated: We must be very careful in construing that section, because it imposes a penalty. If there is a reasonable interpretation, which will avoid the penalty in any particular case, we must adopt that construction. Unless penalties are impos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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