Full Judgment Text
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 2328 OF 2022
DEEPAK GABA AND OTHERS ... APPELLANTS
VERSUS
STATE OF UTTAR PRADESH AND ANOTHER ... RESPONDENTS
J U D G M E N T
SANJIV KHANNA, J.
This appeal by Jotun India Private Limited (JIPL), Deepak
Gaba - Regional Sales Manager - North (Decorative), and Sanjay
Ramachandran Nair - Sales and Marketing Director (Decorative),
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takes exception to the order dated 30 March 2022, whereby the
High Court of Judicature at Allahabad has dismissed their petition
1
under Section 482 of the Code of Criminal Procedure, 1973 ,
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challenging the summoning order dated 19 July 2018 passed by
the Additional Chief Judicial Magistrate, Court No. 8, Ghaziabad,
Uttar Pradesh, the operative portion of which, reads as under:
Signature Not Verified
Digitally signed by
BABITA PANDEY
Date: 2023.01.02
17:09:21 IST
Reason:
“On the basis of evidence available on records and on
the basis of statement of Complainant, the charge is
1
For short, the ‘Code’.
Criminal Appeal No.2328 of 2022 Page 1 of 23
appearing prima facie regarding showing forged
demand of Rs. 6,37,252.16 against the Complainant by
the Opponents Manager Jotun India Pvt. Ltd. Delhi,
Chief Manager Jotun India Pvt. Ltd. Andheri East,
Mumbai .
Hence, the Opponents Manager Jotun India Pvt. Ltd.
through Chief Manager Jotun India Pvt. ltd. Andheri
East, Mumbai is liable to (be) summoned for trial in
section 406 I.P.C. for trial prima facie.”
( emphasis supplied )
2. Interestingly, in the cause title of the private complaint filed by
Shubhankar P. Tomar, the proprietor of Adhunik Colour Solutions,
respondent no. 2 - complainant, states that the complaint was
directed against:
(a) Manager, JIPL, having its office at Saket District Centre, New
Delhi;
(b) Chief Manager, JIPL, having its office at Andheri East,
Mumbai;
2
(c) Jotun S/S Hystadveien, Sanddefjord, Norway ; and
3
(d) Orkala ASA Nedre Skoyen vei, Oslo, Norway .
3. The Manager and the Chief Manager, JIPL have not been named
and identified in the complaint. Neither does the summoning order
name the Manager or the Chief Manager, JIPL, who have been
2
For short, ‘Jotun S/S’.
3
For short, ‘Orkala ASA’.
Criminal Appeal No.2328 of 2022 Page 2 of 23
summoned to stand trial under Section 406 of the Indian Penal
4
Code, 1860 .
4. It is an accepted and admitted position that JIPL is a company
incorporated under the laws of India and is a part of multinational
group mainly dealing in decorative paints and performance coatings
(marine, protective and powder coatings). JIPL and Shubhankar P.
Tomar, the proprietor of respondent no. 2 - complainant,
Ghaziabad, Uttar Pradesh, had entered into dealership
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agreements , for supply and purchase of decorative paints in the
State of Uttar Pradesh and Delhi region respectively.
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5. On 27 September 2016, JIPL filed two separate criminal
complaints under Section 138 of the Negotiable Instruments Act,
6
1881 against Shubhankar P. Tomar, on account of dishonour of
cheque no. 463151 drawn on Canara Bank, Patparganj Branch,
4
For short, the ‘IPC’.
5
The dates of execution of these agreements are disputed. As per the appellants, the agreements are
dated 11th April 2012 and 27th October 2013. As per respondent No. 2 - complainant, the agreements
were executed on 20th March 2012 and 30th January 2013. The complaint filed by respondent no. 2 -
complainant refers to a third agreement dated 16th May 2014. In the counter affidavit filed by
respondent no. 2 - complainant before this court, execution of the agreement dated 20th March 2012
is accepted. It is stated that despite repeated protests, a copy of the agreement dated 20th March 2012
was not furnished to respondent no. 2 - complainant. However, no such assertion is made with regard
to the agreement dated 30th January 2013 and 16th May 2014. In fact, an extract of the agreement
dated 16th May 2014 is enclosed as Annexure R2/5 to the counter affidavit. The appellants have relied
on the clauses of the agreement dated 11th April 2012 enclosed as Annexure P-1, as per which the
dealer had agreed to deliver the products to JIPL’s direct clients, when requested and if within a
reasonable distance from the location of the dealer. Another clause permitted JIPL to enter into a direct
contractual relationship with specific customers, if in the opinion of JIPL they could be served better by
JIPL. In such situations the dealer had option to act as an intermediary. The agreement has several
clauses relating to prices, invoice and payment. For the purpose of this decision, we are not required
to examine and decide these controversies and disputes.
6 For short, the ‘NI Act’.
Criminal Appeal No.2328 of 2022 Page 3 of 23
Delhi for Rs. 4,99,610/-, and cheque no. 003252 drawn on HDFC
Bank, Chander Nagar, Ghaziabad, Uttar Pradesh for Rs. 1,93,776/-
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, both dated 8 August 2016. As per the complaints, the cheques
were drawn by respondent no. 2 - complainant for discharge of the
outstanding amount payable by him to JIPL. The cheques on
presentation were dishonoured due to ‘insufficient funds’ vide
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memo issued by the respective banks on 12 August 2016.
Thereupon, legal notice of demand was issued on behalf of JIPL by
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speed post and courier on 20 August 2016, which as per the
tracking report of the postal authorities, was served on the
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Ghaziabad address on 24 August 2016, albeit the notice issued at
the Delhi address was returned by the postal authorities with the
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remark “ item delivery attempt/unclaimed ” dated 23 August 2016.
6. The facts stated noted above, though admitted, do not find any
mention in the private complaint filed by respondent no. 2 -
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complainant on 23 December 2017, which is the subject matter of
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the present appeal and in which the summoning order dated 19
July 2018 was passed by the Additional Chief Judicial Magistrate,
Ghaziabad, which order, as noticed above, has been upheld by the
High Court.
Criminal Appeal No.2328 of 2022 Page 4 of 23
7. The private complaint filed by respondent no.2- complainant
accepts the factum of commercial relationship between the parties,
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and states that the agreements dated 20 March 2012, 30 January
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2013, and 16 May 2014 were executed. It is not specifically
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alleged that copies of agreements dated 30 January 2013 and 16
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May 2014 were not furnished. Regarding the agreement dated 20
March 2012, it is alleged that the agreement was not provided and
therefore, respondent no. 2 - complainant had not carried out any
work. However, supplies were made on the Ghaziabad account. It
is alleged that respondent no. 2 - complainant had given two blank
cheques bearing Nos. 580251 drawn on the Bank of Baroda and
003251 drawn on HDFC Bank as security when they had executed
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the agreements dated 20 March 2012 and 30 January 2013. JIPL
were not issuing bills on time despite reminders, but would insist
upon payment of money. One forged bill of Rs.79,752/- was raised
despite not ordering any goods, and this amount was shown as the
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balance payable to JIPL as on 30 March 2013. This bill was
withdrawn and taken back, as respondent no. 2 - complainant had
refused to make payment towards a false bill. Cheque bearing no.
463151 drawn on Canara Bank was given as security for a new
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dealership/direct customer agreement dated 16 May 2014. For
this, written confirmation was taken from Saurav Gaur, a person
Criminal Appeal No.2328 of 2022 Page 5 of 23
authorised by JIPL. Further, JIPL would send goods to respondent
no. 2 - complainant and issue bills in their name, without asking
them. Respondent no. 2 - complainant was also asked to collect the
money from third parties. These pleas, when escalated with JIPL,
were ignored. Bill of Rs. 53,215/- in the name of respondent no. 2 -
complainant, was sent by JIPL to Manav Rachna International
directly. Another bill of Rs. 52,000/- was issued in the name of
respondent no. 2 - complainant, but they were not concerned
whatsoever with the said bill. The bills issued were paid by
respondent no. 2 - complainant by bank transfer to JIPL.
Respondent no. 2 - complainant was falsely billed to the extent of
Rs. 2,00,000/-. Dhiraj and Saurabh Gaur of JIPL had also forged a
bill of Rs. 4,33,633.47p. Respondent no. 2 - complainant had
nd
protested by e-mail on 2 December 2014 and several reminders
were sent thereafter. Respondent no. 2 - complainant had
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thereupon informed JIPL on 13 July 2015 and 19 August 2015
that 242 buckets of 20 litres and 4 litres were available and should
be taken back and adjusted against the outstanding amount.
However, no reply was received in spite of reminders. E-mails were
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also written on 4 January 2016 and 11 January 2016. Since there
was no response from JIPL, respondent no. 2 - complainant had
written letters to Jotun S/S and Orkala ASA, the shareholders of
Criminal Appeal No.2328 of 2022 Page 6 of 23
JIPL. They had also sent a registered notice to JIPL stating that Rs.
6,37,252.16p., shown as outstanding amount due and payable by
respondent no. 2 - complainant to JIPL, was forged and incorrect.
8. At the pre-summoning evidence stage, two witnesses, namely
Shubhankar P. Tomar and his employee Sakshi Tilak Chand, were
examined. Shubhankar P. Tomar had deposed that JIPL had
violated the terms of service and had cheated him, and a wrong
outstanding amount of Rs. 6,37,252.16p. had been shown as
payable. He had not received a copy of the written agreement for
the purchase of paints from JIPL. He had furnished one blank
cheque to JIPL. JIPL would not send invoices on purchase of the
goods. Thereafter, JIPL started selling goods to third parties
showing that the goods were being sold to respondent no. 2 -
complainant. Despite raising objections with the sales manager and
manager, JIPL had continued to sell goods to third parties in the
name of respondent no. 2 - complainant. Demand of Rs.
6,37,252.16p. was raised against them till the year 2016, in respect
of which, a notice was also issued.
9. Sakshi Tilak Chand had deposed that he was working for
respondent no. 2 - complainant and used to interact with JIPL.
There were discrepancies in the goods ordered by respondent no.
Criminal Appeal No.2328 of 2022 Page 7 of 23
2 - complainant, and the goods delivered by JIPL. The customers
would not accept the goods on account of colour mismatch. When
the issue was raised, JIPL had asked them to keep the goods, and
they would take the goods later. Despite visiting the offices of JIPL
and filling up forms for return of the goods, no concrete steps were
taken. The goods were never taken back. JIPL would issue
statement of accounts without deducting or giving credit of the
goods returned by respondent no. 2 - complainant.
10. The private complaint filed by respondent no. 2 - complainant had
invoked Sections 405, 420, 471, and 120B of the IPC. However, by
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the order dated 19 July 2018, summons were directed to be issued
only under Section 406 of the IPC, and not under Sections 420, 471
or 120B of the IPC. We have quoted the operative and reasoning
portion of the summoning order, that records in brief the assertions
in the complaint, to hold that respondent no. 2 - complainant had
shown that “ a forged demand of Rs. 6,37,252.16p had been raised
by JIPL, which demand is not due in terms of the statements made
by Shubhankar P. Tomar and Sakshi Tilak Chand ”. The order
states that respondent no. 2 - complainant had filed photocopy of
“one” e-mail as per documents 1 to 34, but the narration and the
contents of the e-mail is not adverted to and elucidated.
Criminal Appeal No.2328 of 2022 Page 8 of 23
11. In case of a private complaint, the Magistrate can issue summons
when the evidence produced at the pre-summoning stage shows
that there is sufficient ground for proceeding against the accused.
The material on record should indicate that the ingredients for
taking cognizance of an offence and issuing summons to the
7
accused is made out.
12. In the present case, the trial court did not issue summons under
Sections 420 and 471 of the IPC, or for that matter, invoke the
provision relating to conspiracy under Section 120B of the IPC.
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Although the summoning order dated 19 July 2018 does not deal
with these sections of the IPC, we deem it imperative to examine
the ingredients of the aforesaid sections, and Section 406 of the
IPC, and whether the allegations made in the complaint attract the
penal provisions under the relevant sections of the IPC. We have
undertaken this exercise in order to carry out a complete and
comprehensive analysis of the factual matrix and the legal
provisions, and rule out possibility of an error to the detriment of
respondent no. 2 - complainant.
7
Dipakbhai Jagdishchndra Patel v. State of Gujarat , (2019) 16 SCC 547; Sunil Bharti Mittal v. Central
Bureau of Investigation , (2015) 4 SCC 609; and Pepsi Foods Ltd. v. Judicial Magistrate , (1998) 5 SCC
749. Proviso to Section 200 of the Code is not applicable in the present case.
Criminal Appeal No.2328 of 2022 Page 9 of 23
8
13. Section 406 of the IPC prescribes punishment for breach of trust
which may extend to three years or with fine or with both, when
ingredients of Section 405 of the IPC are satisfied. For Section 406
of the IPC to get attracted, there must be criminal breach of trust in
9
terms of Section 405 of the IPC.
For Section 405 of the IPC to be attracted, the following have
to be established:
(a) the accused was entrusted with property, or entrusted with
dominion over property;
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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.
9
405. Criminal breach of trust . —Whoever, being in any manner entrusted with property, or with any
dominion over property, dishonestly misappropriates or converts to his own use that property, or
dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode
in which such trust is to be discharged, or of any legal contract, express or implied, which he has made
touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal
breach of trust".
Illustrations
(b) A is a warehouse-keeper. Z going on a journey, entrusts his furniture to A, under a contract that it
shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods.
A has committed criminal breach of trust.
(c) A, residing in Calcutta, is agent for Z, residing at Delhi. There is an express or implied contract
between A and Z, that all sums remitted by Z to A shall be invested by A, according to Z's direction. Z
remits a lakh of rupees to A, with directions to A to invest the same in Company's paper. A dishonestly
disobeys the directions and employs the money in his own business. A has committed criminal breach
of trust.
(d) But if A, in the last illustration, not dishonestly but in good faith, believing that it will be more for Z's
advantage to hold shares in the Bank of Bengal, disobeys Z's directions, and buys shares in the Bank
of Bengal, for Z, instead of buying Company's paper, here, thought Z should suffer loss, and should
be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly,
has not committed criminal breach of trust.
(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly
misappropriates the property. A has committed criminal breach of trust.
(Explanations 1 and 2 and illustrations (a) and (e) to Section 405 of the IPC are excluded, as they are
irrelevant.)
Criminal Appeal No.2328 of 2022 Page 10 of 23
(b) the accused had dishonestly misappropriated or converted to
their own use that property, or dishonestly used or disposed
of that property or wilfully suffer any other person to do so;
and
(c) such misappropriation, conversion, use or disposal should be
in violation of any direction of law prescribing the mode in
which such trust is to be discharged, or of any legal contract
which the person has made, touching the discharge of such
trust.
14. Thus, criminal breach of trust would, inter alia , mean using or
disposing of the property by a person who is entrusted with or
otherwise has dominion. Such an act must not only be done
dishonestly, but also in violation of any direction of law or any
10
contract express or implied relating to carrying out the trust.
15. However, in the instant case, materials on record fail to satisfy the
ingredients of Section 405 of the IPC. The complaint does not
directly refer to the ingredients of Section 405 of the IPC and does
not state how and in what manner, on facts, the requirements are
satisfied. Pre-summoning evidence is also lacking and suffers on
this account. On these aspects, the summoning order is equally
10
Sudhir Shantilal Mehta v. Central Bureau of Investigation , (2009) 8 SCC 1.
Criminal Appeal No.2328 of 2022 Page 11 of 23
quiet, albeit , it states that “ a forged demand of Rs. 6,37,252.16p
had been raised by JIPL, which demand is not due in terms of
statements by Shubhankar P. Tomar and Sakshi Tilak Chand ”. A
mere wrong demand or claim would not meet the conditions
specified by Section 405 of the IPC in the absence of evidence to
establish entrustment, dishonest misappropriation, conversion, use
or disposal, which action should be in violation of any direction of
law, or legal contract touching the discharge of trust. Hence, even
if respondent no. 2 - complainant is of the opinion that the monetary
demand or claim is incorrect and not payable, given the failure to
prove the requirements of Section 405 of the IPC, an offence under
the same section is not constituted. In the absence of factual
allegations which satisfy the ingredients of the offence under
Section 405 of the IPC, a mere dispute on monetary demand of Rs.
6,37,252.16p, does not attract criminal prosecution under Section
406 of the IPC.
16. In order to apply Section 420 of the IPC, namely cheating and
dishonestly inducing delivery of property, the ingredients of Section
415 of the IPC have to be satisfied. To constitute an offence of
cheating under Section 415 of the IPC, a person should be induced,
either fraudulently or dishonestly, to deliver any property to any
person, or consent that any person shall retain any property. The
Criminal Appeal No.2328 of 2022 Page 12 of 23
second class of acts set forth in the section is the intentional
inducement of doing or omitting to do anything which the person
deceived would not do or omit to do, if she were not so deceived.
Thus, the sine qua non of Section 415 of the IPC is “fraudulence”,
“dishonesty”, or “intentional inducement”, and the absence of these
11
elements would debase the offence of cheating. Explaining the
contours, this Court in Mohd. Ibrahim and Another v. State of
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Bihar and Others , observed that for the offence of cheating,
there should not only be cheating, but as a consequence of such
cheating, the accused should also have dishonestly adduced the
person deceived to deliver any property to a person; or to make,
alter, or destroy, wholly or in part, a valuable security, or anything
signed or sealed and which is capable of being converted into a
valuable security.
17. In the present case, the ingredients to constitute an offence under
Section 420 read with Section 415 of the IPC are absent. The pre-
summoning evidence does not disclose and establish the essential
ingredients of Section 415 of the IPC. There is no assertion, much
less legal evidence, to submit that JIPL had engaged in dishonesty,
11
Iridium India Telecom Limited v. Motorola Incorporated and Others , AIR 2011 SC 20.
12 (2009) 8 SCC 751. This Court, in this case, has cautioned that the ratio should not be misunderstood,
to record the clarification, which in the present case, in our opinion, is not of any avail and help to
respondent no. 2 - complainant. We respectfully concur with the clarification as well as the ratio
explaining Section 415, 464 etc. of the IPC.
Criminal Appeal No.2328 of 2022 Page 13 of 23
fraud, or intentional inducement to deliver a property. It is not the
case of respondent no. 2 - complainant that JIPL had tried to
deceive them, either by making a false or misleading
representation, or by any other action or omission; nor is it their
case that JIPL had offered any fraudulent or dishonest inducement
to deliver a property. As such, given that the ingredients of Section
415 of the IPC are not satisfied, the offence under Section 420 of
the IPC is not made out.
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18. Section 471 of the IPC is also not attracted. This Section is
applicable when a person fraudulently or dishonestly uses as
genuine any document or electronic record, which he knows or has
reasons to believe to be a forged document or electronic record.
This Court in Mohd. Ibrahim and Another (Supra), has elucidated
that the condition precedent of an offence under Section 471 of the
IPC is forgery by making a false document or false electronic record
or part thereof. Further, to constitute the offence under Section 471
of the IPC, it has to be proven that the document was “forged” in
14
terms of Section 470 , and “false” in terms of Section 464 of the
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471. Using as genuine a forged document or electronic record.—Whoever fraudulently or dishonestly
uses as genuine any document or electronic record which he knows or has reason to believe to be a
forged document or electronic record, shall be punished in the same manner as if he had forged such
document or electronic record.
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470. Forged document.—A false document or electronic record] made wholly or in part by forgery
is designated “a forged document or electronic record”
Criminal Appeal No.2328 of 2022 Page 14 of 23
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IPC . Section 470 lays down that a document is ‘forged’ if there is:
(i) fraudulent or dishonest use of a document as genuine; and (ii)
knowledge or reasonable belief on the part of the person using the
document that it is a forged one. Section 470 defines a forged
document as a false document made by forgery. As per Section
464 of the IPC, a person is said to have made a ‘false document’:
(i) if he has made or executed a document claiming to be someone
else or authorised by someone else; (ii) if he has altered or
tampered a document; or (iii) if he has obtained a document by
practising deception, or from a person not in control of his senses.
Unless, the document is false and forged in terms of Sections 464
and 470 of the IPC respectively, the requirement of Section 471 of
the IPC would not be met.
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464 – Making a false document .— A person is said to make a false document or false electronic
record—
First.—Who dishonestly or fraudulently—
(a) makes, signs, seals or executes a document or part of a document;
(b) makes or transmits any electronic record or part of any electronic record;
(c) affixes any electronic signature on any electronic record;
(d) makes any mark denoting the execution of a document or the authenticity of the electronic
signature,with the intention of causing it to be believed that such document or part of document,
electronic record or 2 [electronic signature] was made, signed, sealed, executed, transmitted or affixed
by or by the authority of a person by whom or by whose authority he knows that it was not made,
singed, sealed, executed or affixed; or
Secondly.—Who without lawful authority, dishonestly or fraudulently, by cancellation or otherwise,
alters a document or an electronic record in any material part thereof, after it has been made, executed
or affixed with electronic signature either by himself or by any other person, whether such person be
living or dead at the time of such alteration; or
Thirdly.—Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document
or an electronic record or to affix his electronic signature on any electronic record knowing that such
person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception
practised upon him, he does not know the contents of the document or electronic record or the nature
of the alteration.
Criminal Appeal No.2328 of 2022 Page 15 of 23
19. In the counter affidavit filed by respondent no. 2 - complainant, it is
submitted that a few bills were faked/forged, as the goods were not
ordered. Reference is made to balance of Rs. 79,752/- shown on
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30 March 2013, which was objected to and thereupon as per the
complaint itself the demand/bill was withdrawn. This would not
make the bill a forged document or false document, in terms of
Sections 470 and 464 of the IPC. The complaint was made in the
year 2017, four years after the bill/claim had been withdrawn,
reflecting no criminal intent. The bill was not fake or forged, and at
best it could be stated that it was wrongly raised. Moreover, the pre-
summoning evidence is silent with regard to this bill and mens rea
on the part of the accused is not shown and established. Same
would be the position with regard to the bill/invoice of Rs. 53,215/-
which was as per the complaint, sent directly to Manav Rachna
International at Faridabad. The bill/invoice is not doubted as ‘forged’
or ‘false’ within the meaning of Sections 470 and 464 of the IPC. No
doubt, Adhunik Colour Solutions is mentioned as the buyer, and
Manav Rachna International as the consignee, albeit the invoice
was issued by JIPL. Pre-summoning evidence does not help and
make out a case predicated on this bill/invoice. In the counter
affidavit filed before us, it is alleged that since this bill was sent to
Faridabad, JIPL had added the GST in the invoice. It is argued that
Criminal Appeal No.2328 of 2022 Page 16 of 23
had respondent no. 2 - complainant supplied the goods, instead of
GST, VAT as applicable in Delhi would have been levied, as
respondent no. 2 - complainant was based in Delhi. This argument
is rather fanciful and does not impress us to justify summoning for
the offence under Section 471 of the IPC. Besides, the assertion is
not to be found in the complaint, and cannot be predicated on the
pre-summoning evidence. For completeness, we must record that
the appellants have placed on record the dealership agreement
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dated 11 April 2012, which, inter alia states that JIPL has a
discretion to establish direct contractual relationship with specific
customers, if JIPL feels they can be served better. Further, in such
a situation, the dealer, if JIPL agrees, can act as an intermediary.
Assuming the bill/invoice had wrongly recorded respondent no. 2 -
complainant as the buyer, it is not doubted that Manav Rachna
International was the consignee. At best, respondent no. 2 -
complainant would not be liable, had Manav Rachna International
failed to pay. Non-payment is also not alleged in the complaint or
the pre-summoning evidence. Reliance on objections vide e-mails
th st
dated 4 July 2014 and 21 July 2014 are of no avail, as they are
st
for the period prior to 31 July 2014, when the bill/invoice was
raised.
Criminal Appeal No.2328 of 2022 Page 17 of 23
20. It is evident from the pre-summoning evidence led and the
assertions made in the criminal complaint that the dispute raised by
respondent no. 2 - complainant primarily pertains to settlement of
accounts. The allegations are: (i) goods supplied by JIPL were not
as per the requirements and demands of respondent no. 2 -
complainant, (ii) goods supplied were different from the order
placed, and (iii) goods lying with, and returned by respondent no. 2
- complainant have not been accounted for. These assertions, even
if assumed to be correct, would not fulfil the requirements of Section
405 of the IPC, or for that matter Sections 420 or 471. The material
on record does not reflect and indicate that JIPL indeed had the
dishonest/culpable intention for the commission of the alleged
offences under the IPC. Unless the ingredients of aforesaid
Sections of the IPC are fulfilled, the offence under Section 120-B of
the IPC, for criminal conspiracy, would not be made. In fact, a
combined reading of the complaint and the pre-summoning
evidence does not disclose any element of criminal conspiracy as
per Section 120-A of the IPC. The complaint discloses a civil
dispute and grievance relating to the claim made by JIPL. What is
challenged by respondent no. 2 - complainant is the demand of Rs.
6,37,252.16p raised by JIPL as the amount payable till the year
ending 2016. This assertion made by JIPL is questioned as
Criminal Appeal No.2328 of 2022 Page 18 of 23
incorrect. The demand, even if assumed to be wrong, would not
satisfy the ingredients of Section 405, or Sections 420 or 471 of the
IPC, so as to justify the summoning order. As noted above, JIPL
had filed a criminal case under Section 138 of the NI Act as two
cheques for Rs. 1,93,776/- and Rs. 4,99,610/- issued by them, on
presentation, were dishonoured on account of ‘insufficient funds’ .
21. We are, therefore, of the opinion that the assertions made in the
complaint and the pre-summoning evidence led by respondent no.
2 - complainant fail to establish the conditions and incidence of the
penal liability set out under Sections 405, 420, and 471 of the IPC,
as the allegations pertain to alleged breach of contractual
obligations. Pertinently, this Court, in a number of cases, has
noticed attempts made by parties to invoke jurisdiction of criminal
courts, by filing vexatious criminal complaints by camouflaging
allegations which were ex facie outrageous or pure civil claims.
These attempts are not be entertained and should be dismissed at
the threshold. To avoid prolixity, we would only like to refer to the
judgment of this Court in Thermax Limited and Others v. K.M.
16
Johny , as it refers to earlier case laws in copious detail. In
Thermax Limited and Others (Supra), it was pointed that the court
16
(2011) 13 SCC 412.
Criminal Appeal No.2328 of 2022 Page 19 of 23
should be watchful of the difference between civil and criminal
wrongs, though there can be situations where the allegations may
constitute both civil and criminal wrongs. The court must cautiously
examine the facts to ascertain whether they only constitute a civil
wrong, as the ingredients of criminal wrong are missing. A
conscious application of the said aspects is required by the
Magistrate, as a summoning order has grave consequences of
setting criminal proceedings in motion. Even though at the stage of
issuing process to the accused the Magistrate is not required to
record detailed reasons, there should be adequate evidence on
record to set the criminal proceedings into motion. The requirement
of Section 204 of the Code is that the Magistrate should carefully
scrutinize the evidence brought on record. He/she may even put
questions to complainant and his/her witnesses when examined
under Section 200 of the Code to elicit answers to find out the truth
about the allegations. Only upon being satisfied that there is
sufficient ground for summoning the accused to stand the trial,
17
summons should be issued. Summoning order is to be passed
when the complainant discloses the offence, and when there is
material that supports and constitutes essential ingredients of the
17
Birla Corporation Limited v. Adventz Investments and Holdings Limited and Others , (2019) 16 SCC
610; Pepsi Foods Ltd. (Supra); and Mehmood Ul Rehman v. Khazir Mohammad Tunda , (2015) 12
SCC 420.
Criminal Appeal No.2328 of 2022 Page 20 of 23
offence. It should not be passed lightly or as a matter of course.
When the violation of law alleged is clearly debatable and doubtful,
either on account of paucity and lack of clarity of facts, or on
application of law to the facts, the Magistrate must ensure
clarification of the ambiguities. Summoning without appreciation of
the legal provisions and their application to the facts may result in
an innocent being summoned to stand the prosecution/trial.
Initiation of prosecution and summoning of the accused to stand
trial, apart from monetary loss, sacrifice of time, and effort to
prepare a defence, also causes humiliation and disrepute in the
society. It results in anxiety of uncertain times.
22. While summoning an accused who resides outside the jurisdiction
of court, in terms of the insertion made to Section 202 of the Code
by Act No. 25 of 2005, it is obligatory upon the Magistrate to inquire
into the case himself or direct investigation be made by a police
officer or such other officer for finding out whether or not there is
18
sufficient ground for proceeding against the accused. In the
present case, the said exercise has not been undertaken.
18
Vijay Dhanuka v. Najima Mamtaj , (2014) 14 SCC 638; Abhijit Pawar v. Hemant Madhukar Nimalkar ,
(2017) 3 SCC 528; and Birla Corporation Limited (Supra).
Criminal Appeal No.2328 of 2022 Page 21 of 23
23. The order sheet of the trial court enclosed with the appeal reveals
that notwithstanding that the summoning order was limited to
unnamed Manager and Chief Manager of JIPL, the Additional Chief
Judicial Magistrate had deemed it appropriate to issue non-bailable
warrant. The non-bailable warrant was not issued in the name of
any person but by designation against the Chief Manager JIPL,
Andheri East, Mumbai. This was also one of the reasons that had
prompted the appellants to the file the petition under Section 482 of
the Code.
24. We must also observe that the High Court, while dismissing the
petition filed under Section 482 of the Code, failed to take due
notice that criminal proceedings should not be allowed to be
initiated when it is manifest that these proceedings have been
initiated with ulterior motive of wreaking vengeance and with a view
19
to spite the opposite side due to private or personal grudge.
Allegations in the complaint and the pre-summoning evidence on
record, when taken on the face value and accepted in entirety, do
not constitute the offence alleged. The inherent powers of the court
can and should be exercised in such circumstances. When the
allegations in the complaint are so absurd or inherently improbable,
19
Birla Corporation Limited (Supra); Mehmood Ul Rehman (Supra); R.P. Kapur v. State of Punjab, AIR
1960 SC 866; and State of Haryana and Others v. Bhajan Lal and Others , 1992 Supp (1) SCC 335.
Criminal Appeal No.2328 of 2022 Page 22 of 23
on the basis of which no prudent person can ever reach a just
conclusion that there is sufficient wrong for proceeding against the
accused, summons should not be issued.
25. For the aforesaid reasons, the appeal is allowed. The order of the
th
High Court dated 30 March 2022 in the Application u/s 482 No.
th
31828 of 2019; the summoning order dated 19 July 2018 in the
Complaint No. 3665 of 2017 and the order issuing non-bailable
rd
warrant dated 3 June 2019 in the above complaint passed by the
Additional Chief Judicial Magistrate, Court No. 8, Ghaziabad, Uttar
Pradesh are set aside and quashed.
......................................J.
(SANJIV KHANNA)
......................................J.
(J.K. MAHESHWARI)
NEW DELHI;
JANUARY 02, 2023.
Criminal Appeal No.2328 of 2022 Page 23 of 23