Full Judgment Text
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CASE NO.:
Appeal (civil) 4126-50 of 2000
PETITIONER:
COMMISSIONER OF INCOME TAX, MUMBAI ..APPELLANT
Vs.
RESPONDENT:
VERSUS
DATE OF JUDGMENT: 17/10/2001
BENCH:
M.B.Shah, R.P.Sethi
JUDGMENT:
SETHI,J.
Leave granted.
Aggrieved by the impugned order of the High Court quashing her
complaint and the order of the Magistrate issuing the process against
the respondents for the offences under Sections 465, 467, 468, 471 and
120B of the Indian Penal Code, the appellant has approached this Court
by way of this appeal for setting aside the order of the High Court
with direction to the Magistrate for proceeding with the complaint in
accordance with law. It is submitted that the High Court of Calcutta
has passed the impugned order in exercise of its power under Section
482 of the Code of Criminal Procedure completely ignoring the mandate
of law as settled by various pronouncements of this Court and other
High Courts in the country.
The complainant claims to be a partner of M/s.Chandmal
Gangabishan, a firm registered under the Partnership Act and carrying
on business of Bhujia and other allied products with the trade mark
HALDIRAM BHUJIAWALA. According to the averments made in the complaint,
the partnership business was initially commenced in the year 1956 with
four partners, namely, Ganga Bishan Agarwal, Moolchand Agarwal,
Rameshwarlal Agarawl and Satidas Agarwal. Rameshwar Aggarwal retired
from the firm in the year 1958. The firm was reconstituted by
admitting Shri Shivkishan Aggarwal as partner in place of the retiring
partner. They started using the brand name HALDIRAM BHUJIAWALA in the
year 1965. The appellant was admitted as a partner of the said firm on
31st October, 1969. An application for registration of trademark of
HALDIRAM BHUJIAWALA and Logo HRB was filed with the appropriate
authority by all the partners on 29th December, 1972. The said
application was advertised inviting objections. Opposition proceedings
were commenced at the instance of one Madanlal on 12th January, 1976
which was rejected on 16.4.1980 and the trademark was registered on 27th
January, 1981 in the name of the firm, of which the appellant was a
partner. The appellant alleged that when in the first week of June,
1999 she went to Delhi to attend her ailing son Ashok Kumar Aggarwal,
found him to be suffering from serious mental depression on account of
serious nervous breakdown. After inquiries and persuasions her son
told the appellant in July, 1999 that he had suffered mental shock upon
closure of his opened shop in the year 1991 at Delhi by reason of the
order of injunction passed by the court of law. He disclosed that the
said injunction had been granted against him on the ground that the
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partnership of which the appellant was also a partner stood dissolved
on 16.11.1974. She informed her son of not having signed any deed of
dissolution of the partnership. When Ashok Kumar Aggarwal handed over
to the appellant a xerox copy of the deed of dissolution, she was
shocked to know that her signatures had been forged. Upon scrutiny it
appeared that the signatures, purporting to be of Gangabishan Aggarwal
and Moolchand Aggarwal were also not genuine and had been forged
besides her signatures. She alleged that Accused Nos.1 to 4 have
brought into existence the self-forged deed of dissolution for their
personal gains and to the detriment of the partners of the firm of
M/s.Chandmal Gangabishan. She referred to number of circumstances in
her complaint to show that the forgery had been committed by the
respondent-accused. In para 22 of the complaint, the appellant
catalogued a number of instances allegedly showing the forgery by the
respondents.
The Trial Magistrate received the complaint on 21st January, 2000
and fixed the next date on 7th February, 2000 for examination of the
complainant and her witnesses in terms of Section 200 of the Code of
Criminal Procedure. On request of the appellant, the case was
adjourned to 10th March, 2000 when she appeared before the Magistrate
along with her three witnesses out of whom one was hand-writing expert.
After recording their statements, the case was adjourned and ultimately
the Trial Magistrate, vide his order dated 5.4.2000, found that the
appellant had made out a prima facie case under Sections 465, 467, 468,
471 and 120B of the Indian Penal Code against all the accused persons
and, therefore, issued summons for their presence on the next date
fixed for 19th June, 2000. Instead of appearing before the Trial
Magistrate and contesting the case, the respondents chose to approach
the High Court by way of a petition under Section 482 of the Code of
Criminal Procedure praying for quashing of the proceedings initiated
and process issued against them. Their application was allowed vide
the order impugned, hence the present appeal.
Mr.V.A. Mohta, Sr.Advocate appearing for the appellant submitted
that the impugned judgment is in conflict with the various judgments of
this Court. It is submitted that merely because a civil action is
pending between the parties can be no ground to quash the proceedings
as between the civil and criminal proceedings, the criminal matters
should be given precedence and that only because the genuineness of
the documents is required to be determined in both the proceedings, the
High Court was not justified in quashing the proceedings. It is
submitted that the nature of criminal proceedings and the onus of proof
required in such proceedings being different than the proceedings in
the civil suit, the High Court committed a mistake by quashing the
proceedings.
Per contra Shri U.R. Lalit, Sr.Advocate supported the judgment of
the High Court and submitted that besides law, propriety demanded that
when a higher court was seized of the matter, though in civil
proceedings, Magistrate should have not proceeded with the matter by
issuance of process against the respondents. Relying upon some
judgments of this Court, the learned counsel has contended that the
pendency of the proceedings before the Trial Magistrate would amount to
abuse of the process of the court. The impugned order is stated to
have been passed to secure the ends of justice. Referring to some
judgments, the attending circumstances and the evidence led in the
case, the learned counsel has tried to impress upon us that the order
impugned is just and reasonable which does not require interference by
this Court in exercise of its power under Article 136 of the
Constitution of India.
This Court has consistently held that the revisional or inherent
powers of quashing the proceedings at the initial stage should be
exercised sparingly and only where the allegations made in the
complaint or the FIR, even if taken it at the face value and accepted
in entirety, do not prima facie disclose the commission of an offence.
Disputed and controversial facts cannot be made the basis for the
exercise of the jurisdiction. In R.P. Kapur v. State of Punjab [AIR
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1960 SC 866] this Court held:
"It is well established that the inherent jurisdiction of
the High Court can be exercised to quash proceedings in a
proper case either to prevent the abuse of the process of
any court or otherwise to secure the ends of justice.
Ordinarily criminal proceedings instituted against an
accused person must be tried under the provisions of the
Code, and the High Court would be reluctant to interfere
with the said proceedings at an interlocutory stage. It is
not possible, desirable or expedient to lay down any
inflexible rule which would govern the exercise of this
inherent jurisdiction. However, we may indicate some
categories of cases where the inherent jurisdiction can and
should be exercised for quashing the proceedings. There
may be cases where it may be possible for the High Court to
take the view that the institution or continuance of
criminal proceedings against an accused person may amount
to the abuse of the process of the court or that the
quashing of the impugned proceedings would secure the ends
of justice. If the criminal proceedings in question is in
respect of an offence alleged to have been committed by an
accused person and it manifestly appears that there is a
legal bar against the institution or continuance of the
said proceeding the High Court would be justified in
quashing the proceedings on that ground. Absence of the
requisite sanction may, for instance, furnish cases under
this category. Cases may also arise where the allegations
in the First Information Report or the complaint, even if
they are taken at their face value and accepted in their
entirety, do not constitute the offence alleged; in such
cases no question of appreciating evidence arises; it is a
matter of merely of looking at the complaint or the First
Information Report to decide whether the offence alleged is
disclosed or not. In such cases it would be legitimate for
the High Court to hold that it would be manifestly unjust
to allow the process of the criminal court to be issued
against the accused person. A third category of the cases
in which the inherent jurisdiction of High Court can be
successfully invoked may also arise. In cases falling
under this category the allegations made against the
accused person do constitute an offence alleged but there
is either no legal evidence adduced in support of the case
or evidence adduced clearly or manifestly fails to prove
the charge. In dealing with this class of cases it is
important to bear in mind the distinction between a case
where there is no legal evidence or where there is evidence
which is manifestly and clearly inconsistent with the
accusation made and cases where there is legal evidence
which on its appreciation may or may not support the
accusation in question. In exercising its jurisdiction
under S.561A the High Court would not embark upon an
inquiry 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 part 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. Broadly stated
that is the nature and scope of the inherent jurisdiction
of the High Court under S.561A in the matter of quashing
criminal proceedings, and that is the effect of the
judicial decisions on the poin (Vide: In re: Shripad G.
Chandavarkar, AIR 1928 Bom 184, Jagat Chandra Mozumdar v.
Queen Empress, ILR 26 Cal 786, Dr.Shankar Singh v. State of
Punjab, 56 Pun LR 54: (AIR 1954 Punj 193), Nripendra Bhusan
Roy v. Gobinda Bandhu Majumdar, AIR 1924 Cal 1018 and
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Ramanathan Chettiyar v. Sivarama Subramania, ILR 47 Mad
722: (AIR 1925 Mad. 39)."
This judgment was reiterated and following in Hazari Lal Gupta v.
Rameshwar Prasad & Anr. [AIR 1972 SC 484], State of Karnataka v. L.
Muniswamy & Ors. [AIR 1977 SC 1489], State of Haryana & Ors. v.
Ch.Bhajan Lal & Ors. [AIR 1992 SC 604] and various other pronoucements.
Criminal prosecution cannot be thwarted at the initial stage
merely because civil proceedings are also pending. After referring to
judgments in State of Haryana v. Bhajan Lal [1992 Suppl. (1) SCC 335],
Rajesh Bajaj v. State NCT of Delhi [1999 (3) SCC 259] this Court in
Trisuns Chemical Industry v. Rajesh Agarwal & Ors. [1999 (8) SC 687]
held:
"Time and again this Court has been pointing out that
quashing of FIR or a complaint in exercise of the inherent
powers of the High Court should be limited to very extreme
exceptions (vide State of Haryana v. Bhajan Lal 1992 Supp
(1) SCC 335and Rajesh Bajaj v. State NCT of Delhi 1999 (3)
SCC 259].
In the last referred case this court also pointed out that
merely because an act has a civil profile is not sufficient
to denude it of its criminal outfit. We quote the
following observations: (SCC p.263, para 10)
"10. It may be that the facts narrated in the
present complaint would as well reveal a commercial
transaction or money transaction. But that is hardly
a reason for holding that the offence of cheating
were committed in the course of commercial and also
money transactions."
In Medchl Chemical & Pharma (P) Ltd. v. Biological E. Ltd. & Ors.
[2000 (3) SCC 269] this Court again reiterated the position and held:
"Exercise of jurisdiction under the inherent power as
envisaged in Section 482 of the Code to have the complaint
or the charge-sheet quashed is an exception rather than a
rule and the case for quashing at the initial stage must
have to be treated as rarest of rare so as not to scuttle
the prosecution. With the lodgement of first information
report the ball is set to roll and thenceforth the law
takes its own course and the investigation ensues in
accordance with the provisions of law. The jurisdiction as
such is rather limited and restricted and its undue
expansion is neither practicable nor warranted. In the
event, however, the court on a perusal of the complaint
comes to a conclusion that the allegations levelled in the
complaint or charge-sheet on the face of it does not
constitute or disclose any offence as alleged, there ought
not to be any hesitation to rise up to the expectation of
the people and deal with the situation as is required under
the law....
Needless to record however and it being a settled principle
of law that to exercise powers under Section 482 of the
Code, the complaint in its entirety shall have to be
examined on the basis of the allegations made in the
complaint and the High Court at that stage has no authority
or jurisdiction to go into the matter or examine its
correctness. Whatever appears on the face of the complaint
shall be taken into consideration without any critical
examination of the same. But the offence ought to appear
ex facie on the complaint. The observations in Nagawwa v.
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Veeranna Shivalingappa Konjalgi (1976) 3 SCC 736 lend
support to the above statement of law: (SCC p.741, para 5)
"(1) where the allegations made in the complaint or
the statements of the witnesses recorded in support
of the same taken at their face value make out
absolutely no case against the accused or the
complaint does not disclose the essential ingredients
of an offence which is alleged against the accused;
(2) where the allegations made in the complaint are
patently absurd and inherently improbable so that no
prudent person can ever reach a conclusion that there
is sufficient ground for proceeding against the
accused;
(3) where the discretion exercised by the
Magistrate in issuing process is capricious and
arbitrary having been based either on no evidence or
on materials which are wholly irrelevant or
inadmissible; and
(4) where the complaint suffers from fundamental
legal defects, such as, want of sanction, or absence
of a complaint by legally competent authority and the
like."
The cases mentioned by us are purely illustrative and
provide sufficient guidelines to indicate contingencies
where the High Court can quash proceedings."
In Lalmuni Devi (Smt.) v. State of Bihar & Ors. [2001 (2) SCC 17]
this Court held:
"There could be no dispute to the proposition that if the
complaint does not make out an offence it can be quashed.
However, it is also settled law that facts may give rise to
a civil claim and also amount to an offence. Merely
because a civil claim is maintainable does not mean that
the criminal complaint cannot be maintained. In this case,
on the facts, it cannot be stated, at this prima facie
stage, that this is a frivolous complaint. The High Court
does not state that on facts no offence is made out. If
that be so, then merely on the ground that it was a civil
wrong the criminal prosecution could not have been
quashed."
Again in M.Krishnan v. Vijay Singh & Anr. (Criminal Appeal
No.1028 of 2001 decided on 11.10.2001) this Court held that while
exercising powers under Section 482 of the Code, the High Court should
be slow in interfering with the proceedings at the initial stage and
that merely because the nature of the dispute is primarily of a civil
nature, the criminal prosecution cannot be quashed because in cases of
forgery and fraud there is always some element of civil nature. In a
case where the accused alleged that the transaction between the parties
are of a civil nature and the criminal court cannot proceed with the
complaint because the factum of document being forged was pending in
the civil court, the court observed:
"Accepting such a general proposition would be against the
provisions of law inasmuch as in all cases of cheating and
fraud, in the whole transaction, there is generally some
element of civil nature. However, in this case, the
allegations were regarding the forging of the documents and
acquiring gains on the basis of such forged documents. The
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proceedings could not be quashed only because the
respondents had filed a civil suit with respect to the
aforesaid documents. In a criminal court the allegations
made in the complaint have to be established independently,
notwithstanding the adjudication by a civil court. Had the
complainant failed to prove the allegations made by him in
the complaint, the respondents were entitled to discharge
or acquittal but not otherwise. If mere pendency of a suit
is made a ground for quashing the criminal proceedings, the
unscrupulous litigants, apprehending criminal action
against them, would be encouraged to frustrate the course
of justice and law by filing suits with respect to the
documents intended to be used against them after the
initiation of criminal proceedings or in anticipation of
such proceedings. Such a course cannot be the mandate of
law. Civil proceedings, as distinguished from the criminal
action, have to be adjudicated and concluded by adopting
separate yardsticks. The onus of proving the allegations
beyond reasonable doubt, in criminal case, is not
applicable in the civil proceedings which can be decided
merely on the basis of the probabilities with respect to
the acts complained of."
Referring to the judgments of this Court in Smt.Manju Gupta v.
Lt.Col.M.S. Paintal [1982 (2) SCC 412], Sardool Singh & Anr. v.
Smt.Nasib Kaur [1987 Supp. SCC 146] and M/s.Karamchand Ganga Pershad &
Anr. v. Union of India & Ors. [AIR 1971 SC 1244], the learned counsel
appearing for the respondents submitted that the High Court was
justified in quashing the complaint which does not require any
interference by this Court in this appeal.
In Manju Gupta’s case (supra) the criminal proceedings were
quashed under the peculiar circumstances of the case. After referring
to para 20 of the complaint and holding "such an averment in our view
is clearly inadequate and insufficient to bring home criminality of the
appellant in the matter of the alleged offences", the court found that
simply because accused was the Secretary of the Society, the Magistrate
was not justified in presuming her connection or complicity with the
offence merely on that ground. The allegations in the complaint
pertinent to forgery of rent receipts was held to be vague and
indefinite. Sardool Singh’s case (supra) was also decided on its facts
on the basis of law earlier settled by this Court. In Karamchan Ganga
Pershad’s case (supra) an observation was made that "it is a well
established principle of law that decisions of the civil courts are
binding on the criminal courts. The converse is not true". In that
case the appellants had filed a writ petition in the High Court for the
issuance of appropriate directions requiring the Union of India to
release and deliver to them some consignments of maize transported from
the State of Haryana to Howrah. Alleging that the movement of maize had
been controlled by the provisions of Essential Commodities Act read
with Northern Inter-Zonal Maize (Movement Control) Order, 1967
promulgated by the State Government, the restriction on export imposed
by the Order were removed by the State of Haryana in October, 1967
which was duly published and advertised. The contention of the Union
was that the State of Haryana had not lifted the ban on export and
further that it had no power to lift the ban. The High Court dismissed
the writ petition on the sole ground that in view of the pendency of
the criminal proceedings before some court in the State of West Bengal
it was inappropriate for the High Court to pronounce on the question
arising for decision in the writ petition. In that context the court
held:
"In our opinion the High Court seriously erred in coming to
this conclusion. If the appellants are able to establish
their case that the ban on export of maize from the State
of Haryana had been validly lifted all the proceedings
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taken against those who exported the maize automatically
fall to the ground. Their maintainability depends on the
assumption that the exports were made without the authority
of law. It is a well established principle of law that the
decisions of the civil courts are binding on the criminal
courts. The converse is not true. The High Court after
entertaining the writ petitions and hearing arguments on
the merits of the case should not have dismissed the
petitions merely because certain consequential proceedings
had been taken on the basis that the exports in question
were illegal."
We have already noticed that the nature and scope of civil and
criminal proceedings and the standard of proof required in both matters
is different and distinct. Whereas in civil proceedings the matter can
be decided on the basis of probabilities, the criminal case has to be
decided by adopting the standard of proof of "beyond reasonable doubt".
A Constitution Bench of this Court, dealing with the similar
circumstances, in M.S. Sheriff & Anr. v. State of Madras & Ors.[AIR
1954 SC 397] held that where civil and criminal cases are pending,
precedence shall be given to criminal proceedings. Detailing the
reasons for the conclusions, the court held:
"As between the civil and the criminal proceedings we are
of the opinion that the criminal matters should be given
precedence. There is some difference of opinion in the
High Courts of India on this point. No hard and fast rule
can be laid down but we do not consider that the
possibility of conflicting decisions in the civil and
criminal courts is a relevant consideration. The law
envisages such an eventuality when it expressly refrains
from making the decision of one court binding on the other,
or even relevant, except for certain limited purposes, such
as sentence or damages. The only relevant consideration
here is the likelihood of embarrassment.
Another factor which weighs with us is that a civil suit
often drags on for years and it is undesirable that a
criminal prosecution should wait till everybody concerned
has forgotten all about the crime. The public interests
demand that criminal justice should be swift and sure; that
the guilty should be punished while the events are still
fresh in the public mind and that the innocent should be
absolved as early as is consistent with a fair and
impartial trial. Another reason is that it is undesirable
to let things slide till memories have grown too dim to
trust.
This however, is not a hard and fast rule. Special
considerations obtaining in any particular case might make
some other course more expedient and just. For example,
the civil case or the other criminal proceeding may be so
near its end as to make it expedient to stay it in order to
give precedence to a prosecution ordered under S.476. But
in this case we are of the view that the civil suits should
be stayed till the criminal proceedings have finished."
In the present case we have noticed that before issuance of the
process, the Trial Magistrate had recorded the statement of the
witnesses for the complainant, perused the record including the opinion
of the expert and his deposition and prima facie found that the
respondents were guilty for the offences for which the process was
issued against them. The High Court rightly did not refer to any of
those circumstances but quashed the proceedings only on the ground:
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"Consideration is and should be whether any criminal
proceeding instituted before a court subordinate to this
court should be allowed to continue when the very
foundation of the criminal case, namely, forgery of
document is under scrutiny by this court in a civil
proceeding instituted by same person i.e., the complainant
in the criminal case. In my considered view it would not
be proper to allow the criminal proceeding to continue when
the validity of the document (deed of dissolution is being
tested in a civil proceeding before this court. Judicial
propriety demands that the course adopted by the Hon’ble
Supreme Court in the case of Manju Gupta (supra) and
Sardool Singh (supra) should be followed. If such course
of action is adopted by this court, that would be in
consonance with the expression used in Section 482 of the
Code of Criminal Procedure - "or otherwise to secure the
ends of justice". In both the cases referred to above
civil suits were pending, where the validity and
genuineness of a document was challenged. It was held by
the Hon’ble Supreme Court that when the question regarding
validity of a document is subjudice in the civil courts,
criminal prosecution, on the allegation of the document
being forged, cannot be instituted."
In view of the preponderance of authorities to the contrary, we
are satisfied that the High Court was not justified in quashing the
proceedings initiated by the appellant against the respondents. We are
also not impressed by the argument that as the civil suit was pending
in the High Court, the Magistrate was not justified to proceed with the
criminal case either in law or on the basis of propriety. Criminal
cases have to be proceeded with in accordance with the procedure as
prescribed under the Code of Criminal Procedure and the pendency of a
civil action in a different court even though higher in status and
authority, cannot be made a basis for quashing of the proceedings.
In the result the appeal is allowed by setting aside the impugned
order passed by the High Court and restoring the order of the
Magistrate with direction to proceed with the trial of the case in
accordance with the provisions of law and decide the same on merits.