1998 JTR(SC) 806
1998 4 AICLR 316 ; 1998 AIR(SC) 2796 ; 1998 AIR(SCW) 2972 ; 1998 2 ALD(Cri)(SC) 534 ; 1998 37 AllCriC 468 ; 1999 1 BBCJ(SC) 10 ; 1998 94 CompCas 401 ; 1998 4 CompLJ 394 ; 1998 CriLR 535 ; 1998 CrLJ 4091 ; 1999 1 EastCrC(SC) 8 ; 1998 2 JCC 63 ; 1998 5 JT 452 ; 1998 3 RCR(Cri) 801 ; 1998 4 Scale 521 ; 1998 7 SCC 698 ; 1998 SCC(Cri) 1704 ; 1998 2 KLT(Online) 1249 ; 1998 KHC 1219 ; 1998 6 Supreme 394
1998(6) Supreme 394
Supreme Court of India
(From Patna High Court)
Sujata V. Manohar & G.B. Pattanaik, JJ.
Ashok Chaturvedi & Ors. -Appellants
versus
Shitul H. Chanchani & Anr. -Respondents
Criminal Appeal No. 811 of 1998
(Arising out of SLP (Crl.) No. 3193 of 1997)
Decided on 13-8-1998
Counsel for the Parties :
For the Appellants : Ashok Desai, Sr. Advocate, Ms. Bindu Saxena, Neeraj Gupta Advocates for M/s. Swarup and Associates Advocates.
For the Respondents : Rao Ranjit, Advocate (B.B. Singh) Advocate (N.P.)
Important Point
Merely because an accused has a right to plead at the time of framing charges that there is no sufficient material for such framing of charges as provided in Section 245 Cr.P.C. he is not barred from invoking Section 482 at earliest point of time when the magistrate take cognizance of offence and summons the accused to appeal to contend that very issuance of the order taking cognizance is invalid.
Act
Referred
:CRIMINAL PROCEDURE CODE : S.190, S.482
INDIAN PENAL CODE : S.406, S.420, S.467, S.468, S.120(b)
(A) The proceedings involve an appeal against cognizance taken under Section 190 read with Sections 406, 420, 467, 468, and 120-B of the Indian Penal Code read with Section 482 of the Code of Criminal Procedure, concerning the alleged transfer of shares by Flex Engineering Ltd. The High Court exercised its inherent powers under Section 482 of the Code of Criminal Procedure to reject the plea to quash the order of cognizance, holding that the allegations of forgery, if accepted on their face, could prima facie establish the offences charged. The court emphasized that the power under Section 482 must be exercised sparingly and in the interest of justice to prevent abuse of the process of court, especially where the allegations, even when taken at their face value, fail to disclose any offence warranting trial.
(B) Key legal principles include that a mere allegation of forgery without material supporting the involvement of the accused does not make out a prima facie case; criminal proceedings must be quashed where no offence is made out on the face of the complaint; the remedy under Section 482 of the CrPC is available to prevent abuse of court process; and a dispute of a civil nature cannot be converted into a criminal one merely by the filing of a separate civil claim before a forum.
Facts of the case:
The appellants were named as accused in a complaint filed by respondent No. 1 alleging offences under Sections 406, 420, 467, 468, and 120-B of the Indian Penal Code in connection with the transfer of shares by Flex Engineering Ltd. The Magistrate took cognizance after examining the complainant and witnesses, directing issuance of process against the appellants. The appellants challenged the cognizance in the High Court under Section 482 of the Code, arguing that no offence was made out on the face of the complaint and that the allegations were civil in nature. The High Court dismissed the plea, finding a prima facie case of forgery. The Supreme Court, on appeal, examined the complaint and evidence and held that the allegations and evidence did not disclose any involvement of the appellants in the alleged forgery.
Findings of Court:
The Supreme Court found that the complaint was vague and contained only a bald allegation of forgery without explaining how any of the appellants were involved. The statements of the complainant and witnesses did not improve the material on record. The Court held that even if the allegations were accepted on their face value, no offence under the charged sections could be said to have been made out against the appellants. Consequently, the exercise of power under Section 482 of the Code required quashing the cognizance both at the Magistrates stage and the High Courts stage.
Issues:
Whether the allegations in the complaint, even when taken at their face value, disclose any offence under Sections 406, 420, 467, 468, and 120-B of the Indian Penal Code; whether the dispute is a civil matter and the filing of a claim before the Consumer Forum changes the nature of the proceedings; and whether the High Court was justified in not quashing the cognizance under Section 482 of the Code of Criminal Procedure.
Ratio Decidendi:
The Court held that the onus is on the complainant to disclose sufficient material to prima facie establish an offence. In the absence of any indication of how the appellants were involved in the alleged forgery, and with no supporting evidence beyond vague allegations, the complaint did not disclose any offence. The inherent jurisdiction under Section 482 of the CrPC must be exercised to quash criminal proceedings where there is no case to answer, in order to prevent abuse of the court process.
Result:
The appeal is allowed. The orders of the Magistrate dated 5.2.1996 and the impugned order of the High Court are quashed. The criminal proceedings against all appellants, including those who did not file the appeal, are dismissed.
(A) The proceedings involve an appeal against cognizance taken under Section 190 read with Sections 406, 420, 467, 468, and 120-B of the Indian Penal Code read with Section 482 of the Code of Criminal Procedure, concerning the alleged transfer of shares by Flex Engineering Ltd. The High Court exercised its inherent powers under Section 482 of the Code of Criminal Procedure to reject the plea to quash the order of cognizance, holding that the allegations of forgery, if accepted on their face, could prima facie establish the offences charged. The court emphasized that the power under Section 482 must be exercised sparingly and in the interest of justice to prevent abuse of the process of court, especially where the allegations, even when taken at their face value, fail to disclose any offence warranting trial.
(B) Key legal principles include that a mere allegation of forgery without material supporting the involvement of the accused does not make out a prima facie case; criminal proceedings must be quashed where no offence is made out on the face of the complaint; the remedy under Section 482 of the CrPC is available to prevent abuse of court process; and a dispute of a civil nature cannot be converted into a criminal one merely by the filing of a separate civil claim before a forum.
Facts of the case:
The appellants were named as accused in a complaint filed by respondent No. 1 alleging offences under Sections 406, 420, 467, 468, and 120-B of the Indian Penal Code in connection with the transfer of shares by Flex Engineering Ltd. The Magistrate took cognizance after examining the complainant and witnesses, directing issuance of process against the appellants. The appellants challenged the cognizance in the High Court under Section 482 of the Code, arguing that no offence was made out on the face of the complaint and that the allegations were civil in nature. The High Court dismissed the plea, finding a prima facie case of forgery. The Supreme Court, on appeal, examined the complaint and evidence and held that the allegations and evidence did not disclose any involvement of the appellants in the alleged forgery.
Findings of Court:
The Supreme Court found that the complaint was vague and contained only a bald allegation of forgery without explaining how any of the appellants were involved. The statements of the complainant and witnesses did not improve the material on record. The Court held that even if the allegations were accepted on their face value, no offence under the charged sections could be said to have been made out against the appellants. Consequently, the exercise of power under Section 482 of the Code required quashing the cognizance both at the Magistrates stage and the High Courts stage.
Issues:
Whether the allegations in the complaint, even when taken at their face value, disclose any offence under Sections 406, 420, 467, 468, and 120-B of the Indian Penal Code; whether the dispute is a civil matter and the filing of a claim before the Consumer Forum changes the nature of the proceedings; and whether the High Court was justified in not quashing the cognizance under Section 482 of the Code of Criminal Procedure.
Ratio Decidendi:
The Court held that the onus is on the complainant to disclose sufficient material to prima facie establish an offence. In the absence of any indication of how the appellants were involved in the alleged forgery, and with no supporting evidence beyond vague allegations, the complaint did not disclose any offence. The inherent jurisdiction under Section 482 of the CrPC must be exercised to quash criminal proceedings where there is no case to answer, in order to prevent abuse of the court process.
Result:
The appeal is allowed. The orders of the Magistrate dated 5.2.1996 and the impugned order of the High Court are quashed. The criminal proceedings against all appellants, including those who did not file the appeal, are dismissed.
Judgment
Pattanaik, J.-Leave granted.
The appellants have been arrayed as accused persons along with others in a complaint petition filed by respondent No. 1 alleging offences committed by the appellants under Sections 406, 420, 467, 468 and 120-B of the Indian Penal Code, in respect of transfer of shares effected by Flex Engineering Ltd., a public limited company. The learned Magistrate on receipt of the petition of complaint examined the complainant on oath and also the witnesses produced by the complainant. On the basis of those material the Magistrate took cognizance of the offence under Sections 406, 420, 467, 468 and 120-B IPC by his order dated 5.2.96 and directed issuance of process against the accused-appellants. The appellants then moved the High Court under Section 482 of the Code of Criminal Procedure for quashing the cognizance, inter alia, on the ground that the allegations made in the petition of complaint even being accepted on its face value no offence can be said to have been made out against them. The High Court by the impugned judgment, however, being of the opinion that the allegations having been made that shares have been transferred on the basis of forged and fabricated signature a prima facie case has been made out, and therefore, it would not be appropriate to quash the order of cognizance in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure, rejected the prayer of the appellants.
2. Mr. Ashok Desai the learned senior counsel appearing for the appellants submitted that accused Nos. 1 to 9 are Chairman, Directors and Secretary of the Company and no allegation whatsoever having been made against them either in the petition of complaint or in the evidence adduced before the Magistrate, the High Court committed serious prior in not quashing the cognizance merely because there is an allegation of forgery and being of the opinion that the same could be substantiated only during trial. Mr. Desai also contended that in a company having share capital of 5 crores and 50 lakh shares of Rs. 10/- each at the point when the alleged transfer of share of the complainant took place, it is unimaginable that the 100 equity shares of the complainant could be transferred against the wishes of the complainant at the connivance of the Director to the company. Mr. Desai also contended that the dispute, if at all any, is a dispute of civil nature and the complainant himself has already filed a claim petition before the Consumer Forum and the criminal proceedings, therefore, cannot be permitted to be continued as that would amount to an abuse of the process of court. The learned counsel appearing for the complainant-respondent on the other hand contended that on the materials on record, the High Court was fully justified in coming to the conclusion that a prima facie case has been made out, and therefore, for it is not a fit case for quashing the order of cognizance in exercise of the inherent jurisdiction of the court under Section 482 of the Code which has to be exercised sparingly and only when a conclusion is arrived at that non-exercise of the power would ultimately lead to abuse of the process of court.
3. Having examined the rival submissions and the averments made in the petition of complaint as well as the evidence of the complainant and the witnesses before the Magistrate, we are not in a position to accept Mr. Desai’s contention that dispute essentially is a civil dispute, and therefore, the order of cognizance should be quashed. A mere filing of a claim before the Consumer Forum could not make the dispute a civil dispute. The aforesaid submission of Mr. Desai has to be rejected.
4. But the question yet remains for consideration is whether the allegations made in the petition of complaint together with statements made by the complainant and the witnesses before the Magistrate taken on their face value, do make the offence for which the Magistrate has taken cognizance of? The learned counsel for the respondent in this connection had urged that the accused had a right to put this argument at the time of framing of charges, and therefore, this Court should not interfere with the order of Magistrate taking cognizance, at this stage. This argument, however, does not appeal to us inasmuch as merely because an accused has a right to plead at the time of framing of charges that there is no sufficient material for such framing of charges as provided in Section 245 of the Criminal Procedure Code he is debarred from approaching the court even at the earliest point of time when the Magistrate takes cognizance of the offence and summons the accused to appear to contend that the very issuance of the order of taking cognizance is invalid on the ground that no offence can be said to have been made out on the allegations made in the complaint petition. It has been held in a number of cases that power under Section 482 has to be exercised sparingly and in the interest of justice. But allowing the criminal proceeding to continue even where the allegations in the complaint petition do not make out any offence would be tantamount to an abuse of the process of court, and therefore, there cannot be any dispute that in such case power under Section 482 of the Code can be exercised. Bearing in mind the parameters laid down by this Court in several decisions for exercise of power under Section 482 of the Code, we have examined the allegations made in the complaint petition and the statement of the complainant and the two other witnesses made on oath before the Magistrate. We are clearly of the opinion that the necessary ingredients of any of the offence have not been made out so far as the appellants are concerned. The petition of complaint is a vague one and excepting the bald allegation that the shares of the complainant have been transferred on the forged signatures, nothing further has been stated and there is not an iota of material to indicate how all or any of these appellants are involved in the so-called allegation of forgery. The statement of the complainant on oath as well as his witnesses do not improve the position in any manner, and therefore, in our considered opinion even if the allegations made in the complaint petition and the statement of complainant and his witnesses are taken on their face value, the offence under Sections 406, 420, 467, 468 and 120-B of the Indian Penal Code cannot be said to have been made out. This being the position the impugned order of the Magistrate taking cognizance of the offence dated 5.2.1996 so far as it relates the appellants are concerned cannot be sustained and the High Court also committed error in not invoking its power under Section 482 of the Code. In the aforesaid premises, the impugned order of the High Court as well as the order of the Magistrate dated 5.2.96 taking cognizance of the offence as against the appellants stand quashed.
5. It is true that out of 9 officials of the company who are the accused persons in the criminal case only 7 of them have preferred this special leave petition and R.K. Sharma, Whole Time Director, as well as Capt. G.P.S. Choudhary, Director of the company have not preferred the special leave petition. But in view of our conclusion, allegations in the complaint petition do not make out any offence against any of the officers of the company it would be futile to allow continuance of the criminal proceedings so far as the said two officers of the company are concerned.
6. In the premises, as aforesaid, we quash not only the cognizance taken by the Magistrate of the offences as against the 7 appellants but also against the said two officers of the company, namely, Shri R.K. Sharma and Capt. G.P.S. Choudhary. This appeal is accordingly allowed.
(C.R.) Appeal allowed.
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Parallel Citations of other Journals :
Ashok Chaturvedi v. Shitul H. Chanchani, 1998(6) Supreme 394 : JT 1998(5) SC 452
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