Civil & Criminal Lawyer

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Pradeep K Khatana

Jurisdiction under Section 482 of the Code has to be exercised with a great care. In exercise of its jurisdiction High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code, Jurisdiction- under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice. In State of Karnataka v. L. Muniswamy and Others, AIR (1977) SC 1489 = [1977] 3 SCR 113, this Court said that in the exercise of the wholesome power under Section 482 of the Code High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceed-ing to continue would be an abuse of the process of the Court or that the ends of justice require that the proceedings are to be quashed.

In Kurukshatra University and Another v. State of Haryana, AIR (1977) SC 2229 = [1977] 4 SCC 451 High Court in exercise of its powers under Section 482 of the Code quashed the First information Report when police had not even commenced investigation into the complaint. This Court said that inherent powers do not confer an arbitrary jurisdiction on the High Court to act according to whim or caprice and that statutory power has to be exercised sparingly, with circumspection and in the rarest of rare cases. In the case First Information Report was lodged by Warden, Kurukshatra University. Acting on that report the police registered a case under Sections 443 and 452, IPC against one Vinay Kumar, who filed a petition in the High Court praying that FIR be quashed. High Court without issuing notice to the University quashed the FIR. Not only that High Court directed the State of Haryana to pay a sum of Rs. 300 by way of cost to Vinay Kumar. High Court even made observations concerning the University's power to enforce discipline in the Campus. This Court observed that the High Court seemed to fail that outsiders can with impunity flout the University rule that no outsider shall stay in a university hostel. It said that such a view is plainly calculated to subvert discipline in a sphere where it is most needed. This Court said that High Court ought not to have made these observations without, at least, giving a hearing to the University. This Court set aside the judgment of the High Court and allowed investigation to proceed.

In Chandrapal Singh and Others v. Maharaj Singh and Another, AIR (1982) SC 1238, the judgment started as under ;-

"A frustrated landlord after having met his Waterloo in the hierarchy of civil courts, has further enmeshed the tenant in a frivolous criminal prosecution which prima facie appears to be an abuse of the process of law. The facts when stated are so, telling that the further discussion may appear to be superfluous.

This Court said :-

"We see some force in the submission but it is equally true that chargrined and frustrated litigants should not be permitted to give' vent to their frustration by cheaply invoking jurisdiction of the criminal court. Complainant herein is an Advocate. He lost in both courts in the rest control proceedings and has now rushed to the criminal court. This itself speaks volumes. Add to this the fact that another suit between the parties was pending from 1975. The conclusion is inescapable that invoking the jurisdiction of the criminal court in this background is an abuse of the process of law and the High Court rather glossed over this important fact while declining to exercise its power under Section 482 Cr. P.C."

This Court said that the Chief Judicial Magistrate, Secunderabad ought not to have taken cognizance of the proceedings. It said it considered it to be a fit case to involve jurisdiction under Section 482 of the Code.

In the circumstances of the case in hand conclusion is inescapable that invoking the jurisdiction of criminal court for allegedly having com-mitted offences under Sections 406/420 IPC by the appellants is certainly an abuse of the process of law. In the counter affidavit filed on behalf of the complainant it is now admitted that none of the two appellants is a Director of Ganga Automobiles Ltd. Only in respect of the first appellant it is stated that he is the authorised signatory of that company and that in fact he had signed the cheques which were returned dishonoured. Apart from making the omnibus statement that the first appellant with dishonest intentions and misrepresentations got loan of Rs. 50,00,000 from the com- plainant company for Ganga Automobiles Ltd. there is nothing said as to what were those misrepresentations and how the complainant company was duped. The only part attributed to the second appellant is that the first appellant along with Ashwani Suri, Managing Director and Mukender Singh, Director approached the complainant in June, 19% and had repre-sented that they and Shalini Suri, Shama Suri (Appellant No. 2), Charanjit Singh and M.L. Kampani were the Directors of Ganga Automobiles Ltd. There is nothing stated in the counter affidavit about the role, if any, played by the second appellant. A complaint under Section 138 of the Negotiable Instruments Act has already been filed by the complainant. There is no allegation of any corrupt practice by any of the accused as if they duped the Finance Company in parting with the amount of Rs. 50,00,000, As normally understood business of a finance company is to invite deposits, pay interest on that and also to give loans and earn interest. A finance company also advances short term loans. In that case it is essentially a commercial transaction. After first two cheques were dishonoured two cheques were again issued, which again were dishonoured resulting in filing of complaint under Section 138 of the Negotiable Instruments Act. None of the respondents has been able to explain as to why offences under Sections 406/420 IPC were not added in the complaint filed under Section 138 of the Negotiable Instruments Act and why resort was had to filing of a separate First Information Report. Certain motive has been attributed to the investigating officer but we think we need not go into that. There is also no answer as to why investigation against three other directors was still stated to be pending when same role is assigned to all the accused. In the FIR it is Sukhvender Singh, who first approached the complainant, but later it is Mukender Singh. There is no answer as to why there are two different names. as to who are the Directors of Ganga Automobiles Ltd. could have been easily found by the complainant after going through the records of Registrar of Companies and also about its status. As noted above, in the subsequent statement by the complainant he does not assign any role to the first appellant. The allegation that in the first instance three persons contacted the complainant company, who told the complainant of other Directors with whom the complainant conversed on telephone ap-pears to be rather improbable.

We agree with the submission of the appellants that the whole attempt of the complainant is evidently to rope in all the members of the family particularly who are the parents of the Managing Director or Ganga Automobile Ltd. in the instant criminal case without regard to their role or participation in the alleged offences with a sole purpose of getting the loan due to the Finance Company by browbeating and tyrannizing the appellants of criminal prosecution. A criminal complaint under Section 138 of the Negotiable instruments Act is already pending against the appellants and other accused. They would suffer the consequences if offence under Section 138 is proved against them. In any case there is no occasion for the complainant to prosecute the appellants under Sections 406/420 IPC and in his doing so it is clearly an abuse of the process of law and prosecution against the appellants for those offences is liable to be quashed, which we do.

The appeal is allowed and judgment of the High Court dated May 6, 1999 is set aside and prosecution of the appellants under Sections 406/420 IPC in Criminal Case No. 674/97 (now Criminal Case No. 6054/98) and pending the Court of Chief Judicial Magistrate, Ghaziabad is quashed.e.