Calcutta High Court (Appellete Side)

@ Dasrath Chaudhary & Another vs The State Of West Bengal & Another on 4 October, 2024

IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
Appellate Side

Present:

The Hon'ble Justice Ajay Kumar Gupta

C.R.R. 1395 of 2022

Dasrathbhai Narsangbhai Chaudhary
@ Dasrath Chaudhary & Another
Versus
The State of West Bengal & Another

For the Petitioners : Mr. Apalak Basu, Adv.
Mr. Debayan Ghosh, Adv.

For the Opposite Party No. 2 : Mr. Manojit Bhattacharya, Adv.
Ms. Sumitra Bhattacharya, Adv.

Heard on : 13.09.2024

Judgment on : 04.10.2024
2

Ajay Kumar Gupta, J:

1. Petitioners being the accused persons have filed this

Criminal Revisional application under Section 482 read with Section

401 of the Code of Criminal Procedure, 1973 praying for quashing of

the Complaint Case No. 180 of 2020 filed by the complainant making

accusations under Sections 420/406/34 of the Indian Penal Code,

1860 against the company and its Directors, petitioners herein. The

case is now pending before the Court of the Learned Judicial

Magistrate, 1st Class, 6th Court, Sealdah, 24 Parganas (South).

2. Short facts, leading to filing of this present Criminal

Revisional application, are summarised as under: -

2a. The Opposite Party No. 2 being the ex-employee of Safal Life

Science (P) Ltd. (hereinafter referred to as 'the said company') filed a

complaint before the Court of the Learned Judicial Magistrate

alleging, inter alia, that the Opposite Party No. 2/complainant was

employed by the Board of Directors of the aforesaid company on 31st

day of March, 2017 upon issuing appointment letter. The

complainant joined as a Chief Executive Officer with effect from 1st

April, 2017 and his salary was fixed by the company @ Rs.

2,50,000/- per month plus additional 2% as Performance Bonus of

the annual sale volume after deducting the income tax.
3

2b. The complainant worked there for the financial years 2017-

2018 and 2018-2019 efficiently, sincerely and diligently and is

entitled to receive a total Outstanding Salary and Performance Bonus

after deducting the income tax including penalty to the tune of Rs.

1,47,64,833/- (Rupees One Crore Forty-Seven Lakh Sixty-Four

Thousand Eight Hundred and Thirty-Three) only after deducting the

salary and bonus already received during the period of working

tenure. Despite such outstanding dues of salary and Performance

Bonus, the accused company did not heed to pay. Notice was sent

through e-mail to the accused company on 2nd August, 2020 but in

vain. The opposite party no. 2 had lodged a complaint before

Ultadanga Police Station on 10.10.2020 with regard to non-payment

of Salary and Performance Bonus but no action has been taken by

the police against the accused persons for such non-payment of

Outstanding Salary and Performance Bonus and commission of

offences by way of committing criminal breach of trust and cheating

upon the opposite party no. 2. Hence, the complainant has compelled

to initiate a complaint case before the Learned Judicial Magistrate.

After examination of the witnesses under Section 200 of the CrPC

and being fully satisfied with the materials and documents, Learned

Magistrate found prime facie case and issued process against the

accused persons.
4

2c. On the other hand, petitioners have disputed and denied the

allegations of the complainant. It is specifically contended that the

petitioner nos. 1 and 2 were Directors of the Safal Life Science (P) Ltd.

at the alleged period of work but now they are no longer Directors of

the said company. Both are residing in the addresses given in the

cause title which fall outside the jurisdiction of the Learned Judicial

Magistrate, 1st Class, 6th Court, Sealdah, 24 Parganas (South). But,

the Learned Magistrate, without holding enquiry under Section 202 of

the CrPC, took cognizance under Sections 406/34 of the Indian Penal

Code, 1860 on 22nd February, 2022 and thereby issued summons

upon the petitioners which is ex facie illegal and unlawful and same

ought to be set aside by this Court for non-compliance of mandatory

provision as enshrined in the Code of Criminal Procedure, 1973

(hereinafter referred to as 'the Cr.PC').

2d. It is totally absurd and unbelievable that how complainant

can claim Outstanding Salary and Performance Bonus of Rs.

1,47,64,833/- (Rupees One Crore Forty-Seven Lakh Sixty-Four

Thousand Eight Hundred and Thirty-Three) only after working for a

period of three long years. All payments have been made to the

employee during his service period. There are no dues with the

company. It is unimaginable to accept that an employee would have
5

been worked for such long period without Salary and Performance

Bonus.

2e. According to the petitioners, they were erstwhile Directors

holding shares in the 25:75 ratio in the said company. On

27.03.2019, the petitioners sold all their shares of the company to (1)

Newtronic Lifecare Equipment Private Limited, (2) Shri Navinbahi

Manilal Mehta and (3) Shri Jignesh Navinchandra Mehta by way of

executing a Memorandum of Undertaking dated 27.03.2019. That

subsequent to transfer of all the shares by the petitioners in the

company stood sold and transferred to the aforementioned

purchasers.

2f. Shri Navinbhai Manilal Mehta and Shri Jignesh

Navinchandra Mehta are the new Owners and Directors of the

company and the same will be reflected from the Company Master

Data of Safal Life Science (P) Ltd. as obtained from the online portal

of Ministry of Corporate Affairs, Government of India.

2g. It is further contended that the petitioners had resigned from

the Company stood effected on and from 16.03.2020. The relevant

documents evidencing such resignation of the petitioners were

obtained from the website of the Ministry of Corporate Affairs,

Government of India. The new owners of the accused company were
6

made Directors of the company and their names appearing as

Directors and same can be obtained in the Company Master Data

from the website of Ministry of Corporate Affairs, Government of

India. Hence, the complaint, made against the present petitioners, is

not at all maintainable or applicable. The Learned Magistrate took

cognizance under Sections 406/34 of the IPC and issued summons

upon the petitioners without holding any proper enquiry under

Section 202 of the CrPC though the allegations against the registered

company, which is situated at Gujarat and two erstwhile Directors,

Petitioners herein, are also resident of Gujarat beyond the territorial

jurisdiction of the Learned Trial Court and had already sold their

entire shares to third party. Therefore, they are not at all liable for the

offence punishable under Sections 406/34 of the IPC. For the sake of

argument, even if any dues lie with the company, it would be a civil

dispute and the Hon'ble Apex Court, in catena of judgments, clarified

that if the facts relating to the case involved civil disputes, Hon'ble

Courts should not hesitate to quash the proceeding for ends of justice

and the civil dispute cannot be converted to criminal case for

realisation of the dues amount. Hence, petitioners filed this case

before this Hon'ble High Court with a prayer for quashing of the

proceedings and the same has come up before this Bench for its

disposal.
7

SUBMISSION ON BEHALF OF THE PETITIONERS:

3. Mr. Basu, learned Advocate appearing on behalf of the

petitioners argued mainly on five folds arguments.

3a. Firstly, it was submitted that the entire dispute between the

employee and the employer with regard to alleged Outstanding Salary

and Performance Bonus is out rightly a civil dispute, which cannot be

converted to a criminal case to recover the money. Only on this issue,

this Court can quash the proceeding as the case of the complainant

is to the effect that the petitioners have not paid his Outstanding

Salary and Performance Bonus. The allegation, pertaining to dispute

relating to contract between the employer and employee and alleged

dues of Salary and Performance Bonus, is purely civil in nature.

Learned advocate placed reliance of the judgments to bolster his

aforesaid submission as follows: -

i. Binod Kumar and Others Vs. State of Bihar and Another1;

ii. Lalit Chaturvedi and Others Vs. State of Uttar Pradesh
and Another2;

iii. Naresh Kumar & Anr. Vs. The State of Karnataka &
Anr.3;

1
(2014) 10 SCC 663 (paragraphs 16 and 18);
2
2024 SCC OnLine SC 171 (paragraphs 9 and 10);
3
Judgment dated 12.03.2024 passed in SLP (CRL.) No. 1570 of 2021 (paragraph 6);
8

iv. V.K. Mittal & Ors. Vs. State of Jharkhand & Anr.4;

v. Sameer Kumar S/O. Sushilkumar Sharma Vs. State of
Gujarat & 1 Other(s)5.

3b. Secondly, it was submitted that the Learned Trial Court has

no territorial jurisdiction to entertain the complaint filed by the

complainant since the alleged place of commission of offence and

place of his working was in Gujarat, which is situated outside the

State of West Bengal. The actual cause of action arose in the State of

Gujarat as the complainant worked in Gujarat which apparent from

the complaint itself and the erstwhile Directors, petitioners herein,

were/are residing in the State of Gujarat. So, the Learned Magistrate

has no territorial jurisdiction to take up the matter and further

wrongly issued summons upon the petitioners. Non-payment of

salary or Performance Bonus by an employer to the employee is a

civil dispute, which never tantamount to commission of offence of

cheating or criminal breach of trust as alleged by the complainant.

3c. Thirdly, the summons were issued in violation of mandatory

provision of Section 202 of CrPC. Under such mandatory provision,

4
2009 SCC OnLine Jhar 1635: (2010) 1 AIR Jhar R 645: 2010 Cri LJ (NOC 620) 165;
5
Judgment dated 27.08.2021 passed by the Hon'ble High Court at Gujarat at Ahmedabad in R/Criminal Misc.
Application No. 20134 of 2015.
9

the learned Court ought to have initiated enquiry against the accused

persons, who reside beyond the territorial jurisdiction of the

concerned Court. It was submitted that the Hon'ble Apex Court, in

series of judgments, has clarified that the provision of Section 202 of

the CrPC is mandatory in nature. The Learned Trial Court has to

follow it before issuing summons under Section 204 of the CrPC. He

further placed reliance of a judgment passed in S.S. Binu Vs. State

of West Bengal & Anr.6, wherein the Hon'ble High Court has

clarified that the provision u/s 202 of Cr.PC is mandatory when the

accused resides beyond the territorial jurisdiction of the Learned Trial

Court. Accordingly, he prays for quashing of the proceeding against

the present petitioners for non-compliance of mandatory provision.

3d. Fourthly, it was further submitted that the accused persons

were the Directors of the company. They are not accountable under

Section 406 of the IPC as they sold all their shares to (1) Newtronic

Lifecare Equipment Private Limited, (2) Shri Navinbahi Manilal Mehta

and (3) Shri Jignesh Navinchandra Mehta by way of executing a

Memorandum of Undertaking dated 27.03.2019. Therefore, accused

company stood sold and transferred to the aforesaid purchasers.

Now, they are no longer Directors of the accused company as such

they cannot be held liable for any offence as alleged.
6
2018 SCC OnLine Cal 16881: (2018) 3 RCR (Cri) 4: (2018) 5 CHN 562.
10

3e. Lastly, mere being Ex-Directors of the company, the

petitioners cannot be roped in a criminal proceeding specifically when

no specific or particular allegations made against them in the

complaint. The allegation, made by the complainant against the

present petitioners, is vague and insufficient to make them liable for

offence punishable under Sections 406/420/34 of the IPC.

3f. At the end, it was submitted in view of the aforesaid facts,

the complaint is a nature of frivolous, illegal and harassing one.

Thus, it requires to be quashed so far as the petitioners are

concerned. To support of his contention, he placed reliance on the

following judgments: -

i. Managing Director, Castrol India Limited Vs. State

of Karnataka Another7;

ii. Sunil Bharti Mittal Vs. Central Bureau of

Investigation8.

SUBMISSION ON BEHALF OF THE OPPOSITE PARTY NO. 2:

4. Per contra, Mr. Bhattacharya, learned counsel appearing on

behalf of the complainant/opposite party no. 2 raised strong

objection of such prayer made by the Petitioners and further

7
(2018) 17 SCC 275;
8
(2015) 4 SCC 609.
11

submitted that the complainant had served the company for the

financial years 2017-2018 and 2018-2019 efficiently, sincerely and

diligently. Despite such service, the petitioners being the Directors of

the company did not pay the Outstanding Salary and Performance

Bonus after deduction of income tax, as the case may be,

intentionally. They withheld his Outstanding Salary and Performance

Bonus to the tune of Rs. 1,47,64,833/- (Rupees One Crore Forty-

Seven Lakh Sixty-Four Thousand Eight Hundred and Thirty-Three)

only after deducting the income tax, and amount already received

during the working tenure. They have not paid in spite of repeated

requests and issuance of demand notice.

4a. Having no other alternative, he has to file complaint before

Ultadanga Police Station on 10.10.2020 but no action has been taken

by the police against the accused persons for such non-payment of

Outstanding Salary and Performance Bonus. Accordingly, he initiated

a complaint against the Company as well as its Directors. They

committed the offence punishable under Sections 420/406/34 of the

IPC. After examining the P.W. 1 and P.W. 2 under Section 200 of the

CrPC, the Learned Judicial Magistrate found prima facie case under

Sections 406/34 of the IPC against the petitioners as such Learned

Magistrate issued process against the present petitioners for offence
12

as alleged. Therefore, question of quashing of the instant proceeding

does not arise. To prove the case of cheating and criminal breach of

trust, a full-fledged trial is required to be commenced and completed

to unearth the truth. Until and unless the trial is commenced and

decided the case by the Learned Trial Court, this case should not be

quashed. He prays for its dismissal.

DISCUSSIONS AND FINDINGS BY THIS COURT:

5. Heard the arguments of the rival parties and on perusal of

the record as well as judgments referred by the learned counsel

appearing on behalf of the petitioners, this Court finds it is admitted

fact that the complainant, namely, Debasis Majumdar was an

employee of the accused company, namely, Safal Life Science (P) Ltd.

on and from 31st March, 2017 in view of the appointment letter

issued by the company's Board of Directors. He was employed as

Chief Executive Officer with effect from 1st April, 2017. He worked till

the financial year 2018-2019. The claim of Debasis Majumdar is that

he is entitled to get a total Outstanding Salary and Performance

Bonus after deducting the income tax including penalty, as the case

may be, to the tune of Rs. 1,47,64,833/- (Rupees One Crore Forty-

Seven Lakh Sixty-Four Thousand Eight Hundred and Thirty-Three)
13

only. However, the said amount was not paid by the accused persons

to the complainant as alleged.

6. In the present case, it has nowhere been stated that at the

very inception there was any intention on behalf of the petitioners to

cheat, which is a condition precedent for an offence under Section

420 of the Indian Penal Code, 1860. Furthermore, there is nothing in

the complaint to show that the petitioners had dishonest and

fraudulent intention at the time, when the opposite party no. 2 had

been engaged or worked. It is further admitted facts that the

company had paid Salary and Performance Bonus to the

complainant. Dispute arises between the parties when the said

company allegedly failed to pay the outstanding amount of Rs.

1,47,64,833/- (Rupees One Crore Forty-Seven Lakh Sixty-Four

Thousand Eight Hundred and Thirty-Three) only as Salary and

Performance Bonus and the said non-payment was for work done by

the opposite party no. 2 as Chief Executive Officer in the company,

namely, Safal Life Science (P) Ltd. These disputes are apparently civil

in nature and that could be decided by Civil Court. No other prima

facie ingredients were made out by the opposite party no. 2 in a Court

complaint case regarding offence punishable under Section 420 of the

CrPC as alleged.
14

7. This Court also relied on several Judgments of the Hon'ble

Apex Court. Those are taken up herein below:

The Hon'ble Supreme Court in The State of Kerala v. A.

Pareed Pillai and Anr.9 has held as follows: -

"To hold a person guilty of the offence of
cheating, it has to be shown that his intention was
dishonest at the time of making the promise. Such a
dishonest intention cannot be inferred from the mere fact
that he could not subsequently fulfill the promise."

Similarly, in the case in hand, there was nothing to show

that the petitioners had dishonest or fraudulent intention at the time

when agreement executed at the time of engagement. He worked for

considerable period of time. It is not disputed by the complainant

that he had not received any Salary and Performance Bonus from

beginning. However, complainant raised question about the dues.

Non-payment of Salary and Performance Bonus, by no stretch of

imagination, can be called dishonest inducements. It

was purely employer and employee dispute which definitely comes

under civil dispute. Simply because of the amounts have not been

paid or there are outstanding will not make it a case of wilful or

dishonest inducement or deception or criminal breach of trust.

9
1972 Cri.L.J.1243
15

Similarly, in Haridaya Ranjan Prasad Verma and Ors. v.

State of Bihar and Anr.10, like in the present case, the Hon'ble Apex

Court held that:-

"There was no allegation in the complaint
indicating, expressly or impliedly, any intentional
deception on the part of the appellants right from the
beginning of the transaction. The Hon'ble Apex Court
drew distinction between cheating from mere breach of
contract. According to the Hon'ble Apex Court, definition
of cheating contemplates two separate classes of acts
namely deception by fraudulent or dishonest
inducement and deception by intention. Deception by
fraudulent or dishonest inducement must be shown to
exist right from the beginning of the transaction".

It is not the case of the opposite party no. 2, in the present

case, that he was deceived by fraudulent or dishonest inducement

from the beginning of his engagement rather admits he received

Salary and Performance Bonus.

8. Upon perusal of the copy of complaint, it shows that there

was no fraudulent or dishonest inducement or deception by

intentional practice by the petitioners right from the beginning of his

engagement or working as Chief Executive Officer even if subsequent

10
(2000) 4 Supreme Court Cases 168
16

payment has not been made, that will not tantamount to deception,

fraudulent or dishonest inducement nor would it amount to

deception by intentional means right from the beginning. Therefore,

the case either under Section 420 or 406 of IPC, in the facts of this

case, has not been made out. He entered into a contract. Non-

payment of Salary or Performance Bonus cannot be called cheating in

the facts of this case.

Similar view was also expressed in the case of Govind

Prasad Kejriwal vs State of Bihar and another11 as relied by the

Petitioners. The Hon'ble Supreme Court has observed that the

Magistrate is required to consider whether even a prima facie case is

made out and the dispute is purely of a civil nature then proceedings

against the accused even for offence under Section 323 shall be an

abuse of process of the Court and the law. In those cases, order

passed by the Magistrate taking cognizance and issuing the

summons against the accused should be set aside.

9. In the case of Paramjeet Batra v. State of Uttarakhand12,

the Hon'ble Court recognized that although the inherent powers of a

High Court under Section 482 of the Code of Criminal Procedure

11
(2020) 16 Supreme Court Cases 714
12
(2013) 11 SCC 673
17

should be exercised sparingly, yet the High Court must not hesitate

in quashing such criminal proceedings which are essentially of a civil

nature. This is what was held:

"12. While exercising its jurisdiction under Section 482
of the Code the High Court has to be cautious. This
power is to be used sparingly and only for the purpose
of preventing abuse of the process of any court or
otherwise to secure ends of justice. Whether a complaint
discloses a criminal offence or not depends upon the
nature of facts alleged therein. Whether essential
ingredients of criminal offence are present or not has to
be judged by the High Court. A complaint disclosing civil
transactions may also have a criminal texture. But the
High Court must see whether a dispute which is
essentially of a civil nature is given a cloak of criminal
offence. In such a situation, if a civil remedy is available
and is, in fact, adopted as has happened in this case,
the High Court should not hesitate to quash the criminal
proceedings to prevent abuse of process of the court."
(emphasis supplied)

10. In the light of above observations together with averments

contained in the Court complaint, this Court finds ingredient of the

offences alleged by the opposite party no. 2 are missing. Merely

because non-payment of Salary or Performance Bonus has not been

made or accounts have not been settled, does not constitute offences

punishable under Sections 406/420/34 of the Indian Penal Code,
18

1860. The allegation in Court complaint does not spell out any

essential ingredient for commission of offence under Sections 406

and 420 of the Indian Penal Code, 1860. The disputes between the

parties are purely civil in nature and criminal proceeding in such a

civil nature case should not be allowed to be continued any further

against the present petitioners.

11. So far as the question raised by the learned counsel

appearing on behalf of the petitioners that no part of cause of action

arose in Kolkata or within the territorial jurisdiction of the Learned

Trial Court because it is the admitted fact that the company and

place of work were at Gujarat. The alleged dues towards Salary and

Performance Bonus and record of the same are also lying at Gujarat.

Nothing happened in Kolkata or within the territorial jurisdiction of

the Learned Trial Court. However, the complainant has deliberately

filed a complaint only to harass the petitioners and without

considering the territorial jurisdiction. The Learned Trial Court has

taken cognizance upon the opposite party no. 2's complaint without

looking into the territorial jurisdiction. The question of territorial

jurisdiction in criminal cases revolves around (i) place of commission

of the offence or (ii) place where the consequence of an act, both of

which constitute an offence, ensues or (iii) place where the accused
19

was found or (iv) place where the victim was found or (v) place where

the property in respect of which the offence was committed, was

found or (vi) place where the property forming the subject

matter of an offence was required to be returned or

accounted for, etc., accordingly, as the case may be.

12. Chapter XIII of the Code of Criminal Procedure, 1973

contains provisions relating to jurisdiction of Criminal Courts in

inquiries and trials. The Code maintains a distinction between (i)

inquiry; (ii) investigation; and (iii) trial. The words "inquiry" and

"investigation" are defined respectively in clauses (g) and (h) of

Section 2 of the Code.

13. The principles laid down in Sections 177 to 184 of the Code

(contained in Chapter XIII) regarding the jurisdiction of criminal

Courts in inquiries and trials can be summarized in simple terms as

follows:

(I) Every offence should ordinarily be inquired into
and tried by a Court within whose local jurisdiction
it was committed. This rule is found in
Section 177. The expression "local jurisdiction"
found in Section 177 is defined in Section 2(j) "in
relation to a Court or Magistrate, the local area
within which the Court or Magistrate may exercise
all or any of its or his powers under the Code.
20

(II) In case of uncertainty about the place in which,
among the several local areas, an offence was
committed, the Court having jurisdiction over any of
such local areas may inquire into or try such an
offence.

(III) Where an offence is committed partly in one area
and partly in another, it may be inquired into or
tried by a Court having jurisdiction over any of such
local areas.

(IV) In the case of a continuing offence which is
committed in more local areas than one, it may be
inquired into or tried by a Court having jurisdiction
over any of such local areas.

(V) Where an offence consists of several acts
done in different local areas it may be inquired into
or tried by a Court having jurisdiction over any of
such local areas. (Serial nos. II to V are mentioned in
Section 178 of the CrPC).

(VI) Where something is an offence by reason of the
act done, as well as the consequence that ensued,
then the offence may be inquired into or tried
by a Court within whose local jurisdiction
either the act was done or the consequence ensued.
(Mentioned in Section 179 of the CrPC).
21

(VII) In cases where an act is an offence, by reason of
its relation to any other act which is also an offence,
then the first mentioned offence may be inquired
into or tried by a Court within whose local
jurisdiction either of the acts was done. (Mentioned
Section 180 of the CrPC)

(VIII) In certain cases, such as dacoity, dacoity with
murder, escaping from custody etc., the offence may
be inquired into and tried by a Court within whose
local jurisdiction either the offence was committed or
the accused person was found.

(IX) In the case of an offence of kidnapping or
abduction, it may be inquired into or tried by a
Court within whose local jurisdiction the person was
kidnapped or conveyed or concealed or detained.

(X) The offences of theft, extortion or robbery
may be inquired into or tried by a Court within
whose local jurisdiction, the offence was
committed or the stolen property was
possessed, received or retained.

(XI) An offence of criminal misappropriation
or criminal breach of trust may be inquired into or
tried by a Court within whose local jurisdiction the
offence was committed or any part of the property
22

was received or retained or was required to be
returned or accounted for by the accused person.

(XII) An offence which includes the possession
of stolen property, may be inquired into or tried by
a Court within whose local jurisdiction the
offence was committed or the stolen property
was possessed by any person, having knowledge
that it is stolen property. (Serial Nos. VIII to XII are
found in Section 181 of the CrPC)

(XIII) An offence which includes cheating, if
committed by means of letters or
telecommunication messages, may be inquired
into or tried by any Court within whose
local jurisdiction such letters or messages were sent
or received.

(XIV) An offence of cheating and dishonestly
inducing delivery of the property may be inquired
into or tried by a Court within whose local
jurisdiction the property was delivered by the
person deceived or was received by the accused
person.

(XV) Some offences relating to marriage such as
Section 494, IPC (marrying again during the life time
of husband or wife) and Section 495, IPC
(committing the offence under Section 494 with
23

concealment of former marriage) may be inquired
into or tried by a Court within whose local
jurisdiction the offence was committed or the
offender last resided with the spouse by the first
marriage.
(Serial Nos. XIII to XV are available in Section 182 of
the CrPC)

(XVI) An offence committed in the course of
a journey or voyage may be inquired into or tried
by a Court through or into whose local jurisdiction
that person or thing passed in the course of that
journey or voyage.
(Serial no.XVI found in Section 183 of the CrPC).

(XVII) Cases falling under Section 219 (three
offences of the same kind committed within a space
of twelve months whether in respect of the same
person or not), cases falling under Section 220
(commission of more offences than one, in one series
of acts committed together as to form the same
transaction) and cases falling under Section 221,
(where it is doubtful what offences have been
committed), may be inquired into or tried by any
Court competent to inquire into or try any of the
offences.
(Serial no. XVII found in Section 184 of the CrPC).
24

14. Apart from Sections 177 to 184, which lay down in

elaborate details, the rules relating to jurisdiction, Chapter XIII of the

Code also contains a few other sections.

Section 185 empowers the State Government to order
any case or class of cases committed for trial in any
district, to be tried in any Sessions division.

Section 186 empowers the High Court, in case where 2
or more courts have taken cognizance of the same
offence and a question as to which of them should
inquire into or try the offence has arisen, to decide the
district where the inquiry or trial shall take place.

Section 187 speaks about the powers of the Magistrate,
in case where a person within his local jurisdiction,
has committed an offence outside his
jurisdiction, but the same cannot be inquired
into or tried within such jurisdiction.

Sections 188 and 189 deal with offences
committed outside India.

15. After laying down in such great detail, the rules relating to

territorial jurisdiction in Chapter XIII, the Code of Criminal

Procedure, 1973 makes provisions in Chapter XXXV, as to the fate of
25

irregular proceedings. It is in that Chapter XXXV that one has to

search for an answer to the question as to what happens when a

court, which has no territorial jurisdiction, inquires or tries an

offence.

16. Section 460 lists out 9 irregularities, which, if done in good

faith by the Magistrate, may not vitiate his proceedings. Section 461

lists out 17 irregularities, which if done by the Magistrate, will make

the whole proceedings void. Clause (l) of Section 461 is of significance

and it reads as follows:

"If any Magistrate, not being empowered by law in this
behalf, does any of the following things, namely:
(l) tries an offender:
his proceedings shall be void"

17. Then comes to Section 462, which saves the proceedings

that had taken place in a wrong sessions division or district or local

area. But, this is subject to the condition that no failure of justice has

occasioned on account of the mistake. Section 462 reads as follows:

"462. Proceedings in wrong place. -
No finding, sentence or order of any Criminal Court shall
be set aside merely on the ground that the inquiry, trial
or other proceedings in the course of which it was
arrived at or passed, took place in a wrong sessions
26

division, district, sub division or other local area,
unless it appears that such error has in fact
occasioned a failure of justice."

18. A cursory reading of Section 461(l) and Section 462 gives an

impression that there is some incongruity. Under Clause (l) of Section

461 if a Magistrate not being empowered by law to try an

offender, wrongly tries him, his proceedings shall be void. A

proceeding which is void under Section 461 cannot be saved by

Section 462. The focus of clause (l) of Section 461 is on the

"offender" and not on the "offence". If clause (l) had used the words

"tries an offence" rather than the words "tries an offender", the

consequence might have been different.

19. It is significant to note that Section 460, which lists out nine

irregularities that would not vitiate the proceedings, uses the word

"offence" in three places namely clauses (b), (d) and (e). Section 460

does not use the word "offender" even once.

20. On the contrary, Section 461 uses the word 'offence' only

once, namely in clause (a), but uses the word "offender" twice namely

in clauses (l) and (m). Therefore, it is clear that if an offender is tried

by a Magistrate not empowered by law in that behalf, his proceedings
27

shall be void under Section 461. Section 462 does not make the

principle contained therein to have force notwithstanding anything

contained in Section 461.

21. The saving clause contained in Section 462 of the Code of

Criminal Procedure, 1973 is in pari materia with Section 531 of the

Code of 1898. In the light of Section 531 of the Code of 1898, a

question arose before the Calcutta High Court in Ramnath

Sardar Vs. Rekharani Sardar13, as to the stage at which an

objection to the territorial jurisdiction of the court could be

raised and considered. In that case, the objection to the

territorial jurisdiction raised before a Magistrate in a petition

for maintenance filed by the wife against the husband, was rejected

by the Magistrate both on merits and on the basis of the saving

clause in Section 531. But, the Hon'ble High Court held that Section

531 would apply only after the decision or finding or order is arrived

at by any Magistrate or Court in a wrong jurisdiction and that if any

objection to the territorial jurisdiction is taken in any proceeding, it

would be the duty of the Magistrate to deal with the same.

13
(1975) Criminal Law Journal 1139
28

22. This Bench relied upon the decision in Purushottam

Das Dalmia Vs. State of West Bengal14 to point out that there are

two types of jurisdictional issues for a criminal Court, namely,

(i) the jurisdiction with respect of the power of the Court

to try particular kinds of offences and (ii) its territorial jurisdiction.

23. It was specifically held by the Hon'ble Supreme Court in Raj

Kumari Vijh vs. Dev Raj Vijh15 that the question of jurisdiction with

respect to the power of the Court to try particular kinds of offences

goes to the root of the matter and that any transgression of the same

would make the entire trial void. However, territorial

jurisdiction, according to the Court :

"Territorial jurisdiction is a matter of convenience,
keeping in mind the administrative point of view with
respect to the work of a particular court, the convenience
of the accused and the convenience of the witnesses
who have to appear before the Court."

24. After making such a distinction between two different types

of jurisdictional issues, the Hon'ble Supreme Court concluded in that

case, that where a Magistrate has the power to try a

particular offence, but the controversy relates solely to his

14
AIR 1961 SC 1589
15
(1977) 2 SCC 190
29

territorial jurisdiction, the case would normally be covered by the

Section 462 of the Code of 1973.

25. From the above discussion, it is possible to take a view that

the words "tries an offence" are more appropriate than the words

"tries an offender" in Section 461 (l). This is because, lack of

jurisdiction to try an offence cannot be cured by Section 462 and

hence Section 461, logically, could have included the trial of an

offence by a Magistrate, not empowered by law to do so, as one of the

several items which make the proceedings void. In contrast, the trial

of an offender by a court which does not have territorial jurisdiction,

can be saved because of Section 462, provided there is no other bar

for the court to try the said offender (such as in Section 27). But,

Section 461 (l) makes the proceedings of a Magistrate void, if he tried

an offender, when not empowered by law to do.

26. Be that as it may, the upshot of the above discussion is (i)

that the issue of jurisdiction of a court to try an "offence" or

"offender" as well as the issue of territorial jurisdiction,

depend upon facts established through evidence (ii) that if the issue

is one of territorial jurisdiction, the same has to be

decided with respect to the various rules enunciated in Sections 177
30

to 184 of the Code and (iii) that these questions may have to be raised

before the court while trying the offence.

27. Having taken note of the legal position, let me now come

back to the cases on hand. It raises about the territorial jurisdiction,

at least as of now. The answer to this depends upon facts to be

established by evidence. The facts to be established by evidence, may

relate either to the place of commission of the offence or to other

things dealt with by Sections 177 to 184 of the Code. In such

circumstances, this Court cannot order about the lack of territorial

jurisdiction before marshalling of evidence.

28. In the light of the above discussions, this Court finds this is

not the stage to decide about the territorial jurisdiction.

29. With regard to non-compliance of mandatory provision as

enumerated in Section 202 of the CrPC, it is admitted fact that the

petitioners reside beyond the territorial jurisdiction of the Court

concerned. There is no dispute with regard to the address of the

accused persons. Accordingly, it would be necessary to assert

whether the Learned Trial Magistrate should follow the provisions of

sub-section (1) of Section 202 of the CrPC and for that this Court

would like to considered the judgment referred by the Petitioners
31

passed in S. S. Binu v. State of West Bengal and Another where

the Division Bench observed in paragraph nos. 61 to 68 as under: -

"61. The term "inquiry" is defined under Sub-Section (g)
of Section 2 Cr.P.C which is quoted below: -

2.(g) "inquiry" means every inquiry other than
trial, conducted under this court by a Magistrate
or court."

62. The above provision purports that every inquiry
other than a trial conducted by the Magistrate or court is
an inquiry under Section 200, Cr.P.C. Examination of
complaint only is necessary with the option of examining
the witness present, if any, under the inquiry under
Section 202, Cr.P.C., the witnesses are examined for the
purpose of deciding whether or not there is sufficient
ground for proceeding against the accused.

63. In Chandra Deo Singh Vs. P. C. Bose reported
in AIR 1963 SC 1430 a four Judges Bench of the
Hon'ble Supreme Court considered Section 202 of the
old Criminal Procedure and held as under: -

8. the object of the provisions of Section 202
(corresponding to present Section 202 of the
Code), was to enable the Magistrate to form an
opinion as to whether process should be issued
or not and to remove from his mind any
hesitation that he may have felt upon the mere
perusal of the complaint and the consideration of
the complainant's evidence on oath.
32

64. The Hon'ble Supreme Court while considering the
objects underlined the provisions of Section 202 Cr.P.C.
in Manharibhai Muljibhai Kakadia & Anr. (2012
AIR SCW 5314, para 23) (supra) and made the
following observations: -

"20. Section 202 of the Code has twin objects;
one, to enable the Magistrate to scrutinize
carefully the allegations made in the complaint
with a view to prevent a person named therein
as accused from being called upon to face an
unnecessary, frivolous or meritless complaint
and the other, to find out whether there is some
material to support the allegations made in the
complaint. The Magistrate has a duty to elicit all
facts having regard to the interest of an absent
accused person and also to bring to book a
person or persons against whom the allegations
have been made. To find out the above, the
Magistrate himself may hold an inquiry under
Section 202 of the Code or direct an investigation
to be made by a police officer. The dismissal of
the complaint under Section 203 is without doubt
a pre-issuance of process stage. The Code does
not permit an accused person to intervene in the
course of inquiry by the Magistrate under Section
202. The legal position is no more res integra in
this regard. More than five decades back, this
Court in Vadilal Panchal v. Dattatraya Dulaji
Ghadigaonker (AIR 1960 SC 1113) with
reference to Section 202 of the Criminal
Procedure Code, 1898 (corresponding to Section
202 of the present Code) held that the inquiry
under Section 202 was for the purpose of
ascertaining the truth or falsehood of the
complaint, i.e. for ascertaining whether there
33

was evidence in support of the complaint so as to
justify the issuance of process and
commencement of proceedings against the
person concerned.

65. The amended provision of sub-section (1) of Section
202 CrPC came up for consideration of the Hon'ble
Supreme Court in the matter of National Bank of
Oman (supra) and the following observation made in
the above decision is hereunder: -

9. The duty of a Magistrate receiving a complaint
is set out in Section 202, Cr.PC and there is an
obligation on the Magistrate to find out if there is
any matter which calls for investigation by a
criminal court. The scope of enquiry under this
section is restricted only to find out the truth or
otherwise of the allegations made in the
complaint in order to determine whether process
has to be issued or not. Investigation under
Section 202, CrPC is different from the
investigation contemplated in Section 156 as it is
only for holding the Magistrate to decide whether
or not there is sufficient ground for him to
proceed further. The scope of enquiry under
Section 202, CrPC is, therefore, limited to the
ascertainment of truth or falsehood of the
allegations made in the complaint:

(i) on the materials placed by the complainant
before the court;

(ii) for the limited purpose of finding out whether
a prima facie case for issue of process has been
made out; and

(iii) for deciding the question purely from the
point of view of the complainant without at all
34

adverting to any defense that the accused may
have.

66. In Vijay Dhanuka (2014 AIR SCW 2095, paras
13 and 14) (supra), it has been held that under Section
200, Cr. P.C, examination of complainant only is
necessary with the option of examining the witnesses
present, if any, whereas in enquiry under Section 202
Cr. P.C., the witnesses are examined for the purpose of
deciding whether or not there is sufficient ground for
proceeding against the accused. The relevant portion of
the above decision is set out below:

17. In view of our answer to the aforesaid
question, the next question which falls for our
determination is whether the learned Magistrate
before issuing summons has held the inquiry as
mandated under Section 202 of the Code. The
word "inquiry" has been defined under Section 2
(g) of the Code, the same reads as follows: "2.
xxx xxx xxx (g) "inquiry" means every inquiry,
other than a trial, conducted under this Code by
a Magistrate or Court; xxx xxx xxx". It is evident
from the aforesaid provision, every inquiry other
than a trial conducted by the Magistrate or Court
is an inquiry. No specific mode or manner of
inquiry is provided under Section 202 of the
Code. In the inquiry envisaged under Section
202 of the Code, the witnesses are examined
whereas under Section 200 of the Code,
examination of the complainant only is
necessary with the option of examining the
witnesses present, if any.

18. This exercise by the Magistrate, for the
purpose of deciding whether or not there is
35

sufficient ground for proceeding against the
accused, is nothing but an inquiry envisaged
under Section 202 of the Code. In the present
case, as we have stated earlier, the Magistrate
has examined the complainant on solemn
affirmation and the two witnesses and only
thereafter he had directed for issuance of
process. In view of what we have observed
above, we do not find any error in the order
impugned. In the result, we do not find any merit
in the appeals and the same are dismissed
accordingly.

67. In Vijay Dhanuka (2014 AIR SCW 2095) (supra)
the aforesaid principle has been repeated and reiterated
in the observation that under Section 200, Cr.P.C. the
examining of complainant only is necessary with the
option of examining the witnesses present, if any.
Though no specific mode or manner of enquiry is
provided under Section 202 Cr.P.C., in an enquiry under
Section 202, Cr. P.C., the witnesses are examined for
the purpose of deciding whether or not there is sufficient
ground of proceeding against the accused. The relevant
portion of the above decision is quoted below:

14. In view of our answer to the aforesaid
question, the next question which falls for our
determination is whether the learned Magistrate
before issuing summons has held the inquiry as
mandated under Section 202 of the Code. The
word "inquiry" has been defined under Section 2
(g) of the Code, the same reads as follows:
36

2. (g) 'inquiry' means every inquiry, other
than a trial, conducted under this Code by a
Magistrate or court,

It is evident from the aforesaid provision,
every inquiry other than a trial conducted by the
Magistrate or the court is an inquiry. No specific
mode or manner of inquiry is provided under
Section 202 of the Code. In the inquiry envisaged
under Section 202 of the Code, the witnesses are
examined whereas under Section 200 of the
Code, examination of the complainant only is
necessary with the option of examining the
witnesses present, if any. This exercise by the
Magistrate, for the purpose of deciding whether
or not there is sufficient ground for proceeding
against the accused, is nothing but an inquiry
envisaged under Section 202 of the Code.

15. In the present case, as we have stated
earlier, the Magistrate has examined the
complainant on solemn affirmation and the two
witnesses and only thereafter he had directed
for issuance of process.

68. Therefore, keeping in mind the object sought to be
achieved by way of amendment of sub-section (1) of
Section 202, Cr.P.C., the nature of enquiry as indicated
in Section 19 of the Criminal Procedure (Amendment)
Act, 2005, the Magistrate concerned is to ward of false
complaints against such persons who reside at far of
places with a view to save them for unnecessary
harassment and the Learned Magistrate concerned is
under obligation to find out if there is any matter which
calls for investigation by Criminal Court in the light of
the settled principles of law holding an enquiry by way
37

of examining the witnesses produced by the
complainant or direct an investigation made by a police
officer as discussed hereinabove."

The Hon'ble Division Bench of this Court finally came
to conclusion and answered in following manner in
Paragraph 100 of the aforesaid judgment as under:

"I. According to the settled principles of law, the
amendment of subsection (1) of Section 202 Cr.P.C. by
virtue of Section 19 of the Criminal Procedure
(Amendment) Act, 2005, is aimed to prevent innocent
persons, who are residing outside the territorial
jurisdiction of the Learned Magistrate concerned, from
harassment by unscrupulous persons from false
complaints. The use of expression "shall", looking to the
intention of the legislature to the context, is mandatory
before summons are issued against the accused living
beyond the territorial jurisdiction of the Magistrate

II........................

III. When an order of issuing summon is issued by a
learned Magistrate against an accused who is residing
at a place beyond the area in which he exercises his
jurisdiction without conducting an enquiry under Section
202 Cr.P.C. the matter is required to be remitted to the
learned Magistrate concerned for passing fresh orders
uninfluenced by the prima facie conclusion reached by
the Appellate Court.

IV.....................
38

V. ........................"

30. Issue raised by the petitioners is meticulously considered by

the Hon'ble Supreme Court in the case of Sunil Todi and Ors. Vs.

State of Gujarat & Anr.16, wherein the Hon'ble Supreme Court

while deciding the Issue has held in paragraph 33 as under:

"33. The provisions of Section 202 which mandate the
Magistrate, in a case where the accused is residing at a
place beyond the area of its jurisdiction, to postpone the
issuance of process so as to enquire into the case
himself or direct an investigation by police officer or by
another person were introduced by Act 25 of 2005 with
effect from 23 June 2006. The rationale for the
amendment is based on the recognition by Parliament
that false complaints are filed against persons residing
at far off places as an instrument of harassment. In
Vijay Dhanuka v. Najima Mamtaj [(2014) 14 SCC
638: 2014 AIR SCW 2095], this Court dwelt on the
purpose of the amendment to Section 202, observing:

"11. Section 202 of the Code, inter alia,
contemplates postponement of the issue of the
process 'in a case where the accused is residing
at a place beyond the area in which he exercises
his jurisdiction' and thereafter to either inquire
into the case by himself or direct an investigation
to be made by a police officer or by such other

16
(2022) 16 SCC 762 : 2021 SCC OnLine SC 1174
39

person as he thinks fit. In the face of it, what
needs our determination is as to whether in a
case where the accused is residing at a place
beyond the area in which the Magistrate
exercises his jurisdiction, inquiry is mandatory or
not.

12. The words 'and shall, in a case where the
accused is residing at a place beyond the area in
which he exercises his jurisdiction' were inserted
by Section 19 of the Code of Criminal Procedure
(Amendment) Act (Central Act 25 of 2005) w.e.f.
23-6-2006. The aforesaid amendment, in the
opinion of the legislature, was essential as false
complaints are filed against persons residing at
far-off places in order to harass them. The note
for the amendment reads as follows:

'False complaints are filed against persons
residing at far-off places simply to harass
them. In order to see that innocent persons
are not harassed by unscrupulous persons,
this clause seeks to amend sub-section (1)
of Section 202 to make it obligatory upon
the Magistrate that before summoning the
accused residing beyond his jurisdiction, he
shall enquire into the case himself or direct
investigation to be made by a police officer
or by such other person as he thinks fit, for
finding out whether or not there was
sufficient ground for proceeding against the
accused.' The use of the expression "shall"
prima facie makes the inquiry or the
investigation, as the case may be, by the
Magistrate mandatory. The word "shall" is
ordinarily mandatory but sometimes, taking
into account the context or the intention, it
can be held to be directory. The use of the
40

word "shall" in all circumstances is not
decisive. Bearing in mind the aforesaid
principle, when we look to the intention of
the legislature, we find that it is aimed to
prevent innocent persons from harassment
by unscrupulous persons from false
complaints. Hence, in our opinion, the use of
the expression "shall" and the background
and the purpose for which the amendment
has been brought, we have no doubt in our
mind that inquiry or the investigation, as
the case may be, is mandatory before
summons are issued against the accused
living beyond the territorial jurisdiction of
the Magistrate."

The judgment delivered in the cases of S.S. Binu V. State of West

Bengal and another reported in 2018 Crl.L.J 3769 as well as

Sunil Todi and Ors. Vs. State of Gujarat & Anr. reported in

(2022) 16 SCC 762 : 2021 SCC OnLine SC 1174 are squarely

applicable in the present facts and circumstances of the instant case.

31. Furthermore, this Court finds there is no substance or

ingredients to constitute offence punishable under Sections

420/406/34 of the Indian Penal Code, 1860. The Learned Trial Court

issued process under Sections 406/34 of the Indian Penal Code,

1860 without considering the case of the complainant. He must have

to prove at least prima facie case against the petitioners. A reading of
41

the complaint petition in question does not disclose any specific role

or act or particulars of the Petitioners resulting in commission of the

offences alleged. The learned counsel appearing on behalf of the

petitioners rightly relied a judgment passed in a case Binod Kumar

and others vs. State of Bihar and Another17. In the said

judgment, the Hon'ble Supreme Court held in paragraphs 16 to 18 as

follows:

"16. Section 406 IPC prescribes punishment for criminal
breach of trust as defined in Section 405 IPC. For the
offence punishable under Section 406 IPC, prosecution
must prove:

(i) that the accused was entrusted with property or
with dominion over it and

(ii) that he (a) misappropriated it, or (b) converted it
to his own use, or (c) used it, or (d) disposed of it.

The gist of the offence is misappropriation done in a
dishonest manner. There are two distinct parts of the
said offence. The first involves the fact of entrustment,
wherein an obligation arises in relation to the property
over which dominion or control is acquired. The second
part deals with misappropriation which should be
contrary to the terms of the obligation which is created.

17. Section 420 IPC deals with cheating. Essential
ingredients of Section 420 IPC are:-

17
(2014) Supreme Court Cases 663
42

(i) cheating;

(ii) dishonest inducement to deliver property or to
make, alter or destroy any valuable security or
anything which is sealed or signed or is capable of
being converted into a valuable security, and

(iii) mens rea of the accused at the time of making
the inducement.

18. In the present case, looking at the allegations in the
complaint on the face of it, we find that no allegations
are made attracting the ingredients of Section 405 IPC.
Likewise, there are no allegations as to cheating or the
dishonest intention of the appellants in retaining the
money in order to have wrongful gain to themselves or
causing wrongful loss to the complainant. Excepting the
bald allegations that the appellants did not make
payment to the second respondent and that the

appellants utilized the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest intention in misappropriating the property. To make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by the appellants. It must also be shown that the appellants dishonestly disposed of the same in some way or dishonestly retained the same. The mere fact that the appellants did not pay the money to the complainant does not amount to criminal breach of trust."

From the aforesaid observation of the Hon'ble Supreme Court, it is

crystal clear that non-payment of outstanding dues towards

Outstanding Salary or Performance Bonus by the company does not

amount to Criminal breach of trust.

32. Accordingly, CRR No. 1395 of 2022 is allowed. Connected

applications, if any, are also, thus, disposed of.

33. Consequently, the proceeding arising out of a Complaint

Case No. 180 of 2020 filed under Sections 420/406/34 of the Indian

Penal Code, 1860 by the complainant is hereby quashed insofar as

the petitioners are concerned and issuance of summons thereof upon

the petitioners are also, thus, set aside.

34. Let a copy of this Judgment be sent to the Learned Trial