Jharkhand High Court

Sunil Kumar Singh @ Sunil Singh vs The State Of Jharkhand on 24 August, 2023

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             IN THE HIGH COURT OF JHARKHAND, RANCHI
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Cr.M.P. No. 68 of 2017

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      1.Sunil Kumar Singh @ Sunil Singh
      2.Rahul Singh
      3.Abhishek Kumar Singh                         .... Petitioners
                                 --   Versus    --
      1.The State of Jharkhand
      2.Mukteshwar Kumar Singh                       .... Opposite Parties
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CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI

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For the Petitioners :- Mr. R.S. Mazumdar, Senior Advocate Mr. Nishant Kumar Roy, Advocate For the State :- Mr. Rajneesh Vardhan, Advocate For the O.P.No.2 :- Mr. Mahesh Tewari, Advocate

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21/24.08.2023 Heard Mr. R.S.Mazundar, the learned Senior counsel along

with Mr. Nishant Kumar Roy, the learned assisting counsel appearing on

behalf of the petitioners, Mr. Rajneesh Vardhan, the learned counsel

appearing on behalf of the respondent State and Mr. Mahesh Tewari, the

learned counsel appearing on behalf of the Opposite Party No.2.

2. This petition has been filed for quashing of the entire

criminal proceeding including the order taking cognizance dated

12.08.2016 passed in connection with Complaint Case No.374 of 2016,

pending in the court of learned Judicial Magistrate, Ranchi.

3. The entire case is based on not providing the choice

number for the vehicle in question after paying a sum of Rs.11,000/- for

the same.

4. Mr. Mazumdar, the learned Senior counsel appearing on

behalf of the petitioners submits that the learned court has been pleased

to take cognizance by order dated 12.08.2016 against these petitioners.

By way of referring solemn affirmation he submits that the role of the

petitioners played in such transaction has not been disclosed. He further

submits that Celerio car was purchased by M/s Sudha Business

Enterprises Private Limited and the company is not made an accused. He

submits that the company has already deposited the amount and the

form was duly submitted which was obtained from the office of the

D.T.O. under the Right to Information Act contained at page-42 and 43.

He submits that no ingredient of cheating from the very beginning is

made out against the petitioners who happened to be the Directors of

the said company/firm. He submits that when the petitioner came to

know about the present case, a sum of Rs.11,000/- was already refunded

by Annexure-3 to the main petition. He submits that when the company

is not made an accused and if the allegations are made against the

company the entire criminal proceeding is vitiated and to buttress his

such argument he relied in the case of Ravindranatha Bajpe v.

Mangalore Special Economic Zone Ltd. and Others, 2021 SCC

OnLine SC 806 and he refers to paragraph nos.27 and 28 of the said

judgment which are quoted below:

27. As held by this Court in the case of India Infoline Limited (supra), in the order issuing summons, the learned Magistrate has to record his satisfaction about a prima facie case against the accused who are Managing Director, the Company Secretary and the Directors of the Company and the role played by them in their respective capacities which is sine qua non for initiating criminal proceedings against them. Looking to the averments and the allegations in the complaint, there are no specific allegations and/or averments with respect to role played by them in their capacity as Chairman, Managing Director, Executive Director, Deputy General Manager and Planner & Executor. Merely because they are Chairman, Managing Director/Executive Director and/or Deputy General Manager and/or Planner/Supervisor of A1 & A6, without any specific role attributed and the role played by

them in their capacity, they cannot be arrayed as an accused, more particularly they cannot be held vicariously liable for the offences committed by A1 & A6.

28. From the order passed by the learned Magistrate issuing the process against the respondents herein - accused nos. 1 to 8, there does not appear that the learned Magistrate has recorded his satisfaction about a prima facie case against respondent nos. 2 to 5 and 7 & 8. Merely because respondent Nos. 2 to 5 and 7 & 8 are the Chairman/Managing Director/Executive Director/Deputy General Manager/Planner & Executor, automatically they cannot be held vicariously liable, unless, as observed hereinabove, there are specific allegations and averments against them with respect to their individual role. Under the circumstances, the High Court has rightly dismissed the revision applications and has rightly confirmed the order passed by the learned Sessions Court quashing and setting aside the order passed by the learned Magistrate issuing process against respondent nos. 1 to 8 herein - original accused nos. 1 to 8 for the offences punishable under Sections 427, 447, 506 and 120B read with Section 34 IPC.

5. He submits that if the corporate criminal liability is there,

the liability of directors, controlling authority of the company only arises,

there must be specific statutory provision in that regard and vicarious

liability in view of that cannot be fastened against the petitioners who

happened to be Directors of M/s Sudha Business Enterprises Private

Limited and to buttress his such argument, he relied in the case of Shiv

Kumar Jatia v. State (NCT of Delhi), (2019) 17 SCC 193 and he refers

to paragraph nos.19 to 21 of the said judgment, which are quoted below:

19. The liability of the Directors/the controlling authorities of company, in a corporate criminal liability is elaborately considered by this Court in Sunil Bharti Mittal [Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609 : (2015) 2 SCC (Cri) 687] . In the aforesaid case, while considering the circumstances when Director/person in charge of the

affairs of the company can also be prosecuted, when the company is an accused person, this Court has held, a corporate entity is an artificial person which acts through its officers, Directors, Managing Director, Chairman, etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. At the same time it is observed that it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides for. It is further held by this Court, an individual who has perpetrated the commission of an offence on behalf of the company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent.

Further it is also held that an individual can be implicated in those cases where statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision.

20. Though there are allegations of negligence on the part of the hotel and its officers who are incharge of day- to-day affairs of the hotel, so far as appellant-Accused 2 Shiv Kumar Jatia is concerned, no allegation is made directly attributing negligence with the criminal intent attracting provisions under Sections 336, 338 read with Section 32 IPC. Taking contents of the final report as it is we are of the view that, there is no reason and justification to proceed against him only on ground that he was the Managing Director of M/s Asian Hotels (North) Ltd., which runs Hotel Hyatt Regency. The mere fact that he was chairing the meetings of the company and taking decisions, by itself cannot directly link the allegation of negligence with the criminal intent, so far as appellant-Accused 2. Applying the judgment in Sunil Bharti Mittal [Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609 : (2015) 2 SCC (Cri) 687] we are of the view that the said view expressed by this Court, supports the case of appellant-Accused 2.

21. By applying the ratio laid down by this Court in Sunil Bharti Mittal [Sunil Bharti Mittal v. CBI, (2015) 4

SCC 609 : (2015) 2 SCC (Cri) 687] it is clear that an individual either as a Director or a Managing Director or Chairman of the company can be made an accused, along with the company, only if there is sufficient material to prove his active role coupled with the criminal intent. Further the criminal intent alleged must have direct nexus with the accused. Further in Maksud Saiyed v. State of Gujarat [Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668 : (2008) 2 SCC (Cri) 692] this Court has examined the vicarious liability of Directors for the charges levelled against the Company. In the aforesaid judgment this Court has held that, the Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company, when the accused is a company. It is held that vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. It is further held that statutes indisputably must provide fixing such vicarious liability. It is also held that, even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability.

6. On the aforesaid grounds, he submits that the entire

criminal proceeding may kindly be quashed.

7. Per contra, Mr. Mahesh Tewari, the learned counsel

appearing on behalf of the O.P.No.2 submits that in the prayer portion

the prayer is made only for the quashing of the order taking cognizance,

however, there is no prayer of quashing of summons. He submits that all

these petitioners assured and insisted the O.P.No.2 and that is why the

O.P.no.2 has paid an additional amount of Rs.11,000/- for the choice

number as 0135. By way of referring the paragraph nos.34, 40 and 41 of

the counter affidavit, he further submits that the opposite party no.2 has

been cheated by the accused petitioners in their personal capacity on the

date with the car was purchased the accused petitioners each of them

personally approached the O.P.No.2 assuring him that he would be given

the choice number and even earlier due to this promise and on the part

of the accused petitioners the O.P.No.2 had made his mind for purchase

of the said car. He submits that the petitioners have personally attended

the O.P.No.2 assuring him that if he purchases the vehicle the accused

petitioners undertake that they will provide the choice number from the

office of the D.T.O., Ranchi. He further submits that the documents that

has been annexed as Form-20 does not disclose the entire facts of the

matter rather, it only discloses that the application was made before the

District Transport Office, Ranchi. He submits that for ordinary number

only Rs.700/- is being deposited, however, for choice number, in view of

the notification of Government of Jharkhand a prescribed fee is required

to be deposited, however, they have not deposited Rs.11,000/- for the

choice number. He submits that this submission is fortified in view of the

document annexed as Annexure-'A' which is the statement of account

with regard to the vehicle in question. Annexure-'B' which is the order

dated 22.2.2017 passed by the coordinate Bench of this Court wherein it

has been falsely stated that by the RTGS the said amount has been

returned and by way of referring Annexure-C to the counter affidavit he

submits that this document has been obtained under the Right to

Information Act whereas the office of the D.T.O. has informed that the

said number has already been allotted to another person and the

procedure of providing the choice number is further disclosed therein. He

further submits that so far not making party of the company is concerned

it is not fatal and the allegations are there and the petitioners in their

personal capacity have done so and in view of that, further if there is no

allegation of removing the defect with regard to vehicle, the company is

not necessary party. He further submits that if the case is made out, the

Court is only required to look into the complaint as well as the FIR and

the order taking cognizance as well and in view of that, if the case is

made out, this Court may restrain itself in quashing the entire criminal

proceeding and to buttress his argument, he relied in the case of Indian

Oil Corporation v. NEPC India Ltd. and Others, (2006) 6 SCC 736

and refers to paragraph no.12 of the said judgment, which is quoted

below:

12. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few--Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre [(1988) 1 SCC 692 : 1988 SCC (Cri) 234] , State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , Rupan Deol Bajaj v. Kanwar Pal Singh Gill [(1995) 6 SCC 194 : 1995 SCC (Cri) 1059] , Central Bureau of Investigation v. Duncans Agro Industries Ltd. [(1996) 5 SCC 591 : 1996 SCC (Cri) 1045] , State of Bihar v. Rajendra Agrawalla [(1996) 8 SCC 164 : 1996 SCC (Cri) 628] , Rajesh Bajaj v. State NCT of Delhi [(1999) 3 SCC 259 : 1999 SCC (Cri) 401] , Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269 : 2000 SCC (Cri) 615] , Hridaya Ranjan Prasad Verma v. State of Bihar [(2000) 4 SCC 168 : 2000 SCC (Cri) 786] , M. Krishnan v. Vijay Singh [(2001) 8 SCC 645 : 2002 SCC (Cri) 19] and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005) 1 SCC 122 : 2005 SCC (Cri) 283] . The principles, relevant to our purpose are:

(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused.

For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations.

Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or

genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.

(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.

(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.

(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.

(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.

8. On this ground, he submits that no case of interference is

made out and this petition may kindly be dismissed.

9. He further elaborates his argument by way of submitting

that the vehicle in question was purchased on 09.11.2015 and application

for number was made on 07.12.2015 through an staff of M/s Sudha

Business Enterprises Private Limited namely Mr. Sanjay. He submits that

Form-20 annexed with the main petition dated 23.09.2016. On this

ground, he submits that this is not a case of quashing of the entire

criminal proceeding.

10. In view of the submission of the learned counsel appearing

on behalf of the parties, the Court has gone through the materials on

record including the contents of the complaint petition, the solemn

affirmation, the annexures annexed with the petition as well as the

counter affidavit and annexures thereon. It is an admitted fact that the

O.P.No.2 has purchased Celerio ZXI-CER on 09.11.2015. The application

was made for number by one staff of M/s Sudha Business Enterprises

Private Limited namely Mr. Sanjay. The petitioners are said to be the

Directors of the said Sudha Business Enterprises Private Limited. The

learned court has been pleased to take cognizance and summoned the

petitioners by order dated 12.8.2016. After the order taking cognizance,

the amount in question was refunded by Annexure-3 which has been

denied by the learned counsel for the O.P.No.2 saying that the said

amount has not been allowed to be credited by the O.P.No.2 in the

account. The application for registration was already made which has

been disclosed in the counter affidavit filed by the O.P.no.2 in paragraph

no.11 by one of the staff of the said company on 07.12.2015. It is an

admitted case that a sum of Rs.11,000/-for choice number was also

deposited by the O.P.No.2 with M/s Sudha Business Enterprises Private

Limited contained in Annexure-A of the counter affidavit. Annexure-C is

the document of D.T.O suggesting the procedure of allowing the choice

number and it was disclosed that the said number was already allowed

earlier to another person. The petitioners have already returned the said

amount, however, it has been disputed by the learned counsel for the

O.P.no.2 about the credit of that amount in his account as the O.P.No.2

has directed the bank not to allow the credit in the said account. It is

further an admitted case that the learned Sessions Judge has been

pleased to allow the anticipatory bail petition by order dated 17.11.2016

and considering that the amount has already been returned. The Court

further finds that there is no dispute that these petitioners who

happened to be the Directors of the said company. Admittedly the said

amount of Rs.11000/- was deposited in with the M/s Sudha Business

Enterprises Private Limited and one of the staff as has been discussed in

paragraph no.11 of the counter affidavit has deposited the amount for

registration of the vehicle in question. However, it has been pointed out

by the learned counsel for the O.P.no.2 that only Rs.700/- was deposited

and which is the fee for general number. Thus, it is crystal clear that the

said amount was deposited with the said company and one of the staff

has already acted upon and has deposited the amount, the question

remains as to whether in such circumstance, the case of cheating under

section 415 of the IPC is made out or not. Further for making the case of

cheating, the intention from the very beginning is required to be there

which is lacking in the case in hand. Looking to the complaint petition the

Court finds that in paragraph no.5 of the said complaint petition, the

complainant has also admitted that all correspondences were made with

M/s Sudha Business Enterprises Private Limited, thus, it cannot be said

that three of the Directors of M/s Sudha Business Enterprises Private

Limited have involved themselves for cheating a sum of Rs.11,000/- and

if such situation is there, the case of the petitioners is fully covered in

view of the judgment relied by the learned counsel for the petitioners in

the case of 'Ravindranatha Bajpe v. Mangalore Special Economic

Zone Ltd. and Others' and 'Shiv Kumar Jatia v. State (NCT of

Delhi), (2019) 17 SCC 193' (supra). The judgment relied by Mr.

Tewari, the learned counsel for the O.P.no.2 with regard to Indian Oil

Corporation v. NEPC India Ltd. and Others(supra), it is not in

dispute. It is well settled that the Court if the criminality is made out, the

civil and criminal proceeding can go simultaneously. However, if the

criminality is not made out, the criminal case cannot be allowed to

proceed which amounts to abuse of the process of law. In the case relied

by Mr. Tewari, the learned counsel for the O.P.No.2 in paragraph nos.13

and 14 of the judgment ijn the case of Indian Oil Corporation v.

NEPC India Ltd. and Others, (2006) 6 SCC 736, the consequences

of criminal proceeding has been dealt by the Hon'ble Supreme Court,

which is quoted hereinbelow:

"13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged. In G. Sagar Suri v. State of U.P. [(2000) 2 SCC 636 : 2000 SCC (Cri) 513] this Court observed: (SCC p. 643, para 8) "It is to be seen if a matter, which is essentially of a 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 the 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."

14. While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under Section 250 CrPC more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may."

11. At best this can be said that it is a case of deficiency in

service and if the deficiency in service is detected post-purchase, offence

of an avenue for the aggrieved consumer to seek relief before the

consumer forum, as has been held by the Hon'ble Supreme Court in the

case of Debashis Sinha v. R.N.R Enterprise, (2023) 3 SCC 195,

paragraph no.16 of the said judgment is quoted below:

16. We have failed to comprehend as to what NCDRC meant when it observed that the appellants "ought to have known what they were purchasing." More often than not, the jurisdiction of the consumer For a under the CP Act is invoked post-purchase. If complaints were to be spurned on the specious ground that the consumers knew what they were purchasing, the object and purpose of the enactment would be defeated. Any deficiency detected post purchase opens up an avenue for the agrrieved consumer to seek relief before the Consumer Fora. The reasoning of NCDRC is, thus, indefensible. Indeed, the appellants had purchased their respective flats on payment of consideration amounts as per market rate and there was due execution and registration of the deeds of conveyance preceded by agreements for sale and these instruments did indicate, inter alia, what formed part of the common facilities/amenities; however, the matter obviously could not have ended there. Whether the appellants had been

provided what the respondents had promised did survive for consideration, which does not get reflected in the impugned order.

12. Although the case has been registered under section 120B,

406 and 420 of the IPC, however, the learned court has only taken

cognizance under section 420 of the IPC and for taking such cognizance,

the ingredient of section 415 is required to be fulfilled which is lacking in

the case in hand. The petitioners have prayed for quashing the order

dated 12.08.2016 which is composite order and thus, word summon not

disclosed in prayer has got no consequence.

13. In view of the above reasons and analysis, entire criminal

proceeding including the order taking cognizance dated 12.08.2016

passed in connection with Complaint Case No.374 of 2016, pending in

the court of learned Judicial Magistrate, Ranchi is quashed.

14. This petition is allowed and disposed of.