Sh. Venkatram Mamillapalle vs The State Of Jharkhand
2023 Latest Caselaw 518 Jhar

IN THE HIGH COURT OF JHARKHAND AT RANCHI
                       Cr.M.P. No. 1826 of 2021
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Sh. Venkatram Mamillapalle           .... .... .... Petitioner
                      Versus
1. The State of Jharkhand
2. Mrs. Rachna Kumari               ....  .... .... Opp. Parties

CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY

For the Petitioner : Mr. Shailesh Poddar, Advocate
For the State      : Mr. Manoj Kumar, A.P.P.
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Order No.10 Dated : 01.02.2023

Instant petition has been filed for quashing of F.I.R. of Deoghar Town P.S. Case No.285 of 2021 under Section 406 & 420 of the Indian Penal Code.

2. The complaint petition filed by one Rachna Kumari which is the basis of present case. As per the prosecution case, the complainant/informant had approached Renault India Pvt. Ltd. showroom situated at Deoghar for purchase of Duster RXS 110PS BSIV (Diesel Car) which was supplied on 20.06.2019 was found to be not the model for which tax invoice and account ledger were raised. As per documents, Duster RXS 85PS BSIV was supplied in place of Duster RXS 110PS BSIV for which the order was placed.

3. Instant petition has been filed mainly on two main grounds. First is that the petitioner is Chief Executive Officer of Renault India Pvt. Ltd. with Head Office at Chennai and had not directly dealt with the customers at Deoghar and therefore, it cannot be said that he had induced the informant or made misrepresentation of any kind. There is no effective role or control in end sale of the vehicles by such authorized dealers to any prospective buyer. There is no material to disclose the fundamental ingredient of the offence under Section 406/420 of the IPC. To make out an offence under Section 406 of the IPC, there must be some material to show (i) entrustment of a property or dominion over property, (ii) the accused was actuated by dishonest intention, misappropriated it or converted to his own use. It is settled law that dishonest inducement is the basic ingredient of the offence of cheating. In the absence of any allegation of inducement in the FIR against the petitioner or any of its employees, the offence under Section 420 is not made out. Director of a Company can only be prosecuted if there is sufficient evidence of his active role coupled with dishonest intention to commit the offence.

4. There does not exist, principal and agent relationship between

manufacturer Company and its dealer, in support of it the dealership agreement which is Annexure 2 has been annexed. Invoice was raised for the supply of Duster RXS 85PS BSIV by the dealer for which the supply has been made as per Annexure-3, therefore, no fault lies on the part of this petitioner in the entire criminal proceeding.

5. Second point of argument is that the instant petition has been referred by the learned Court forwarded under Section 156(3) of the Cr.P.C. without following mandatory guideline as laid down in the case of Priyanka Srivastava & Others Vs. State of U.P. & Others reported in AIR 2015 SC 1758 which has been reiterated by the Hon'ble Supreme Court and other High Courts in the other judgments being Babu Venkatesh & Others Versus State of Karnataka and M.S. Unnikrishnan Versus State of Jharkhand.

6. The notice had been earlier issued and served on the informant but none has appeared.

7. Learned A.P.P. appeared and filed counter affidavit in which it has been disputed that guidelines of Priyanka Srivastava (supra) was not followed. It is also submitted that the complaint is supported by the affidavit and the criminal proceeding cannot be scuttled on this ground. It is submitted that liability of this petitioner arise from the fact that the order of particular model was forwarded by the showroom of Renault to its Headquarter and the particular model was not supplied and therefore, Chief Executive Officer cannot escape from criminal liability on this score. Liability of this petitioner can only be determined on the investigation and not at this stage.

8. In order to appreciate the ratio laid down by Hon'ble the Supreme Court in Priyanka Srivastava v. State of U.P., (2015) 6 SCC 287 it will be desirable to extract the relevant part of the judgment which is as under,

30. In our considered opinion, a stage has come in this country where Section 156(3) CrPC applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate.

31. We have already indicated that there has to be prior applications under Sections 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an application under Section 156(3) be supported by an affidavit is so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already stated that the veracity of the same can also be verified by the learned Magistrate, regard being had to the nature of allegations of the case. We are compelled to say so as a number of cases pertaining to fiscal sphere, matrimonial dispute/family disputes, commercial offences, medical negligence cases, corruption cases and the cases where there is abnormal delay/laches in initiating criminal prosecution, as are illustrated in Lalita Kumari [(2014) 2 SCC 1 : (2014) 1

SCC (Cri) 524] are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR.

9. From the above it is apparent that the above guideline is to be followed when an application is filed by the complainant under Section 156 (3) of the Cr.P.C and not when the Court suo motu proceeds to forward the complaint for investigation by the police. The salutary guidelines are intended to curb frivolous and meritless cases where the complainant invokes the jurisdiction of the Court to forward the applications for registration of the case and investigation by police. This is to ensure that the complainant is made liable and responsible for the truthfulness of assertions being made. The guidelines do not in any way denude the statutory power of the Court to forward the complaint under section 156(3) of the Cr.P.C in appropriate cases for which it cannot demand affidavit by the Complainant. This is not intended to fetter the jurisdiction of the Court to forward Complaint Petition. Further, when the courts proceed suo motu, the complainant cannot be expected to anticipate such move by the Court and file complaint accordingly, fulfilling the requisite conditions.

10. This Court is therefore of the view that ratio of Priyanka Srivastava (supra) has not been violated so as to axe the case and quash the entire criminal proceeding on this ground.

11. On the second limb of the argument, the law is settled that a corporate entity is an artificial person which acts through its officers, directors, managing director/chairman etc. It is the cardinal principle of criminal jurisprudence that where there are allegations of vicarious liability, then there has to be sufficient evidence of the active role of each director. There has to be a specific act attributed to a director or the person allegedly in control of management of the company, to the effect that such a person was responsible for the acts committed by or on behalf of the company. There is consistent line of judicial precedence on the point that there should be some material to show active role of the Director or the officer in order to initiate criminal prosecution against him. Reference to some of the judicial pronouncement on the subject will amply clarify the law on the point.

Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609

43. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision.

44. When the company is the offender, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect.

Sharad Kumar Sanghi Vs Sangat Rane (2015)12 SCC 781 The allegations which find place against Managing Director in his personal capacity seem to be absolutely vague. When a complainant intends to rope in the Managing Director or any officer of the Company, it is essential to make requisite allegation to constitute the vicarious liability.

Shiv Kumar Jatia v. State (NCT of Delhi), (2019) 17 SCC 193

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.

12. Here in the present case petitioner is the CEO and MD of Renault India Private Limited, with its headquarter at Chennai, the complainant/informant is a resident of Deoghar and the agency from which the car was booked has been made accused No.2 having its showroom situated both at Deoghar and Dhanbad. The said car was supplied to the informant by accused no.2 from the showroom at Dhanbad. The financial transactions and in the documentation work, like issuance of sale certificate in detail invoice was given by Absolute Auto Pvt ltd. Renault Dhanbad. There was never any interface between the petitioner (A1) and the informant. There is no role attributed to the petitioner, much less in the said act of supplying a different car than for which the order was booked.

Under the circumstance, this Court is of the view that there is no material to make out a prima facie case against the petitioner and criminal prosecution shall be a gross abuse of process of Court. The entire criminal proceeding arising out of Deoghar Town P.S. Case No.285 of 2021 against this petitioner is accordingly quashed.

Criminal Miscellaneous Petition is allowed.

(Gautam Kumar Choudhary, J.) Anit