Asheesh Jain vs The State Of Telangana
2023 Latest Caselaw 3981 Tel

         HIGH COURT FOR THE STATE OF TELANGANA
                       AT HYDERABAD
                              *****

Criminal Petition No.2635 OF 2019 Between:

Asheesh Jain.                                                  ..Petitioner
                                   And
The State of Telangana
Rep. by its Public Prosecutor
High Court of Telangana,through
SHO, Kanchanbagh and another                ...Respondents/ Complainants
                Criminal Petition No.2793 OF 2019
Between:
Sangeeta Jain                                                  ...Petitioner
                                  And
The State of Telangana
Rep. by its Public Prosecutor
High Court of Telangana,through
SHO, Kanchanbagh and another      ...Respondents/ Complainants
                Criminal Petition No.2813 OF 2019
Between:
Rishabh Jain                                                   ...Petitioner
                                  And
The State of Telangana
Rep. by its Public Prosecutor
High Court of Telangana,through
SHO, Kanchanbagh and another                ...Respondents/ Complainants

DATE OF JUDGMENT PRONOUNCEMENT: 06.11.2023 Submitted for approval.

THE HON'BLE SRI JUSTICE K.SURENDER 1 Whether Reporters of Local newspapers may be allowed to see the Yes/No Judgments?

2 Whether the copies of judgment may be marked to Law Reporters/Journals Yes/No

3 Whether Their Ladyship/Lordship Wish to see their fair copy of the Yes/No Judgment?

__________________ K.SURENDER, J

* THE HON'BLE SRI JUSTICE K. SURENDER

+ Crl.P. No.2635 OF 2019

% Dated 15.11.2023

# Asheesh Jain. ..Petitioner And $ The State of Telangana Rep. by its Public Prosecutor High Court of Telangana,through SHO, Kanchanbagh and another ...Respondents/ Complainants + Criminal Petition No.2793 OF 2019 # Sangeeta Jain ...Petitioner And $ The State of Telangana Rep. by its Public Prosecutor High Court of Telangana,through SHO, Kanchanbagh and another ...Respondents/ Complainants + Criminal Petition No.2813 OF 2019 # Rishabh Jain ...Petitioner And $ The State of Telangana Rep. by its Public Prosecutor High Court of Telangana,through SHO, Kanchanbagh and another ...Respondents/ Complainants

! Counsel for the Petitioner: M/s.NOMOS VISTAS THE LAWYERS

^ Counsel for the Respondents: Additional Public Prosecutor for R1 Ms.V.Umadevi for R2 >HEAD NOTE:

? Cases referred

2015 (12) SCC 781 2 2020 (3) SCC 240

2021 AIR (SC) 5626

2022 (7) SCALE 472

Criminal Petitions No.8025 and 8024 of 2021

2002(1) ALD (Crl.) 225

THE HONOURABLE SRI JUSTICE K.SURENDER

CRIMINAL PETITION NOS.2635, 2793 AND 2813 OF 2019

COMMON ORDER:

1. Criminal Petition No.2635 of 2019 is filed by A3, Criminal

Petition No.2793 of 2019 is filed by A4 and Criminal Petition

No.2813 of 2019 is filed by A1 in C.C.No.199 of 2017 on the file of

the VII Additional Metropolitan Magistrate, Hyderabad. Since the

petitioners are questioning the very same case, all the three

petitions are disposed by way of this Common Order.

2. The defacto complainant filed complaint to the police on

20.02.2015. According to the complaint, MIDHANI (Mishra Dhatu

Nigam Limited), Government of India Enterprises advertised calling

for global tenders for supply of 1500 kgs of Ferro Tungsten Alloy

with intention to import the same. M/s.Speciality Chemicals UK

Limited of UK was the lowest bidder and accordingly purchase

order dated 28.07.2014 was placed. One B.Andrew (named as A2 in

the FIR) had signed the documents. According to the terms of

purchase, country of origin of the material was China. A condition

was imposed to submit a test certificate for getting shipping

clearance by MIDHANI as M/s.Speciality Chemicals UK Limited

was a new supplier.

3. M/s.Speciality Chemicals UK Limited nominated

M/s.Rishabh Metals and Chemicals Private Limited of which A3

was the local Indian agent. On the basis of test certificate, material

was dispatched on 23.10.2014 from China. Payment of

Rs.28,43,035/- was made to M/s.Speciality Chemicals UK Limited

through Andhra Bank. On 11.12.2014, MIDHANI received e-mail

along with photographs of material stating that when the cargo was

examined, the bags did not have any particular identification labels

to confirm whether the right material was sent. The information

was forwarded and A1 who was also a local representative of

M/s.Speciality Chemicals UK Limited, who informed that the

material was lying with the customs. On 16.12.2014, inspection

was made and when analyzed the samples, the material was found

to be limestone and not Ferro Tungsten. On 18.12.2014, accused

were told that the shipment will not be cleared since it was

limestone and asked to return the amount paid.

4. On 03.01.2015, MIDHANI forwarded the certificate which was

provided by M/s.Speciality Chemicals UK Limited to the Chinese

firm, which supplied the material. It was informed that the

certificate was fake.

5. Having realized that MIDHANI was cheated, officials tried to

contact Andrew, but there was no response. The accused A1 and

A2 informed that M/s.Speciality Chemicals UK Limited was

genuine and in fact their earlier their associate M/s.Siddharth

Carbochem Products Limited had purchased Ferro Tungsten from

China and they had made high seas sale in favour of M/s.Speciality

Chemicals UK Limited and it is a genuine company and they have

taken responsibility.

6. The office of M/s.Siddharth Carbochem Products Limited

which originally sold the material to M/s.Speciality Chemicals UK

Limited was located in the very same building where M/s.Rishabh

Metals & Chemicals Private Limited and M/s.Siddharth Carbochem

Products Limited were running business. Information was sought

by the complainant and it was known that all the three petitioners

were close relatives and directors in three companies. Suppressing

the said information, each one has attributed different roles to one

another and cheated MIDHANI. In fact, M/s.Siddharth Carbochem

Products Limited, M/s.Speciality Chemicals UK Limited and

M/s.Rishabh Metals & Chemicals Private Limited were run by

these petitioners/accused. The petitioners have colluded and

falsely claimed that they were agents of M/s.Speciality Chemicals

UK Limited.

7. For the said reason of all the three petitioners colluding and

cheating MIDHANI by providing a fake certificate from China and

sending limestone instead of Ferro Tungsten resulting in loss to

MIDHANI, complaint was filed. MIDHANI had to pay customs duty

on the material.

8. On the basis of the said complaint, the police investigated the

case and filed charge sheet.

9. Learned counsel appearing for the petitioners would submit

that complaints were also registered against M/s.Changsha

Kangmei Mining Company Limited, China. The said company sent

the material and these petitioners have nothing to do with the

China company allegedly sending limestone. The companies which

are M/s.Siddharth Carbochem Products Limited, M/s.Speciality

Chemicals UK Limited and M/s.Rishabh Metals & Chemicals

Private Limited and M/s.Changsha Kangmei Mining Company

Limited, China were the companies that were involved in the

transactions but none of the companies were made as accused. The

prosecution is invalid and has to be quashed in view of the

judgments of the Hon'le Supreme Court i.e. i) Sharad Kumar

Sanghi v. Sangita Rane 1; ii) Sushil Sethi and another v. State of

Arunachal Pradesh and others 2; iii) Dayle De'souza v.

Government of India through Deputy Chief Labour

Commissioner 3Dilip Hriramani v. Bank of Baroda 4; v) Nekkanti

Venkata Rao v. Jakka Vinod Kumar Reddy 5; vi) Neeta Bhalla v.

SMS Pharmaceuticals Limited 6.

10. On the other hand, it was argued on behalf of the

respondents that there is no infirmity in the investigation or the

charge sheet that was filed against the petitioners. It was these

petitioners who had interacted with MIDHANI, as such, the

petitioners are liable.

11. According to the complaint, the petitioners had interacted,

deliberately made false claims and induced MIDHANI to part with

the said amount for purchase of Ferro Tungsten. However,

limestone was sent. The wrongful loss to MIDHANI was due to the

fraudulent acts of the petitioners.

12. The acts attributed to the petitioners are in their personal

capacities, though acting on behalf of the companies. A fabricated

2015 (12) SCC 781

2020 (3) SCC 240

2021 AIR (SC) 5626

2022 (7) SCALE 472

Criminal Petitions No.8025 and 8024 of 2021

2002(1) ALD (Crl.) 225

certificate was also provided to falsely claim limestone as Ferro

tungsten.

13. Unless the statute specifies and classifies persons who can be

made vicariously liable on behalf of an entity, there cannot be

criminal prosecution. A company is a legal entity which can be

prosecuted for the offences under IPC as laid down by the Hon'ble

Supreme Court in Standard Chartered Bank's case. If a company is

made accused in accordance with the provisions of any enactment,

vicarious liability would arise in respect of the persons responsible

for the transactions and being responsible for running the company

on day to day basis, if specified in the enactment.

14. In the present case, it is the case of the defacto complainant

that the petitioners have floated companies, running in the same

building complex and cheated MIDHANI. In the said circumstances,

the question of implicating the companies as accused does not

arise. As already stated, for the offences under IPC, there cannot be

any vicarious liability. When these petitioners have approached

MIDHANI and in the process committed acts of fraud resulting in

wrongful loss to MIDHANI, it cannot be said that the petitioners

cannot be prosecuted without making the company as accused.

According to the case of prosecution, except these petitioners no

one else approached MIDHANI on behalf of the company. If a

person floats a company and cheats in the name of the company, it

does not mean that such company has to be made an accused. In

the present facts of the case there is no illegality in prosecuting the

petitioners, without making the companies as accused.

15. In view of above discussion, all the three Criminal Petitions

fail and accordingly dismissed.

_________________ K.SURENDER, J Date: 15.11.2023 Note: LR copy to be marked.

B/o.kvs