Tuesday 13 September 2016

Guidelines for exercise of power of quashing of prosecution By high court U/S 482 of CRPC

 In State of Haryana and Ors. v. Bhajan Lal and
Ors. reported in 1992 Supp(1) SCC 335, this Court
laid down the following guidelines where the power
under Section 482 should be exercised. They are:-
“102. In the backdrop of the interpretation
of the various relevant provisions of the
Code under Chapter XIV and of the principles of
law enunciated by this Court in a series of decisions
relating to the exercise of the extraordinary
power under Article 226 or the inherent
powers under Section 482 of the Code which
we have extracted and reproduced above, we give
the following categories of cases by way of illustration
wherein such power could be exercised
either to prevent abuse of the process of
any court or otherwise to secure the ends of
justice, though it may not be possible to lay
down any precise, clearly defined and sufficiently
channelised and inflexible guidelines
or rigid formulae and to give an exhaustive
list of myriad kinds of cases wherein such
power should be exercised.
(1) Where the allegations made in the
first information report or 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 a case against the accused.
(2) Where the allegations in the first information
report and other materials, if
any, accompanying the FIR do not disclose
a cognizable offence, justifying an investigation
by police officers under Section
156(1) of the Code except under an order
of a Magistrate within the purview of Section
155(2) of the Code.
(3) Where the uncontroverted allegations
made in the FIR or complaint and the evidence
collected in support of the same do
not disclose the commission of any offence
and make out a case against the accused.
(4) Where, the allegations in the FIR do
not constitute a cognizable offence but
constitute only a non-cognizable offence,
no investigation is permitted by a police
officer without an order of a Magistrate
as contemplated under Section 155(2) of
the Code.
(5) Where the allegations made in the FIR
or complaint are so absurd and inherently
improbable on the basis of which no prudent
person can ever reach a just conclusion
that there is sufficient ground for
proceeding against the accused.
(6) Where there is an express legal bar
engrafted in any of the provisions of the
Code or the concerned Act (under which a
criminal proceeding is instituted) to the
institution and continuance of the proceedings
and/or where there is a specific
provision in the Code or the concerned
Act, providing efficacious redress for the
grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly
attended with mala fide and/or
where the proceeding is maliciously instituted
with an ulterior motive for wreaking
vengeance on the accused and with a view
to spite him due to private and personal
grudge.”
We find that the High Court ought to have exercised
its power under Clause (1), (3) and (5) of the above
said judgment.
17. In Madhavrao Jiwajirao Scindia and Ors. v.
Sambhajirao Chandrojirao Angre and Ors., reported in
(1988) 1 SCC 692, this Court observed as follows:-
“7. The legal position is well settled
that when a prosecution at the initial stage is
asked to be quashed, the test to be applied by
the court is as to whether the uncontroverted
allegations as made prima facie establish the
offence. It is also for the court to take into
consideration any special features which appear
in a particular case to consider whether it is
expedient and in the interest of justice to permit
a prosecution to continue. This is so on the
basis that the court cannot be utilised for any
oblique purpose and where in the opinion of the
court chances of an ultimate conviction are
bleak and, therefore, no useful purpose is
likely to be served by allowing a criminal prosecution
to continue, the court may while taking
into consideration the special facts of a case
also quash the proceeding even though it may be
at a preliminary stage.”
18. This Court in Janata Dal v. H.S. Chowdhary and
Ors., reported in (1992) 4 SCC 305, observed as
follows:-
“132. The criminal courts are clothed with
inherent power to make such orders as may be
necessary for the ends of justice. Such power
though unrestricted and undefined should not
be capriciously or arbitrarily exercised, but
should be exercised in appropriate cases, ex
debito justitiae to do real and substantial
justice for the administration of which alone
the courts exist. The powers possessed by the
High Court under Section 482 of the Code are
very wide and the very plenitude of the power
requires great caution in its exercise. Courts
must be careful to see that its decision in
exercise of this power is based on sound principles.”
We reiterate the same caution having found that this
is an appropriate case for the exercise of such
powers.
19. The entire law on the subjects was reviewed by a
three Judges Bench of this Court in Inder Mohan
Goswami and Anr. v. State of Uttaranchal and Ors.,
reported in (2007) 12 SCC 1 vide paragraphs 23 to 39.
Thereafter, the law was reiterated in R. Kalyani v.
Janak C. Mehta and Ors. reported in (2009) 1 SCC 516
vide paragraphs 15 and 16.
20. In all the cases the principle that the accused
must be relieved from the prosecution, even if the
allegations are taken at their face value and
accepted in their entirety do not constitute any
offence has been upheld, and thereafter in Umesh
Kumar v. State of Andhra Pradesh and anr., reported
in (2013) 10 SCC 591.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

 CRIMINAL APPEAL NO. 133 OF 2016
(Arising out of S.L.P.(Crl.) No.2554 of 2011)
RAMESH RAJAGOPAL Appellant(s)
 Versus
DEVI POLYMERS PRIVATE LIMITED Respondent(s)
Citation: 2016 ALLSCR (CRI)757:(2016) 6 SCC310
S.A.BOBDE, J.

1. We have heard learned counsel for the parties.
2. Leave granted.
3. The appellant has preferred this appeal against
the judgment passed by the Madras High Court in
Criminal O.P. No. 4404 of 2010 refusing to quash the
criminal proceedings initiated against him.
4. The appellant was prosecuted by the respondent
under Sections 409, 468 and 471 of the Indian Penal
Code (in short 'the IPC') read with Sections 65 and
66 of the Information Technology Act, 2000 read with
Section 120(b) of the IPC. The appellant is a
Director in Devi Polymers Private Limited, Chennai
which is a leader in Polyester Moulding Compound
(PMC), Sheet Moulding Compound (SMC) and Dough
Moulding Compound (DMCO) in India.
It is also manufacturing SMC and DMC moulded
components for the electrical, automotive and various
other industries. The company is also supplying SMC
and DMC compounds and components to almost all the
leading electrical switch gear industries and
automotive industries in India.
5. It has three Units – A, B and C. Unit 'C' is
being headed by the appellant. It is not disputed
that the Unit 'C' primarily renders consultancy
services. However, all the three Units are units of
one entity i.e. Devi Polymers Private Limited.
6. In the course of business, the appellant thought
of improving the consultancy services and apparently
contacted a consultant known as Michael T Jackson.
He also contacted the regular consultants of the
Company i.e. Devi Polymers Private Limited. The
consultants apparently advised the creation of a
separate entity known as Devi Consultancy Services
and accordingly, in the web page that was created by
the consultant, this name occurred. Since an invoice
was raised by the consultant Michael T Jackson inPage 3
3
the sum of 10,857.50 US Dollars, the said amount was
paid from the funds of Devi Polymers Private Limited
amounting to Rs.5,57,207/-. The amount of
Rs.17,000/-has been paid by the Devi Polymers Private
Limited to M/s Easy Link. These amounts were paid as
advised by the appellant. It is significant that no
amount has been paid or received by Unit C
separately, independently of Devi Polymers Private
Limited. All this, namely the engaging of
consultants and payments to them was apparently done
at the behest of the appellant.
7. The relationship being strained between the
respondent and the appellant, who are relatives,
several proceedings seem to have been initiated in
the Company Law Board pertaining to oppression and
mismanagement. As of now, it is said that the
appellant's petition for mismanagement has been
dismissed but an appeal is pending. We are, however,
not concerned with those proceedings.
8. However, in the course of disputes and the
pending proceedings, the respondent initiated the
instant criminal complaint against the appellant.
The main circumstances which are relied upon by the
respondent in the complaint is that in the website
for Devi Consultancy Services that was created on the
advice of the consultant is shown as a separate
division independent of Devi Polymers Private
Limited. According to the complainant, this has
resulted in forgery, since there is no such thing as
Devi Consultancy Services; though the existence of
Unit C of Devi Polymers Private Limited, which deal
with consultancy is not denied. The second
circumstance seems to be the payment made by the Devi
Polymers Private Limited to the consultants from
their own account. The former is said to be forgery
and the latter is said to be mis-appropriation of
funds and breach of trust.
9. Having given our anxious consideration to the
dispute, we find that none of the aforesaid
circumstances can lead to an inference of commission
of an offence under the IPC at any rate none of the
offence alleged. As far as the website is concerned,
though undoubtedly, Devi Consultancy Services (DCS)
is mentioned, it is made clear in the website itself
that DCS is a part of Devi Polymers Private Limited
which is apparent from a link which shows Devi
Polymers Private Limited, in the website itself, are
shown as Devi Polymers Private Limited, the main
Company and Devi Consultancy Services as a sister
Company. Similarly, in the website of Devi Polymers
Private Limited, which was moved by the consultant,
there is a link which shows that Devi Consultancy
Services is a sister concern and it is stated that
viewers may visit that site. The address of Devi
Consultancy Services is shown to be the same address
as that of Devi Polymers Private Limited. We are
satisfied that there is no attempt whatsoever to
project the Devi Consultancy Services as a concern or
a Company which is independent and separate from Devi
Polymers Private Limited, to which both the parties
belong. In any case it is not possible to view the
act as an act of forgery.
10. It might have been possible to attribute some
criminal intent to the projection of the Unit C as
Devi Consultancy Services in the website, if as a
result of such projection, the appellant had received
any amounts separate from the Devi Polymers Private
Limited, but a perusal of the complaint shows that
this is not so. Not a single rupee has been received
by the appellant in his own name or even separately
in the name of Unit C, which he is heading. All
amounts have been received by Devi Polymers Private
Limited.
11. Section 463 of the Indian Penal Code defines
forgery which reads as follows:-
“463. Forgery.— Whoever makes any false
documents or false electronic record or part
of a document or electronic record, with
intent to cause damage or injury, to the
public or to any person, or to support any
claim or title, or to cause any person to part
with property, or to enter into any express or
implied contract, or with intent to commit
fraud or that fraud may be committed, commits
forgery.”
12. It is not possible to view the contents of the
website showing the Devi Consultancy Services as a
concern which is separate from Devi Polymers Private
Limited in view of the contents of the website
described above. Moreover, it is not possible to
impute any intent to cause damage or injury or to
enter into any express or implied contract or any
intent to commit fraud in the making of the said
website. The appellant has not committed any act
which fits the above description. Admittedly, he has
not received a single rupee or nor has he entered
into any contract in his own name on the basis of the
above website.
13. Section 468 of the IPC reads as follows:-
“468. Forgery for purpose of
cheating — Whoever commits forgery,
intending that the document or
electronic record forged shall be used
for the purpose of cheating, shall be
punished with imprisonment of either
description for a term which may extend
to seven years, and shall also be
liable to fine.”
14. In the absence of any act in pursuance of the
website by which he has deceived any person
fraudulently or dishonestly, induced any one to
deliver any property to any person, we find that it
is not possible to attribute any intention of
cheating which is a necessary ingredient for the
offence under Section 468.
15. We find that the allegations that the appellant
is guilty of an offence under the aforesaid section
are inherently improbable and there is no sufficient
ground of proceedings against the accused. The
proceedings have been initiated against the appellant
as a part of an ongoing dispute between the parties
and seem to be due to a private and personal grudge.
16. In State of Haryana and Ors. v. Bhajan Lal and
Ors. reported in 1992 Supp(1) SCC 335, this Court
laid down the following guidelines where the power
under Section 482 should be exercised. They are:-
“102. In the backdrop of the interpretation
of the various relevant provisions of the
Code under Chapter XIV and of the principles of
law enunciated by this Court in a series of decisions
relating to the exercise of the extraordinary
power under Article 226 or the inherent
powers under Section 482 of the Code which
we have extracted and reproduced above, we give
the following categories of cases by way of illustration
wherein such power could be exercised
either to prevent abuse of the process of
any court or otherwise to secure the ends of
justice, though it may not be possible to lay
down any precise, clearly defined and sufficiently
channelised and inflexible guidelines
or rigid formulae and to give an exhaustive
list of myriad kinds of cases wherein such
power should be exercised.
(1) Where the allegations made in the
first information report or 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 a case against the accused.
(2) Where the allegations in the first information
report and other materials, if
any, accompanying the FIR do not disclose
a cognizable offence, justifying an investigation
by police officers under Section
156(1) of the Code except under an order
of a Magistrate within the purview of Section
155(2) of the Code.
(3) Where the uncontroverted allegations
made in the FIR or complaint and the evidence
collected in support of the same do
not disclose the commission of any offence
and make out a case against the accused.
(4) Where, the allegations in the FIR do
not constitute a cognizable offence but
constitute only a non-cognizable offence,
no investigation is permitted by a police
officer without an order of a Magistrate
as contemplated under Section 155(2) of
the Code.
(5) Where the allegations made in the FIR
or complaint are so absurd and inherently
improbable on the basis of which no prudent
person can ever reach a just conclusion
that there is sufficient ground for
proceeding against the accused.
(6) Where there is an express legal bar
engrafted in any of the provisions of the
Code or the concerned Act (under which a
criminal proceeding is instituted) to the
institution and continuance of the proceedings
and/or where there is a specific
provision in the Code or the concerned
Act, providing efficacious redress for the
grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly
attended with mala fide and/or
where the proceeding is maliciously instituted
with an ulterior motive for wreaking
vengeance on the accused and with a view
to spite him due to private and personal
grudge.”
We find that the High Court ought to have exercised
its power under Clause (1), (3) and (5) of the above
said judgment.
17. In Madhavrao Jiwajirao Scindia and Ors. v.
Sambhajirao Chandrojirao Angre and Ors., reported in
(1988) 1 SCC 692, this Court observed as follows:-
“7. The legal position is well settled
that when a prosecution at the initial stage is
asked to be quashed, the test to be applied by
the court is as to whether the uncontroverted
allegations as made prima facie establish the
offence. It is also for the court to take into
consideration any special features which appear
in a particular case to consider whether it is
expedient and in the interest of justice to permit
a prosecution to continue. This is so on the
basis that the court cannot be utilised for any
oblique purpose and where in the opinion of the
court chances of an ultimate conviction are
bleak and, therefore, no useful purpose is
likely to be served by allowing a criminal prosecution
to continue, the court may while taking
into consideration the special facts of a case
also quash the proceeding even though it may be
at a preliminary stage.”
18. This Court in Janata Dal v. H.S. Chowdhary and
Ors., reported in (1992) 4 SCC 305, observed as
follows:-
“132. The criminal courts are clothed with
inherent power to make such orders as may be
necessary for the ends of justice. Such power
though unrestricted and undefined should not
be capriciously or arbitrarily exercised, but
should be exercised in appropriate cases, ex
debito justitiae to do real and substantial
justice for the administration of which alone
the courts exist. The powers possessed by the
High Court under Section 482 of the Code are
very wide and the very plenitude of the power
requires great caution in its exercise. Courts
must be careful to see that its decision in
exercise of this power is based on sound principles.”
We reiterate the same caution having found that this
is an appropriate case for the exercise of such
powers.
19. The entire law on the subjects was reviewed by a
three Judges Bench of this Court in Inder Mohan
Goswami and Anr. v. State of Uttaranchal and Ors.,
reported in (2007) 12 SCC 1 vide paragraphs 23 to 39.
Thereafter, the law was reiterated in R. Kalyani v.
Janak C. Mehta and Ors. reported in (2009) 1 SCC 516
vide paragraphs 15 and 16.
20. In all the cases the principle that the accused
must be relieved from the prosecution, even if the
allegations are taken at their face value and
accepted in their entirety do not constitute any
offence has been upheld, and thereafter in Umesh
Kumar v. State of Andhra Pradesh and anr., reported
in (2013) 10 SCC 591.
21. As regards the commission of offences under the
Information Technology Act, 2000 the allegations are
that the appellant had, with fraudulent and dishonest
intention on the website of Devi Consultancy Services
i.e. www.devidcs.com that the former is a sister
concern of Devi Polymers. Further, that this amounts
to creating false electronic record. In view of the
finding above we find that no offence is made out
under Section 66 of the I.T. Act, read with Section
43. The appellant was a Director of Devi Polymers
and nothing is brought on record to show that he did
not have any authority to access the computer system
or the computer network of the company. That apart
there is nothing on record to show the commission of
offence under Section 65 of the I.T. Act, since the
allegation is not that any computer source code has
been concealed, destroyed or altered. We have
already observed that the acts of the appellant did
not have any dishonest intention while considering
the allegations in respect of the other offences. In
the circumstances, no case is made out under Sections
65 and 66 of the I.T. Act, 2000.
22. The High Court seems to have over looked these
circumstances and has merely dismissed the petition
under Section 482 of the Criminal Procedure Code on
the ground that it requires evidence at a trial to
come to any conclusion. We, however, find that the
criminal proceedings initiated by the respondent
constitute an abuse of process of Court and it is
necessary to meet the ends of justice to quash the
prosecution against the appellant.
23. Accordingly, the appeal succeeds. The prosecution
is quashed.


 ........................J.
 (S.A. BOBDE)
 ........................J.
 (AMITAVA ROY)
New Delhi,
April 19,2016

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