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2004 DIGILAW 215 (CAL)

ICI INDIA LIMITED v. INDIANA CONVEYORS LTD

2004-03-24

DEBIPRASAD SENGUPTA

body2004
DEBIPRASAD SENGUPTA, J. ( 1 ) IN the present application the petitioner has prayed for quashing of a proceeding being complaint Case No. C/4301/02 (T. R. No. 378/02) under sections 406/420/120b of the Indian Penal Code pending in the Court of learned Metropolitan Magistrate, 14th Court, Calcutta. ( 2 ) THE petitioner Nos. 2 to 5 are senior officials of the petitioner no. 1 Company and the petitioner No. 6 has been engaged as a contractor by the petitioner No. 1 Company. ( 3 ) THE complainant/opposite party filed a petition of complaint alleging that the petitioners induced the complainant/opposite party to submit a quotation for supply of certain equipments. In this regard the petitioner No. 5 wrote a letter on 22. 1. 2001 on behalf of petitioners to the complainant and pursuant thereto the complainant submitted quotation. The petitioners thereafter placed order for supply of equipments and assured to pay a sum of Rs. 4,34,304/ -. After the supply of equipments was complete, bill was raised on 22. 5. 2001 and 2. 6. 2001. It was alleged in the complaint that although the petitioners promised to pay for the equipments, they failed to make such payment. By several letters the accused/petitioners were requested to make the payment, but they refused to do so. ( 4 ) AT the very outset Mr. Sekhar Basu, learned Advocate of the petitioners draws the attention of the Court to the order dated 18. 10. 2002 passed by the learned Chief Metropolitan Magistrate, Calcutta taking cognizance of the offence. Mr. Basu points out that although the complaint was lodged alleging commission of offences under Sections 406/420/120b of the Indian Penal Code, the learned Chief Metropolitan Magistrate took cognizance of the offence under Section 138 of the N. I. Act. Mr. Basu submits that this order dated 8. 10. 02 be speaks of complete non-application of mind by the learned C. M. M. Lower Court records were called for and i find from the record that the learned C. M. M. passed an order of 8. 10. 02, by which he took cognizance of offence under Sections 138/141 of the N. I. Act although the petition of complaint was filed alleging commission of offences under Sections 406/420/120b I. P. C. Such type of mistake is not expected from a judicial officer like Chief Metropolitan Magistrate and this highly deprecated by this Court. 10. 02, by which he took cognizance of offence under Sections 138/141 of the N. I. Act although the petition of complaint was filed alleging commission of offences under Sections 406/420/120b I. P. C. Such type of mistake is not expected from a judicial officer like Chief Metropolitan Magistrate and this highly deprecated by this Court. ( 5 ) FROM the subsequent order dated 11. 10. 02 it appears that the learned Metropolitan Magistrate, 14th Court, Calcutta after examining the complainant and his witnesses and on being satisfied that there are grounds for presuming that the accused persons have committed offence under sections 406/420/120b I. P. C. , directed issuance of process upon the accused persons. ( 6 ) ALTHOUGH I find that a gross mistake was committed by the learned chief Metropolitan Magistrate in the initial order of taking cognizance, in my view, this cannot be a ground for quashing of proceeding. ( 7 ) IT is the contention of Mr. Basu, learned Advocate of the petitioner that the allegation made in the petition of complaint do not disclose any offence as alleged or at all. The allegations made in the complaint, even if believed to be true, disclose a sale transaction which is purely a civil dispute and continuation of the present criminal proceeding will be an abuse of the process of Court. ( 8 ) MR. Basu relies upon a judgment of the Hon'ble Apex Court reported in 1998 Cr. LJ 1 (M/s. Pepsi Foods Ltd. and Anr. v. Special Judicial magistrate and Ors. ). Mr. Bose learned Advocate refers to Paragraph 28 of the judgment which runs as follows : summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused. " ( 9 ) I have gone through the judgment referred to above. The law laid down by the Hon'ble Supreme Court is settled principle of law. In my view the said judgment is not applicable in the present case. Although a mistake was committed by the learned C. M. M. in the initial order of taking cognizance, from the subsequent order dated 11. 10. 02 it becomes clear that the learned Metropolitan Magistrate, 14th Court, Calcutta examined the complainant and his witnesses on S. A and on being satisfied that there were grounds for proceeding further, issued process. From the said order it is clear that the learned Magistrate duly applied his mind before issuing process. ( 10 ) MR. Bose relies upon a judgment reported in 2002 (1) SCC 241 (S. W. Palanitkar v. State of Bihar ). From a reading of the said judgment it appears that a proceeding under Section 406 I. P. O. was quashed by the hon'ble Supreme Court on the ground that there was no ingredient of the offence alleged in the complaint or in the sworn statements of the complainant and his witnesses. The facts and circumstances of the said case, in my considered view, is totally different from the present case. ( 11 ) THE next judgment relied upon by Mr. Bose is reported in 2000 cal. Cr. LR. (SC) 293 (Hridaya Ranjan D. Verma v. State of Bihar), wherein it was held by the Hon'ble Supreme Court in Paragraph 15 as follows :-"in determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. Bose is reported in 2000 cal. Cr. LR. (SC) 293 (Hridaya Ranjan D. Verma v. State of Bihar), wherein it was held by the Hon'ble Supreme Court in Paragraph 15 as follows :-"in determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot'give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed. " ( 12 ) IN the considered view this judgment is also not applicable in the present case. The judgment was delivered by the Hon'ble Apex Court in an appeal against the judgment and order of the High Court affirming the order of conviction and sentence of the trial Court. The facts and circumstances were also different from the present case. ( 13 ) THE judgment of the Hon'ble Apex Court reported in AIR 1973 sc 326 (State of Kerala v. A. P. Pillai), relied upon the learned Advocate of the petitioner is also not applicable in the present case for the same reason as stated above. ( 14 ) NEXT argument advanced by Mr. Bose, learned Advocate of the petitioner is that the petitioner No. 1 being a company is a juristic person not having a mind of its own. Mens rea being the essential ingredient of the offence the present proceeding should not be allowed to continue against the petitioner No. 1/company. ( 15 ) IN support of his contention Mr. Bose relies upon a judgment of this Court reported in 1974 CHN Page 400 (M/s. Champa Agencies and Anr. v. R. Chowdhury and Anr ). Mens rea being the essential ingredient of the offence the present proceeding should not be allowed to continue against the petitioner No. 1/company. ( 15 ) IN support of his contention Mr. Bose relies upon a judgment of this Court reported in 1974 CHN Page 400 (M/s. Champa Agencies and Anr. v. R. Chowdhury and Anr ). From a reading of the said judgment it appears that a proceeding under Section 407 I. P. C. was quashed against the petitioner No. 1 being a corporate body. It was held that a corporate body cannot be said to have the necessary mens rea and as such it cannot be prosecuted for an offence under Section 407 I. P. C. ( 16 ) NEXT judgment relied upon by Mr. Bose is reported in 2001 Cal. Cr. LR (Cal.) 106 (See Telefilms Ltd. v. M/s. Sahara India Commercial corporation Ltd. and Anr ). In the said case a proceeding under Sections 500/34 I. P. C was quashed against the company on the ground that the company was incapable of committing an offence, of which mens rea or a particular state of mind or intention is the essential ingredient. ( 17 ) MR. Bose relies upon a judgment of the Hon'ble Apex Court reported in 1997 (8) SCC 732 (Kalpnath Rai v. The State Through C. B. I), wherein it was held that the company is not a natural person and Mens rea being an essential ingredient of the offence under Section 3 (4) of TADA (Prevention) Act, 1987, there is no question of prosecuting a company for the same. In many recent penal statutes, companies or corporations are deemed to be offenders on the strength of the acts committed by persons responsible for the management or affairs of such company or corporation. But there being no such provision in TADA, there is no scope to prosecute a company for the offence under Section 3 (4) of TADA. ( 18 ) RELYING upon the aforesaid judgments it is submitted by Mr. Bose that in the present case the petitioner No. 1 being a company and a juristic person cannot have a mind of its own. Mens rea being the essential ingredient of the offence of criminal breach of trust and cheating, the petitioner No. 1/company cannot be prosecuted for such offences and the proceeding against it is liable to be quashed. Bose that in the present case the petitioner No. 1 being a company and a juristic person cannot have a mind of its own. Mens rea being the essential ingredient of the offence of criminal breach of trust and cheating, the petitioner No. 1/company cannot be prosecuted for such offences and the proceeding against it is liable to be quashed. ( 19 ) MR. Sengupta learned Advocate appearing for the complainant/ o. P. submits that the present proceeding is at the very initial stage, when the learned Magistrate on being satisfied regarding the prima facie case has issued process against the accused persons. At this initial stage this court should not quash the proceedings as prayed for by the petitioners. In support of his contention Mr. Sengupta, learned Advocate of the O. P. relies upon a judgment of the Hon'ble Apex Court reported in 2000 SCC (Cri.) 615 (Medehl Chemicals and Pharma (P) Ltd. v. Biological E. Ltd. and ors. ). From a reading of the said judgment it appears that the Hon'ble apex Court has dealt with the scope of High Courts in exercising its jurisdiction under Section 482 Cr. P. C. in quashing a criminal proceeding. It was held that the complaint has to be examined as a whole without going into the merits of the allegations made in it, if a prima facie case is made out disclosing the ingredients of the offence alleged against the accused, the Court should not quash the complaint. But it the allegations do not constitute any offence as alleged and appear to be patently absurd and improbable, Court should not hesitate to quash the proceeding. It was further held that to exercise power under Section 482 Cr. P. C. the complaint in its entirity shall have to be examined on the basis of the allegations made in the complaint and the High Court at that stage has no authority or jurisdiction to go into the matter or examine its correctness. Whatever appears on the face of the complaint shall be taken into consideration without any critical examination of the same. Whatever appears on the face of the complaint shall be taken into consideration without any critical examination of the same. ( 20 ) IN the next judgment relied upon by the learned Advocate of the o. P. (1996 SCC (Cri) 497) it was held by the Hon'ble Supreme Court that the High Court should be loath to interfere at the threshold to thwart the prosecution in exercise of its power under Section 482 or under Articles 226 and 227 of the Constitution of India. ( 21 ) MR. Sengupta, learned Advocate next relies upon a judgment of the Hon'ble Apex Court reported in 1997 SCC (Cri) 1239 (M. V. Javali v. Mahajan Borewell and Co. and Ors. ). In Paragraph 6 of the said judgment it was held as follows :-"from a plain reading of the above section it is manifest that if an offence under the Act is committed by a company the persons who are liable to be proceeded against and punished are : (i) the company, (which includes a firm); (ii) every person, who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business; and (iii) any director (who in relation to a firm means a partner), manager, secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom the offence has been committed. The words "as well as the company" appearing in the section also make it unmistakably clear that the company alone can be prosecuted and punished even if the persons mentioned in categories (ii) and (iii), who are for all intents and purposes vicariously liable for the offence, are not arraigned, for it is the company which is primarily guilty of the offence. " ( 22 ) RELYING upon the aforesaid judgment it is submitted by Mr. Sengupta, learned Advocate that since the company is a juristic person it can be prosecuted and can be punished with sentence of fine. ( 23 ) THE aforesaid judgment, in my considered view, does not have any manner of application in the present case. The case is under the Income tax Act, wherein specific provision has been made for prosecution of a company under Section 278b for violation of Section 276b. ( 23 ) THE aforesaid judgment, in my considered view, does not have any manner of application in the present case. The case is under the Income tax Act, wherein specific provision has been made for prosecution of a company under Section 278b for violation of Section 276b. But in the indian Penal Code there is no such provision which makes the company liable for prosecution for the offence, of which mens rea is one of the essential ingredients. The facts and circumstances of the said case is quite different from the present one. ( 24 ) I have heard the learned Advocates of the respective parties. I have also gone through the judgments referred to above. In my considered view the allegations made in the petition of complaint clearly make out offence under Sections 406 and 420 of the Indian Penal Code. The proceeding is at the initial stage, when only cognizance of offence has been taken and process has been issued. The learned Magistrate after examining the complainant and his witnesses and on being satisfied regarding the prima facie case, issued process against the accused person. ( 25 ) CONSIDERING the factual aspect of the matter I am of the view that this is not such a case where the proceeding can be quashed at the very threshold in exercise of power under Section 482 of the Code of criminal Procedure. Accordingly, prayer for quashing of proceeding made on behalf of the petitioner Nos. 2 to 6 is refused. But I find sufficient merit in the submission of Mr. Bose, learned Advocate of the petitioner so far as the petitioner No. 1/company is concerned. In view of the judgments referred to above I am of the view that the present proceeding should not be allowed to continue against the petitioner No. 1/company. If the company is incapable of committing an offence, of which mens rea or a particular state of mind or intention is the essential ingredient, the process issued against the petitioner No. 1/company must be quashed though the proceeding initiated against others, namely petitioner Nos. 2 to 6 are maintainable. ( 26 ) ACCORDINGLY the present application is allowed in part. Proceeding pending against the petitioner No. 1/company being Case No. C/4301/02 under Sections 406/420/120b I. P. C. in the Court of learned Metropolitan magistrate, 14th Court, Calcutta is hereby quashed. 2 to 6 are maintainable. ( 26 ) ACCORDINGLY the present application is allowed in part. Proceeding pending against the petitioner No. 1/company being Case No. C/4301/02 under Sections 406/420/120b I. P. C. in the Court of learned Metropolitan magistrate, 14th Court, Calcutta is hereby quashed. But the learned magistrate is directed to proceed with the matter against other accused petitioners in accordance with law. ( 27 ) THE learned Magistrate is further directed to see that the proceeding is expedited and the same is concluded with utmost expedition. ( 28 ) THE lower Court records may be sent down to the Court of learned trial Magistrate immediately. Urgent xerox certified copy of the judgment, if applied for, may be handed over to the respective parties.