Deepak Gaba vs State Of Uttar Pradesh

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 2328 OF 2022

DEEPAK GABA AND OTHERS ... APPELLANTS

VERSUS

STATE OF UTTAR PRADESH AND ANOTHER ... RESPONDENTS

JUDGMENT

SANJIV KHANNA, J.

This appeal by Jotun India Private Limited (JIPL), Deepak

Gaba - Regional Sales Manager - North (Decorative), and Sanjay

Ramachandran Nair - Sales and Marketing Director (Decorative),

takes exception to the order dated 30th March 2022, whereby the

High Court of Judicature at Allahabad has dismissed their petition

under Section 482 of the Code of Criminal Procedure, 19731,

challenging the summoning order dated 19th July 2018 passed by

the Additional Chief Judicial Magistrate, Court No. 8, Ghaziabad,

Signature Not Verified Uttar Pradesh, the operative portion of which, reads as under: Digitally signed by BABITA PANDEY Date: 2023.01.02 17:09:21 IST Reason:

“On the basis of evidence available on records and on the basis of statement of Complainant, the charge is 1 For short, the ‘Code’.

Criminal Appeal No.2328 of 2022 Page 1 of 23

appearing prima facie regarding showing forged demand of Rs. 6,37,252.16 against the Complainant by the Opponents Manager Jotun India Pvt. Ltd. Delhi, Chief Manager Jotun India Pvt. Ltd. Andheri East, Mumbai.

Hence, the Opponents Manager Jotun India Pvt. Ltd.

through Chief Manager Jotun India Pvt. ltd. Andheri East, Mumbai is liable to (be) summoned for trial in section 406 I.P.C. for trial prima facie.” (emphasis supplied)

2. Interestingly, in the cause title of the private complaint filed by

Shubhankar P. Tomar, the proprietor of Adhunik Colour Solutions,

respondent no. 2 - complainant, states that the complaint was

directed against:

(a) Manager, JIPL, having its office at Saket District Centre, New

Delhi;

(b) Chief Manager, JIPL, having its office at Andheri East,

Mumbai;

(c) Jotun S/S Hystadveien, Sanddefjord, Norway2; and

(d) Orkala ASA Nedre Skoyen vei, Oslo, Norway3.

3. The Manager and the Chief Manager, JIPL have not been named

and identified in the complaint. Neither does the summoning order

name the Manager or the Chief Manager, JIPL, who have been

2 For short, ‘Jotun S/S’.

3 For short, ‘Orkala ASA’.

Criminal Appeal No.2328 of 2022 Page 2 of 23

summoned to stand trial under Section 406 of the Indian Penal

Code, 18604.

4. It is an accepted and admitted position that JIPL is a company

incorporated under the laws of India and is a part of multinational

group mainly dealing in decorative paints and performance coatings

(marine, protective and powder coatings). JIPL and Shubhankar P.

Tomar, the proprietor of respondent no. 2 - complainant,

Ghaziabad, Uttar Pradesh, had entered into dealership

agreements5, for supply and purchase of decorative paints in the

State of Uttar Pradesh and Delhi region respectively.

5. On 27th September 2016, JIPL filed two separate criminal

complaints under Section 138 of the Negotiable Instruments Act,

18816 against Shubhankar P. Tomar, on account of dishonour of

cheque no. 463151 drawn on Canara Bank, Patparganj Branch,

4 For short, the ‘IPC’.

5 The dates of execution of these agreements are disputed. As per the appellants, the agreements are

dated 11th April 2012 and 27th October 2013. As per respondent No. 2 - complainant, the agreements were executed on 20th March 2012 and 30th January 2013. The complaint filed by respondent no. 2 - complainant refers to a third agreement dated 16th May 2014. In the counter affidavit filed by respondent no. 2 - complainant before this court, execution of the agreement dated 20th March 2012 is accepted. It is stated that despite repeated protests, a copy of the agreement dated 20th March 2012 was not furnished to respondent no. 2 - complainant. However, no such assertion is made with regard to the agreement dated 30th January 2013 and 16th May 2014. In fact, an extract of the agreement dated 16th May 2014 is enclosed as Annexure R2/5 to the counter affidavit. The appellants have relied on the clauses of the agreement dated 11th April 2012 enclosed as Annexure P-1, as per which the dealer had agreed to deliver the products to JIPL’s direct clients, when requested and if within a reasonable distance from the location of the dealer. Another clause permitted JIPL to enter into a direct contractual relationship with specific customers, if in the opinion of JIPL they could be served better by JIPL. In such situations the dealer had option to act as an intermediary. The agreement has several clauses relating to prices, invoice and payment. For the purpose of this decision, we are not required to examine and decide these controversies and disputes. 6 For short, the ‘NI Act’.

Criminal Appeal No.2328 of 2022 Page 3 of 23 Delhi for Rs. 4,99,610/-, and cheque no. 003252 drawn on HDFC

Bank, Chander Nagar, Ghaziabad, Uttar Pradesh for Rs. 1,93,776/-

, both dated 8th August 2016. As per the complaints, the cheques

were drawn by respondent no. 2 - complainant for discharge of the

outstanding amount payable by him to JIPL. The cheques on

presentation were dishonoured due to ‘insufficient funds’ vide

memo issued by the respective banks on 12th August 2016.

Thereupon, legal notice of demand was issued on behalf of JIPL by

speed post and courier on 20th August 2016, which as per the

tracking report of the postal authorities, was served on the

Ghaziabad address on 24th August 2016, albeit the notice issued at

the Delhi address was returned by the postal authorities with the

remark “item delivery attempt/unclaimed” dated 23rd August 2016.

6. The facts stated noted above, though admitted, do not find any

mention in the private complaint filed by respondent no. 2 -

complainant on 23rd December 2017, which is the subject matter of

the present appeal and in which the summoning order dated 19th

July 2018 was passed by the Additional Chief Judicial Magistrate,

Ghaziabad, which order, as noticed above, has been upheld by the

High Court.

Criminal Appeal No.2328 of 2022 Page 4 of 23

7. The private complaint filed by respondent no.2- complainant

accepts the factum of commercial relationship between the parties,

and states that the agreements dated 20th March 2012, 30th January

2013, and 16th May 2014 were executed. It is not specifically

alleged that copies of agreements dated 30th January 2013 and 16th

May 2014 were not furnished. Regarding the agreement dated 20th

March 2012, it is alleged that the agreement was not provided and

therefore, respondent no. 2 - complainant had not carried out any

work. However, supplies were made on the Ghaziabad account. It

is alleged that respondent no. 2 - complainant had given two blank

cheques bearing Nos. 580251 drawn on the Bank of Baroda and

003251 drawn on HDFC Bank as security when they had executed

the agreements dated 20th March 2012 and 30th January 2013. JIPL

were not issuing bills on time despite reminders, but would insist

upon payment of money. One forged bill of Rs.79,752/- was raised

despite not ordering any goods, and this amount was shown as the

balance payable to JIPL as on 30th March 2013. This bill was

withdrawn and taken back, as respondent no. 2 - complainant had

refused to make payment towards a false bill. Cheque bearing no.

463151 drawn on Canara Bank was given as security for a new

dealership/direct customer agreement dated 16th May 2014. For

this, written confirmation was taken from Saurav Gaur, a person

Criminal Appeal No.2328 of 2022 Page 5 of 23 authorised by JIPL. Further, JIPL would send goods to respondent

no. 2 - complainant and issue bills in their name, without asking

them. Respondent no. 2 - complainant was also asked to collect the

money from third parties. These pleas, when escalated with JIPL,

were ignored. Bill of Rs. 53,215/- in the name of respondent no. 2 -

complainant, was sent by JIPL to Manav Rachna International

directly. Another bill of Rs. 52,000/- was issued in the name of

respondent no. 2 - complainant, but they were not concerned

whatsoever with the said bill. The bills issued were paid by

respondent no. 2 - complainant by bank transfer to JIPL.

Respondent no. 2 - complainant was falsely billed to the extent of

Rs. 2,00,000/-. Dhiraj and Saurabh Gaur of JIPL had also forged a

bill of Rs. 4,33,633.47p. Respondent no. 2 - complainant had

protested by e-mail on 2nd December 2014 and several reminders

were sent thereafter. Respondent no. 2 - complainant had

thereupon informed JIPL on 13th July 2015 and 19th August 2015

that 242 buckets of 20 litres and 4 litres were available and should

be taken back and adjusted against the outstanding amount.

However, no reply was received in spite of reminders. E-mails were

also written on 4th January 2016 and 11th January 2016. Since there

was no response from JIPL, respondent no. 2 - complainant had

written letters to Jotun S/S and Orkala ASA, the shareholders of

Criminal Appeal No.2328 of 2022 Page 6 of 23 JIPL. They had also sent a registered notice to JIPL stating that Rs.

6,37,252.16p., shown as outstanding amount due and payable by

respondent no. 2 - complainant to JIPL, was forged and incorrect.

8. At the pre-summoning evidence stage, two witnesses, namely

Shubhankar P. Tomar and his employee Sakshi Tilak Chand, were

examined. Shubhankar P. Tomar had deposed that JIPL had

violated the terms of service and had cheated him, and a wrong

outstanding amount of Rs. 6,37,252.16p. had been shown as

payable. He had not received a copy of the written agreement for

the purchase of paints from JIPL. He had furnished one blank

cheque to JIPL. JIPL would not send invoices on purchase of the

goods. Thereafter, JIPL started selling goods to third parties

showing that the goods were being sold to respondent no. 2 -

complainant. Despite raising objections with the sales manager and

manager, JIPL had continued to sell goods to third parties in the

name of respondent no. 2 - complainant. Demand of Rs.

6,37,252.16p. was raised against them till the year 2016, in respect

of which, a notice was also issued.

9. Sakshi Tilak Chand had deposed that he was working for

respondent no. 2 - complainant and used to interact with JIPL.

There were discrepancies in the goods ordered by respondent no.

Criminal Appeal No.2328 of 2022 Page 7 of 23 2 - complainant, and the goods delivered by JIPL. The customers

would not accept the goods on account of colour mismatch. When

the issue was raised, JIPL had asked them to keep the goods, and

they would take the goods later. Despite visiting the offices of JIPL

and filling up forms for return of the goods, no concrete steps were

taken. The goods were never taken back. JIPL would issue

statement of accounts without deducting or giving credit of the

goods returned by respondent no. 2 - complainant.

10. The private complaint filed by respondent no. 2 - complainant had

invoked Sections 405, 420, 471, and 120B of the IPC. However, by

the order dated 19th July 2018, summons were directed to be issued

only under Section 406 of the IPC, and not under Sections 420, 471

or 120B of the IPC. We have quoted the operative and reasoning

portion of the summoning order, that records in brief the assertions

in the complaint, to hold that respondent no. 2 - complainant had

shown that “a forged demand of Rs. 6,37,252.16p had been raised

by JIPL, which demand is not due in terms of the statements made

by Shubhankar P. Tomar and Sakshi Tilak Chand”. The order

states that respondent no. 2 - complainant had filed photocopy of

“one” e-mail as per documents 1 to 34, but the narration and the

contents of the e-mail is not adverted to and elucidated.

Criminal Appeal No.2328 of 2022 Page 8 of 23

11. In case of a private complaint, the Magistrate can issue summons

when the evidence produced at the pre-summoning stage shows

that there is sufficient ground for proceeding against the accused.

The material on record should indicate that the ingredients for

taking cognizance of an offence and issuing summons to the

accused is made out.7

12. In the present case, the trial court did not issue summons under

Sections 420 and 471 of the IPC, or for that matter, invoke the

provision relating to conspiracy under Section 120B of the IPC.

Although the summoning order dated 19th July 2018 does not deal

with these sections of the IPC, we deem it imperative to examine

the ingredients of the aforesaid sections, and Section 406 of the

IPC, and whether the allegations made in the complaint attract the

penal provisions under the relevant sections of the IPC. We have

undertaken this exercise in order to carry out a complete and

comprehensive analysis of the factual matrix and the legal

provisions, and rule out possibility of an error to the detriment of

respondent no. 2 - complainant.

7 Dipakbhai Jagdishchndra Patel v. State of Gujarat, (2019) 16 SCC 547; Sunil Bharti Mittal v. Central

Bureau of Investigation, (2015) 4 SCC 609; and Pepsi Foods Ltd. v. Judicial Magistrate, (1998) 5 SCC

749. Proviso to Section 200 of the Code is not applicable in the present case.

Criminal Appeal No.2328 of 2022 Page 9 of 23

13. Section 406 of the IPC8 prescribes punishment for breach of trust

which may extend to three years or with fine or with both, when

ingredients of Section 405 of the IPC are satisfied. For Section 406

of the IPC to get attracted, there must be criminal breach of trust in

terms of Section 405 of the IPC.9

For Section 405 of the IPC to be attracted, the following have

to be established:

(a) the accused was entrusted with property, or entrusted with

dominion over property;

8 406. Punishment for criminal breach of trust.—Whoever commits criminal breach of trust shall be

punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.

9 405. Criminal breach of trust.—Whoever, being in any manner entrusted with property, or with any

dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".

Illustrations

(b) A is a warehouse-keeper. Z going on a journey, entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods. A has committed criminal breach of trust.

(c) A, residing in Calcutta, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z to A shall be invested by A, according to Z's direction. Z remits a lakh of rupees to A, with directions to A to invest the same in Company's paper. A dishonestly disobeys the directions and employs the money in his own business. A has committed criminal breach of trust.

(d) But if A, in the last illustration, not dishonestly but in good faith, believing that it will be more for Z's advantage to hold shares in the Bank of Bengal, disobeys Z's directions, and buys shares in the Bank of Bengal, for Z, instead of buying Company's paper, here, thought Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property. A has committed criminal breach of trust.

(Explanations 1 and 2 and illustrations (a) and (e) to Section 405 of the IPC are excluded, as they are irrelevant.)

Criminal Appeal No.2328 of 2022 Page 10 of 23

(b) the accused had dishonestly misappropriated or converted to

their own use that property, or dishonestly used or disposed

of that property or wilfully suffer any other person to do so;

and

(c) such misappropriation, conversion, use or disposal should be

in violation of any direction of law prescribing the mode in

which such trust is to be discharged, or of any legal contract

which the person has made, touching the discharge of such

trust.

14. Thus, criminal breach of trust would, inter alia, mean using or

disposing of the property by a person who is entrusted with or

otherwise has dominion. Such an act must not only be done

dishonestly, but also in violation of any direction of law or any

contract express or implied relating to carrying out the trust.10

15. However, in the instant case, materials on record fail to satisfy the

ingredients of Section 405 of the IPC. The complaint does not

directly refer to the ingredients of Section 405 of the IPC and does

not state how and in what manner, on facts, the requirements are

satisfied. Pre-summoning evidence is also lacking and suffers on

this account. On these aspects, the summoning order is equally

10 Sudhir Shantilal Mehta v. Central Bureau of Investigation, (2009) 8 SCC 1.

Criminal Appeal No.2328 of 2022 Page 11 of 23 quiet, albeit, it states that “a forged demand of Rs. 6,37,252.16p

had been raised by JIPL, which demand is not due in terms of

statements by Shubhankar P. Tomar and Sakshi Tilak Chand”. A

mere wrong demand or claim would not meet the conditions

specified by Section 405 of the IPC in the absence of evidence to

establish entrustment, dishonest misappropriation, conversion, use

or disposal, which action should be in violation of any direction of

law, or legal contract touching the discharge of trust. Hence, even

if respondent no. 2 - complainant is of the opinion that the monetary

demand or claim is incorrect and not payable, given the failure to

prove the requirements of Section 405 of the IPC, an offence under

the same section is not constituted. In the absence of factual

allegations which satisfy the ingredients of the offence under

Section 405 of the IPC, a mere dispute on monetary demand of Rs.

6,37,252.16p, does not attract criminal prosecution under Section

406 of the IPC.

16. In order to apply Section 420 of the IPC, namely cheating and

dishonestly inducing delivery of property, the ingredients of Section

415 of the IPC have to be satisfied. To constitute an offence of

cheating under Section 415 of the IPC, a person should be induced,

either fraudulently or dishonestly, to deliver any property to any

person, or consent that any person shall retain any property. The

Criminal Appeal No.2328 of 2022 Page 12 of 23 second class of acts set forth in the section is the intentional

inducement of doing or omitting to do anything which the person

deceived would not do or omit to do, if she were not so deceived.

Thus, the sine qua non of Section 415 of the IPC is “fraudulence”,

“dishonesty”, or “intentional inducement”, and the absence of these

elements would debase the offence of cheating.11 Explaining the

contours, this Court in Mohd. Ibrahim and Another v. State of

Bihar and Others12, observed that for the offence of cheating,

there should not only be cheating, but as a consequence of such

cheating, the accused should also have dishonestly adduced the

person deceived to deliver any property to a person; or to make,

alter, or destroy, wholly or in part, a valuable security, or anything

signed or sealed and which is capable of being converted into a

valuable security.

17. In the present case, the ingredients to constitute an offence under

Section 420 read with Section 415 of the IPC are absent. The pre-

summoning evidence does not disclose and establish the essential

ingredients of Section 415 of the IPC. There is no assertion, much

less legal evidence, to submit that JIPL had engaged in dishonesty,

11 Iridium India Telecom Limited v. Motorola Incorporated and Others, AIR 2011 SC 20.

12 (2009) 8 SCC 751. This Court, in this case, has cautioned that the ratio should not be misunderstood, to record the clarification, which in the present case, in our opinion, is not of any avail and help to respondent no. 2 - complainant. We respectfully concur with the clarification as well as the ratio explaining Section 415, 464 etc. of the IPC.

Criminal Appeal No.2328 of 2022 Page 13 of 23 fraud, or intentional inducement to deliver a property. It is not the

case of respondent no. 2 - complainant that JIPL had tried to

deceive them, either by making a false or misleading

representation, or by any other action or omission; nor is it their

case that JIPL had offered any fraudulent or dishonest inducement

to deliver a property. As such, given that the ingredients of Section

415 of the IPC are not satisfied, the offence under Section 420 of

the IPC is not made out.

18. Section 471 of the IPC13 is also not attracted. This Section is

applicable when a person fraudulently or dishonestly uses as

genuine any document or electronic record, which he knows or has

reasons to believe to be a forged document or electronic record.

This Court in Mohd. Ibrahim and Another (Supra), has elucidated

that the condition precedent of an offence under Section 471 of the

IPC is forgery by making a false document or false electronic record

or part thereof. Further, to constitute the offence under Section 471

of the IPC, it has to be proven that the document was “forged” in

terms of Section 47014, and “false” in terms of Section 464 of the

13 471. Using as genuine a forged document or electronic record.—Whoever fraudulently or dishonestly

uses as genuine any document or electronic record which he knows or has reason to believe to be a forged document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record.

14 470. Forged document.—A false document or electronic record] made wholly or in part by forgery

is designated “a forged document or electronic record”

Criminal Appeal No.2328 of 2022 Page 14 of 23 IPC15. Section 470 lays down that a document is ‘forged’ if there is:

(i) fraudulent or dishonest use of a document as genuine; and (ii)

knowledge or reasonable belief on the part of the person using the

document that it is a forged one. Section 470 defines a forged

document as a false document made by forgery. As per Section

464 of the IPC, a person is said to have made a ‘false document’:

(i) if he has made or executed a document claiming to be someone

else or authorised by someone else; (ii) if he has altered or

tampered a document; or (iii) if he has obtained a document by

practising deception, or from a person not in control of his senses.

Unless, the document is false and forged in terms of Sections 464

and 470 of the IPC respectively, the requirement of Section 471 of

the IPC would not be met.

15 464 – Making a false document .— A person is said to make a false document or false electronic

record— First.—Who dishonestly or fraudulently—

(a) makes, signs, seals or executes a document or part of a document;

(b) makes or transmits any electronic record or part of any electronic record;

(c) affixes any electronic signature on any electronic record;

(d) makes any mark denoting the execution of a document or the authenticity of the electronic signature,with the intention of causing it to be believed that such document or part of document, electronic record or 2 [electronic signature] was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, singed, sealed, executed or affixed; or Secondly.—Who without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with electronic signature either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly.—Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his electronic signature on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or electronic record or the nature of the alteration.

Criminal Appeal No.2328 of 2022 Page 15 of 23

19. In the counter affidavit filed by respondent no. 2 - complainant, it is

submitted that a few bills were faked/forged, as the goods were not

ordered. Reference is made to balance of Rs. 79,752/- shown on

30th March 2013, which was objected to and thereupon as per the

complaint itself the demand/bill was withdrawn. This would not

make the bill a forged document or false document, in terms of

Sections 470 and 464 of the IPC. The complaint was made in the

year 2017, four years after the bill/claim had been withdrawn,

reflecting no criminal intent. The bill was not fake or forged, and at

best it could be stated that it was wrongly raised. Moreover, the pre-

summoning evidence is silent with regard to this bill and mens rea

on the part of the accused is not shown and established. Same

would be the position with regard to the bill/invoice of Rs. 53,215/-

which was as per the complaint, sent directly to Manav Rachna

International at Faridabad. The bill/invoice is not doubted as ‘forged’

or ‘false’ within the meaning of Sections 470 and 464 of the IPC. No

doubt, Adhunik Colour Solutions is mentioned as the buyer, and

Manav Rachna International as the consignee, albeit the invoice

was issued by JIPL. Pre-summoning evidence does not help and

make out a case predicated on this bill/invoice. In the counter

affidavit filed before us, it is alleged that since this bill was sent to

Faridabad, JIPL had added the GST in the invoice. It is argued that

Criminal Appeal No.2328 of 2022 Page 16 of 23 had respondent no. 2 - complainant supplied the goods, instead of

GST, VAT as applicable in Delhi would have been levied, as

respondent no. 2 - complainant was based in Delhi. This argument

is rather fanciful and does not impress us to justify summoning for

the offence under Section 471 of the IPC. Besides, the assertion is

not to be found in the complaint, and cannot be predicated on the

pre-summoning evidence. For completeness, we must record that

the appellants have placed on record the dealership agreement

dated 11th April 2012, which, inter alia states that JIPL has a

discretion to establish direct contractual relationship with specific

customers, if JIPL feels they can be served better. Further, in such

a situation, the dealer, if JIPL agrees, can act as an intermediary.

Assuming the bill/invoice had wrongly recorded respondent no. 2 -

complainant as the buyer, it is not doubted that Manav Rachna

International was the consignee. At best, respondent no. 2 -

complainant would not be liable, had Manav Rachna International

failed to pay. Non-payment is also not alleged in the complaint or

the pre-summoning evidence. Reliance on objections vide e-mails

dated 4th July 2014 and 21st July 2014 are of no avail, as they are

for the period prior to 31st July 2014, when the bill/invoice was

raised.

Criminal Appeal No.2328 of 2022 Page 17 of 23

20. It is evident from the pre-summoning evidence led and the

assertions made in the criminal complaint that the dispute raised by

respondent no. 2 - complainant primarily pertains to settlement of

accounts. The allegations are: (i) goods supplied by JIPL were not

as per the requirements and demands of respondent no. 2 -

complainant, (ii) goods supplied were different from the order

placed, and (iii) goods lying with, and returned by respondent no. 2

- complainant have not been accounted for. These assertions, even

if assumed to be correct, would not fulfil the requirements of Section

405 of the IPC, or for that matter Sections 420 or 471. The material

on record does not reflect and indicate that JIPL indeed had the

dishonest/culpable intention for the commission of the alleged

offences under the IPC. Unless the ingredients of aforesaid

Sections of the IPC are fulfilled, the offence under Section 120-B of

the IPC, for criminal conspiracy, would not be made. In fact, a

combined reading of the complaint and the pre-summoning

evidence does not disclose any element of criminal conspiracy as

per Section 120-A of the IPC. The complaint discloses a civil

dispute and grievance relating to the claim made by JIPL. What is

challenged by respondent no. 2 - complainant is the demand of Rs.

6,37,252.16p raised by JIPL as the amount payable till the year

ending 2016. This assertion made by JIPL is questioned as

Criminal Appeal No.2328 of 2022 Page 18 of 23 incorrect. The demand, even if assumed to be wrong, would not

satisfy the ingredients of Section 405, or Sections 420 or 471 of the

IPC, so as to justify the summoning order. As noted above, JIPL

had filed a criminal case under Section 138 of the NI Act as two

cheques for Rs. 1,93,776/- and Rs. 4,99,610/- issued by them, on

presentation, were dishonoured on account of ‘insufficient funds’.

21. We are, therefore, of the opinion that the assertions made in the

complaint and the pre-summoning evidence led by respondent no.

2 - complainant fail to establish the conditions and incidence of the

penal liability set out under Sections 405, 420, and 471 of the IPC,

as the allegations pertain to alleged breach of contractual

obligations. Pertinently, this Court, in a number of cases, has

noticed attempts made by parties to invoke jurisdiction of criminal

courts, by filing vexatious criminal complaints by camouflaging

allegations which were ex facie outrageous or pure civil claims.

These attempts are not be entertained and should be dismissed at

the threshold. To avoid prolixity, we would only like to refer to the

judgment of this Court in Thermax Limited and Others v. K.M.

Johny16, as it refers to earlier case laws in copious detail. In

Thermax Limited and Others (Supra), it was pointed that the court

16 (2011) 13 SCC 412.

Criminal Appeal No.2328 of 2022 Page 19 of 23 should be watchful of the difference between civil and criminal

wrongs, though there can be situations where the allegations may

constitute both civil and criminal wrongs. The court must cautiously

examine the facts to ascertain whether they only constitute a civil

wrong, as the ingredients of criminal wrong are missing. A

conscious application of the said aspects is required by the

Magistrate, as a summoning order has grave consequences of

setting criminal proceedings in motion. Even though at the stage of

issuing process to the accused the Magistrate is not required to

record detailed reasons, there should be adequate evidence on

record to set the criminal proceedings into motion. The requirement

of Section 204 of the Code is that the Magistrate should carefully

scrutinize the evidence brought on record. He/she may even put

questions to complainant and his/her witnesses when examined

under Section 200 of the Code to elicit answers to find out the truth

about the allegations. Only upon being satisfied that there is

sufficient ground for summoning the accused to stand the trial,

summons should be issued.17 Summoning order is to be passed

when the complainant discloses the offence, and when there is

material that supports and constitutes essential ingredients of the

17 Birla Corporation Limited v. Adventz Investments and Holdings Limited and Others, (2019) 16 SCC

610; Pepsi Foods Ltd. (Supra); and Mehmood Ul Rehman v. Khazir Mohammad Tunda, (2015) 12 SCC 420.

Criminal Appeal No.2328 of 2022 Page 20 of 23 offence. It should not be passed lightly or as a matter of course.

When the violation of law alleged is clearly debatable and doubtful,

either on account of paucity and lack of clarity of facts, or on

application of law to the facts, the Magistrate must ensure

clarification of the ambiguities. Summoning without appreciation of

the legal provisions and their application to the facts may result in

an innocent being summoned to stand the prosecution/trial.

Initiation of prosecution and summoning of the accused to stand

trial, apart from monetary loss, sacrifice of time, and effort to

prepare a defence, also causes humiliation and disrepute in the

society. It results in anxiety of uncertain times.

22. While summoning an accused who resides outside the jurisdiction

of court, in terms of the insertion made to Section 202 of the Code

by Act No. 25 of 2005, it is obligatory upon the Magistrate to inquire

into the case himself or direct investigation be made by a police

officer or such other officer for finding out whether or not there is

sufficient ground for proceeding against the accused.18 In the

present case, the said exercise has not been undertaken.

18 Vijay Dhanuka v. Najima Mamtaj, (2014) 14 SCC 638; Abhijit Pawar v. Hemant Madhukar Nimalkar,

(2017) 3 SCC 528; and Birla Corporation Limited (Supra). Criminal Appeal No.2328 of 2022 Page 21 of 23

23. The order sheet of the trial court enclosed with the appeal reveals

that notwithstanding that the summoning order was limited to

unnamed Manager and Chief Manager of JIPL, the Additional Chief

Judicial Magistrate had deemed it appropriate to issue non-bailable

warrant. The non-bailable warrant was not issued in the name of

any person but by designation against the Chief Manager JIPL,

Andheri East, Mumbai. This was also one of the reasons that had

prompted the appellants to the file the petition under Section 482 of

the Code.

24. We must also observe that the High Court, while dismissing the

petition filed under Section 482 of the Code, failed to take due

notice that criminal proceedings should not be allowed to be

initiated when it is manifest that these proceedings have been

initiated with ulterior motive of wreaking vengeance and with a view

to spite the opposite side due to private or personal grudge.19

Allegations in the complaint and the pre-summoning evidence on

record, when taken on the face value and accepted in entirety, do

not constitute the offence alleged. The inherent powers of the court

can and should be exercised in such circumstances. When the

allegations in the complaint are so absurd or inherently improbable,

19 Birla Corporation Limited (Supra); Mehmood Ul Rehman (Supra); R.P. Kapur v. State of Punjab, AIR

1960 SC 866; and State of Haryana and Others v. Bhajan Lal and Others, 1992 Supp (1) SCC 335.

Criminal Appeal No.2328 of 2022 Page 22 of 23 on the basis of which no prudent person can ever reach a just

conclusion that there is sufficient wrong for proceeding against the

accused, summons should not be issued.

25. For the aforesaid reasons, the appeal is allowed. The order of the

High Court dated 30th March 2022 in the Application u/s 482 No.

31828 of 2019; the summoning order dated 19th July 2018 in the

Complaint No. 3665 of 2017 and the order issuing non-bailable

warrant dated 3rd June 2019 in the above complaint passed by the

Additional Chief Judicial Magistrate, Court No. 8, Ghaziabad, Uttar

Pradesh are set aside and quashed.

......................................J. (SANJIV KHANNA)

......................................J. (J.K. MAHESHWARI)

NEW DELHI;

JANUARY 02, 2023.

Criminal Appeal No.2328 of 2022 Page 23 of 23