Rupeshbhai Balchandra Bhavsar vs State Of Gujarat

The present petition has been filed for quashing and setting aside the impugned F.I.R. being I-C.R.No. 41 of 2016 dated 08.06.2016 for the offences punishable under Sections 406, 409, 408, 420 and 120(b) of the Indian Penal Code, 1860 (for short "the IPC") registered with G.I.D.C. Vatva Police Station, District: Ahmedabad as well Charge sheet No. 60 of 2016 dated 29.10.2016 and the proceedings culminated in Criminal Case Nos.500 and 1743 of 2016 pending before the Additional Chief Metropolitan Magistrate Court No. 5, Gheekanta, Ahmedabad.

The brief facts leading to the filing of the present petition are as under:-

2.1 It is the case of prosecution that the complainant is working as a Company Secretary and is authorized by the company KHS Machinery Private Limited to file the F.I.R. The company is having respectable name in bottling and packaging machine, wherein the petitioners No. 1 and 2 were ex-employees and as per their post and positioning in the company, they were aware about the confidential and internal details and information with regard to the technical details certic diagram, bottle washer filler primacies and other machineries and its functioning, which information they were not supposed to pass to any other persons still however, without intimating the complainant company, the aforesaid two accused formed a company named Rapid Engineers, wherein the petitioner No 2 and wife of the petitioner No. 2 were the partners. The ex-employees by illegal means using the information and technical details which were made known to them because the complainant company sent them to Germany for learning such techniques at the cost of the company and such information was not to be developed upon any other persons for which agreement was executed and undertaking was given but by breaching the aforesaid agreement by the petitioners, a loss of Rs. 1.5 crore was caused to the company and they have to lose their valued customers. Upon coming to know the said fact, the accused persons had accepted their liability and executed a tripartite agreement dated 23.10.2012.

2.2 It is alleged that the petitioners accused had a website for Rapid Engineering's wherein pictures and drawing of different machineries of their work were highlighted, which were similar to that of the complainant and the accused started manufacturing of bottling and packaging machine in the year 2013 and took the work orders from the companies which were the customers of the complainant. Thereafter, the accused persons and other Directors of Rapid BevTech Private Limited on the basis of the technology of the complainant and conspired to sell and use the technology for their own financial benefit and imposed loss on the complainant. The said company is established on Survey No. 246/1, 479/2-3 and 283/2, 285/1 at GIDC Vatva, Ahmedabad and as on today by using the technology of the complainant Company, they are doing their own business.

2.3 It is further alleged that in the year 2015 the complainant company gave a quotation to Varun Beverages but the said machine was not purchased from the complainant company and it came to the knowledge of the complainant that the said machinery was provided by the accused persons.

2.4 Thus, all the accused in connivance with each other have caused financial damage to the complainant and being ex- employees had taken knowledge of the technology known to the complainant company and by using such technology formed Rapid Bevtech, thereby playing fraud upon the complainant company and causing huge financial loss to the complainant, for which the impugned FIR has been filed.

Learned advocate Mr. Jayant Panchal appearing for the writ applicants has submitted that no case is made out against the applicants as alleged in the FIR. Even assuming without admitting the allegation leveled in the First Information Report to be true, it leads to breach of the Contract, if any, i.e. tripartite agreement, for which no criminal offence is committed by the applicant. He has submitted that the action of registration of the FIR is absolutely a civil dispute and the same is filed only to misuse the police machinery with a view to settle their other disputes and, therefore, the FIR is required to be quashed and set aside. It is further submitted that the aforesaid fact that the dispute between the petitioners and the complainant is a civil dispute is further fortified by the fact that the complainant has already preferred Commercial Suit No. 321 of 2016 before the Commercial Court for appropriate relief.

3.1 Learned advocate Mr. Panchal has submitted that in fact, the present applicants were acting as per the clause of the agreement while starting their own business after period of two years which was condition stated in the said agreement

3.2 He has submitted that no offence, including the offence under Section 409 of the IPC is made out since the essential ingredients for constituting an offence of criminal breach of trust are entrustment of property and misappropriation of the same, which is absent in the present case even if the allegations are accepted in toto. He has also submitted that the customers are free to avail service from any company/firm or individual of their own choice and the customers of the first informant switch over to different companies, firms, individuals, who is more beneficial to them. Therefore, it cannot be said that any offence has been committed by the applicant. It is further asserted that the first informant is not having any proprietary rights nor is entitled to claim any proprietary rights in any of the intellectual properties under the Patent Act, the Copyright Act, the Designs Act, the Trademark Act and/or under the Semi-conductor Integrated Circuits Layout-Design Act, 2000, the contention of the first informant that the petitioners cannot use, divulge and/or copy of the alleged technology, know-how, specifications, drawings etc for manufacturing, assembling machines similar to that manufactured by the first informant is baseless and frivolous. It is also contended that in absence of registration under any of the statues aforementioned of the drawings, designs specifications, images, presentations, brochures, data, software etc the first informant cannot claim any proprietary rights thereunder and, therefore, is not in any manner entitled to initiate any criminal proceedings without any legal basis for the alleged breach of the business trademark.

3.3. It is further submitted that the knowledge and experience gained by the employees i.e. petitioners by their own skill and excellence during their employment cannot be called trade secret or confidential information, the divulgence or use of which should be prohibited. It is further contended that the information available in public domain can be collected by little search on Google and the same cannot be called Confidential Information.

3.4 Learned advocate Mr. Jayant Panchal has also invited the attention of this Court to the certificate of Incorporation "RAPID BevTech Private Limited.", which was incorporated on 01.04.2015 and has submitted that the same is incorporated after two years as envisaged in the clause of the agreement and the petitioners have started their business pursuant to the aforesaid incorporation of the company being "RAPID BevTech Private Limited." Thus, he has submitted that the impugned First Information Report is required to be quashed and set aside since the same exclusively falls under the domain of a civil dispute and hence no criminal prosecution can be permitted to be continued in the facts and circumstances of the case.

In response to the submissions advanced by Mr. Panchal, learned Senior Counsel Mr. Shalin Mehta with learned advocate Mr. Rahul Dholakia for the first informant has submitted that the present petitioners had entered into a confidentiality contract with the complainant company on basis of the said contract and agreement, the accused persons were entrusted with secret information of the complainant company like offers given to the customers, list and contact details of the customers, electric drawings of machines automation programs for machine operations etc and by stealing the other information like mechanical drawings and designs of machines, bill of material (details of components and sub-components), list of spare parts etc and divulging and using the said information to fulfill their criminal design, the accused persons have committed an offence of criminal breach of trust under Section 408 of the IPC.

4.1 It is further asserted by the learned Senior Counsel Mr. Mehta that the accused persons were granted limited computer access to the data belonging to the complainant company like offers given to the customers, list and contact details of customers, electric drawings of machines, automation programs for machine operations etc however, the accused persons without any authorization had managed to steal the data belonging to the complainant company and had diverted the same in pursuance to the criminal conspiracy entered into and had used the same despite knowing fully well that they are not allowed to access such information and thereby misused the secret information.

4.2 It is also contended by Mr. Mehta, learned Senior Counsel that the accused persons have started their manufacturing process by stealing the secret information, designs etc belonging to the complainant company in the year 2013. He also submitted that that the accused persons had also breached the terms of the tripartite agreement entered into between the parties on 23.10.2012, wherein it becomes clear that the accused persons had the dishonest intention right from the inception. He has further invited the attention of this Court to the clause of the agreement, nowhere it stipulates that the accused persons were permitted to use their right for manufacturing process or manufacturing any items by using their technology. He has submitted that clauses 1, 2 and 3 of the said agreement only stipulate that the accused shall not use services i.e. installation, trouble shooting, repairing & commissioning KHS equipment rendered to different customers and also would not rendered any service to their effect for the period of two years.

4.3 He has submitted that there was no intention on the part of the first informant to divulge their secret information regarding technology which they had obtained from German company "KHS Machinery".

4.4 Learned senior counsel Mr. Mehta has pointed out the Forensic Science Laboratory (FSL) report dated 04.03.2017 where the FSL has examined the Hard Disk of the accused and has opined that there were different documents, drawing, images, acrobat reader PDF documents, logs and Microsoft excel spreadsheets were found present in the Hard Disk of the accused and in fact, belonging to the "KHS Machinery" .

4.5 In response to the commission of offence envisaged by the learned advocate Mr.Panchal, in regard to the nature of dispute, learned Senior Counsel Mr.Mehta has submitted that merely because the offence as alleged has civil traits the same would not curtail the rights of the first informant, if the offence as alleged has criminal ingredients to it. It is further submitted that merely because civil proceedings have been instituted and they are pending, the same would not make the First Information Report a sham if the complaint and the charge sheet material discloses prima facie offences against the petitioners.

4.6 It is further contented that very same transaction may have trappings of dispute of civil nature as well as the elements of criminal offence and there could be civil disputes/cases which inherently may also have characteristics of criminal offence. It is further submitted that the complainant company have started its manufacturing operations in the year 1997, wherein the shareholding to the extent of 97% belong to the parent German Company namely K.H.S. GmBH. It is submitted that the complainant company and KHS GmBH had entered into a contractual relationship for using and sharing of know-how, confidential information and intellectual property in the year 1997 and thereby the complainant company became exclusive use and license of the said information and property. It is further submitted that perusal of the agreement would clarify that the criminal acts committed by the accused persons are also prejudicial to the company and its liability for the same is fastened on the complainant company.

4.7 Learned senior counsel Mr.Mehta has further submitted that accused were former employees of the complainant company wherein the petitioner no. 1 had joined the complainant company in the month of March 1999, whereas the petitioner no.2 had joined in the month of August 1998. It is further asserted that the petitioners had signed the terms and conditions of the employment and training agreements and were also sent to Germany for training by the complainant company. Mr. Mehta, learned senior advocate has submitted that the petitioner no. 2 had resigned from services of complainant company and thereafter had started a partnership firm namely Rapid Engineers with the wife of the petitioner no. 1 herein while the petitioner No. 1 was still employed with the complainant company. It is further submitted that the applicant No. 1 herein was divulging know-how and vital and confidential information in clear breach of entrustment of the said information to him to the venture namely Rapid Engineers. When the said information came to the knowledge of the complainant company, the petitioner No. 1 was terminated from his services and that a tripartite agreement was also entered into between the parties. It is thus, submitted that the accused persons have started planning, preparation and operation of their establishment while still being employed with the complainant company and have started diverting the customers to their establishment. In support of his submissions, learned Senior Counsel Mr. Mehta has placed reliance on the website of Rapid Engineers, wherein, it is stated that the same is established in the year 2010.

4.8 Learned Senior Counsel Mr. Mehta has invited the attention of this Court to the observations made by the Co-ordinate Bench of this Court in the judgment dated 25.07.2018, passed in Appeal from Order No. 145 of 2018 filed by the present petitioners challenging the order of Commercial Trade Mark Civil Suit No. 31 of 2017. Mr. Mehta has further submitted that, in fact, the Court, while considering the judgment in Appeal From Order has observed thus:- the appeals have miserably failed to administer the Commercial Court or before this Court about the possession of the information pertaining to the technology, know-how and they have failed to substantiate with the same was available with them through public domain.

4.9 Learned Senior Counsel Mr. Mehta has pointed out the observations made by the Co-ordinate Bench, wherein the Court has considered the information of technical expert, which is opined that "The Schematic plant figure is a direct plagiarism from KHS Presentation of Filler Screen Figure". It is submitted by Mr.Mehta that this Court in the afore-noted judgement has held that the clauses of tripartite agreement nowhere provide for continuing the use of protected softwares, database drawings, process information, diagram etc. of the Respondent no.2 Company.

4.10 Thus, Mr. Mehta, learned senior counsel has submitted that the petitioners have, in fact, breached the Memorandum of Understanding and during the pendency of Memorandum of Understanding (MoU) they had further disclosed the vital information of the complainant company and hence they were forced to lodge the FIR against the present petitioners. Thus, it is submitted at this stage, the matter requires trial and investigation and hence, the impugned FIR may not be quashed and set aside.

In rejoinder, Mr. Panchal, learned advocate for the petitioners has submitted that the contents of the FIR reveal that it is not the case of the first informant that, in fact, they were utilizing or using the same technology from images of the first informant and it can be said that the technology, which is used by the petitioners were similar to the complainant company and hence it cannot be said that the ingredient of the offence as alleged against the petitioners is established. Thus, he has submitted that the impugned FIR and subsequent charge sheet may also quash and set aside.

Learned Additional Public Prosecutor maintaining the arguments advanced by learned Senior Counsel Mr. Mehta has submitted before this Court that FIR reveals that the offence is registered against the present petitioners. She has submitted that the FSL report also indicates that the confidential information, drawing, images were recovered from the computer, Hard Disk, which is belonging to the present petitioners. She has submitted that since the charge sheet is filed, it is open for the petitioners to file discharged application before the appropriate Court. In this view of the submissions, it is urged that the impugned FIR may not be quashed and set aside.

Heard the learned advocates for the respective parties. This Court has perused the documents as pointed out by learned advocates for the respective parties.

The contents of the FIR in brief, reveal that the first informant has alleged that the petitioners and other Directors of Rapid Bevtech Pvt. Ltd., had conspired and formed the said firm on the basis of the technology of the Company of the first informant and also conspired to selling and using the technology for their own financial benefit and imposing loss on the complainant. It is further alleged that the petitioners were the ex-employees and as per their post and positioning in the company they were aware about the confidential and internal details and information with regard to the technical details, softwares, database, drawings, process information relating to, bottle washer filler primacies and other machineries and its functioning which information they were not supposed to disclose, still however, without intimating the Respondent no.2, the accused formed a company named Rapid Engineers wherein the petitioner no. 2 and wife of petitioner No. 1 were the partners. Thus, it is alleged that the petitioners, who were the ex-employees by illegal means used the information and technical details which were made known to them because the Company sent him to Germany for learning such techniques at the cost of the Company and such information was not to be devolved upon to any other person. It appears that the first informant came to know about the offence committed by the petitioners and when the petitioners were confronted with the same , they have entered into the tripartite agreement on 23. 10.2012. The relevant portion of the tripartite agreement are incorporated as under:-

"AND WHEREAS Shri Vishnu Shukla had as an employee joined the organization of the party of the Third Part on 01.08.1998 and left the service on 28.09.2009 and thereafter started a new venture in the name of the party of the First Part.

AND WHEREAS the party of Second Part had an employee joined the organization of the party of the Third Part on 08.03.1999 and the concerned persons of the party of the Third Part having learned about the dishonest activities undertaken by party of the Second Part immediately vide letter dated 10.09.2012 terminated the service of the party of Second Party of Second Part by issuing two month notice payment."

NOW THIS INDENTURE WINTESSTH AND IT IS HEREBY AGREED, UNDERSTOOD, CONFIRMED AND DECLARED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:-

That the party of the First Part & Second part hereby agrees that the services viz. Installation, trouble shooting, repairing & commissioning KHS equipment rendered to different customers, details indicated on a separate sheet annexed as Scheduled-I shall not be extended to said customers henceforth from the date of the present agreement for a period of two years either in the name of party of first Part or under the guise of any other name of party of First Part or under the guise of any other name.

That the party of the First Part & Second Part also agrees that the remaining customers of the party of the Third Part, details indicated on a separate sheet titled as Schedule-2, shall not be approached by whatsoever mean for rendering any services viz. Installation, trouble shooting, repairing & commissioning KHS equipment for a period of two years from the date of the present agreement either in the name of party of First Part or under the guise of any other name.

That the party of First Part & Second part shall not divulge technical know-how in respect to bottling plants & other related equipment to any third person for a period of two years.

That the party of Second Part has volunteered to repay back an amount of Rs.3000,000/- (Rs. Three lakh only) to the party of the Third Part to which the party of the Second Part has received towards dishonest activities done by him against business interest of party three. Accordingly, repays back the said amount vide cheque No. 257425 drawn on Axis bank, Maninagar Branch, Ahmedabad. In favour of the party of Third Part while signing the present agreement.

That the party of the Third Part has agreed of not initiating any action pursuant to the legal notice dated 09.10.2012 against the party of the First & Second Part for the acts done as far.

That the party of the First & Second Part agrees that any breach of condition agreed upon by way of present agreement in future, shall unconditionally make them liable to pay a sum of Rs. 50 Lakh to the party of Third Part and the party of Third part shall be at liberty to initiate all action available and contemplated as per law.

That all the parties herein above agrees that the present agreement has been entered among them without undue influence, force, coercion and on their own sweet will & volition which shall be binding to all their legal heirs too.

Party of Second Part will not join any organization being in to same business activities of KHS machinery for period of two years in line with agreement signed by him with party three. Ref. agreements dated 02.06.2011 and 05.03.2012.

From the contents of the tripartite agreement, it can be prima-facie concluded that the petitioners have utilized and used the technology/technical know-how of the Company of Respondent no.2 without its consent. The clauses of the agreement stipulate that it was agreed upon between the first informant as well as the petitioners that the services (Installation, trouble shooting, repairing & commissioning KHS equipment rendered to different customers, details indicated on a separate sheet annexed as Scheduled-I shall not be extended to the said customers henceforth from the date of the present agreement for a period of two years either in the name of the party of first Part or under the guise of any other names of the first informant.

It is further stipulates that the petitioners shall not divulge technical know-how in respect to the bottling plants & other related equipments to any third person for a period of two years.

Thus, the plain and simple reading of the clause of tripartite agreement contemplates that there was no assurance,right or license given by the first informant to use their protected softwares, databases, drawings, process information manufacturing process or use their technology-expertise for manufacturing the similar products that of the respondent no.2 Company for all times to come. It appears that despite the aforesaid tripartite agreement which was entered on 23. 10.2012, the petitioners continued with their activities and the details of the website of Rapid Engineers fortify the allegations leveled in the FIR. The details of the website reveal that the company was established in the year 2010 and the same started functioning in the year 2012, thereafter, some of the activities relating to the manufacturing process were initiated in February, 2013 though the clauses of the tripartite agreement stipulate that such activities shall not be carried for a period of two years. Hence, prima facie the ingredients of offence under section 420 of the IPC are satisfied.

A kernel of the arguments in the present case is that whether the file containing backup, Microsoft word documents, autocad drawing, images, acrobat reader PDF documents, logs and Microsoft excel spreadsheets, which were found in electronic form can be said to be "property" as envisaged under Sections 405, 409 and 420 of the IPC. Section 405 of the IPC defines "criminal breach of trust, which reads as under:-

Section 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"

The offence under Section 409 of the IPC is registered against the petitioners which reads as under:-

Section 409:- Criminal breach of trust by public servant, or by banker, merchant or agent.-Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with 1[imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.

It is also alleged that the petitioners have committed the offence under Section 420 of the IPC is registered against the petitioners, which reads as under:-

Section 420:- Cheating and dishonestly inducing delivery of property.-Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."

The conspectus of the provisions of aforesaid sections of the IPC reveals the dishonest use/ delivery/ conversion/ destruction/ disposing/misappropriation of any property in violation of any direction of law prescribing such mode, will amount to an offence.

Section 22 of the IPC defines "movable property" which reads as under:-

Section 22 "Movable property".-The words "movable property" are intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth.

In the present case, as noted herein above, it is the specific case of the first informant that the petitioners have, in fact, by stealing the information like softwares drawings, images, bills of materials, list of spare parts including electronic drawing of machinery, etc belonging to KHS Company have used the same for manufacturing process of their products. All the information in the said material contained the business/trade secret of the first informant company. Such secrets are subject to theft and the same cannot be infringed. The success of a Company depends on its technical expertise which it would like to keep it a secret. The same can be termed as intellectual property being secretly guarded by the Company. The business of the company depends on the technical expertise which comprises of secret process or formula or the process of manufacturing which cannot be shared with anyone for its survival. If the same is stolen and used for manufacturing of similar products then it would have direct impact on the competition resulting into financial ramification of the Company.

In the case of R.K.Dalmia vs Delhi Administration, AIR 1962 SC 1821, the Supreme Court while dealing with the definition of property in section 405 and section 22 of the IPC has observed thus:

"We are of opinion that there is no good reason to restrict the meaning of the word 'property' to movable property only when it is used without any qualification in s. 405 or in other Section of the Indian Penal Code Whether the offence defined in a particular section of the Indian Penal Code can be com-mitted in respect of any particular kind of property will de-pend not on the interpretation of the word 'property' but on the fact whether that particular kind of property can be sub-ject to the acts covered by that section. It is in this sense that it may be said that the, word property in a particular section covers only that type of property with respect to which the of-fence contemplated in that section can be committed.

Section 22 Indian Penal Code defines 'movable property'. The definition is not exhaustive. According to the section the words 'movable property' are intended to include corporeal property of every description, except land and things at-tached to the earth or permanently fastened to anything which is attached to the earth. The definition is of the expres-sion movable property' and not of 'property' and can apply to all corporeal property except property excluded from the definition. It is thus clear that the word 'property' is used in the Code in a much wider sense than the expression movable property'. It is not therefore necessary to consider in detail what type of property will be included in the various S. of the Indian Penal Code."

Thus, the Supreme Court has held that the meaning of the word "property" cannot be restricted to movable property only when it is used without any qualification in section 405 and other section of the IPC. It is also observed that the word "property" is used in the Code in much wider sense and then the expression movable property. The definition of "movable property" applies to all the provisions of various chapters of the IPC. There are various offences provided in relation to the both corporeal and incorporeal property. Offences related to documents and to Property Marks in Chapter XVIII deal with electronic records. Thus, the definition of "movable property" cannot be restricted to corporeal or tangible property but it has to be appreciated in wider sense encompassing intangible property also. Thus, any property either tangible or intangible, which is subject to theft and is misused by any person by committing theft or breach of trust with the rightful owner adversely affecting his interest, will fall under the definition of "movable property".

In the present case, it is alleged that secret information of the Company is used by the petitioners to form their own Company and by utilizing such information relating to trade/business secret they have adversely affected their business. Thus, it can be safely presumed that the petitioners who were the employees of the complainant company were entrusted with such "movable property'.

Further investigation reveals the complicity of the present petitioners in the offence. The FSL report of the Hard disk of the computer of the petitioners reveal the name of the KHS company to whom the file, documents etc. belonged. The contention raised by the petitioner that no such allegations of stealing the software or documents are found in the FIR does not merit acceptance in light of the observations of the Apex Court in the case of Rajesh Bajaj Vs State NCT of Delhi AIR 1999 SC 1216.

The Apex Court has held that it is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor it is necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelled out in the complaint, is not the need at this stage.

It is also contended by the petitioners that the respondent no.2 has already preferred Commercial Suit No.321 of 2016, hence the impugned F.I.R. may be quashed and set aside. It is further contended that at the most the dispute can be said to be one of breach of agreement which is in the nature of civil dispute. The contention raised by the petitioners that the allegations made in the FIR fall within the domain of civil dispute does not merit acceptance. The Supreme Court in the case of V.Ravi Kumar Versus State, Rep.By Inspector Of Police, District Crime Branch, Salem, Tamil Nadu, JT 2018

(12) SC 163, has observed thus:

" There can be no doubt that a mere breach of contract is not in it-self a criminal offence, and gives rise to the civil liability of dam-ages. However, as held by this Court in Mridaya Ranjan Prasad Verma and Ors. v. State of Bihar and Anr., 2000 4 SCC 168 the dis-tinction between mere breach of contract and cheating, which is a criminal offence, is a fine one. While breach of contract cannot give rise to criminal prosecution for cheating, fraudulent or dishonest in-tention is the basis of the offence of cheating. In this case, in the FIR, there were allegations of fraudulent and dishonest intention in-cluding allegations of fabrication of documents, the correctness or otherwise whereof can be determined only during trial when evid-ence is adduced.

30 Exercise of the inherent power of the High Court under Section 482 of the Criminal Procedure Code would depend on the facts and circumstances of each case. It is neither proper nor permissible for the Court to lay down any straitjacket formula for regulating the in-herent power of the High Court under Section 482 of the Cr.P.C.

31 Power under Section 482 Cr.P.C. might be exercised to prevent abuse of the process of law, but only when, the allegations, even if true, would not constitute an offence and/or were frivolous and vexa-tious on their face.

32 Where the accused seeks quashing of the FIR, invoking inherent jurisdiction of the High Court, it is wholly impermissible for the High Court to enter into the factual arena to adjudge the correctness of the allegations in the complaint. Reference may be made to the de-cision of this Court, inter alia, in State of Punjab v. Subhash Kumar and Ors., 2004 13 SCC 437 and Janata Dal v. H.S. Chowdhary and Ors., 1992 4 SCC 305

33 In Vesa Holdings (P) Ltd. and Anr. v. State of Kerala and Ors., 2015 8 SCC 293 this Court observed:

"12. The settled proposition of law is that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception."

It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be avail-able to the complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not."

Thus, the afore-noted observations of the Supreme Court enunciate that if the set of facts may make out a civil wrong as well as the criminal offence and only because a civil remedy is available to the complainant that itself cannot be ground to quash the criminal proceeding. The Supreme Court has observed that the powers under Section 482 Cr.P.C. might be exercised to prevent abuse of the process of law, but only when, the allegations, even if true, would not constitute an offence and/or were frivolous and vexatious on their face. In the present case there are serious allegations against the petitioners of using the secret technical expertise of the Company in which they were employed and were entrusted with it. It is alleged that they used the same for manufacturing the same products by forming their own company. Hence, the impugned FIR and the subsequent proceedings are required to be sustained in wake of the serious allegations leveled against the petitioners.

The scope of the exercise of inherent of the High Court under Section 482 of the Criminal Procedure Code is well set out by the Supreme Court in the case of Dinesh Patel Vs. State of Gujarat, 2018 (3) SCC 104. The Apex Court has observed thus:-

" 25). Having heard the learned counsel for the parties at length and on perusal of the record of the case, we are inclined to accept the submissions of the learned counsel appearing for the Complainants finding force therein whereas we do not find any merit in the submissions urged by the learned counsel appearing for the accused persons.

26) The law on the question as to when a registration of the FIR is challenged seeking its quashing by the accused under Article 226 of the Constitution or Section 482 of the Code and what are the powers of the High Court and how the High Court should deal with such question is fairly well settled.

27) This Court in State of West Bengal & Ors. vs. Swapan Kumar Guha & Ors. (AIR 1982 SC 949) had the occasion to deal with this issue. Y.V. Chandrachud, the learned Chief Justice speaking 14 for Three Judge Bench laid down the following principle: "Whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case. If on a consideration of the relevant materials, the Court is satisfied that an offence is disclosed, the Court will normally not interfere with the investigation into the offence and will generally allow the investigation in the offence to be completed for collecting materials for proving the offence. The condition precedent to the commencement of investigation under S.157 of the Code is that the F.I.R. must disclose, prima facie, that a cognizable offence has been committed. It is wrong to suppose that the police have an unfettered discretion to commence investigation under S.157 of the Code. Their right of inquiry is conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot, reasonably, have reason so to suspect unless the F.I.R., prima facie, discloses the commission of such offence. If that condition is satisfied, the investigation must go on. The Court has then no power to stop the investigation, for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences."

28........

29) In doing so, the High Court, in our view, virtually decided all the issues arising out of the case like an investigating authority or/and appellate authority decides, by little realizing that it was exercising its inherent jurisdiction under Section 482 of the Code at this stage.

30) The High Court, in our view, failed to see the extent of its jurisdiction, which it possess to exercise while examining the legality of any First Information Report complaining commission of several cognizable offences by accused persons. In order to examine as to whether the factual contents of the FIR disclose any prima facie cognizable offences or not, the High Court cannot act like an investigating agency and nor can exercise the powers like an appellate court. The question, in our opinion, was required to be examined keeping in view the contents of the FIR and prima facie material, if any, requiring no proof.

31) At this stage, the High Court could not appreciate the evidence nor could draw its own inferences from the contents of the FIR and the material relied on. It was more so when the material relied on was disputed by the 17 Complainants and visaseversa. In such a situation, it becomes the job of the investigating authority at such stage to probe and then of the Court to examine the questions once the charge sheet is filed along with such material as to how far and to what extent reliance can be placed on such material.

Thus, the contents of the FIR as well as the charge-sheet reveal that the petitioners who were the ex-employees of the company of the first informant have, prima-facie, stolen the information, drawings, designs specifications, images, presentations, brochures, data, software etc and secret information of the company and used them for their own business by forming the company named Rapid Engineer and also pursuant to such inventory, contacted the customers of the first informant and also enticed them to carry the business relation with them by using secret information pertaining to manufacturing process. In the considered opinion of this Court at this stage, as per the law enunciated by the Apex Court this Court cannot act as an investigating authority or the appellate authority and appreciate the evidence nor could draw its own inferences from the contents of the FIR and the material.

In light of the foregoing reasons and analysis of the contents of the FIR, this Court is of the considered opinion that no interference is required by this Court by exercising its inherent power under Section 482 of the Code of Criminal Procedure, 1973.

Resultantly, the petition fails and the same is hereby dismissed. Rule is discharged. Interim relief, if any, granted earlier shall stand vacated.