AI Structured Summary
Not yet generated for this judgment
Judgment
R.M. Borde, J.—Heard the respective Counsel appearing for the parties.
Rule. With the consent of the parties, the application is taken up for final disposal at the admission stage.
The applicants, who are original accused Nos. 5, 7 & 8 in criminal complaint Case No. 407 of 2004 are challenging the order passed by the Judicial Magistrate, First Class, Akola on 10/9/2008, whereby the Magistrate took cognizance of the offence punishable under Sections 403, 406, 418 and 468 read with Section 34 of the Indian Penal Code and directed issuance of process against the accused including the applicants herein. The order passed by the trial Magistrate was subjected to challenge in criminal revision No. 87 of 2009, which came to be heard and disposed of by the Additional Sessions Judge, Akola on 05/02/2010, whereby the revision application presented by the applicants came to be dismissed.
Applicant-accused No. 1 is President of the Company, accused No. 2 is Regional Sales Manager of the Company, Accused No. 3 is Area General Manager of the Company, accused No. 4 is Marketing Manager, accused No. 6 is Finance Manager, whereas accused Nos. 7 and 8 are Sales Executives and Pilot Sales Representatives of the Company at Akola, The instant application is presented by accused No. 4, who is serving as Area Sales Manager and accused Nos. 7 and 8, who were Sales Executives and Pilot Sales Representatives of the Company.
In the complaint presented by respondent No. 1original complainant, it is contended that she was appointed by Hindustan Cocacola Marketing Company as a distributor for the area of Akola city since 09/10/1997. The complainant alleges that on 11/01/2003 a demand draft drawn on H.D.F.C. Bank, Akola and some other 19 demand drafts amounting to Rs. 8,17,430/drawn in favour of M/s. Hindustan Coca-Cola Marketing Company Pvt. Ltd., Nasik were sent to the office of original accused No. 3. Accused Nos. 4 and 6 were serving in the office of accused No. 3, however, despite receipt of the said amount, the same was not accounted in the accounts of the complainant. It is contended that there was no supply of products against the amount deposited by the complainant. It is further alleged that accused Nos. 3 to 6 misappropriated the amount and put the same for their own use thereby committed offence of criminal breach of trust. It is further alleged that accused Nos. 3 to 6 have dishonestly misappropriated the amount by violating the legal contract. Accused Nos. 1 and 2 are said to have abated accused Nos. 3 to 6 in commission of the offence. Accused Nos. 7 and 8 are alleged to have misrepresented the other accused by concealing material facts regarding efficient work of the complainant and thereby engaged themselves in conspiracy with accused Nos. 3 to 6. The complainant also further states in the complaint that accused Nos. 3 to 6 have misappropriated the amount dishonestly and deceived the complainant by inducing him to deposit the amount and thereby caused harm to his mind and reputation knowingly that wrongful loss would be caused to the complainant. The accused, by their failure to take entry of deposit, falsified the accounts with intention to commit fraud and caused injury to the complainant and they prepared forged documents for the purpose of cheating. Thus, it is alleged that the accused have committed offence punishable under Sections 107, 403, 405, 409, 415, 418, 464, 468, 477B read with Section 34 of the Indian Penal Code. It is further contended that the oral report was lodged to the police, but they failed to take any action. Initially the complaint was forwarded to the police authorities for conducting investigation u/s 156(3) of the Code of Criminal Procedure with a direction to register F. I. R. and investigate the matter.
The applicants herein along with one Sunil Peter Lobo presented criminal revision No. 127 of 2004 in the Court of Sessions at Akola challenging order dated 22/4/2004 passed by the J. M. F. C., Akola, thereby directing investigation by police u/s 156(3) Cr. P. C. The revision application tendered by the applicants came to be allowed by the Additional Sessions Judge on 04/8/2005 and the order passed by the J.M.F.C. was quashed and set aside. The complainant challenged the order passed in Criminal Revision No. 127 of 2004 by presenting criminal Revision Application No. 173 of 2005 before the High Court, Bench at Nagpur. In the meantime, the trial Magistrate, on receipt of police report, proceeded to dismiss the complaint on 05/8/2005. The order passed by the Magistrate came to be challenge by presenting an application seeking amendment in pending criminal revision application No. 173 of 2005 before the High Court. This Court, while disposing of the criminal revision application, directed quashment of the order passed by the revisional Court dated 22/4/2004 and the order passed by the Magistrate on 05/8/2005 and the matter came to be remitted back to the Chief Judicial Magistrate for rendering fresh decision in the matter. The High Court observed while disposing of the revision application that the Magistrate shall give opportunity to the complainant of being heard before passing any order in the complaint. It was also further directed by this Court to the learned Magistrate to take into consideration the report submitted by the P. S. O, City Kotwali, Police Station Akola in an inquiry conducted in pursuance to the order passed by the Magistrate u/s 156(3) of the Code, while determining the issue.
The learned Magistrate, after receiving evidence led by the complainant, directed issuance of process against the accused for offences punishable under Sections 403, 406, 418 and 468 read with Section 34 of the Indian Penal Code and as stated above, the order passed by the Magistrate has been confirmed by the revisional Court. As such, the instant criminal application.
It transpires that, in the meantime, the complainant presented another complaint on 28/9/2006 to the Magistrate implicating therein the police officials along with present applicants. The learned J. M. F. C. was pleased to call report u/s 202 Cr. P. C. from the Police Station, Ramdaspeth, Akola and on receipt of the report, the Magistrate proceeded to dismiss the complaint by Order dated 08/10/2007.
Another aspect that is required to be taken into account is that the complainant has presented regular civil suit No. 282 of 2003 in the Court of Civil Judge, Senior Division, Akola against Hindustan Coca-cola Marketing Company Pvt. Ltd. seeking decree of perpetual and mandatory injunction thereby restraining the Company from discontinuing the distributorship of the complainant and further order in respect of continuance of supply of products. The restrain order is also prayed against the Company in respect of appointing any person as distributor for the area. The suit came to be presented on 07/6/2003 along with application for temporary injunction. The application seeking temporary injunction came to be dismissed. It is claimed in the civil litigation that the defendants are responsible for not adjusting 19 demand drafts worth Rs. 8,07,187/- sent by the complainant in the account. Thus, it appears that grievance raised in the instant complaint in respect of failure to adjust the amount of Rs. 8,07,187/is also a subject matter of civil litigation.
I have heard the argument advanced by Shri S. P. Dharmadhikari, senior counsel for the applicant, Shri S. B. Wahane, Counsel appearing for respondent No. 1 and Smt. Bodade, A. P. P. for respondent No. 2 State. The Counsel appearing for the applicants-accused has stated that on perusal of the complaint presented to the Magistrate, no offence as alleged can be said to have been made out. The grievance made by the complainant is essentially of civil character for which the complainant has already taken recourse by presenting civil litigation. It is contended that the accused are concerned with the marketing of products of the Company and are not at all responsible for maintaining accounts or maintaining any official record or creating any documents. Admittedly, the complainant has issued demand drafts for the amount in favour of the Company and by no stretch of imagination, it can be assumed that the amount deposited in the account of the Company has landed in the accounts of the individual accused. The accused have no domain over the finance nor they were entrusted with the amount and as such there is no question of committing criminal breach of trust by them. Admittedly, the accused are looking after the marketing business of the Company and are not responsible for maintaining either the account or record of the Company. As such, there is no question of preparing any forged documents. On perusal of the complaint it is evident that there are no allegations in respect of transmitting the amount in the accounts of the individual accused nor they are alleged to have withdrawn the amount which is admittedly deposited by the complainant in the account of the Company. The ingredients of the offence punishable u/s 403, 406, 418 and 468 I.P.C. can not be said to have been attracted on consideration of the contents of the complaint or the evidence laid by the complainant in support of the complaint. It is also further contended that the Company in whose account the money was stated to have been deposited, is not made accused in the crime and as such in absence of the Company, the representatives of the Company cannot be prosecuted. It is also urged by the learned Counsel for the applicants that considering the law laid down by the Apex Court in the case of State of Haryana and others Vs. Ch. Bhajan Lal and others, as the complainant has not made out any case against the accused herein, the proceedings initiated by the complainant is nothing but an abuse of process of the Court need to be quashed.
The Counsel appearing for the respondents has supported the order passed by the learned Magistrate which has been confirmed by the revisional Court. It is contended that there is sufficient material showing complicity of the accused in the crime and even if the accused applicants are employed in the marketing division of the Company, they cannot escape the criminal liability as there is sufficient material available against them. It is contended by the Counsel appearing for the respondents that the complainant has made out a triable case against the accused and the allegations contained in the complaint are sufficient to attract the penal provisions for which the accused are being tried.
Having considered the submissions advanced by the respective Counsel appearing for the parties, first of all, it has to be tested as to whether case is made out by the applicant accused for causing interference in the present matter in the light of parameters laid down in Bhajanlal''s case (cited supra), wherein broad principles for exercise of inherent powers by the High Court are laid down by the Apex Court in paragraph 102 of the judgment as under:
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers u/s 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated u/s 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are no absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
The Counsel appearing for the applicants contends that even if the allegations made in the first information report are taken at their face value and accepted to be true, the same do not prima facie constitute any offence or make out case against the accused. It is contended that the criminal proceedings are initiated with mala fide intention and with an ulterior motive for bringing the Company to the terms. It is to be noted that the complainant alleges that amount of Rs. 8,17,430/ has been deposited in the accounts of the Company by way of demand drafts. It has not been substantiated as to how the accused can have access to the amount or in what manner they have misappropriated the funds. Admittedly, the applicants are serving in the marketing department and can have no access to the amount. In respect of offence u/s 418 I.P.C. also, there is no material placed on record nor the ingredients of the offence can be said to have been spelt out in the complaint. The contents of the complaint if taken at its face value, it does not disclose any allegation in respect of cheating by the accused. It is an admitted fact that the demand drafts were duly credited in the account of the Company and even if it is assumed that the same were credited by the distributor from whom the complainant received the products, it cannot be said that the accused in any manner are instrumental in cheating the complainant. So far as the offence u/s 468 is concerned, there are no allegations in the complaint that the applicants original accused Nos. 5, 7 and 8 have fabricated the documents or have committed forgery in respect of document for the purpose of cheating. It is noted in the complaint itself that the applicants are either area sales or pilot sales representatives of the Company. They are admittedly not responsible for maintenance of record of the Company nor they can be said to have access to the record of the Company nor there are such allegations against accused of such nature in the complaint. It is also not spelt out in the complaint or in the evidence before charge laid by the complaint as to in what manner and how the applicants accused are responsible for fabricating the documents or have committed an offence of forgery for the purpose of cheating the complainant. Thus, the ingredients of the offence alleged against the accused applicants are not at all attracted on the bare perusal of the complaint or the statement of witnesses examined by the complainant for the purpose of taking cognizance of the offence.
It is also worth noting that initially on receipt of the complaint, the Magistrate directed an inquiry by the police officials by taking recourse to the provisions of Section 156(3) Cr.P.C. The police authorities have submitted the report and informed the Court that no case is made out against the accused for taking criminal action. It is to be noted at this stage that this Court while directing further inquiry by the Magistrate has issued directions for taking into consideration the report of the police submitted by P.S.O., City Kotwali, Akola. However, on perusal of the order passed by the Magistrate or the revisional Court, it does not transpire that either the learned Magistrate or the learned Additional Sessions Judge have taken into account the report submitted by the police. The learned Magistrate while taking cognizance of the offence was supposed to not only refer to the report of the police but also to record reasons as to why the learned Magistrate does not agree with the finding recorded by the police authorities who reported that no case is made out against the accused. The learned Magistrate has not recorded any reasons in respect of his disagreement with the report submitted by the police officials nor has recorded as to what is the material placed by the complainant before Court which calls for taking cognizance of case in spite of adverse police report. This is also a reason as to why interference is required to be caused in the order passed by the trial Magistrate.
The Counsel appearing for the applicants has vehemently contended that in absence of Company being included in the array of the accused, the criminal complaint cannot be proceeded against the employees alone. It is the contention of the Counsel appearing for the applicants that the complainant himself has asserted that the amount has been deposited with the Company and as such the Company alone shall have domain over the amount. The accused impleaded in the complaint are the employees of the Company or representing the Company. Considering the nature of the allegations, the accused cannot be prosecuted in absence of the Company with whom the misappropriated amount is allegedly deposited by the complainant. The Counsel appearing for the applicants seeks leave to place reliance on the judgment in the matter of Sharon Michael and Ors. v. State of Tamil Nadu and Anr. reported in CDJ 2008 SC 2144 (Criminal Appeal No. 2089/2008 Arising out of SLP (Cri.) No. 3600 of 2006). The Apex Court referring to the judgment in the matter of R. Kalyani v. Janak C. Mehta and Ors. 2008 (14) SCALE 85 has noted thus;
...If a person, thus, has to be proceeded with as being variously liable for the acts of the company, the company must be made an accused. In any event, it would be a fair thing to do so, as legal fiction is raised both against the Company as well as the person responsible for the acts of the Company.
The Counsel appearing for the respondents has contended that the prosecution can proceed in absence of the Company. Placing reliance in the matter of Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd. reported in (2009) 3 SCC (Cri) 845 it is urged that the prosecution can be proceeded in absence of the Company. In the reported matter, the prosecution was u/s 138 of the Negotiable Instruments Act. While referring to the provisions of Section 138 and more particularly phrase, ''any debt or liability'', the Apex Court ruled that it can be the director''s personal liability irrespective of company''s liability and as such the complaint against the director shall be held to be maintainable. Section 141(2) of the Negotiable Instruments Act starts with non obstante clause creates a liability of the director of the company in case of commission of offence with consent or connivance of, or attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, and such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to proceeded. Section 141 of the Negotiable Instruments Act refers to offences by companies which provides for responsibility of the person who, at the time the offence was committed, was incharge of, and was responsible to the company for the conduct of business of the company so also the company shall be deemed to be guilty of the offence. Considering the provisions of the Negotiable Instruments Act, the Apex Court ruled that in absence of the company, the prosecution can be launched against the person responsible for conduct of affairs of the company. In the instant matter, the act alleged against the accused is in respect of misappropriation of funds as well as forgery. Admittedly, the funds are deposited with the company and it has not been shown as to how the amount has landed in the accounts of the accused or as to how the accused have domain over the funds. In the given circumstances, considering the allegations made in the complaint, the complaint cannot be proceeded further in absence of the company.
It is urged that the complainant has already presented a civil suit seeking declaratory relief as well as order of injunction against the company. The complainant has made allegations in respect of tendering of amount more than Rs. 8 lac with the Company and it has also been alleged that the company has not accounted said amount in the account of the complainant maintained by the company and no entry has been taken towards the deposit of the said amount. In the pending suit the company has presented written statement wherein it is contended that there is no amount outstanding against the complainant and claimed dismissal of the suit. Thus, the dispute is between the complainant and the company is in respect of adjustment of the amount alleged to have been advanced by the complainant to the company. Thus, the dispute is purely of civil character and recourse is already taken by the complainant by filing the suit. Further, it has not been stated nor has been disclosed as to how the accused herein are responsible for managing the accounts or as to in what manner the accused are responsible for handling funds received by the Company. The complainant himself has stated in the complaint that the accused are the persons employed in the marketing section of the company and as such by very nature of the duties assigned to the accused, they cannot be said to have any domain over the funds nor there is any allegation in the complaint nor any evidence led by the complainant that the accused have any domain over the amount alleged to have been paid by him to the company. In these circumstances, therefore, it cannot be said that the complainant has made out any triable case against the accused applicants herein. The dispute as stated above is purely of civil character and allowing to proceed the criminal prosecution against the accused applicants in the facts and circumstances of the case would amount to permitting the complainant to abuse the process of the Court for securing his own objective. The criminal application thus deserves to be allowed and same is accordingly allowed.
Criminal proceedings initiated against the accused-applicants herein being Regular Criminal Case No. 407/2004 pending before the Judicial Magistrate, First Class Court-I, Akola shall stand quashed. The order dated 05/02/2010 passed by the revisional Court in Criminal Revision No. 87 of 2009 as well as initial order passed by the Magistrate directing issuance of process on 10/9/2008 stand quashed and set aside, so far as it relates to the applicants herein.
Rule is accordingly made absolute.