Important point
Quashment of FIR or a complaint in exercise of inherent powers of the High Court should be limited to very extreme exceptions.

Headnote:Criminal Procedure Code, 1973 -Sections 156(3) and 482-Cheating-Respondents accused residing at Indore offered to supply Toasted Soyabean extractions to appellant - Price demanded by accused paid by cheques-Commodity sent was of inferior and sub-standard quality-Appellant Company filed complaint before Judicial Magistrate Gandhidham alleging certain offences including offence of cheating-Complaint forwarded by Magistrate for investigation under Section 156(3) of Code-Accused directors moved High Court of Gujarat for quashing complaint under Section 482 of Code-Complaint quashed-Appeal -High Court without considering legal aspects rushed to erroneous conclusion that judicial Magistrate of first class Gandhidham has no power to take cognizance of offences alleged merely because such offences committed outside territorial limits of State of Gujarat-Question of jurisdiction could not have been taken by High Court at grossly premature stage-Impugned judgment quashed.
Held: Unfortunately, the High Court, without considering any of the aforesaid legal aspects rushed to the erroneous conclusion that the “judicial magistrate of first class, Gandhidham has no power to take cognizance of the offences alleged” merely because such offences could have been committed outside the territorial limits of the State of Gujarat. Even otherwise, without being apprised of the fuller conspectus a decision on the question of jurisdiction should not have been taken by the High Court at a grossly premature stage as this. (Para 15)

Judgment

Thomas, J.-Leave granted.

2. Chairman of the appellant company filed a complaint before the Judicial Magistrate of First Class, Gandhidham (Gujarat) alleging certain offences including the offence of cheating against another company located at Indore (Madhya Pradesh) and its Directors. The Magistrate forwarded the complaint to the appellant for investigation as per his order passed under Section 156(3) of the Code of Criminal Procedure (for short “the Code”). The accused Directors thereupon moved the High Court of Gujarat under Section 482 of the Code for quashing the complaint. A single Judge of the High Court quashed the complaint as also the order passed by the Magistrate thereon. Complainant has, therefore, filed this appeal.

3. The gist of the complaint is this : In the month of October 1996 the accused Directors approached him and offered to supply 5450 metric tones of “Toasted Soyabean Extractions” for a price of nearly four and a half crores of rupees. The rate quoted by the accused was higher than the market price. Appellant had to pay the price in advance as demanded by the accused. So the same was paid through cheques. But the accused sent the commodity which was of the most inferior and sub-standard quality. Complainant produced Xerox copies of the reports obtained from the laboratory to which samples of the commodities were sent for testing purposes. The said laboratory has remarked that the commodity was of “the most inferior and sub-standard quality”. The complainant suffered a loss of 17 lakhs of rupees by the aforesaid consignment alone. According to the appellant he was induced to pay the price on the representation that the best quality commodity would be supplied and the price was paid on such representation. But by supplying the most inferior quality the accused deceived the complainant and thereby the offence was committed. The above are the salient features of the allegations in the complaint.

4. We have noted from the judgment of the learned single judge of the High Court that appellant’s counsel in the High Court did not turn up to argue the matter. Evidently learned judge was deprived of the advantage of getting appellant’s version projected. The deficiency is seen reflected in the impugned judgment also.

5. Respondent’s counsel in the High Court put forward mainly two contentions. First was that the dispute is purely of a civil nature and hence no prosecution should have been permitted, and the second was that the Judicial Magistrate of First Class, Gandhidham has no jurisdiction to entertain the complaint. Learned single judge has approved both the contentions and quashed the complaint and the order passed by the magistrate thereon.

6. On the first count learned single judge pointed out that there was a specific clause in the Memorandum of understanding arrived between the parties that disputes, if any arising between them in respect of any transaction can be resolved through arbitration. High Court made the following observations:-

“Besides supplies of processed soyabean were received by the complainant company without any objection and the same have been exported by the complainant-company. The question whether the complainant-Company did suffer the loss as alleged by it are the matters to be adjudicated by the Civil Court and cannot be the subject matter of criminal prosecution.”

7. Time and again this Court has been pointing out that quashment of FIR or a complaint in exercise of inherent powers of the High Court should be limited to very extreme exceptions (vide State of Haryana v. Bhajan Lal1 and Rajesh Bajaj v. State NCT of Delhi2).

8. In the last referred case this Court also pointed out that merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. We quote the following observations :

“It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for hold

Click Here to Read the rest of this document

1999 Supreme(SC) 1074

Important pointQuashment of FIR or a complaint in exercise of inherent powers of the High Court should be limited to very extreme exceptions.

Cases Referred (2)

Important point
Quashment of FIR or a complaint in exercise of inherent powers of the High Court should be limited to very extreme exceptions.