IMPORTANT POINTS
Ingredients of Sections 192 and 199, IPC restated.
Setting in criminal justice system in motion to pressurize the other party in a dispute of civil nature is an abuse of the process of law.
Principle of vicarious liability having not been incorporated in Sections 192 and 199 the complainant must specifically aver role of each of the accused in the complaint.

Headnote:(a) Code of Criminal Procedure, 1973 – Section 482 – Setting in criminal justice system in motion to pressurize the other party in a dispute of civil nature is an abuse of the process of law – High Court ought to have interfered. (Para 13)
        (2007) 12 SCC 1; (2008) 4 SCC 541; (2008) 8 SCC 77; (2008) 11 SCC 670; (2000) 2 SCC 636 – Referred
        (b) Code of Criminal Procedure, 1973 – Section 482 – Where the FIR or the complaint even if taken at its face value and accepted in their entirety do not constitute the offence alleged, the High Court would be justified in invoking its powers under Section 482 to quash the criminal proceedings. (Para 19)
        AIR 1960 SC 866; (1995) 6 SCC 194; (2008) 3 SCC 574 – Relied upon
        (2008) 2 SCC 705; (2008) 3 SCC 574 – Referred
        (c) Indian Penal Code, 1860 – Sections 192 and 199 – Ingredients restated. (Paras 26 and 27)
        AIR 1964 SC 725 – Relied upon
        (d) Indian Penal Code, 1860 – Section 192 and 199 – It cannot be presumed that a Chairman of a company is responsible for all acts committed by or on behalf of the Company – No material to connect the Chairman MSEB with the allegation – Sections 192 and 199 not incorporating principle of vicarious liability – Complainant had to specifically aver role of each of the accused in the complaint. (Paras 28 and 29)
        (2005) 8 SCC 89; (2008) 5 SCC 662 – Relied upon
        (2001) 9 SCC 728; (2002) 6 SCC 670 – Referred
        (e) Indian Penal Code, 1860 – Sections 192 and 199 – Offences under Sections 192 and 199 if made out, exist independent of the final arbitral award (Para 32)
        (f) Code of Criminal Procedure, 1973 – No prima facie case having been made out, not proper to decline interference. (Para 32)
        (g) Indian Penal Code, 1860 – Section 34 – Section 34 does not constitute a substantive offence – It is merely in the nature of a rule of evidence – To attract section 34, common intention in the sense of a pre-arranged plan and the accused acting in the same manner is the main ingredient – Complaint must, prima facie, reflect a common prior concert or planning amongst all the accused – On the facts section 34 not attracted in the case. (Paras 33 and 34)
        1998 SCC (Cri) 698; (2003) 10 SCC 108; (2000) 4 SCC 110 – Relied upon
        (1998) 5 SCC 749; (2005) 8 SCC 89; (2009) 6 SCC 475; (2007) 9 SCC 481; (2009) 3 SCC 375; (2008) 5 SCC 668; (2008) 2 SCC 705 – Referred
       Facts of the case:
        1. MSEB issued a work order whereby respondent No. 1 was required to install at various locations and lease out 47,987 LTLMS to MSEB for a period of 10 years.
        2. On 19th February 1999, respondent No.1 partially terminated the contract, conveying to MSEB that it would not install any more LTLMS, and would only maintain the installed items.
        3. On 21st April 1999, respondent No.1 terminated the contract in entirety.
        As dispute arose between respondent No. 1 and MSEB, the High Court referred the disputes to Arbitral Tribunal.
        4. On the basis of observations in the arbitral award, respondent Nos. 1 to 3 filed criminal complaint for offences under Sections 192 and 199 read with Section 34 of the IPC. The Judicial Magistrate took cognizance of the said complaint and issued summons against all the accused named in the complaint.
        5. The appellants preferred petition under Section 482 Cr. P.C. before the High Court for quashing of the complaint. The High Court has dismissed the said petition.
       Finding of the Court:
        No prima facie case having been made out, High Cour ought to have interfered.
       Result : Appeal allowed.

JUDGMENT

D.K. Jain, J. —

Leave granted.

2. This appeal, by special leave, is directed against the judgment, dated 9th October 2007, delivered by the High Court of Bombay in Criminal Application No. 3715 of 2005, in a petition filed by the two appellants herein under Section 482 of the Code of Criminal Procedure, 1973 (in short “the Code”). By the impugned judgment, the High Court has declined to quash a criminal complaint filed by respondents No.1 to 3 in this appeal against the appellants and others for offences under Sections 192 and 199 read with Section 34 of the Indian Penal Code, 1860 (for short “the IPC”).

3. Shorn of unnecessary details, the facts, material for adjudication of the issue arising in this appeal may be stated thus:

Appellant No.1, viz. Maharashtra State Electricity Distribution Co. Ltd.; constituted in terms of the provisions of the Electricity Act, 2003 is the successor in interest of Maharashtra State Electricity Board (for short “MSEB”) and appellant No. 2 is its Chairman. Respondent No.1 is an incorporated company, viz. M/s Datar Switchgear Ltd. and respondents No.2 and 3, senior officials of respondent No.1, are the complainants and respondents No.4 to 7 are the co-accused.

4. Pursuant to various contracts entered into between respondent No. 1 and MSEB in the year 1993-94 for installation of “Low Tension Load Management Systems” (for short “LTLMS”), MSEB issued a work order on 27th March 1997 whereby respondent No. 1 was required to install at various locations and lease out 47,987 LTLMS to MSEB for a period of 10 years at a monthly rent of ` 825/- for the first six years, and about ` 650/- per month for the remaining four years.

5. Clause 8.1 of the said contract stipulated that respondent No.1 would send intimation to the Section-in-charge of MSEB regarding the installation of the equipment, and thereafter, a commissioning report was to be prepared in that regard, which was to be signed jointly by the representative of the complainant and the concerned Section-in-charge of the MSEB.

6. During the validity period of the contract, various disputes arose between respondent No.1 and MSEB. On 19th February 1999, respondent No.1 partially terminated the contract, conveying to MSEB that it would not install any more LTLMS, and would only maintain the installed items.

7. On 21st April 1999, respondent No.1 terminated the contract in entirety. Nevertheless, they offered to maintain the installed objects provided MSEB continued to pay rent during the duration of the work order. As the dispute arose between respondent No. 1 and MSEB vide order dated 5th May 1999, the High Court of Bombay referred the disputes to Arbitral Tribunal.

8. The arbitration proceedings commenced on 19th February 1999. The controversy in the instant case pertains to the amended written statement filed by the MSEB on 7th February 2000, the relevant extract of which reads as follows:

“9A. The Respondents submit that the Claimants are not entitled to claim any amount from the Respondents as claimed or otherwise. In fact, as stated hereinafter, the Claimants are bound to refund to the Respondents all the amounts recovered by them from the Respondents along with interest thereon. The Respondents submit that the Claimants are guilty of having practiced fraud upon the Respondents. The Claimants have fabricated documents as also are guilty of misrepresentation of material facts in the matter of commissioning objects, installing them, taking out print outs therefrom and submitting bills in respect thereof.... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ...

a) COMMISSIONING/COMMISSIONING REPORTS

The provisions of Clause 8.1 of the work order provided for installation and commissioning of LTLMS systems in presence of Section in Charge of every Section. The Claimants not only did not inform the concerned/Section in Charge as required by Clauses (a) and (b) thereof, but submitted commissi

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2010 Supreme(SC) 977

Cases Referred (23)