The main legal point established is the requirement for specific allegations to establish vicarious liability of a corporate entity's director and the need for evidence of dishonest inducement or active role in the offense.

JUDGMENT :

Instant petition has been filed for quashing of F.I.R. of Deoghar Town P.S. Case No.285 of 2021 under Section 406 & 420 of the Indian Penal Code.

2. The complaint petition filed by one Rachna Kumari which is the basis of present case. As per the prosecution case, the complainant/informant had approached Renault India Pvt. Ltd. showroom situated at Deoghar for purchase of Duster RXS 110PS BSIV (Diesel Car) which was supplied on 20.06.2019 was found to be not the model for which tax invoice and account ledger were raised. As per documents, Duster RXS 85PS BSIV was supplied in place of Duster RXS 110PS BSIV for which the order was placed.

3. Instant petition has been filed mainly on two main grounds. First is that the petitioner is Chief Executive Officer of Renault India Pvt. Ltd. with Head Office at Chennai and had not directly dealt with the customers at Deoghar and therefore, it cannot be said that he had induced the informant or made misrepresentation of any kind. There is no effective role or control in end sale of the vehicles by such authorized dealers to any prospective buyer. There is no material to disclose the fundamental ingredient of the offence under Section 406/420 of the IPC. To make out an offence under Section 406 of the IPC, there must be some material to show (i) entrustment of a property or dominion over property, (ii) the accused was actuated by dishonest intention, misappropriated it or converted to his own use. It is settled law that dishonest inducement is the basic ingredient of the offence of cheating. In the absence of any allegation of inducement in the FIR against the petitioner or any of its employees, the offence under Section 420 is not made out. Director of a Company can only be prosecuted if there is sufficient evidence of his active role coupled with dishonest intention to commit the offence.

4. There does not exist, principal and agent relationship between manufacturer Company and its dealer, in support of it the dealership agreement which is Annexure 2 has been annexed. Invoice was raised for the supply of Duster RXS 85PS BSIV by the dealer for which the supply has been made as per Annexure-3, therefore, no fault lies on the part of this petitioner in the entire criminal proceeding.

5. Second point of argument is that the instant petition has been referred by the learned Court forwarded under Section 156(3) of the Cr.P.C. without following mandatory guideline as laid down in the case of Priyanka Srivastava & Others Vs. State of U.P. & Others reported in AIR 2015 SC 1758 which has been reiterated by the Hon’ble Supreme Court and other High Courts in the other judgments being Babu Venkatesh & Others Versus State of Karnataka and M.S. Unnikrishnan Versus State of Jharkhand.

6. The notice had been earlier issued and served on the informant but none has appeared.

7. Learned A.P.P. appeared and filed counter affidavit in which it has been disputed that guidelines of Priyanka Srivastava (supra) was not followed. It is also submitted that the complaint is supported by the affidavit and the criminal proceeding cannot be scuttled on this ground. It is submitted that liability of this petitioner arise from the fact that the order of particular model was forwarded by the showroom of Renault to its Headquarter and the particular model was not supplied and therefore, Chief Executive Officer cannot escape from criminal liability on this score. Liability of this petitioner can only be determined on the investigation and not at this stage.

8. In order to appreciate the ratio laid down by Hon’ble the Supreme Court in Priyanka Srivastava v. State of U.P., (2015) 6 SCC 287 it will be desirable to extract the relevant part of the judgment which is as under,

30. In our considered opinion, a stage has come in this country where Section 156(3) CrPC applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate.

31. We have already indicat