The main legal point established in the judgment is the absence of vicarious liability for individuals not directly charged with the commission of the offense of criminal breach of trust, as well as the significance of adhering to dispute resolution procedures outlined in commercial agreements.

By way of this criminal miscellaneous application moved u/s 482 Cr.P.C., a prayer has been made to quash the order of cognizance dated 09.10.2007 passed by the Chief Judicial Magistrate, Haridwar in complaint case no.3619 of 2007, Mahendra Pal Singh Vs. T. Ishikawa and another. The said order was passed by learned Magistrate taking cognizance for the offence of Section 406 IPC against the petitioner Subhankar Ganguly and Mr. T. Ishikawa.

2. Having heard the learned counsel of both the parties, it appears that an agreement dated 10.1.2006 was entered into between the complainant Mahendra Pal Singh, Partner of M/s Sant Auto Sales, Haridwar and Yamaha Motors India Pvt. Ltd./Yamaha Motor India Sales Private Limited. M/s Sant Auto Sales is a dealer of Two-Wheeler Auto Bikes while M/s Yamaha Motors Company Ltd. is the manufacturer. For securing the dealership of Yamaha Motors Pvt. Ltd., an amount of Rs.3.00 lacs, as security deposit, was made by M/s Sant Auto Sales and the dealership was awarded to him for selling the Two-wheelers and its spare parts in Haridwar. Within a span of 1½ year or so, the business transactions between the duo became sour and the dealership was broken.

3. So, M/s Santo Auto Sales sought refund of his deposit. Out of the said amount of Rs.3.00 lacs, only Rs.2.00 lacs were returned. Anyhow, Rs.1.00 lacs nay the amount of Rs.87,788/- for some other consideration was left with Yamaha Motors Pvt. Ltd. to be paid to M/s Sant Auto Sales, which they made a default.

4. Deeming it as a criminal breach of trust on the part of company, because of default in returning the amount, respondent no.2-Mahendra Pal Singh, Partner, Sant Auto Sales filed a complaint against T. Ishikawa, Managing Director and the petitioner Subhankar Ganguly, Assistant Manager of the Company for the offence of Sections 406/420 IPC. The Magistrate, after recording the statement u/s 200 Cr.P.C. and perusing the other papers, denied to take cognizance in the matter and dismissed the complaint u/s 203 Cr.P.C. on dated 2.8.2007.

5. Feeling aggrieved, respondent no.2-Mahendra Pal Singh filed a revision no.402/2007 in the court of Sessions, Haridwar, without making the petitioner and his associates as opposite party. The said revision was allowed by the Sessions Judge, with the result, the order of the Magistrate dated 2.8.2007 was set aside and the matter was remitted back to the concerned Magistrate for reconsideration.

6. The learned Magistrate then took cognizance in the matter and passed the impugned order dated 9.10.2007, where-against this petition has been filed.

7. It is pertinent to mention here that this petition has been filed only by petitioner Subhankar Ganguly and not by Mr. T. Ishikawa, who is said to have left for his native place Japan after resigning the company and leaving this country. Now, there remains only the petitioner Subhankar Ganguly to face the complaint, so he has filed this petition.

8. It has been argued on behalf of the petitioner that Subhankar Ganguly, in person, cannot be made an accused for the offence of Sections 406/420 IPC (if any), as he does not owe any vicarious liability on behalf of the company. Fortiori, the Company has not been made party in the complaint. Reliance in this regard has been made upon a Supreme Court's judgment in the case of “S. K. Alagh Vs. State of U.P. & others reported in 2008 (1) Crimes 439 (SC)”, wherein it was held by the Hon'ble Apex Court that indisputably, the company is a juristic person. The demand drafts were issued in the name of the company. The company was not made an accused. The dealership agreement was by and between M/s Akash Traders and the company. It was also held that in that case, the Managing Director of the Company cannot be said to have committed an offence u/s 406 of the I.P.C. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Directo