Mallika Sriniwasan vs State of U. P. - 2023 Supreme(All) 2707

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(All) 2707

IN THE HIGH COURT OF ALLAHABAD
UMESH CHANDRA SHARMA, J.
Smt. Mallika Sriniwasan And Another - Applicants
Versus
State of U.P. and Others - Opposite Parties
APPLICATION UNDER SECTION 482 NO. 6095 OF 2004.
Decided On : 09-08-2023

Advocates appeared:
For the Applicants : Samit Gopal, Anuj Srivastava, V. Ramalingan.
For the Opposite Parties : A.G.A., Anuj Srivastava, Smt. Usha Srivastava, V.K.Srivastava.

Headnote:(A) Code of Criminal Procedure, 1973 - Section 482 - Indian Penal Code, 1860 - Sections 406 and 418 - Quashing of criminal complaint - Applicants sought to quash the proceedings initiated against them in a criminal complaint alleging cheating and criminal breach of trust; Court found allegations were civil in nature and thus held that the proceedings amounted to an abuse of process of law. (Paras 1-22)

(B) Abuse of process of court - The court reiterated that criminal complaints cannot be used as instruments to harass parties involved in civil disputes; jurisdiction under Section 482 Cr.P.C. should be exercised with caution to prevent unnecessary legal hardships. (Paras 20-48)

Facts of the case:
The applicants were accused of fraud concerning a dealership agreement pertaining to a new territory after the formation of a separate district, where it was alleged that they appointed another dealer knowing it would result in loss for the complainant.

Findings of Court:
The court ruled there was no evidence of a criminal offence, and the dispute arose from a civil agreement that was rendered void due to changes in territorial administration.

Issues: The primary issues included whether the underlying dispute was civil or criminal and if the allegations substantiated an offence under the IPC.

Ratio Decidendi: The court determined that the allegations did not disclose necessary elements to constitute a criminal offence and affirmed that such cases should not transition into criminal actions when they are essentially civil in nature.

Result: Application under Section 482 Cr.P.C. is allowed; summoning order quashed.

Table of Content
1. complaint details and allegations. (Para 1 , 2 , 3)
2. nature of the dealership agreement and its implications. (Para 4 , 5 , 6)
3. counterarguments and procedural history. (Para 10 , 11 , 12)
4. legal standards regarding criminal vs civil disputes. (Para 13 , 14 , 15)
5. criteria for summoning in criminal proceedings. (Para 16 , 17 , 18)
6. inherent powers of the high court to prevent abuse. (Para 19 , 20 , 21)
7. final order quashing the complaint. (Para 22)

JUDGMENT

Umesh Chandra Sharma, J.

This application under Section 482 Cr.P.C. has been filed by the applicants with the prayer to quash the proceedings of Criminal Complaint Case No. 2154 of 2001 ( Ram Saran Agarwal v. Smt. Srinivasan and Others) under Section 406 /418 I.P.C. Police Station- Kotwali, District- Farrukhabad and summoning order dated 2.8.2001 passed by Chief Judicial Magistrate, Farrukhabad.

2. In brief, facts of the case are that, opposite party no.2 Ram Saran Agarwal filed a complaint dated 13.6.2001 against the applicants under Section 406 /418 I.P.C. and got recorded his statement under Section 200 Cr.P.C. Ram Saran Agarwal and Ankush Goyal were examined as P.W.1 and P.W.2 under section 202 Cr.P.C. thereafter learned C.J.M. Passed the summoning order dated 2.8.2001. applicant no. 1 is the director of firm/company namely 'Tractor & Farm & Equipment Limited' (TAFE). The applicant No.2 was the Area Manager of the company and presently is not in the service of the company. Applicant no. 3 is a dealer of the company.

3. The opposite party no.2 alleged that he was given a dealership of the company for district Farrukhabad. Initially district Farrukhabad comprised of Tehsil Chhibra Mau and Kannauj. Later on Kannauj was declared as a different district by the Government, the applicants informed the opposite party no.2 that he may also open a branch in Kannauj for the products of the company. It is further alleged that the complainant after receiving the information from the applicants purchased a land for the same in Kannauj and informed the applicants. It is further alleged that the applicants knew that at the time of dealership agreement Tehsil Kannauj and Chhibra Mau were within the district Farrukhabad and with an intention to cheat and cause monitory loss violating the conditions of the dealership agreement appointed the applicant no. 3 as dealer for Tehsil Kannauj.

4. The applicants on being regularly contacted by the complainant on telephone, assured him that Kannauj and Chhibra Mau will fall within his territory. The firm of the opposite party no. 2 was appointed as MF-TAFE Dealer Franchise as probationary appointment for dealing with the products of the company. A probationary appointment agreement was entered into on 13.8.1993 between the complainant and the company. The dispute, if any, was between the complainant and the company regarding breach of conditions of contract. The company is at its own free will to appoint as many dealers/and/or/franchise in a territory as it likes. There is no evidence on record to show that the applicants ever requested the opposite party no.2 to open a franchise in Kannauj.

5. Contrary to the allegations as made by the complainant regarding the request by the applicants for setting up a dealership/franchise in Kannauj to him, the company had lost a good market in Farrukhabad due to continuous poor performance of the firm of the complainant since its opening in the said area. Therefore, his dealership was discontinued from 4.12.2003. Thus, the proceedings initiated against the applicants are clearly an abuse of process of court and deserves to be dismissed with exemplary costs. From the contents of the complaint, statements recorded under Section 200 and 202 Cr.P.C. no offence under Section 416/418 I.P.C. whatsoever is made out against the applicants. The complaint has been filed with malafide intention just in order to falsely implicate and harass the applicants.

6. As the Tehsil Chhibramau and Kannauj fell