IMPORTANT POINTS
High Court can exercise its inherent power even suo motu.
If a person, thus, has to be proceeded with as being variously liable for the acts of the company, the company must be made an accused.

JUDGMENT

S.B. Sinha, J. —

1. Leave granted.

2. Appellant lodged a First Information Report (FIR) against the respondents on or about 4.1.2003 under Sections 409, 420 and 468 read with Section 34 of the Indian Penal Code.

3. First and second respondent approached the High Court for an order for quashing of the said FIR as also the investigation initiated pursuant thereto or in furtherance thereof. The High Court allowed the said proceedings by reason of the impugned order dated 29.4.2004.

Mr. K.K. Mani, learned counsel appearing on behalf of the appellant, would, in support of the appeal, contend :

(1) The High Court exercised its inherent jurisdiction under Section 482 of the Code of Criminal Procedure wholly illegally and without jurisdiction insofar as it entered into the disputed questions of fact in regard to the involvement of the respondents as the contents of the first information report disclose an offence of cheating, criminal breech of trust and forgery.

(2) While admittedly the investigation was not even complete, the High Court could not have relied upon the documents furnished by the defendants either for the purpose of finding out absence of mens rea on the part of the applicants or their involvement in the case.

(3) Respondent Nos.1 and 2 herein being high ranking officers of M/s. Shares and Securities Ltd., a company dealing in shares, were vicariously liable for commission of the offence being in day to day charge of the affairs thereof.

(4) An offence of forgery being a serious one and in view of the fact that the respondent No.2 forwarded a letter purporting to authorize the accused No.3 to transfer shares to the National Stock Exchange, he must be held to have the requisite intention to commit the said offence along with the respondent No.3.

(5) In any view of the matter, the respondent No.3 being not an applicant before the High Court, the entire criminal prosecution could not have quashed by the High Court.

4. Ms. Indu Malhotra, learned senior counsel appearing on behalf of Respondent No.1, on the other hand, would contend :

(a) In view of the admitted fact that a first information report had been lodged by the respondents as against the appellant herein on 20.12.2002, i.e., much prior to the lodging of the FIR by the appellant herein vis-‘-vis the FIR lodged by the appellant herein on 4.1.2003, the same was done with a mala fide intention.

(b) In view of the fact that the appellant herself owed a sum of Rs.13.28 lacs to the company and her group, a sum of Rs.45 lacs which is evident from the balance sheet of the appellants, continuation of the criminal proceedings initiated against the respondents would be an abuse of the process of court.

5. Mr. U.U. Lalit, learned senior counsel appearing on behalf of the respondent No.2, supplementing the submissions of Ms. Malhotra urged :

(1) Appellant having not entered into any individual transaction with the company and as the accounts held by her together with members of her family were treated as group accounts and only because respondent No.2 had forwarded a letter of the appellant dated 10.1.2002, which is alleged to be forged, to the National Stock Exchange, the same by itself does not show that he was a party to the forgery.

(2) In respect of the offences under general law, vicarious liability cannot be fastened on an individual.

6. Mr. Vijay Thakur, learned counsel appearing on behalf of respondent No.3, submitted that although his client was not an applicant before the High Court, if the High Court having issued notice to him and quashed the entire criminal proceedings, the impugned judgment should not be interfered with.

7. The legal principles in regard to quashing of a First Information Report in view of a large number of decisions rendered by this Court are now almost well settled.

8. We may notice some of them :

In State of Haryana & Ors. v. Bhajan Lal & Ors.,1 [1992 Supp.(1) SCC 335], it was held:

“102. In the backdrop of the interpretation of the various relevant provi