Commissioner
of Income Tax, Mumbai Vs. Versus [2001] Insc 549 (17 October 2001)
M.B.Shah,
R.P.Sethi Sethi,J.
Leave
granted.
Aggrieved
by the impugned order of the High Court quashing her complaint and the order of
the Magistrate issuing the process against the respondents for the offences
under Sections 465, 467, 468, 471 and 120B of the Indian Penal Code, the
appellant has approached this Court by way of this appeal for setting aside the
order of the High Court with direction to the Magistrate for proceeding with
the complaint in accordance with law. It is submitted that the High Court of
Calcutta has passed the impugned order in exercise of its power under Section
482 of the Code of Criminal Procedure completely ignoring the mandate of law as
settled by various pronouncements of this Court and other High Courts in the
country.
The
complainant claims to be a partner of M/s.Chandmal Gangabishan, a firm
registered under the Partnership Act and carrying on business of Bhujia and
other allied products with the trade mark HALDIRAM BHUJIAWALA. According to the
averments made in the complaint, the partnership business was initially
commenced in the year 1956 with four partners, namely, Ganga Bishan Agarwal, Moolchand
Agarwal, Rameshwarlal Agarawl and Satidas Agarwal. Rameshwar Aggarwal retired
from the firm in the year 1958. The firm was reconstituted by admitting Shri Shivkishan
Aggarwal as partner in place of the retiring partner. They started using the
brand name HALDIRAM BHUJIAWALA in the year 1965. The appellant was admitted as
a partner of the said firm on 31st October, 1969. An application for registration of trademark of HALDIRAM BHUJIAWALA
and Logo HRB was filed with the appropriate authority by all the partners on 29th December, 1972. The said application was
advertised inviting objections. Opposition proceedings were commenced at the
instance of one Madanlal on 12th January, 1976 which was rejected on 16.4.1980 and the trademark was registered on 27th January, 1981 in the name of the firm, of which
the appellant was a partner. The appellant alleged that when in the first week
of June, 1999 she went to Delhi to attend her ailing son Ashok Kumar Aggarwal,
found him to be suffering from serious mental depression on account of serious
nervous breakdown. After inquiries and persuasions her son told the appellant
in July, 1999 that he had suffered mental shock upon closure of his opened shop
in the year 1991 at Delhi by reason of the order of injunction passed by the
court of law. He disclosed that the said injunction had been granted against
him on the ground that the partnership of which the appellant was also a
partner stood dissolved on 16.11.1974. She informed her son of not having
signed any deed of dissolution of the partnership. When Ashok Kumar Aggarwal handed
over to the appellant a xerox copy of the deed of dissolution, she was shocked
to know that her signatures had been forged. Upon scrutiny it appeared that the
signatures, purporting to be of Gangabishan Aggarwal and Moolchand Aggarwal
were also not genuine and had been forged besides her signatures. She alleged
that Accused Nos.1 to 4 have brought into existence the self-forged deed of
dissolution for their personal gains and to the detriment of the partners of
the firm of M/s.Chandmal Gangabishan. She referred to number of circumstances
in her complaint to show that the forgery had been committed by the
respondent-accused. In para 22 of the complaint, the appellant catalogued a
number of instances allegedly showing the forgery by the respondents.
The Trial
Magistrate received the complaint on 21st January, 2000 and fixed the next date on 7th February, 2000 for examination of the complainant
and her witnesses in terms of Section 200 of the Code of Criminal Procedure. On
request of the appellant, the case was adjourned to 10th March, 2000 when she appeared before the Magistrate along with her
three witnesses out of whom one was hand-writing expert.
After
recording their statements, the case was adjourned and ultimately the Trial
Magistrate, vide his order dated 5.4.2000, found that the appellant had made
out a prima facie case under Sections 465, 467, 468, 471 and 120B of the Indian
Penal Code against all the accused persons and, therefore, issued summons for
their presence on the next date fixed for 19th June, 2000. Instead of appearing
before the Trial Magistrate and contesting the case, the respondents chose to
approach the High Court by way of a petition under Section 482 of the Code of
Criminal Procedure praying for quashing of the proceedings initiated and
process issued against them. Their application was allowed vide the order
impugned, hence the present appeal.
Mr. V.A.
Mohta, Sr.Advocate appearing for the appellant submitted that the impugned
judgment is in conflict with the various judgments of this Court. It is
submitted that merely because a civil action is pending between the parties can
be no ground to quash the proceedings as between the civil and criminal
proceedings, the criminal matters should be given precedence and that only
because the genuineness of the documents is required to be determined in both
the proceedings, the High Court was not justified in quashing the proceedings.
It is submitted that the nature of criminal proceedings and the onus of proof
required in such proceedings being different than the proceedings in the civil
suit, the High Court committed a mistake by quashing the proceedings.
Per
contra Shri U.R. Lalit, Sr.Advocate supported the judgment of the High Court
and submitted that besides law, propriety demanded that when a higher court was
seized of the matter, though in civil proceedings, Magistrate should have not
proceeded with the matter by issuance of process against the respondents.
Relying upon some judgments of this Court, the learned counsel has contended
that the pendency of the proceedings before the Trial Magistrate would amount
to abuse of the process of the court. The impugned order is stated to have been
passed to secure the ends of justice. Referring to some judgments, the
attending circumstances and the evidence led in the case, the learned counsel
has tried to impress upon us that the order impugned is just and reasonable
which does not require interference by this Court in exercise of its power
under Article 136 of the Constitution of India.
This
Court has consistently held that the revisional or inherent powers of quashing
the proceedings at the initial stage should be exercised sparingly and only
where the allegations made in the complaint or the FIR, even if taken it at the
face value and accepted in entirety, do not prima facie disclose the commission
of an offence.
Disputed
and controversial facts cannot be made the basis for the exercise of the
jurisdiction. In R.P. Kapur v. State of Punjab [AIR 1960 SC 866] this Court held:
"It
is well established that the inherent jurisdiction of the High Court can be
exercised to quash proceedings in a proper case either to prevent the abuse of
the process of any court or otherwise to secure the ends of justice.
Ordinarily
criminal proceedings instituted against an accused person must be tried under
the provisions of the Code, and the High Court would be reluctant to interfere
with the said proceedings at an interlocutory stage. It is not possible,
desirable or expedient to lay down any inflexible rule which would govern the
exercise of this inherent jurisdiction. However, we may indicate some
categories of cases where the inherent jurisdiction can and should be exercised
for quashing the proceedings. There may be cases where it may be possible for
the High Court to take the view that the institution or continuance of criminal
proceedings against an accused person may amount to the abuse of the process of
the court or that the quashing of the impugned proceedings would secure the
ends of justice. If the criminal proceedings in question is in respect of an
offence alleged to have been committed by an accused person and it manifestly
appears that there is a legal bar against the institution or continuance of the
said proceeding the High Court would be justified in quashing the proceedings
on that ground. Absence of the requisite sanction may, for instance, furnish
cases under this category. Cases may also arise where the allegations in the
First Information Report or the complaint, even if they are taken at their face
value and accepted in their entirety, do not constitute the offence alleged; in
such cases no question of appreciating evidence arises; it is a matter of
merely of looking at the complaint or the First Information Report to decide
whether the offence alleged is disclosed or not. In such cases it would be
legitimate for the High Court to hold that it would be manifestly unjust to
allow the process of the criminal court to be issued against the accused
person. A third category of the cases in which the inherent jurisdiction of
High Court can be successfully invoked may also arise. In cases falling under
this category the allegations made against the accused person do constitute an
offence alleged but there is either no legal evidence adduced in support of the
case or evidence adduced clearly or manifestly fails to prove the charge. In
dealing with this class of cases it is important to bear in mind the
distinction between a case where there is no legal evidence or where there is
evidence which is manifestly and clearly inconsistent with the accusation made
and cases where there is legal evidence which on its appreciation may or may
not support the accusation in question. In exercising its jurisdiction under
S.561A the High Court would not embark upon an inquiry as to whether the
evidence in question is reliable or not. That is the function of the trial
magistrate, and ordinarily it would not be open to any part to invoke the High
Court's inherent jurisdiction and contend that on a reasonable appreciation of
the evidence the accusation made against the accused would not be sustained.
Broadly stated that is the nature and scope of the inherent jurisdiction of the
High Court under S.561A in the matter of quashing criminal proceedings, and
that is the effect of the judicial decisions on the poin (Vide: In re: Shripad
G. Chandavarkar, AIR 1928 Bom 184, Jagat Chandra Mozumdar v. Queen Empress, ILR
26 Cal 786, Dr.Shankar Singh v. State of Punjab, 56 Pun LR 54: (AIR 1954 Punj
193), Nripendra Bhusan Roy v. Gobinda Bandhu Majumdar, AIR 1924 Cal 1018 and Ramanathan
Chettiyar v. Sivarama Subramania, ILR 47 Mad 722: (AIR 1925 Mad. 39)."
This judgment was reiterated and following in Hazari Lal Gupta v. Rameshwar
Prasad & Anr. [AIR 1972 SC 484], State of Karnataka v. L. Muniswamy &
Ors. [AIR 1977 SC 1489], State of Haryana & Ors. v. Ch.Bhajan Lal &
Ors. [AIR 1992 SC 604] and various other pronoucements.
Criminal
prosecution cannot be thwarted at the initial stage merely because civil
proceedings are also pending. After referring to judgments in State of Haryana
v. Bhajan Lal [1992 Suppl. (1) SCC 335], Rajesh Bajaj v. State NCT of Delhi
[1999 (3) SCC 259] this Court in Trisuns Chemical Industry v. Rajesh Agarwal
& Ors. [1999 (8) SC 687] held:
"Time
and again this Court has been pointing out that quashing of FIR or a complaint
in exercise of the inherent powers of the High Court should be limited to very
extreme exceptions (vide State of Haryana v. Bhajan Lal 1992 Supp (1) SCC
335and Rajesh Bajaj v. State NCT of Delhi 1999 (3) SCC 259].
In the
last referred case this court also pointed out that merely because an act has a
civil profile is not sufficient to denude it of its criminal outfit. We quote
the following observations: (SCC p.263, para 10) "10. It may be that the
facts narrated in the present complaint would as well reveal a commercial
transaction or money transaction. But that is hardly a reason for holding that
the offence of cheating were committed in the course of commercial and also
money transactions." In Medchl Chemical & Pharma (P) Ltd. v.
Biological E. Ltd. & Ors. [2000 (3) SCC 269] this Court again reiterated
the position and held:
"Exercise
of jurisdiction under the inherent power as envisaged in Section 482 of the
Code to have the complaint or the charge-sheet quashed is an exception rather
than a rule and the case for quashing at the initial stage must have to be
treated as rarest of rare so as not to scuttle the prosecution. With the lodgement
of first information report the ball is set to roll and thenceforth the law
takes its own course and the investigation ensues in accordance with the
provisions of law. The jurisdiction as such is rather limited and restricted
and its undue expansion is neither practicable nor warranted. In the event,
however, the court on a perusal of the complaint comes to a conclusion that the
allegations levelled in the complaint or charge-sheet on the face of it does
not constitute or disclose any offence as alleged, there ought not to be any
hesitation to rise up to the expectation of the people and deal with the
situation as is required under the law....
Needless
to record however and it being a settled principle of law that to exercise
powers under Section 482 of the Code, the complaint in its entirety shall have
to be examined on the basis of the allegations made in the complaint and the
High Court at that stage has no authority or jurisdiction to go into the matter
or examine its correctness. Whatever appears on the face of the complaint shall
be taken into consideration without any critical examination of the same. But
the offence ought to appear ex facie on the complaint. The observations in Nagawwa
v. Veeranna Shivalingappa Konjalgi (1976) 3 SCC 736 lend support to the above
statement of law: (SCC p.741, para 5) "(1) where the allegations made in
the complaint or the statements of the witnesses recorded in support of the
same taken at their face value make out absolutely no case against the accused
or the complaint does not disclose the essential ingredients of an offence
which is alleged against the accused;
(2) where
the allegations made in the complaint are patently absurd and inherently
improbable so that no prudent person can ever reach a conclusion that there is
sufficient ground for proceeding against the accused;
(3)
where the discretion exercised by the Magistrate in issuing process is
capricious and arbitrary having been based either on no evidence or on
materials which are wholly irrelevant or inadmissible; and (4) where the
complaint suffers from fundamental legal defects, such as, want of sanction, or
absence of a complaint by legally competent authority and the like." The
cases mentioned by us are purely illustrative and provide sufficient guidelines
to indicate contingencies where the High Court can quash proceedings."
In Lalmuni
Devi (Smt.) v. State of Bihar & Ors. [2001 (2) SCC 17] this Court held:
"There
could be no dispute to the proposition that if the complaint does not make out
an offence it can be quashed.
However,
it is also settled law that facts may give rise to a civil claim and also
amount to an offence. Merely because a civil claim is maintainable does not
mean that the criminal complaint cannot be maintained. In this case, on the
facts, it cannot be stated, at this prima facie stage, that this is a frivolous
complaint. The High Court does not state that on facts no offence is made out.
If that be so, then merely on the ground that it was a civil wrong the criminal
prosecution could not have been quashed." Again in M.Krishnan v. Vijay
Singh & Anr. (Criminal Appeal No.1028 of 2001 decided on 11.10.2001) this
Court held that while exercising powers under Section 482 of the Code, the High
Court should be slow in interfering with the proceedings at the initial stage
and that merely because the nature of the dispute is primarily of a civil
nature, the criminal prosecution cannot be quashed because in cases of forgery
and fraud there is always some element of civil nature. In a case where the
accused alleged that the transaction between the parties are of a civil nature
and the criminal court cannot proceed with the complaint because the factum of
document being forged was pending in the civil court, the court observed:
"Accepting
such a general proposition would be against the provisions of law inasmuch as
in all cases of cheating and fraud, in the whole transaction, there is
generally some element of civil nature. However, in this case, the allegations
were regarding the forging of the documents and acquiring gains on the basis of
such forged documents. The proceedings could not be quashed only because the
respondents had filed a civil suit with respect to the aforesaid documents. In
a criminal court the allegations made in the complaint have to be established
independently, notwithstanding the adjudication by a civil court. Had the
complainant failed to prove the allegations made by him in the complaint, the
respondents were entitled to discharge or acquittal but not otherwise. If mere pendency
of a suit is made a ground for quashing the criminal proceedings, the
unscrupulous litigants, apprehending criminal action against them, would be
encouraged to frustrate the course of justice and law by filing suits with
respect to the documents intended to be used against them after the initiation
of criminal proceedings or in anticipation of such proceedings. Such a course
cannot be the mandate of law. Civil proceedings, as distinguished from the
criminal action, have to be adjudicated and concluded by adopting separate
yardsticks. The onus of proving the allegations beyond reasonable doubt, in
criminal case, is not applicable in the civil proceedings which can be decided
merely on the basis of the probabilities with respect to the acts complained
of." Referring to the judgments of this Court in Smt.Manju Gupta v. Lt.Col.M.S.
Paintal [1982 (2) SCC 412], Sardool Singh & Anr. v. Smt.Nasib Kaur [1987
Supp. SCC 146] and M/s.Karamchand Ganga Pershad & Anr. v. Union of India
& Ors. [AIR 1971 SC 1244], the learned counsel appearing for the
respondents submitted that the High Court was justified in quashing the
complaint which does not require any interference by this Court in this appeal.
In Manju
Gupta's case (supra) the criminal proceedings were quashed under the peculiar
circumstances of the case. After referring to para 20 of the complaint and holding
"such an averment in our view is clearly inadequate and insufficient to
bring home criminality of the appellant in the matter of the alleged
offences", the court found that simply because accused was the Secretary
of the Society, the Magistrate was not justified in presuming her connection or
complicity with the offence merely on that ground. The allegations in the
complaint pertinent to forgery of rent receipts was held to be vague and
indefinite. Sardool Singh's case (supra) was also decided on its facts on the
basis of law earlier settled by this Court. In Karamchan Ganga Pershad's case
(supra) an observation was made that "it is a well established principle
of law that decisions of the civil courts are binding on the criminal courts.
The converse is not true". In that case the appellants had filed a writ
petition in the High Court for the issuance of appropriate directions requiring
the Union of India to release and deliver to them some consignments of maize
transported from the State of Haryana to Howrah. Alleging that the movement of
maize had been controlled by the provisions of Essential Commodities Act read
with Northern Inter-Zonal Maize (Movement Control) Order, 1967 promulgated by
the State Government, the restriction on export imposed by the Order were
removed by the State of Haryana in October, 1967 which was duly published and
advertised. The contention of the Union was that the State of Haryana had not
lifted the ban on export and further that it had no power to lift the ban. The
High Court dismissed the writ petition on the sole ground that in view of the pendency
of the criminal proceedings before some court in the State of West Bengal it
was inappropriate for the High Court to pronounce on the question arising for
decision in the writ petition. In that context the court held:
"In
our opinion the High Court seriously erred in coming to this conclusion. If the
appellants are able to establish their case that the ban on export of maize
from the State of Haryana had been validly lifted all the proceedings taken
against those who exported the maize automatically fall to the ground. Their
maintainability depends on the assumption that the exports were made without
the authority of law. It is a well established principle of law that the
decisions of the civil courts are binding on the criminal courts. The converse
is not true. The High Court after entertaining the writ petitions and hearing
arguments on the merits of the case should not have dismissed the petitions
merely because certain consequential proceedings had been taken on the basis
that the exports in question were illegal." We have already noticed that
the nature and scope of civil and criminal proceedings and the standard of
proof required in both matters is different and distinct. Whereas in civil
proceedings the matter can be decided on the basis of probabilities, the
criminal case has to be decided by adopting the standard of proof of
"beyond reasonable doubt".
A
Constitution Bench of this Court, dealing with the similar circumstances, in
M.S. Sheriff & Anr. v. State of Madras & Ors.[AIR 1954 SC 397] held
that where civil and criminal cases are pending, precedence shall be given to
criminal proceedings. Detailing the reasons for the conclusions, the court
held:
"As
between the civil and the criminal proceedings we are of the opinion that the
criminal matters should be given precedence. There is some difference of
opinion in the High Courts of India on this point. No hard and fast rule can be
laid down but we do not consider that the possibility of conflicting decisions
in the civil and criminal courts is a relevant consideration. The law envisages
such an eventuality when it expressly refrains from making the decision of one
court binding on the other, or even relevant, except for certain limited
purposes, such as sentence or damages. The only relevant consideration here is
the likelihood of embarrassment.
Another
factor which weighs with us is that a civil suit often drags on for years and
it is undesirable that a criminal prosecution should wait till everybody
concerned has forgotten all about the crime. The public interests demand that
criminal justice should be swift and sure; that the guilty should be punished
while the events are still fresh in the public mind and that the innocent should
be absolved as early as is consistent with a fair and impartial trial. Another
reason is that it is undesirable to let things slide till memories have grown
too dim to trust.
This
however, is not a hard and fast rule. Special considerations obtaining in any
particular case might make some other course more expedient and just. For
example, the civil case or the other criminal proceeding may be so near its end
as to make it expedient to stay it in order to give precedence to a prosecution
ordered under S.476. But in this case we are of the view that the civil suits
should be stayed till the criminal proceedings have finished." In the
present case we have noticed that before issuance of the process, the Trial
Magistrate had recorded the statement of the witnesses for the complainant,
perused the record including the opinion of the expert and his deposition and
prima facie found that the respondents were guilty for the offences for which
the process was issued against them. The High Court rightly did not refer to
any of those circumstances but quashed the proceedings only on the ground:
"Consideration
is and should be whether any criminal proceeding instituted before a court
subordinate to this court should be allowed to continue when the very
foundation of the criminal case, namely, forgery of document is under scrutiny
by this court in a civil proceeding instituted by same person i.e., the
complainant in the criminal case. In my considered view it would not be proper
to allow the criminal proceeding to continue when the validity of the document
(deed of dissolution is being tested in a civil proceeding before this court.
Judicial propriety demands that the course adopted by the Hon'ble Supreme Court
in the case of Manju Gupta (supra) and Sardool Singh (supra) should be
followed. If such course of action is adopted by this court, that would be in
consonance with the expression used in Section 482 of the Code of Criminal
Procedure - "or otherwise to secure the ends of justice". In both the
cases referred to above civil suits were pending, where the validity and
genuineness of a document was challenged. It was held by the Hon'ble Supreme
Court that when the question regarding validity of a document is subjudice in
the civil courts, criminal prosecution, on the allegation of the document being
forged, cannot be instituted." In view of the preponderance of authorities
to the contrary, we are satisfied that the High Court was not justified in
quashing the proceedings initiated by the appellant against the respondents. We
are also not impressed by the argument that as the civil suit was pending in
the High Court, the Magistrate was not justified to proceed with the criminal
case either in law or on the basis of propriety. Criminal cases have to be
proceeded with in accordance with the procedure as prescribed under the Code of
Criminal Procedure and the pendency of a civil action in a different court even
though higher in status and authority, cannot be made a basis for quashing of
the proceedings.
In the
result the appeal is allowed by setting aside the impugned order passed by the
High Court and restoring the order of the Magistrate with direction to proceed
with the trial of the case in accordance with the provisions of law and decide
the same on merits.
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