Modi Vs. Sanjay Jain & Ors.  INSC 1214 (14 July 2009)
SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 1214
OF 2009 (Arising out of SLP (Crl) No. 4278 of 2008) Rajiv Modi
..........Appellant Versus Sanjay Jain and Ors. ........Respondents
This is an appeal for special leave arises from the judgment and
order of the Patna High Court in Criminal Miscellaneous Case No. 17815 of 2002
dated 20.11.2007. We grant special leave and dispose of this appeal as
By the judgment and the order impugned, the High Court in exercise
of its power under Section 482 of the Code of Criminal Procedure has quashed
the private complaint filed under Section 200 Cr.P.C., on the ground that the
Judicial Magistrate, Patna did not have territorial jurisdiction to take 1 cognizance
of the offence alleged under Sections 406, 420 and 120-B of the Indian Penal
The admitted facts are, that, on 1.4.1999 M/s. Dhriti Agro Farms
Private Limited (DAFPL), a company owned by the appellant, had entered into an
agreement with Rajasthan Breweries Limited (RBL), a company owned by respondent
Nos. 1 and 2. The agreement provides for appointment of DAFPL as their C&F
Agent for the State of Rajasthan. It also provides the payment that requires to
be made by the appellant for supply of raw materials to the suppliers of the
respondents on behalf of the respondents and the respondents would supply the
finished goods to the appellant for sale in Rajasthan.
It is the case of the appellant that he had visited his in-laws in
Patna in the month of February, 1998 and there the respondents had met him and
had projected a lucrative picture of their business and assured the appellant
the high returns for his investments. The appellant had agreed to become the
C&F Agent of the respondent's company for State of Rajasthan.
the respondents handed over the Letter of Appointment of the appellant at the
residence of his in-laws at Patna. It is the case of the appellant, that,
pursuant to the agreement it has made several payments for supply of raw
materials to different suppliers of the respondent but the respondents have not
made any payment of the same till date. It is its further 2 grievance that
appellant though had made repeated requests to the respondent to return the
money paid, the respondents have not acceded to the request so made.
In view of the inaction of the police authorities, the appellant
was constrained to file a private complaint before the Chief Judicial
Magistrate, inter alia alleging commission of the offences by the respondents
under Sections 406 and 420 read with Section 120-B of the Indian Penal Code.
After recording the statements of the appellant and his witnesses
and being convinced that a prima facie case has been made out against the
respondents, for the offences, under Sections 420, 406 and 120(b) of the Indian
Penal Code, the learned Magistrate has taken cognizance of the complaint and
has issued summons to the respondents.
7) Aggrieved by the aforesaid order, the respondents had
approached the High Court by filing a petition under Section 482 of the
Cr.P.C., inter alia, requesting the court to quash the proceedings pending
before the Judicial Magistrate, Patna.
8) Before the High Court, the learned Counsel for the respondents
had submitted that, no part of cause of action arose within the territorial
jurisdiction of Patna and as such the Judicial Magistrate, Patna could not have
taken cognizance and passed the impugned order. It was further argued that the
appellant had also filed a complaint before the Deputy 3 Commissioner of
Police, Economic Wing, Crime Branch, New Delhi and also before the Mehrauli
Police Station, New Delhi, but when both the authorities did not respond to his
complaint, he has filed the present complaint before the Judicial Magistrate,
Patna, only to harass the respondents. It was also submitted that the
complainant/appellant himself had approached the respondents for execution of
the agreement and therefore, a Letter of Appointment was sent to him at his New
Delhi address and, therefore, the learned Judicial Magistrate has erred in
taking cognizance of the complaint and ordering issue of summons to the
The High Court by the impugned order has quashed the proceedings
pending before the learned Magistrate primarily on the ground that no cause of
action arose within the territorial jurisdiction of Chief Judicial Magistrate
at Patna, and while elaborating on this issue, the Court has also observed that
although there is an allegation that the respondents had induced the appellant
to part with huge amount of money, but no such inducement was made at Patna or
the appellant parted with any part of his money at Patna or the respondents
were required to account for any property at Patna or any agreement was
executed within the jurisdiction of Patna and even if it is accepted that the
Letter of Appointment was handed over by the respondents to the appellant at
Patna, it does not constitute any part of cause 4 of action. Aggrieved by the
said order, the appellant is before us in this appeal.
The issue before us is, whether the High Court under Section 482,
Cr.P.C was justified in quashing the complaint on the ground that no cause of
action has arisen in Patna in respect of the alleged offences under the
provisions of IPC.
The Learned Counsel for the appellant would submit, that, the
cognizance stage and the trial stage are two different aspects of criminal
jurisprudence and under the Code, there is no territorial restriction for any
Magistrate to take cognizance of an offence although at the stage of trial, the
said issue may become relevant in view of the provisions of Chapter XIII of the
Code. The Counsel would also assert that section 177 of the code relating to
the jurisdiction of the criminal courts do not trammel the powers of any court
to take cognizance of the offence and thus, would apply to section 190 and 200
as well. It is contended that a part of cause of action did arise in Patna as
in the complaint filed by the complainant/appellant, it was specifically asserted
that the appointment of the appellant's company as C&F Agent of the
respondent's company was agreed upon in Patna. It was the respondents who
approached the appellant for the said agreement on his short stay at his
in-laws in Patna. Therefore, the High Court was not justified in holding that
the Judicial Magistrate did not have the jurisdiction 5 to take cognizance in
the matter as no cause of action arose in Patna and has erred in quashing the
proceedings pending before the Judicial Magistrate by exercising its inherent
power under Section 482 of Cr.P.C.
In order to appreciate the jurisdictional aspect, it would be
relevant to discuss the meaning of the expression "cause of action".
This Court has laid down that the cause of action is a fundamental element to
confer the jurisdiction upon any Court and which has to be proved by the
plaintiff to support his right to a judgment of the court. It is relevant to
take note of what was stated by this court in State of Bombay v. Narottamdas
Jethabhai, 1951 SCR 51. In this case, it is observed, that, the jurisdiction of
the courts depended in civil cases on a "cause of action" giving rise
to a civil liability, and in criminal cases on the commission of an offence,
and on the provisions made in the two Codes of Procedure as to the venue of the
trial and other relevant matters.
In the case of State of Madras v. V.P. Agencies, AIR 1960 SC 1309,
it was stated that:
the cause of action, has no relation whatever to the defence which may be set
up by the defendant, nor does it depend upon the character of the relief prayed
for by the plaintiff. It refers entirely to the grounds set forth in the plaint
as the cause of action, or, in other words, to the media upon which the
plaintiff asks the court to arrive at a conclusion in his favour."
In the case of Gurdit Singh v. Munsha Singh, (1977) 1 SCC 791,
this Court held that:
expression "cause of action" has sometimes been employed to convey
the restricted idea of facts or circumstances which constitute either the
infringement or the basis of a right and no more. In a wider and more
comprehensive sense, it has been used to denote the whole bundle of material
facts which a plaintiff must prove in order to succeed.
all those essential facts without the proof of which the plaintiff must fail in
In the case of State of Rajasthan v. Swaika Properties, (1985) 3
SCC 217, it was observed that:
`cause of action' means every fact which, if traversed, it would be necessary
for the plaintiff to prove in order to support his right to a judgment of the
case of ONGC v. Utpal Kumar Basu, (1994) 4 SCC 711, this Court held that:
is well settled that the expression "cause of action" means that
bundle of facts which the petitioner must prove, if traversed, to entitle him
to a judgment in his favour by the Court. Therefore, in determining the
objection of lack of territorial jurisdiction the court must take all the facts
pleaded in support of the cause of action into consideration albeit without
embarking upon an enquiry as to the correctness or otherwise of the said facts.
In other words the question whether a High Court has territorial jurisdiction
to entertain a writ petition must be answered on the basis of the averments
made in the petition, the truth or otherwise whereof being immaterial. To put
it 7 differently, the question of territorial jurisdiction must be decided on the
facts pleaded in the petition." (Para 6) 17)In the case of Bloom Dekor
Ltd. v. Subhash Himatlal Desai, (1994) 6 SCC 322, it was observed that:
"cause of action" it is meant every fact, which, if traversed, it
would be necessary for the plaintiff to prove in order to support his right to
a judgment of the Court, (Cooke v. Gill, (1873) 8 CP 107). In other words,
cause of action is a bundle of facts which it is necessary for the plaintiff to
prove in order to succeed in the suit." (Para 28) 18)In Rajasthan High
Court Advocates' Assn. v. Union of India, (2001) 2 SCC 294, this Court stated
expression "cause of action" has acquired a judicially-settled
meaning. In the restricted sense cause of action means the circumstances
forming the infraction of the right or the immediate occasion for the action.
In the wider sense, it means the necessary conditions for the maintenance of
the suit, including not only the infraction of the right, but the infraction
coupled with the right itself. Compendiously the expression means every fact
which it would be necessary for the plaintiff to prove, if traversed, in order
to support his right to the judgment of the Court.
fact which is necessary to be proved, as distinguished from every piece of
evidence which is necessary to prove each fact, comprises in "cause of
action". It has to be left to be determined in each individual case as to
where the cause of action arises." (Para 17) 8 19)In the case of Y.
Abraham Ajith v. Inspector of Police, (2004) 8 SCC 100, this Court said that:
expression "cause of action" is generally understood to mean a
situation or state of facts that entitles a party to maintain an action in a
court or a tribunal; a group of operative facts giving rise to one or more
bases for sitting; a factual situation that entitles one person to obtain a
remedy in court from another person. In Black's Law Dictionary a "cause of
action" is stated to be the entire set of facts that gives rise to an
enforceable claim; the phrase comprises every fact, which, if traversed, the
plaintiff must prove in order to obtain judgment. In Words and Phrases (4th
Edn.), the meaning attributed to the phrase "cause of action"
legal parlance is existence of those facts, which give a party a right to judicial
interference on his behalf." (Para 17) 20)In Halsbury's Laws of England
(4th Edn.) it has been stated as follows:
of action has been defined as meaning simply a factual situation, the existence
of which entitles one person to obtain from the court a remedy against another
person. The phrase has been held from earliest time to include every fact which
is material to be proved to entitle the plaintiff to succeed, and every fact
which a defendant would have a right to traverse. `Cause of action' has also
been taken to mean that a particular act on the part of the defendant which
gives the plaintiff his cause of complaint, or the subject-matter of grievance
founding the action, not merely the technical cause of action."
Court in the case of Alchemist Ltd. v. State Bank of Sikkim, (2007) 11 SCC 335,
it was held that:
the aforesaid discussion and keeping in view the ratio laid down in a catena of
decisions by this Court, it is clear that for the purpose of deciding whether
facts averred by the appellant- petitioner would or would not constitute a part
of cause of action, one has to consider whether such fact constitutes a
material, essential, or integral part of the cause of action. It is no doubt
true that even if a small fraction of the cause of action arises within the
jurisdiction of the court, the court would have territorial jurisdiction to
entertain the suit/petition. Nevertheless it must be a "part of cause of
action", nothing less than that." (Para 37) 22)It is evident from the
above decisions, that, to constitute the territorial jurisdiction, the whole or
a part of "cause of action" must have arisen within the territorial
jurisdiction of the court and the same must be decided on the basis of the
averments made in the complaint without embarking upon an enquiry as to the
correctness or otherwise of the said facts.
next question is, whether a court can take cognizance of the offence after
examining the complaint filed by the complainant wherein, prima facie whole or
a part of cause of action seems to have arisen.
Union of India v. Adani Exports Ltd., (2002) 1 SCC 567, this Court observed:
is seen from the above that in order to confer jurisdiction on a High Court to
entertain a writ petition or a special civil application as in this 10 case,
the High Court must be satisfied from the entire facts pleaded in support of
the cause of action that those facts do constitute a cause so as to empower the
court to decide a dispute which has, at least in part, arisen within its
jurisdiction. It is clear from the above judgment that each and every fact
pleaded by the respondents in their application does not ipso facto lead to the
conclusion that those facts give rise to a cause of action within the court's
territorial jurisdiction unless those facts pleaded are such which have a nexus
or relevance with the lis that is involved in the case. Facts which have no
bearing with the lis or the dispute involved in the case, do not give rise to a
cause of action so as to confer territorial jurisdiction on the court
concerned." (Para 17) 25)In the case of Satvinder Kaur v. State (Govt. of
NCT of Delhi), (1999) 8 SCC 728, it is stated that:
the FIR, prima facie, discloses the commission of an offence, the court does
not normally stop the investigation, for, to do so would be to trench upon the
lawful power of the police to investigate into cognizable offences. It is also
settled by a long course of decisions of this Court that for the purpose of
exercising its power under Section 482 CrPC to quash an FIR or a complaint, the
High Court would have to proceed entirely on the basis of the allegations made
in the complaint or the documents accompanying the same per se; it has no
jurisdiction to examine the correctness or otherwise of the allegations."
(Para 4) 26)This Court in the case of V.C. Shukla v. State through CBI, 1980
Supp SCC 92, it was observed that :
is the duty of the court to apply its judicial mind to the materials and come
to a clear conclusion that 11 a prima facie case has been made out on the basis
of which it would be justified in framing charges."
27)Also in the case of Liverpool & London S.P. & I Assn. Ltd. v. M.V.
Sea Success I,(2004) 9 SCC 512, it was observed that:
a plaint discloses a cause of action or not is essentially a question of fact.
But whether it does or does not must be found out from reading the plaint
itself. For the said purpose the averments made in the plaint in their entirety
must be held to be correct. The test is as to whether if the averments made in
the plaint are taken to be correct in their entirety, a decree would be
139) "In ascertaining whether the plaint shows a cause of action, the
court is not required to make an elaborate enquiry into doubtful or complicated
questions of law or fact. By the statute the jurisdiction of the court is
restricted to ascertaining whether on the allegations a cause of action is
shown." (Para 151) 28)In Vijai Pratap Singh v. Dukh Haran Nath Singh,1962
Supp (2) SCR 675, this Court held that:
the allegations in the petition, prima facie, show a cause of action, the court
cannot embark upon an enquiry whether the allegations are true in fact, or
whether the petitioner will succeed in the claims made by him. By the statute,
the jurisdiction of the court is restricted to ascertaining whether on the
allegations a cause of action is shown: the jurisdiction does not extend to
trial of issues which must fairly be left for decision at the hearing of the
suit." (Para 9) 12 29)In view of the above principles, the Court on basis
of the averments made in the complaint, if it is prima facie of the opinion
that the whole or a part of cause of action has arisen in its jurisdiction, it
can certainly take cognizance of the complaint. There is no need to ascertain
that the allegations made are true in fact.
only question, which remains to be considered, is, whether the Judicial
Magistrate, Patna had the jurisdiction to take cognizance of the complaint?
31)It is argued that the appointment of the appellant's company as C&F
Agent of the respondent's company was agreed upon in Patna and the Letter of
Appointment was also delivered at the address of the in-laws house of the
appellant in Patna and therefore, it can be said that part of cause of action
prima facie appears to have arisen in Patna. Therefore, Judicial Magistrate,
Patna was justified in taking cognizance complaint and issuing process to the
view of the above, in our considered opinion, the High Court has erred by going
into merits of the case and deciding doubtful or complicated questions of law
and fact while invoking its powers under Section 482 of Cr.P.C. This is not the
fit case where the High Court could have exercised its inherent powers under
section 482 of the Code.
cardinal principle's which requires to be kept in view while invoking powers
under Section 482 of Cr.P.C. has been stated in the case of State of H.P. v.
Pirthi Chand, (1996) 2 SCC 37, where in this Court has observed that:
the court exercises its inherent power under Section 482, the prime
consideration should only be whether the exercise of the power would advance
the cause of justice or it would be an abuse of the process of the court."
(Para 13) "It is thus settled law that the exercise of inherent power of
the High Court is an exceptional one.
care should be taken by the High Court before embarking to scrutinise the
FIR/charge- sheet/complaint. In deciding whether the case is rarest of rare
cases to scuttle the prosecution in its inception, it first has to get into the
grip of the matter whether the allegations constitute the offence. It must be
remembered that FIR is only an initiation to move the machinery and to
investigate into cognizable offence. After the investigation is conducted (sic
concluded) and the charge-sheet is laid, the prosecution produces the
statements of the witnesses recorded under Section 161 of the Code in support
of the charge-sheet. At that stage it is not the function of the court to weigh
the pros and cons of the prosecution case or to consider necessity of strict
compliance of the provisions which are considered mandatory and its effect of
non-compliance. It would be done after the trial is concluded. The court has to
prima facie consider from the averments in the charge-sheet and the statements
of witnesses on the record in support thereof whether court could take
cognizance of the offence on that evidence and proceed further with the trial.
If it reaches a conclusion that no cognizable offence is made out, no further
act 14 could be done except to quash the charge-sheet.
in exceptional cases, i.e., in rarest of rare cases of mala fide initiation of
the proceedings to wreak private vengeance, the court may embark upon the
consideration thereof and exercise the power." (Para 12) 34)In view of the
above discussion, we allow this appeal and set aside the impugned order passed
by the High Court. The trial court is directed to proceed with the complaint.
make it clear that the observations made by us in the course of our judgment is
only for the purpose of disposal of criminal appeal and the same need not be
taken as any expression on the merits of the case.
.......................................J. [TARUN CHATTERJEE]
.......................................J. [ H.L. DATTU ]
July 14, 2009.
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