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Monday, January 5, 2015



                        IN THE SUPREME COURT OF INDIA


                    CRIMINAL APPEAL NO(S).729-732 OF 2010

|RAJIB RANJAN & ORS.                        |…..APPELLANT(S)                 |
|                                           |                                |
|VERSUS                                     |                                |
|R. VIJAYKUMAR                              |…..RESPONDENT(S)                |

                               J U D G M E N T


                 These appeals  are  filed  by  four  appellants,  who  were
arrayed as accused persons in the complaint case No.183/2007  filed  by  the
respondent  herein  before  the  Court   of   Judicial   Magistrate   No.II,
Tiruchirapalli, Tamil Nadu.  The complaint has  been  filed  under  Sections
120-B, 468, 420 and 500 of the Indian Penal  Code  (for  short  'the  IPC').
The learned Judicial Magistrate took cognizance of the  said  complaint  and
summoned the appellants.   The  appellants  (who  were  arrayed  as  accused
Nos.3, 4,  5  and  6)  challenged  the  said  summoning  orders  and  sought
quashment of the complaint by filing petition under Section 482 of the  Code
of Criminal Procedure (for short 'the  Cr.P.C.)  inasmuch  as  according  to
them the allegations in the complaint did not make  out  any  offence  under
the aforesaid provisions of the IPC; the complainant had neither  any  locus
standi nor any legal status to prefer any  such  complaint;  the  appellants
being public servants and Gazetted  officers  of  the  State  Government  of
Chhattisgarh, no such criminal proceedings could be initiated  against  them
without prior sanction from the appointing authority as per Section  197  of
the Cr.P.C.; and the complaint was blatant misuse and abuse of  the  process
of Court which was filed by  the  complainant  after  exhausting  the  civil
remedies in which he had failed.   The High Court, after examination of  the
matter, has not found any merit in any of the aforesaid  contentions  raised
by the appellants and, consequently, dismissed their petitions.

2.    Before we advert to the  submissions  of  the  appellants,  which  are
mirror image of  what  was  argued  before  the  High  Court,  it  would  be
appropriate to traverse through the relevant facts  and  events  leading  to
the filing of the said complaint by the complainant.  These are as under:

                 The Chhattisgarh State Electricity Board  (for  short  'the
CSEB') issued an advertisement inviting tender (NIT) bearing No.  T-136/2004
dated 02.06.2004 for its work at Hasedeo Thermal Power Station (Korba  West)
towards Designing, Engineering, Testing, Supply, Erection  &  Commission  of
HEA Ignition system.  The applications received there  under  were  required
to be processed in three stages successively namely; Part-I  (EMD);  Part-II
(Techno-Commercial Criteria) and  Part  III  (Price  Bid).   The  respondent
herein submitted an application on 26.08.2004 as Chief Executive Officer  of
M/s Control  Electronics India (CEI) requesting  for  Tender  Document.  The
application  was  rejected  on  the  ground  that  it  was  accompanied   by
incomplete documents i.e. non-submission of  documentary  evidence  of  past
performance and  experience  of  the  respondent.   The  respondent  made  a
complaint dated 06.09.2004 against appellant No. 3 herein alleging that  the
Tender Documents were not issued to the  respondent.   It  was  followed  by
several letters  requesting  for  issuance  of  Tender  Documents.   He  was
informed  that  rather  than  pressurising  the  appellants  here  or  other
officials, he should furnish documents as per  pre-qualifying  condition  of
the Tender.  In response thereto, vide  his  letter  dated  05.11.2004,  the
respondent filed a  copy  of  purchase  order  dated  28.01.2002  placed  by
Jharkhand State Electricity Board (for short  'the  JSEB')  and  assured  to
supply other documentary  evidence  (performance  report)  subsequently.  On
such assurance, the Tender Documents were issued  to  the  respondent.   The
respondent vide his letter dated 08.12.2004, mentioned that the  Performance
Report was enclosed in Part-II. However,  the  said  report  was  not  found
enclosed  and  even  after  repeated  requests  from  the  CSEB  to  furnish
documents, respondent did not fulfill the  necessary  requirement.   As  the
respondent did not submit the  necessary  documents,  the  CSEB  sought  the
information from the Chief Engineer of JSEB (arrayed  in  the  complaint  as
accused No.2) vide letter dated 10.12.2004  about  the  performance  of  the
respondent.  Appellant No.2 herein was  also  deputed  to  get  the  desired
information from JSEB.  After meeting the officials of JSEB, appellant  No.2
submitted his report stating that the works carried out  by  the  respondent
were not satisfactory as many  defects  were  found  therein.   As  per  the
appellants, even technical expertise was sought from  SE  (ET&I)  KW  (CSEB)
and found that the respondent  was  not  technically  suitable  as  per  the
technical vetting  and  comparative  data  of  SE  (ET&I)  KW  letter  dated
04.02.2005.  On that basis, tender of  the  respondent  was  rejected.   The
appellants submit that as an outburst, in not  getting  the  Tender  in  his
favour, the respondent made complaints alleging  irregularities  to  various
fora including the State Government, which ordered the CSEB  to  conduct  an
enquiry.  The CSEB submitted its report on  21.02.2006  stating  that  there
were no such irregularities and that the respondent had  not  furnished  the
necessary  documents  despite  repeated  requests.   At  this   stage,   the
respondent filed the Civil Suit (26-A/06) before the Civil  Judge  Class-II,
Korba against the  CSEB.   However,  the  respondent  moved  an  application
seeking to withdraw the said suit.  In any case he did  not  appear  on  the
date fixed and accordingly the suit was  dismissed  for  non-prosecution  on
12.09.2006.  The respondent herein then filed a  Writ  Petition  No.2951  of
2006 before the Chhattisgarh High Court which was dismissed  on  25.06.2007.
Even costs of Rs.25,000/- was imposed while  dismissing  the  writ  petition
with  the  observations  that  it  was  abuse  of  the  process  of   Court.
Thereafter, SLP No.15897 of 2007 was preferred by the respondent which  also
came to be dismissed vide order dated 14.09.2007.  After the  exhaustion  of
these remedies, albeit unsuccessfully,  the  respondent  filed  a  complaint
before  K.K.  Nagar  P.S.,  Thirucharapalli,   Tamil   Nadu.    The   police
authorities refused to register the same on the ground that it  is  a  civil
dispute.  It is, thereafter, that the respondent  filed  the  said  Criminal
Complaint under Sections 120-B, 468, 420 & 500 IPC before the  trial  Court,
which was registered as C.C. No. 183/07 and the trial Court  issued  summons
to the appellants herein and accused No.1  (Successful  Bidder)   &  accused
No. 2 (then Chief Engineer, JSEB).   Petitions  of  the  appellants  seeking
quashing of the said complaint have been dismissed by the order of the  High
Court, which is impugned before us.

3.     A  reading  of  the  said  complaint  reveals  the  following   broad
allegations levelled by the respondent:

(a)  The respondent/complainant alleges  that  the  appellants  and  accused
No.1 (Successful Bidder)  & accused No. 2 (then Chief  Engineer,  JSEB)  had
conspired secretly to disentitle the complainant’s  company  by  creating  a
discredit and for the said purpose, they were in constant  touch  so  as  to
create the said Performance Report Cum  Certificate,  which  was  issued  by
accused No.2.

(b)   The respondent/complainant alleges that the  said  conspiracy  started
with an agreement entered into by the 1st accused and the appellants  herein
and they planned to fabricate the said certificate  dated  28.12.2004.   For
this purpose, accused No. 2 was approached so as to tailor  the  certificate
totally discrediting the CEI (Company of the Complainant) with reference  to
supply and service relationship with  Patratu  Thermal  Power  Station  (for
short 'the PTPS') and JSEB.

(c)   The respondent/complainant  alleges  that  the  said  Certificate  cum
Report is false,  fabricated,  motivated  and  malafide  and  the  same  was
contrary to the minutes of meeting that the complainant  and  his  officials
had with the officials of PTPS and JSEB.  He further alleges  that  for  the
said reasons, the accused No. 2 was demoted from his post.

(d)    The  respondent/complainant  alleges  that  on  suspicion   of   such
Certificate Cum Report, the complainant visited the CSEB  and  on  verifying
about the same, he found that the said tender was being given to Company  of
the 1st accused against the Complainant’s Company and so he wrote  a  letter
to the Chief Secretary and Chairman of JSEB  for  verifying  and  cancelling
such certificate. He also wrote to many officials of the CSEB.

(e)   The respondent/complainant alleges that the said Certificate is  perse
defamatory as against the complainant’s company and is a  crude  attempt  to
favour accused No.1 by spoiling the image of the Complainants  company.   He
further alleges that this  caused  a  wrongful  loss  to  the  complainant’s
company by robbing its due chance to get a contract  for  the  Boiler  Plant
Units at Korba.

4.    After recording preliminary evidence, the Magistrate  took  cognizance
of the complaint which order was challenged in the High Court.   Before  the
High Court, the appellants, inter alia, contended that the allegations  made
by the respondent under Sections 120-B, 468, 420 & 500 of IPC  pertained  to
the award of tender in favour of accused No.1 in which  the  respondent  was
also a competing party.  It was also pleaded that  the  said  complaint  has
been lodged as  an  afterthought,  having  failed  in  the  civil  suit  for
injunction which was dismissed and likewise, after unsuccessful  attempt  to
challenge the award of contract in  favour  of  accused  No.1  as  the  writ
petition of the respondent was dismissed  by  the  High  Court.   Thus,  the
lodging of  complaint  before  Judicial  Magistrate-II,  Tiruchirapalli  was
nothing but abuse of process of law.  The  appellants  also  contended  that
the respondents herein had no locus standi nor any legal  status  to  prefer
the said complaint, as CEI is not  a  registered  company,  having  a  legal
entity.  The appellants further relied on Naresh Kumar  Madan  v.  State  of
M.P., (2007) 4 SCC 766 wherein it has been held that an employee working  in
the Electricity Board is covered under the definition  of  ‘Public  Servant’
and State of Maharashtra v. Dr. Budhikota Subbarao, (1993)  2  SCC  567  for
the proposition that the absence of  sanction  order  from  the  appropriate
authority under  Section  197  Cr.P.C  for  prosecuting  a  public  servant,
vitiates the proceedings.

5.    The respondent refuted the aforesaid submissions by arguing  that  the
appellants herein had deliberately conspired and had committed the  offences
against the complainant and therefore he has a right to  lodge  a  complaint
for the offences committed by  the  appellants  along  with  accused  No.  2
(Chief Engineer, JSEB) in rejecting the tender submitted by the  complainant
with a view to accept the tender of the 1st accused.   It  was  argued  that
they conspired and created false document with  an  idea  of  rejecting  the
claim  of  the  complainant.   The   respondent   further   submitted   that
complainant's locus standi as a company was not questioned  in  the  earlier
proceedings before  the  Chhattisgarh  High  Court  and  that  the  Judicial
Magistrate had applied his  mind  and  after  satisfying  himself  that  the
complainant/respondent has got legal status to  lodge  the  said  complaint,
had taken cognizance of the offences committed by the accused  persons.   It
was also contended that the question of  obtaining  sanction  under  Section
197 Cr.P.C. will not arise in so far as the present complaint is  concerned,
as the accused are charged for  conspiracy,  cheating,  criminal  breach  of
trust and defamation.  He further  submitted  that  his  allegation  in  the
complaint pertained to the fabrication of the  Certificate-cum-Report  dated
28.12.2004 which was used against  him  in  rejecting  his  tender  and  1st
accused was favoured with the award of work.  Therefore, they had  committed
offences  against  the  complainant  and  damaged  the  reputation  of   the
respondent/ complainant.

6.    The High  Court  while  dismissing  the  petition  of  the  appellants
recorded that:
(a)   As far as mandatory provisions of Section  197  Cr.P.C  is  concerned,
the High Court accepted that the appellants are ‘Public Servants’.  It  also
observed that if the accusation against the appellants under  Sections  120-
B, 468, 420 & 500 IPC are connected with the discharge of  their  duty  viz.
if the said acts had reasonable connection with discharge of his  duty  then
applicability of Section 197 cannot be disputed.  However, on going  through
the allegations in the complaint, the High Court held that even  though  the
appellants are “Public Servant’, the alleged offences committed by them  are
cognizable offences are not in discharge of their normal  duties,  in  which
component of criminal breach of trust is found as one of  the  elements  and
hence the provisions of Section 197 Cr.P.C. are not attracted.

(b)   It has also been observed that the evidence regarding the  allegations
made in the complaint have to be recorded and gone into by the  trial  court
after the evidence  have  been  adduced  by  the  complainant.  It  is  only
thereafter the lower Court, can decide as to whether the  allegations  about
the falsity of the Certificate with conspiracy of  accused  No.  2  and  the
appellants herein are correct or not.

7.    It is clear from the above that  primarily  two  questions  arise  for
consideration namely:

(a)   Whether prior sanction of the competent  authority  to  prosecute  the
appellants, who are admittedly public servants, is mandatory  under  Section
197 of the Code?

(b)   Whether, on the facts  of  this  case,  the  complaint  filed  by  the
respondent is motivated and afterthought,  after losing the battle in  civil
litigation and amounts to misuse and abuse of law?

                 We would like to remark that having regard to the facts  of
this case  the  two  issues  are  interconnected  and  narratives  would  be
overlapping, as would become apparent when we proceed  with  the  discussion

8.    For this purpose, we would first like  to  point  out  that  the  High
Court has itself taken note of the judgment of this Court  in  the  Case  of
Naresh Kumar Madan (supra) to hold that the appellants are  covered  by  the
description of public servants within the meaning  of  Section  21  of  IPC.
Following observations therefrom have been quoted:

“The officers of the State Electricity  Board  are  required  to  carry  out
public functions.  They are public authorities.  Their action in one way  or
the other may  entail  civil  or  evil  consequences  to  the  consumers  of
electrical energy.  They may prosecute a  person.   They  are  empowered  to
enter into the house of the Board's consumers.  It is only  for  proper  and
effective exercise of those powers, the statute provides that they would  be
public servants, wherefore a legal fiction has been  created  in  favour  of
those employees, when acting or purported to act in pursuance of any of  the
provisions of the Act within the meaning of Section 21 of the  Indian  Penal
Code.  Indian Penal Code denotes various persons  to  the  public  servants.
It is, however, not exhaustive.  A person may be public servant in terms  of
another statute.  However we may notice that a person, who, inter  alia,  is
in the service or pay of the Government established by or under  a  Central,
Provincial or State  Act,  would  also  come  within  the  purview  thereof.
Section 2 (1) (c) of the 1988 Act also brings within its  embrace  a  person
in the service or pay of a corporation established by  or  under  a  Central

9.    The question is of the applicability  of  Section  197  of  the  Code.
Said provision with which we are concerned is reproduced below:

“Prosecution of Judges and public servant. (1) When any  person  who  is  or
was a Judge or Magistrate or a public servant not removable from his  office
save by or with the sanction of the Government  is  accused  of  any  ofence
alleged to have been committed by him while acting or purporting to  act  in
the discharge of his official duty, no Court shall take cognizance  of  such
offence except with the previous sanction-

(a)  In the case of a person who is employed, or as the case may be, was  at
the time of commission of the alleged offence employed, in  connection  with
the affairs of the Union, of the Central Government;

(b)  in the case of a person who is employed or, as the case may be, was  at
the time of commission of the alleged offence employed, in  connection  with
the affairs of a State, of the State Government.”

10.   This provision makes it clear that if any offence is alleged  to  have
been committed by a public servant who cannot be  removed  from  the  office
except by or with the sanction of the Government,  the  Court  is  precluded
from taking cognizance of such offence except with the previous sanction  of
the competent authority specified in this provision.

11.   The sanction, however, is necessary if  the  offence  alleged  against
public servant is committed by him “while acting or  purporting  to  act  in
the discharge of his official duties”.  In order to find out as  to  whether
the alleged offence is committed while acting or purporting to  act  in  the
discharge of his official duty, following  yardstick  is  provided  by  this
Court in Dr. Budhikota Subbarao (supra) in the following words:

“If on facts, therefore, it is prima facie found that the  act  or  omission
for which the accused was charged had reasonable connection  with  discharge
of his duty then it must be held to be official to  which  applicability  of
Section 197 of the Code cannot be disputed.”

12.   This principle was explained in  some  more  detail  in  the  case  of
Raghunath Anant Govilkar v. State of Maharashtra, which was decided by  this
Court on 08.02.2008 in SLP (Crl.) No.5453 of 2007, in the following manner:

“On the question of  the  applicability  of  Section  197  of  the  Code  of
Criminal  Procedure,  the  principle  laid  down  in  two   cases,   namely,
Shreekantiah Ramayya Munipalli v. State of Bombay and Amrik Singh  v.  State
of Pepsu was as follows:

It is not every  offence  committed,  by  a  public  servant  that  requires
sanction for prosecution under Section 197 (1) of  Criminal  Procedure  Cod;
nor even every act  done  by  him  while  he  is  actually  engaged  in  the
performance of his  official  duties;  but  if  the  act  complained  of  is
directly concerned with his official  duties  so  that,  if  questioned,  it
could be claimed to have been done by virtue of the  office,  then  sanction
would be necessary.

The real question therefore, is  whether  the  acts  complained  of  in  the
present case were directly concerned with the official duties of  the  three
public servants.  As far as the offence of  criminal  conspiracy  punishable
under Sections 120-B read with Section 409  of  the  Indian  Penal  Code  is
concerned and also Section 5(2) of the Prevention  of  Corruption  Act,  are
concerned they cannot be said to be of the nature mentioned in  Section  197
of the Code of Criminal Procedure.  To put it shortly, it is no part of  the
duty of a public servant, while discharging his official  duties,  to  enter
into a criminal conspiracy or to indulge in criminal  misconduct.   Want  of
sanction under Section 197 of the Code of Criminal Procedure is,  therefore,
no bar.”

13.   Likewise, in Shambhoo Nath Misra v. State of U.P. and  others,  (1997)
5 SCC 326, the Court dealt with the subject in the following manner:

“5.  The question is when the public servant is alleged  to  have  committed
the offence of fabrication of record  or  misappropriation  of  public  fund
etc. can be said to have acted in discharge of his official  duties?  It  is
not the official duty of the public servant to fabricate  the  false  record
and misappropriate the public  funds  etc.  in  furtherance  of  or  in  the
discharge of his official duties.  The official capacity  only  enables  him
to fabricate the record or misappropriate the public fund etc.  It does  not
mean that it is integrally connected or  inseparably  interlinked  with  the
crime committed in the course of same transaction, as was  believed  by  the
learned Judge.  Under these circumstances, we are of the  opinion  that  the
view expressed by the High Court as well  as  by  the  trial  Court  on  the
question of sanction is clearly illegal and cannot be sustained.”

14.   The ratio of the aforesaid cases, which  is  clearly  discernible,  is
that even while discharging his official duties, if a public servant  enters
into  a  criminal  conspiracy  or  indulges  in  criminal  misconduct,  such
misdemeanor on his part is not to be treated as an act in discharge  of  his
official duties and, therefore, provisions of  Section 197 of the Code  will
not be attracted.  In fact, the  High  Court  has  dismissed  the  petitions
filed  by  the  appellant  precisely  with  these  observations  namely  the
allegations pertain  to  fabricating  the  false  records  which  cannot  be
treated as part of the appellants normal official duties.   The  High  Court
has, thus, correctly spelt out the proposition of law.   The  only  question
is as to whether on the facts  of  the  present  case,  the  same  has  been
correctly applied.  If one looks into the allegations made in the  complaint
as stand alone allegations, probably what the High Court has said  may  seem
to be justified.  However, a little deeper scrutiny into  the  circumstances
under  which  the  complaint  came  to  be  filed  would  demonstrate   that
allegation of fabricating the false record is clearly  an  afterthought  and
it becomes more than apparent that the respondent has chosen to  level  such
a make belief allegation with sole motive to give a shape of criminality  to
the entire dispute, which was otherwise civil in nature.   As  noted  above,
the respondent had in fact initiated civil action in the form  of  suit  for
injunction against the award of the contract in which he failed.   Order  of
civil court was challenged by filing writ petition in the High Court.   Plea
of the respondent was that the action of the  Department  in  rejecting  his
tender and awarding the contract to accused No.1 was illegal and  motivated.
 Writ  petition  was  also  dismissed  with  cost.   These  orders  attained
finality.  It is only  thereafter  criminal  complaint  is  filed  with  the
allegation  that accused No.1 is favoured by creating  a  false  certificate
dated 28.12.2004.  We would dilate this discussion  with  some  elaboration,

15.   As already pointed above, tender was floated by the CSEB and  the  CEI
herein was one of  the  parties  who  had  submitted  its  bid  through  the
respondent.  However, tender conditions mentioned certain conditions and  it
was necessary to fulfill those conditions to become eligible to  submit  the
bid  and  have  it  considered.   As  per  the  appellants,  tender  of  the
respondent was rejected on the ground that plant and  equipment  erected  by
the respondent at Patratu Thermal Power Station, Patratu, Jharkhand was  not
functioning well.  This information was received  by  the  Tender  Committee
from JSEB.  When the report was  sought  by  CSEB  in  December,  2004,  the
Tender Committee took the view that the respondent did not fulfill the  pre-
qualifying conditions  and  rejected  his  tender.   Before  doing  so,  the
respondent was asked time and again to send the performance report which  he
had promised but he failed to comply even when he  had  assured  to  do  the
needful.  In fact, that itself was sufficient to  reject  that  bid  of  the
respondent as it was non compliant with the tender  conditions.   Still,  in
order to verify the claim of the respondent  and  to  consider  his  bid  on
merits, though not strictly required, the appellant R.C.  Jain  was  deputed
to get the desired information from JSEB.   He met  the  officials  of  JSEB
and submitted his report to the effect that the works  carried  out  by  the
respondent at Patratu Thermal Power Station  was  not  satisfactory.   Even,
Shri B.M. Ram, General Manager of  the  said  Power  Station  furnished  his
report dated 28.12.2004 wherein it was summed up that due to the defects  in
the scanning  system,  supplied  by  the  respondent,  generation  had  been
adversely effected and the said Electricity Board  was  not  satisfied  with
the equipment supplied  by  the  respondent.   In  spite  of  the  aforesaid
material, the tender Committee acted with caution  and  even  the  technical
expertise was sought.   Even  the  report  of  the  technical  experts  went
against the respondent as it opined that the respondent was not  technically
suitable on the technical vetting and comparative data.   On  the  basis  of
the aforesaid material, the respondent's tender document was not opened  and
returned and he was informed accordingly.  All this has clearly happened  in
furtherance of and in discharge of the official  duties  by  the  appellant.
In the facts of the present case, we are of the  view  that  allegations  of
fabricating the records are mischievously made as an afterthought,  just  to
give colour of criminality to a civil case.

16.   As pointed out above, the respondent had even  filed  the  civil  suit
challenging the decision of the Electricity Board in  returning  his  tender
documents on the ground  that  the  same  were  not  as  per  pre-qualifying
conditions of the tender.   He  had  thus  resorted  to  the  civil  remedy.
However, he failed therein as for the reasons best known to him,  he  sought
to withdrew the same  and  accordingly  the  same  was  dismissed  for  non-
prosecution.  It is trite that once the suit  is  withdrawn,  that  acts  as
constructive res judicata having regard to  the  provision  of  Order  XXIII
Rule 1 of the Code of Civil Procedure.  Also, when suit is  dismissed  under
Order IX Rule 8 CPC, fresh suit under Order IX Rule 9 is barred.  The  legal
implication would be of that the attempt of the  respondent  in  challenging
the decision of the Tender Committee in not considering his tender  remained
unfaulted.  Even when the respondent himself invited order of  dismissal  in
the civil suit, curiously enough, he  filed  a  writ  petition  against  the
order passed in the civil court dismissing  his  suit  for  non-prosecution,
but the same was also dismissed by the High Court on 25.06.2007 and  even  a
cost of Rs.25,000/- was imposed on the respondent as the said writ  petition
was perceived by the High Court as 'abuse of process  of  the  court'.   SLP
preferred by the respondent was also dismissed by this Court on  14.09.2007.
 It is only thereafter the respondent filed the criminal  complaint  out  of
which  present  proceedings  emanate.   No  doubt,  the  respondent  in  his
complaint has right to colour his complaint  by  levelling  the  allegations
that the appellants herein fabricated the records.  However,  on  the  facts
of this case,  it  becomes  difficult  to  eschew  this  allegation  of  the
respondent and we get an uncanny feeling  that  the  contents  of  FIR  with
these allegations are a  postscript  of  the  respondent  after  losing  the
battle in civil proceedings which were taken  out  by  him  challenging  the
action of the Department in rejecting his tender.  When he did  not  succeed
in the said attempt, he came out with the allegations  of  forgery.   It  is
thus becomes clear that the action of the respondent in filing the  criminal
complaint is not bonafide and amounts to misuse and abuse of the process  of

17.   In State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335,  this  Court
has laid down principles on which Court can quash the  criminal  proceedings
under Section 482 of Cr.P.C.  These are as follows:

“102.(1)  Where the allegations made in the first information report or  the
complaint, even if they are taken at their face value and accepted in  their
entirety do not prima facie constitute  any  offence  or  make  out  a  case
against the accused.

(2)   Where the allegations  in  the  first  information  report  and  other
materials, if any,  accompanying  the  FIR  do  not  disclose  a  cognizable
offence, justifying an investigation by police officers  under  Section  156
(1) of the Code except under an order of a Magistrate within the purview  of
Section 155 (2) of the Code.

(3)   Where the uncontroverted allegations made in the FIR or complaint  and
the  evidence  collected  in  support  of  the  same  do  not  disclose  the
commission of any offence and make out a case against the accused.

(4)   Where the allegations in  the  FIR  do  not  constitute  a  cognizable
offence but constitute only a non-cognizable offence,  no  investigation  is
permitted  by  a  police  officer  without  an  order  of  a  Magistrate  as
contemplated under Section 155 (2) of the Code.

(5)   Where the allegations made in the FIR or complaint are so  absurd  and
inherently improbable on the basis of  which  no  prudent  person  can  ever
reach a just conclusion that  there  is  sufficient  ground  for  proceeding
against the accused.

(6)   Where  there  is  an  express  legal  bar  engrafted  in  any  of  the
provisions of the  Code  or  the  Act  concerned  (under  which  a  criminal
proceeding  is  instituted)  to  the  institution  and  continuance  of  the
proceedings and/or where there is a specific provision in the  Code  or  the
Act concerned, providing  efficacious  redress  for  the  grievance  of  the
aggrieved party.

(7)   Where a criminal proceeding is  manifestly  attended  with  mala  fide
and/or where the proceeding  is  maliciously  instituted  with  an  ulterior
motive for wreaking vengeance on the accused and with a view  to  spite  him
due to private and personal grudge.”

            Principle Nos.6 and 7 are  clearly  applicable  in  the  present

18.   Having regard to the circumstances narrated and  explained  above,  we
are also of the view that attempt is made by the  respondent  to  convert  a
case with civil nature into criminal prosecution.   In  a  case  like  this,
High Court  would  have  been  justified  in  quashing  the  proceedings  in
exercise of its inherent powers under Section 482 of the Code.  It would  be
of benefit to refer to the judgment in the case  of  Indian  Oil  Corpn.  v.
NEPC India Ltd. and others, (2006) 6 SCC 736, wherein  the  Court  adversely
commented upon this very tendency of  filing  criminal  complaints  even  in
cases  relating  to  commercial  transaction  for  which  civil  remedy   is
available is available or  has  been  availed.   The  Court  held  that  the
following observations of the Court in this behalf are taken note of:

“13.  While on this issue, it is necessary  to  take  notice  of  a  growing
tendency in business circles to convert purely civil disputes into  criminal
cases.  This is obviously on account of a prevalent  impression  that  civil
law remedies are time consuming and do not adequately protect the  interests
of lenders/creditors.  Such a tendency is seen in  several  family  disputes
also, leading to irretrievable breakdown of  marriages/families.   There  is
also an impression that  if  a  person  could  somehow  be  entangled  in  a
criminal prosecution, there is a likelihood  of  imminent  settlement.   Any
effort to settle civil  disputes  and  claims,  which  do  not  involve  any
criminal offence, by applying pressure through criminal  prosecution  should
be deprecated and discouraged.  In G. Sagar Suri v. State of U.P., (2000)  2
SCC 636, this Court observed: (SCC p. 643, para 8)

“It is to be seen if a matter, which is essentially of a civil  nature,  has
been given a cloak of criminal offence.   Criminal  proceedings  are  not  a
short cut of other remedies available in  law.   Before  issuing  process  a
criminal court has to exercise a great deal of caution.  For the accused  it
is a serious matter.  This Court has laid certain principles  on  the  basis
of which the High Court is to exercise its jurisdiction  under  Section  482
of the Code.  Jurisdiction  under  this  section  has  to  be  exercised  to
prevent abuse of the process of any court or otherwise to  secure  the  ends
of justice.”

14.  While no one with a legitimate cause or grievance should  be  prevented
from  seeking  remedies  available  in  criminal  law,  a  complainant   who
initiates or persists  with  a  prosecution,  being  fully  aware  that  the
criminal proceedings are unwarranted and his remedy lies only in civil  law,
should himself  be  made  accountable,  at  the  end  of  such  misconceived
criminal proceedings, in accordance with law.  One positive  step  that  can
be taken by the courts, to curb unnecessary prosecutions and  harassment  of
innocent parties, is to exercise their power under  Section  250  CrPC  more
frequently, where they discern malice or frivolousness or  ulterior  motives
on the part of the complainant.  Be that as it may.”

19.   In Inder Mohan  Goswami  and  another  v.  State  of  Uttaranchal  and
others, (2007) 12 SCC 1, the Court reiterated the scope and ambit  of  power
of the High Court under Section 482 of the Code in the following words:

“23.  This Court in a number of cases has laid down the scope and  ambit  of
courts' powers under Section 482 CrPC.  Every High Court has inherent  power
to act ex debito justitiae to do  real  and  substantial  justice,  for  the
administration of which alone it exists, or to prevent abuse of the  process
of the court.  Inherent power under Section 482 CrPC can be exercised:

            (i)   to give effect to an order under the Code;
            (ii)  to prevent abuse of the process of court, and
            (iii) to otherwise secure the ends of justice.

24.  Inherent  powers  under  Section  482  CrPC  though  wide  have  to  be
exercised sparingly, carefully and with great caution  and  only  when  such
exercise is justified by the tests specifically laid down  in  this  section
itself.  Authority of the court exists for the advancement of  justice.   If
any abuse of the process leading to injustice is brought to  the  notice  of
the court, then the could would be  justified  in  preventing  injustice  by
invoking inherent powers in absence of specific provisions in the statute.

Discussion of decided cases

25.  Reference to the following cases would  reveal  that  the  courts  have
consistently taken the view that they must use this extraordinary  power  to
prevent injustice and secure the ends of justice.  The English  courts  have
also used inherent power to achieve the same  objective.   It  is  generally
agreed that the Crown Court has inherent power to protect its  process  from
abuse.  In Connelly v. DPP, 1 1964 AC 1254 Lord  Devlin  stated  that  where
particular criminal proceedings constitute an abuse of  process,  the  court
is empowered to refuse to allow the indictment to proceed  to  trial.   Lord
Salmon in DPP v.  Humphrys,  1977  AC  1  stressed  the  importance  of  the
inherent power when he observed that it is only if the  prosecution  amounts
to an abuse of the process of the court  and  is  oppressive  and  vexatious
that the judge has the power to intervene.  He further  mentioned  that  the
court's power to prevent such abuse is of  great  constitutional  importance
and should be jealously preserved.

46.  The court must ensure that criminal  prosecution  is  not  used  as  an
instrument of  harassment  or  for  seeking  private  vendetta  or  with  an
ulterior  motive  to  pressurise  the   accused.    On   analysis   of   the
aforementioned cases, we are of the opinion that it is neither possible  nor
desirable to lay down an inflexible rule that would govern the  exercise  of
inherent jurisdiction.  Inherent  jurisdiction  of  the  High  Courts  under
Section 482 CrPC though wide has to be exercised  sparingly,  carefully  and
with caution and only when it is justified by the  tests  specifically  laid
down in the statute itself and in the aforementioned cases.  In view of  the
settled legal position, the impugned judgment cannot be sustained.”

20.   As a result, these appeals are allowed.  Order of the  High  Court  is
set aside.  Consequently, cognizance taken by  the  learned  Magistrate  and
orders summoning the appellants as accused is  hereby  set  aside  resulting
into the dismissal of the said complaint. There shall however  be  no  order
as to costs.

                                                            (J. Chelameswar)

                                                                (A.K. Sikri)
New Delhi;
October 14, 2014.

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