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Friday, April 22, 2016

no offence is made out under Section 66 of the I.T. Act, read with Section 43. The appellant was a Director of Devi Polymers and nothing is brought on record to show that he did not have any authority to access the computer system or the computer network of the company. That apart there is nothing on record to show the commission of offence under Section 65 of the I.T. Act, since the allegation is not that any computer source code has been concealed, destroyed or altered. We have already observed that the acts of the appellant did not have any dishonest intention while considering the allegations in respect of the other offences. In the circumstances, no case is made out under Sections 65 and 66 of the I.T. Act, 2000.The High Court seems to have over looked these circumstances and has merely dismissed the petition under Section 482 of the Criminal Procedure Code on the ground that it requires evidence at a trial to come to any conclusion. We, however, find that the criminal proceedings initiated by the respondent constitute an abuse of process of Court and it is necessary to meet the ends of justice to quash the prosecution against the appellant.





                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION



                       CRIMINAL APPEAL NO. 133 OF 2016
                (Arising out of S.L.P.(Crl.) No.2554 of 2011)


|RAMESH RAJAGOPAL                                         |Appellant(s)         |


                         Versus


      |DEVI POLYMERS PRIVATE LIMITED                            |Respondent(s)        |


                                JUDGMENT


      S.A.BOBDE, J.
      1.    We have heard learned counsel for the parties.


      2.    Leave granted.


      3.    The appellant has preferred this  appeal  against  the  judgment
      passed by the Madras High Court in Criminal  O.P.  No.  4404  of  2010
      refusing to quash the criminal proceedings initiated against him.


      4.    The appellant was prosecuted by the  respondent  under  Sections
      409, 468 and 471 of the Indian Penal Code (in short  'the  IPC')  read
      with Sections 65 and 66 of the Information Technology Act,  2000  read
      with Section 120(b) of the IPC.  The appellant is a Director  in  Devi
      Polymers Private Limited, Chennai  which  is  a  leader  in  Polyester
      Moulding Compound (PMC),  Sheet  Moulding  Compound  (SMC)  and  Dough
      Moulding Compound (DMCO) in India.


      It is also manufacturing  SMC  and  DMC  moulded  components  for  the
      electrical, automotive and various other industries.  The  company  is
      also supplying SMC and DMC compounds and components to almost all  the
      leading electrical switch gear industries and automotive industries in
      India.


      5.    It has three Units – A, B and C.  Unit 'C' is  being  headed  by
      the appellant.  It is not disputed that the Unit 'C' primarily renders
      consultancy services.  However, all the three Units are units  of  one
      entity i.e. Devi Polymers Private Limited.


      6.    In the course of business, the appellant  thought  of  improving
      the consultancy services and apparently contacted a  consultant  known
      as Michael T Jackson.  He also contacted the  regular  consultants  of
      the Company i.e.  Devi  Polymers  Private  Limited.   The  consultants
      apparently advised the creation of a separate  entity  known  as  Devi
      Consultancy Services and accordingly, in the web page that was created
      by the consultant, this name occurred.  Since an invoice  was   raised
      by  the consultant Michael T Jackson   in  the  sum  of  10,857.50  US
      Dollars, the said amount was paid from  the  funds  of  Devi  Polymers
      Private Limited amounting to Rs.5,57,207/-. The amount of  Rs.17,000/-
      has been paid by the Devi Polymers Private Limited to M/s  Easy  Link.
      These  amounts  were  paid  as  advised  by  the  appellant.   It   is
      significant that no amount  has  been  paid  or  received  by  Unit  C
      separately, independently of Devi Polymers Private Limited.  All this,
      namely the engaging of consultants and payments to them was apparently
      done at the behest of the appellant.


      7.    The relationship being strained between the respondent  and  the
      appellant, who are relatives, several proceedings seem  to  have  been
      initiated in the  Company  Law  Board  pertaining  to  oppression  and
      mismanagement.  As of now, it is said that  the  appellant's  petition
      for mismanagement has been dismissed but an  appeal  is  pending.   We
      are, however, not concerned with those proceedings.


      8.    However, in the course of disputes and the pending  proceedings,
      the respondent initiated the instant criminal  complaint  against  the
      appellant.  The main  circumstances  which  are  relied  upon  by  the
      respondent  in  the  complaint  is  that  in  the  website  for   Devi
      Consultancy Services that was created on the advice of the  consultant
      is shown as a separate division independent of Devi  Polymers  Private
      Limited.  According to the complainant, this has resulted in  forgery,
      since there is no such thing as Devi Consultancy Services; though  the
      existence of Unit C of Devi Polymers Private Limited, which deal  with
      consultancy is not denied.  The second circumstance seems  to  be  the
      payment made by the Devi Polymers Private Limited to  the  consultants
      from their own account.  The former is said  to  be  forgery  and  the
      latter is said to be mis-appropriation of funds and breach of trust.


      9.    Having given our anxious consideration to the dispute,  we  find
      that none of the aforesaid circumstances can lead to an  inference  of
      commission of an offence under the IPC at any rate none of the offence
      alleged.  As far as the website is concerned, though undoubtedly, Devi
      Consultancy Services (DCS) is mentioned,  it  is  made  clear  in  the
      website itself that DCS is a part of  Devi  Polymers  Private  Limited
      which is apparent from  a  link  which  shows  Devi  Polymers  Private
      Limited, in the website itself, are shown  as  Devi  Polymers  Private
      Limited, the main Company and Devi Consultancy Services  as  a  sister
      Company.  Similarly, in the website of Devi Polymers Private  Limited,
      which was moved by the consultant, there is a link  which  shows  that
      Devi Consultancy Services is a sister concern and it  is  stated  that
      viewers may visit that site. The address of Devi Consultancy  Services
      is shown to be the same address  as  that  of  Devi  Polymers  Private
      Limited.  We are satisfied that there  is  no  attempt  whatsoever  to
      project the Devi Consultancy Services as a concern or a Company  which
      is independent and separate from Devi  Polymers  Private  Limited,  to
      which both the parties belong. In any case it is not possible to  view
      the act as an act of forgery.


      10.   It might have been possible to attribute some   criminal  intent
      to the projection of the Unit C as Devi Consultancy  Services  in  the
      website, if as a result of such projection, the appellant had received
      any amounts separate from the Devi Polymers  Private  Limited,  but  a
      perusal of the complaint shows that this is  not  so.   Not  a  single
      rupee has been received by the appellant  in  his  own  name  or  even
      separately in the name of Unit C, which he is  heading.   All  amounts
      have been received by Devi Polymers Private Limited.


      11.   Section 463 of the Indian Penal Code defines forgery which reads
      as follows:-
                 “463. Forgery.— Whoever makes any false documents or  false
         electronic record or part of a document or electronic record, with
         intent to cause damage or injury, to the public or to any  person,
         or to support any claim or title, or to cause any person  to  part
         with property, or to enter into any express or  implied  contract,
         or with intent to commit fraud or that  fraud  may  be  committed,
         commits forgery.”


      12.   It is not possible to view the contents of the  website  showing
      the Devi Consultancy Services as a concern which is separate from Devi
      Polymers Private Limited in  view  of  the  contents  of  the  website
      described above.  Moreover, it is not possible to impute any intent to
      cause damage or injury  or  to  enter  into  any  express  or  implied
      contract or any intent to commit fraud  in  the  making  of  the  said
      website.  The appellant has not committed any act which fits the above
      description.  Admittedly, he has not received a single  rupee  or  nor
      has he entered into any contract in his own name on the basis  of  the
      above website.
      13.   Section 468 of the IPC reads as follows:-
                       “468. Forgery for  purpose  of  cheating  —  Whoever
              commits forgery, intending that the  document  or  electronic
              record forged shall be used  for  the  purpose  of  cheating,
              shall be punished with imprisonment of either description for
              a term which may extend to seven years,  and  shall  also  be
              liable to fine.”


      14.   In the absence of any act in pursuance of the website  by  which
      he has deceived any person fraudulently or  dishonestly,  induced  any
      one to deliver any property to any person, we  find  that  it  is  not
      possible to attribute any intention of cheating which is  a  necessary
      ingredient for the offence under Section 468.


      15.   We find that the allegations that the appellant is guilty of  an
      offence under the aforesaid  section  are  inherently  improbable  and
      there is no sufficient ground of proceedings against the accused.  The
      proceedings have been initiated against the appellant as a part of  an
      ongoing dispute between the parties and seem to be due  to  a  private
      and personal grudge.


      16.  In State of Haryana and Ors. v. Bhajan Lal and Ors.  reported  in
      1992 Supp(1) SCC 335, this Court laid down  the  following  guidelines
      where the power under Section 482 should be exercised.  They are:-
                  “102. In the backdrop of the interpretation of the various
          relevant provisions of the Code  under  Chapter  XIV  and  of  the
          principles of  law  enunciated  by  this  Court  in  a  series  of
          decisions relating to the  exercise  of  the  extraordinary  power
          under Article 226 or the inherent powers under Section 482 of  the
          Code which we have extracted and reproduced  above,  we  give  the
          following categories of cases by way of illustration wherein  such
          power could be exercised either to prevent abuse of the process of
          any court or otherwise to secure the ends of  justice,  though  it
          may not be possible to lay down any precise, clearly  defined  and
          sufficiently  channelised  and  inflexible  guidelines  or   rigid
          formulae and to give an exhaustive list of myriad kinds  of  cases
          wherein such power should be exercised.
              (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 concerned Act (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  concerned   Act,
              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.”



      We find that the High Court ought to have exercised  its  power  under
      Clause (1), (3) and (5) of the above said judgment.


      17.    In  Madhavrao  Jiwajirao  Scindia  and  Ors.   v.   Sambhajirao
      Chandrojirao Angre and Ors., reported in (1988) 1 SCC 692, this  Court
      observed as follows:-
                 “7.  The  legal  position  is  well  settled  that  when  a
          prosecution at the initial stage is asked to be quashed, the  test
          to be applied by the court is as  to  whether  the  uncontroverted
          allegations as made prima facie establish the offence. It is  also
          for the court to take  into  consideration  any  special  features
          which appear in a  particular  case  to  consider  whether  it  is
          expedient and in the interest of justice to permit  a  prosecution
          to continue. This is so on the basis  that  the  court  cannot  be
          utilised for any oblique purpose and where in the opinion  of  the
          court chances of an ultimate conviction are bleak and,  therefore,
          no useful purpose is likely to be served by  allowing  a  criminal
          prosecution  to  continue,  the  court  may  while   taking   into
          consideration  the  special  facts  of  a  case  also  quash   the
          proceeding even though it may be at a preliminary stage.”


      18.   This Court in Janata Dal v. H.S. Chowdhary and Ors., reported in
      (1992) 4 SCC 305, observed as follows:-
                 “132. The criminal courts are clothed with  inherent  power
            to make such orders as may be necessary for the ends of justice.
            Such power though  unrestricted  and  undefined  should  not  be
            capriciously or arbitrarily exercised, but should  be  exercised
            in appropriate  cases,  ex  debito  justitiae  to  do  real  and
            substantial justice for the administration of  which  alone  the
            courts exist. The powers  possessed  by  the  High  Court  under
            Section 482 of the Code are very wide and the very plenitude  of
            the power requires great caution in its exercise. Courts must be
            careful to see that its decision in exercise of  this  power  is
            based on sound principles.”


      We reiterate the same caution having found that this is an appropriate
      case for the exercise of such powers.


      19.   The entire law on the subjects was reviewed by  a  three  Judges
      Bench of this Court in Inder  Mohan  Goswami  and  Anr.  v.  State  of
      Uttaranchal and Ors., reported in (2007) 12 SCC 1 vide  paragraphs  23
      to 39.  Thereafter, the law was reiterated in R. Kalyani v.  Janak  C.
      Mehta and Ors. reported in (2009) 1 SCC 516 vide paragraphs 15 and 16.


      20.   In all the cases the principle that the accused must be relieved
      from the prosecution, even if the allegations are taken at their  face
      value and accepted in their entirety do not constitute any offence has
      been upheld, and thereafter in Umesh Kumar v. State of Andhra  Pradesh
      and anr., reported in (2013) 10 SCC 591.


      21.   As regards the commission  of  offences  under  the  Information
      Technology Act, 2000 the allegations are that the appellant had,  with
      fraudulent and dishonest intention on the website of Devi  Consultancy
      Services i.e. www.devidcs.com that the former is a sister  concern  of
      Devi  Polymers.   Further,  that  this  amounts  to   creating   false
      electronic record.  In view of the  finding  above  we  find  that  no
      offence is made out under Section  66  of  the  I.T.  Act,  read  with
      Section 43.  The appellant was a Director of Devi Polymers and nothing
      is brought on record to show that he did not  have  any  authority  to
      access the computer system or the computer  network  of  the  company.
      That apart there is nothing  on  record  to  show  the  commission  of
      offence under Section 65 of the I.T. Act, since the allegation is  not
      that any  computer  source  code  has  been  concealed,  destroyed  or
      altered.  We have already observed that the acts of the appellant  did
      not have any dishonest intention while considering the allegations  in
      respect of the other offences.  In the circumstances, no case is  made
      out under Sections 65 and 66 of the I.T. Act, 2000.


      22.   The High Court seems to have over looked these circumstances and
      has merely dismissed the petition under Section 482  of  the  Criminal
      Procedure Code on the ground that it requires evidence at a  trial  to
      come  to  any  conclusion.   We,  however,  find  that  the   criminal
      proceedings initiated by the respondent constitute an abuse of process
      of Court and it is necessary to meet the ends of justice to quash  the
      prosecution against the appellant.


      23.   Accordingly, the appeal succeeds. The prosecution is quashed.




                            ........................J.
                                               (S.A. BOBDE)






                                     ........................J.
                                                      (AMITAVA ROY)


      New Delhi,
      April 19,2016

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