* Author
[2024] 1 S.C.R. 1134 : 2024 INSC 72
Sachin Garg
v.
State of U.P & Anr.
(Criminal Appeal No. 497 of 2024)
30 January 2024
[Aniruddha Bose* and Sanjay Kumar, JJ.]
Issue for Consideration
In a case wherein the dispute was commercial in nature having
no element of criminality, whether the Magistrate was justified in
issuing summons for trial u/ss.406, 504 and 506, Penal Code,
1860 and the High Court in dismissing the application filed by the
appellant for quashing said summons and the complaint case.
Headnotes
Code of Criminal Procedure, 1973 – Issuance of summons,
duty of Magistrate – Penal Code, 1860 – ss.406, 504 and 506 –
Commercial dispute given criminal colour – Dispute between
the parties related to the rate at which the assigned work was
to be done – Respondent no.2 filed complaint case – Summons
issued by Magistrate for trial u/ss.406, 504 and 506, IPC –
Application filed by the appellant for quashing the summons
and the complaint case, dismissed by High Court – Propriety:
Held: Past commercial relationship between the appellant’s
employer and the respondent no.2 was admitted – Dispute between
the parties centred around the rate at which the assigned work
was to be done – Neither in the complaint petition nor in the initial
deposition of the two witnesses (including the complainant), the
ingredients of the offence u/s.405, IPC surfaced – Such commercial
disputes over variation of rate cannot per se give rise to an offence
u/s.405, IPC without presence of any aggravating factor leading
to the substantiation of its ingredients – No material to come to a
prima facie finding that there was dishonest misappropriation or
conversion of any material for the personal use of the appellant in
relation to gas supplying work done by the respondent no.2 – The
said work was done in course of regular commercial transactions –
There was no misappropriation or conversion of the subject property,
[2024] 1 S.C.R. 1135
Sachin Garg v. State of U.P. and Anr.
being Dissolved Acetylene Gas which was supplied to the factory
for the purpose of battery manufacturing at EIL – No evidence
for commission of offence u/s.405/406, IPC – Further, as regards
criminal intimidation also there was a mere bald allegation, short
of any particulars as regards to the manner in which threat was
conveyed – While it is true that at the stage of issuing summons
a magistrate only needs to be satisfied with a prima facie case for
taking cognizance, the duty of the magistrate is also to be satisfied
whether there is sufficient ground for proceeding – Magistrate’s
order issuing summons reflects his satisfaction in a cryptic manner
– At the stage of issue of summons, though detailed reasoning as
to why a Magistrate is issuing summons is not necessary but in
the present case, the allegations made by the complainant do not
give rise to the offences for which the appellant was summoned for
trial – A commercial dispute, which ought to have been resolved
through the forum of Civil Court was given criminal colour by lifting
certain words or phrases from the penal code and implanting
them in a criminal complaint – Magistrate failed to apply his mind
in issuing summons and the High Court failed to exercise its
jurisdiction u/s.482, 1973 Code – Impugned judgment set aside,
complaint and summoning order quashed. [Paras 14, 17 and 18]
Code of Criminal Procedure, 1973 – s.482 – Jurisdiction –
Discussed.
Code of Criminal Procedure, 1973 – Summons issued by
Magistrate for trial u/ss.406, 504 and 506, IPC in the complaint
case filed by Respondent no.2 – Appellant sought dismissal
of the complaint on the ground that the complaint should
not have been entertained without arraigning the principal
company as an accused:
Held: The perceived wrongdoing was attributed to the appellant,
though the complaint petition acknowledges that the job-work was
being done for EIL (appellant’s employer) – Moreover, the allegation
of criminal intimidation was against the appellant directly, whatever
be the value or quality of such allegations – Thus, for that reason
the complaint case cannot be rejected at the nascent stage on the
sole ground of not implicating the company – However, the complaint
and the summons quashed for the reasons given. [Para 20]
1136 [2024] 1 S.C.R.
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Case Law Cited
Sharad Kumar Sanghi vs Sangita Rane [2015] 2 SCR
145 : (2015) 12 SCC 781 – held inapplicable.
Jagdish Ram vs State of Rajasthan and Another [2004]
2 SCR 846 : (2004) 4 SCC 432 – relied on.
Neeharika Infrastructure Pvt. Ltd. vs State of Maharashtra
and Ors., [2021] 4 SCR 1044 : (2021) 19 SCC 401;
R.P. Kapur vs State of Punjab, [1960] 3 SCR 388 : AIR
(1960) SC 866; State of Haryana and Ors. vs Bhajan
Lal and Ors., [1992] Supp. (3) SCR 735 : (1992) SCC
(Cr.) 426; State of Bihar and Anr. vs P. P. Sharma, IAS
and Anr., [1991] 2 SCR 1 : (1992) SCC (Cr.) 192; Zandu
Pharmaceutical Works Ltd. and Ors. vs Mohd. Sharaful
Haque and Another [2004] Supp. (5) S.C.R. 790 : (2005)
SCC (Cr.) 283; Deepak Gaba and Ors. vs State of Uttar
Pradesh and Another (2023) 3 SCC 423; Prof. R.K.
Vijayasarathy and Anr. vs Sudha Seetharam and Anr.
[2019] 2 SCR 185 : (2019) 16 SCC 739; Vijay Kumar
Ghai and Ors. vs State of West Bengal and Ors. [2022]
1 SCR 884 : (2022) 7 SCC 124; Dalip Kaur and Ors. vs
Jagnar Singh and Anr., [2009] 10 SCR 264 : (2009) 14
SCC 696; Birla Corporation Ltd. vs Adventz Investments
and Holdings Ltd. and Ors., [2019] 7 SCR 655 : (2019)
16 SCC 610; Smt Nagawwa vs Veeranna Shivalingappa
Konjalgi and Others [1976] 1 Suppl. SCR 123 : (1976) 3
SCC 736; Fiona Shrikhande vs State of Maharashtra and
Another, [2013] 9 SCR 240 : (2013) 14 SCC 44; Binod
Kumar and Ors. vs State of Bihar and Another, [2014]
11 SCR 85 : (2014) 10 SCC 663; Pepsi Foods Ltd. and
Anr. vs Special Judicial Magistrate and Ors., [1997] 5
Suppl. SCR 12 : (1998) 5 SCC 749 – referred to.
List of Acts
Code of Criminal Procedure, 1973; Penal Code, 1860.
List of Keywords
Commercial dispute; Criminal colour; Stage of issuing summons;
Duty of Magistrate; Quashing; Quashing of summons; Dishonest
misappropriation/conversion of material for personal use; Criminal
intimidation; Non-application of mind; Principal company not implicated.
[2024] 1 S.C.R. 1137
Sachin Garg v. State of U.P. and Anr.
Case Arising From
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.497
of 2024.
From the Judgment and Order dated 23.03.2023 of the High Court
of Judicature at Allahabad in A482 No.18603 of 2021.
Appearances for Parties
Mukul Rohatgi, Guru Krishna Kumar, Sr. Advs., Ms. Misha Rohatgi,
Sushil Shukla, Nakul Mohta, Ms. Alina Merin Mathew, Muthu
Thangathurai, Advs. for the Appellant.
Sarvesh Singh Baghel, Aviral Saxena, Arun Pratap Singh Rajawat,
Ms. Vanshaja Shukla, Ms. Divya Jyoti Singh, Ms. Ankeeta Appanna,
Manish Gupta, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Aniruddha Bose, J.
Leave granted.
2. The appellant, at the material point of time, stood posted as the
Head of factory of Exide Industries Limited (“EIL”), a corporate entity,
situated at Bawal, District Rewari, Haryana. The respondent no.2,
ran a proprietary concern, Ambika Gases. He was the supplier of
Dissolved Acetylene Gas (“DA Gas”), which is used for manufacturing
battery in the said factory. So far as the present appeal is concerned,
the dispute is over a purchase order issued for the supply of the said
item. The original purchase order dated 01.04.2019 was amended
twice on the basis of representations made by the respondent no.2.
The first amendment was made on 18.07.2019 by which the rate was
increased from Rs.1.55 per unit to Rs.1.65 per unit and the second
amendment was made on 20.12.2019 through which the rate per unit
was brought down to Rs.1.48 from Rs.1.65. An invoice was raised
by the respondent no.2 with the aforesaid rates for a total sum of
Rs.9,36,693.18/-. The dispute revolves around non-payment of the
said sum. However, it has been contended by the appellant that EIL,
after ascertaining the market price of DA Gas from other vendors,
by a letter dated 29.06.2020, reconciled the accounts by informing
respondent no.2 of what it claimed was foul play with respect to
1138 [2024] 1 S.C.R.
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revision of rates and appropriated the alleged illegal amounts claimed
by the vendor (respondent no.2) from the invoice.
3. The respondent no.2 instituted a complaint case in the Court of
the Chief Judicial Magistrate, Ghaziabad and the substance of the
complaint would be revealed from the following passages of the
petition of complaint (registered as Misc. Application No.317/2020):-
“….The Applicant through his aboenamed work do the job
work of D.A. Gas. Opposite Party Sachin Garg is posted
as Material Head of Exide Industries Ltd. situated at Plot
No. 179, Sector-3, Bawal, District- Rewari, Haryana and
Opposite Party Sachin Garg also used to issue Purchase
Order to the Applicant’s company on behalf of the Exide
Company and only the Opposite Party Sachin Garg used
to make payment of Job Work to the Applicant. Previously,
the Transaction of Opposite Party was normal with the
Applicant’s company and no problem was ever persisted
in the payment, due to which, the Applicant started trusting
on the Opposite Party and Company. Sachin Garg through
the aforesaid company in the capacity of Purchase Head,
issued Purchase Order to the Applicant’s Company, in
which, it was agreed between the Opposite Party and
Applicant to do job work @ Rs.1.65/- per piece w.e.f.
18.02.2019, which remained continued on the same rates
till December, 2019 and the Opposite Party was regularly
making the payment of job work to the Applicant on the
same rates. In the month of December, in pursuance of the
Purchase Order of Opposite Party, According to Purchase
No. 4800253593 dated 01.04.2019, done the job work of
Filled DA Gases HSN Code 290129910 quantity 3,07,114/-
pieces @ Rs.165 to the tune of Rs.5,06,738.10/-, and Filled
DA Gases H{SN Code 29012910 quantity 1,93,966/- pieces
@ Rs.1.48 per piece to the tune of Rs. 2,87,069.68/- and
18% GST to the tune of Rs.1,42,885.40/-0, in this manner
did the job work of total amount Rs.9,36,693.18/-. The
material Head of Opposite Company namely Sachin
Garg by admitting the job work done by the Applicant
vide Purchaser Order No. 4800253593 dated 01.04.2019,
and got done the job work according to the piece rate
quoted by the Applicant. On 03.07.2020, Applicant sent
[2024] 1 S.C.R. 1139
Sachin Garg v. State of U.P. and Anr.
Bill/Invoice No. AG.SR/20-21/01 dated 02.07.2020 of
Rs.9,36,693.18/- to the Material Head of Opposite Party
Company namely Sachin Garg through registered post
and also sent the aforesaid invoice through email on
14.07.2020, which were received by Opposite Party Sachin
Garg. Applicant repeatedly requested the Opposite Party
for payment through email, but, the Opposite Party did not
make payment of Rs.9,36,693.18/- of job work done by the
Applicant Company in the month of December, 2019 and
he by keeping the Applicant in dark, kept giving assurances
of making full payment. When, the Applicant put more
pressure on the Opposite Party for payment, then, Opposite
Party stopped to get done the job work from the Applicant
Company, and on 29.06.2020, sent a letter with quotation
to the Applicant Company, in which, the Opposite Party has
fixed the rate of job work done by the Applicant company
@ Rs.1.40/- per piece w.e.f. April, 2019, whereas, the job
work of Opposite Party was completed by the Applicant
Company in the month of December, 2019, in which,
Opposite Party on 20.12.2019, requested to change the
rate of job work at the rate of Rs.1.48/- per piece, which
was accepted by the Applicant w.e.f. 20.12.2019. In this
manner, after 20.12.2019, Rs.1.48/- per piece and prior
to that the rate of Rs.1.65/- per piece was payable by the
Opposite Party, but, the Opposite Party with intention to
cheat the Applicant in deliberate manner, and with intention
to cause financial loss to him and not to pay the money,
has committed criminal breach of trust with the Applicant,
which is a cognizable offence. On demanding money by
the Applicant, the Opposite Party is abusing him with filthy
language and threatening him to kill…..”
(quoted verbatim from the paperbook)
4. The learned Magistrate upon recording initial deposition of Saurabh
Sharma, the proprietor of the supplier firm and his father Padam
Kant Sharma issued summons for trial under Sections 406, 504 and
506 of the Indian Penal Code, 1860 (“1860 Code”) on 18.08.2021.
5. The appellant had approached the High Court at Allahabad under
Section 482 of Code of Criminal Procedure, 1973 (“the 1973 Code”)
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by filing, Criminal Miscellaneous Application No.18603/2021, for
quashing the said summons and also the complaint case itself. The
judgment of the High Court was delivered dismissing the application
filed by the appellant on 23.03.2023 and it is this judgment which
is under appeal before us. The main reason for dismissal of the
appellant’s quashing plea was that the subject-complaint involved
adjudication of disputed questions of fact. Referring to the judgments
of this Court in the cases of Neeharika Infrastructure Pvt. Ltd.
-vs- State of Maharashtra and Ors. [(2021) 19 SCC 401], R.P.
Kapur -vs- State of Punjab [AIR 1960 SC 866], State of Haryana
and Ors. -vs- Bhajan Lal and Ors. [1992 SCC (Cr.) 426], State of
Bihar and Anr. -vs- P. P. Sharma, IAS and Anr. [1992 SCC (Cr.)
192] and lastly Zandu Pharmaceutical Works Ltd. and Ors. -vsMohd. Sharaful Haque and Another [2005 SCC (Cr.) 283], the
High Court refrained from considering the defence of the accused.
6. In the case of Neeharika Infrastructure Ltd (supra), a three-judge
Bench of this Court examined the factors which were to be considered
by the High Court for quashing an F.I.R. at the threshold, relating to
factors which would apply to a proceeding which forms the subjectmatter of the present case. Referring to the judgment in the case
of R.P. Kapur (supra), principles for quashing were set down as:-
“10.1 The first case on the point which is required to be noticed
is the decision of this Court in the case ofc8R.P. Kapur (supra).
While dealing with the inherent powers of the High Court under
Section 561-A of the earlier Code (which is pari materia with
Section 482 of the Code), it is observed and held that the inherent
powers of the High Court under Section 561 of the earlier Code
cannot be exercised in regard to the matters specifically covered
by the other provisions of the Code; 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. After observing this, thereafter this Court
then carved out some exceptions to the above-stated rule,
which are as under:
[2024] 1 S.C.R. 1141
Sachin Garg v. State of U.P. and Anr.
“(i) Where it manifestly appears that there is a legal bar
against the institution or continuance of the criminal
proceeding in respect of the offence alleged. Absence
of the requisite sanction may, for instance, furnish
cases under this category.
(ii) 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 merely of
looking at the complaint or the first information report
to decide whether the offence alleged is disclosed
or not.
(iii) Where 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 the 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 Section
561-A the High Court would not embark upon an
enquiry 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
party 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.””
7. In the same decision (i.e. Neeharika Infrastructure Ltd.) (supra),
the seven-point edict laid down in the case of Bhajan Lal (supra)
was also referred to. These are:-
“102.(1) Where the allegations made in the first information
report or the complaint, even if they are taken at their
1142 [2024] 1 S.C.R.
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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.”
[2024] 1 S.C.R. 1143
Sachin Garg v. State of U.P. and Anr.
8. It was observed in the judgment under appeal that the applicant
has got the right of discharge which could be freely taken up by him
before the Trial Court. Mr. Mukul Rohatgi, learned senior counsel
has appeared in this matter on behalf of the appellant along with Mr.
Guru Krishna Kumar, while the case of respondent no.2 has been
argued by Ms. Divya Jyoti Singh. State was represented before
us by Mr. Sarvesh Singh Baghel. The main contentions urged by
Mr. Rohatgi is that the complaint made against the appellant does
not disclose any criminal offence and at best, it is a commercial
dispute, which ought to be determined by a Civil Court. In so far as
the allegations of commission of offence under Sections 405 and
406 are concerned, he has relied on a judgment of this Court in the
case of Deepak Gaba and Ors. -vs- State of Uttar Pradesh and
Another [(2023) 3 SCC 423]. This decision deals with the basic
ingredients of a complaint under Sections 405 and 406 of the 1860
Code and it has been held in this judgment:-
“15. For Section 405 IPC to be attracted, the following
have to be established:
(a) the accused was entrusted with property, or entrusted
with dominion over property;
(b) the accused had dishonestly misappropriated
or converted to their own use that property, or
dishonestly used or disposed of that property or
wilfully suffer any other person to do so; and
(c) such misappropriation, conversion, use or disposal
should be in violation of any direction of law prescribing
the mode in which such trust is to be discharged, or
of any legal contract which the person has made,
touching the discharge of such trust.”
9. The judgment in Deepak Gaba (supra) was delivered in a case
in which there was subsisting commercial relationship between
the parties and the complainant had made allegations of a forged
demand, for a sum of around rupees six and a half lakhs. On that
basis a summoning order was issued for trial under Section 406 of
the 1860 Code. A coordinate Bench of this Court held:-
“17. However, in the instant case, materials on record fail
to satisfy the ingredients of Section 405 IPC. The complaint
does not directly refer to the ingredients of Section 405IPC
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and does not state how and in what manner, on facts, the
requirements are satisfied. Pre-summoning evidence is
also lacking and suffers on this account. On these aspects,
the summoning order is equally quiet, albeit, it states that
“a forged demand of Rs 6,37,252.16p had been raised by
JIPL, which demand is not due in terms of statements by
Shubhankar P. Tomar and Sakshi Tilak Chand”. A mere
wrong demand or claim would not meet the conditions
specified by Section 405IPC in the absence of evidence
to establish entrustment, dishonest misappropriation,
conversion, use or disposal, which action should be in
violation of any direction of law, or legal contract touching
the discharge of trust. Hence, even if Respondent 2
complainant is of the opinion that the monetary demand
or claim is incorrect and not payable, given the failure to
prove the requirements of Section 405 IPC, an offence
under the same section is not constituted. In the absence
of factual allegations which satisfy the ingredients of the
offence under Section 405IPC, a mere dispute on monetary
demand of Rs 6,37,252.16p, does not attract criminal
prosecution under Section 406IPC.”
10. The same view was expressed by this Court in the cases of Prof.
R.K. Vijayasarathy and Anr. -vs- Sudha Seetharam and Anr.
[(2019) 16 SCC 739] and Vijay Kumar Ghai and Ors. -vs- State
of West Bengal and Ors. [(2022) 7 SCC 124]. The judgment of
this Court in the case of Dalip Kaur and Ors. -vs- Jagnar Singh
and Anr. [(2009) 14 SCC 696] has also been cited in support of the
appellant’s case and in this decision it has been, inter-alia, held:-
“10. The High Court, therefore, should have posed a
question as to whether any act of inducement on the part
of the appellant has been raised by the second respondent
and whether the appellant had an intention to cheat him
from the very inception. If the dispute between the parties
was essentially a civil dispute resulting from a breach of
contract on the part of the appellants by non-refunding
the amount of advance the same would not constitute an
offence of cheating. Similar is the legal position in respect
of an offence of criminal breach of trust having regard to
its definition contained in Section 405 of the Penal Code.”
[2024] 1 S.C.R. 1145
Sachin Garg v. State of U.P. and Anr.
This goes for allegations relating to Section 406 of the 1860 Code.
11. So far as the allegations of commission of offence under Sections 504
and 506 of the 1860 Code are concerned, we have gone through the
petition of complaint as well as the initial depositions. The allegations
pertaining to the aforesaid provisions of the 1860 Code surfaces in
the last portion of the petition of complaint. The complainant, in his
initial deposition has not made any statement relatable to criminal
intimidation. But his father made the following statement at that stage
under Section 202 of the 1973 Code:-
“…With effect from 18.07.2019, the Opposite Party
had fixed rate of job work as Rs.1.65/- per piece with
the company of my son, which remained continued till
December, 2019 and Opposite Party used to make payment
of job work to my son, also on this rate and an amount of
Rs. 9,36,693.18/- of my son was due for payment on the
Opposite Party, due to which, he demanded the Opposite
Party to make payment, but, Opposite Party did not make
payment and after doing calculation on less rates, he said
that no amount is due for payment and on demanding
money, the Opposite Party has abused my son with filthy
language and has threatened him to kill. An amount of
Rs. 9,36,693.18/- of my son is due for payment on the
Opposite Party, which he clearly refused to pay the same.”
(quoted verbatim from paperbook)
12. On behalf of the complainant, it has been urged that a detailed
description of the offending acts need not be disclosed at the stage
at which the appellant wants invalidation of the complaint. He has
drawn our attention to the judgment of this Court in the case of
Jagdish Ram -vs- State of Rajasthan and Another [(2004) 4 SCC
432]. In this judgment it has been, inter-alia, held:-
“10…. It is well settled that notwithstanding the opinion of
the police, a Magistrate is empowered to take cognizance
if the material on record makes out a case for the said
purpose. The investigation is the exclusive domain of the
police. The taking of cognizance of the offence is an area
exclusively within the domain of a Magistrate. At this stage,
the Magistrate has to be satisfied whether there is sufficient
1146 [2024] 1 S.C.R.
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ground for proceeding and not whether there is sufficient
ground for conviction. Whether the evidence is adequate
for supporting the conviction, can be determined only at
the trial and not at the stage of inquiry. At the stage of
issuing the process to the accused, the Magistrate is not
required to record reasons.”
Similar views have been expressed by this Court in the case of Birla
Corporation Ltd. -vs- Adventz Investments and Holdings Ltd.
and Ors. [(2019) 16 SCC 610] as also Smt Nagawwa -vs-Veeranna
Shivalingappa Konjalgi and Others [(1976) 3 SCC 736].
13. As far as the allegations of criminal intimidation are concerned, our
attention has been drawn to the judgment of this Court in the case
of Fiona Shrikhande -vs- State of Maharashtra and Another
[(2013) 14 SCC 44]. It has been held in this case that the petition
of complaint need not repeat the actual words or language of insult
word by word and the complaint has to be read as a whole. If the
Magistrate comes to a conclusion, prima facie, that there has been
an intentional insult so as to provoke any person to break the public
peace or to commit any other offence it should be sufficient to bring
the complaint within the ambit of the aforesaid provision. It has also
been argued on behalf of the respondent no.2 that the appellant in
any event has got the right to apply for discharge and the petition
of complaint does not suffer from the defect of not having made out
any offence at all. This was the view taken by the High Court.
14. Past commercial relationship between the appellant’s employer and
the respondent no.2 is admitted. It would also be evident from the
petition of complaint the dispute between the parties centred around
the rate at which the assigned work was to be done. Neither in the
petition of complainant nor in the initial deposition of the two witnesses
(that includes the complainant) the ingredients of the offence under
Section 405 of the 1860 Code surfaced. Such commercial disputes
over variation of rate cannot per se give rise to an offence under
Section 405 of the 1860 Code without presence of any aggravating
factor leading to the substantiation of its ingredients. We do not find
any material to come to a prima facie finding that there was dishonest
misappropriation or conversion of any material for the personal use of
the appellant in relation to gas supplying work done by the respondent
no.2. The said work was done in course of regular commercial
transactions. It cannot be said that there was misappropriation
[2024] 1 S.C.R. 1147
Sachin Garg v. State of U.P. and Anr.
or conversion of the subject property, being dissolved acetylene
gas which was supplied to the factory for the purpose of battery
manufacturing at EIL. The dispute pertains to the revision of rate per
unit in an ongoing commercial transaction. What has emerged from
the petition of complaint and the initial deposition made in support
thereof that the accused-appellant wanted a rate variation and the
entire dispute arose out of such stand of the appellant. On the basis
of these materials, it cannot be said that there was evidence for
commission of offence under Section 405/406. The High Court also
did not apply the test formulated in the case of Dalip Kaur (supra).
We have narrated the relevant passage from that decision earlier.
15. In the case of Binod Kumar and Ors. -vs- State of Bihar and
Another [(2014) 10 SCC 663], a coordinate Bench of this Court
dealt with a criminal complaint arising out of retention of bill amount
in course of commercial transaction. The Court found essential
ingredients of criminal breach of trust or dishonest intention of
inducement, which formed the foundation of the complaint were
missing. The High Court’s judgment rejecting the plea for quashing
the criminal proceeding was set aside by this Court. The reasoning for
quashing the criminal proceeding would be revealed from paragraphs
18 and 19 of the Report, which reads:-
“18. In the present case, looking at the allegations in the
complaint on the face of it, we find that no allegations
are made attracting the ingredients of Section 405 IPC.
Likewise, there are no allegations as to cheating or the
dishonest intention of the appellants in retaining the
money in order to have wrongful gain to themselves or
causing wrongful loss to the complainant. Excepting the
bald allegations that the appellants did not make payment
to the second respondent and that the appellants utilised
the amounts either by themselves or for some other work,
there is no iota of allegation as to the dishonest intention
in misappropriating the property. To make out a case of
criminal breach of trust, it is not sufficient to show that
money has been retained by the appellants. It must also
be shown that the appellants dishonestly disposed of the
same in some way or dishonestly retained the same. The
mere fact that the appellants did not pay the money to the
complainant does not amount to criminal breach of trust.
1148 [2024] 1 S.C.R.
Digital Supreme Court Reports
19. Even if all the allegations in the complaint taken at
the face value are true, in our view, the basic essential
ingredients of dishonest misappropriation and cheating
are missing. Criminal proceedings are not a shortcut for
other remedies. Since no case of criminal breach of trust
or dishonest intention of inducement is made out and the
essential ingredients of Sections 405/420 IPC are missing,
the prosecution of the appellants under Sections 406/120-
B IPC, is liable to be quashed.”
16. So far as the criminal complaint and the initial depositions with which
we are concerned in this case, the factual basis is broadly similar.
We have reproduced these materials earlier in this judgment. We do
not find they carry the ingredients of offence as specified in Section
405 of the 1860 Code.
17. The allegation of criminal intimidation against the accused is made
in the complaint statements made by the appellant, no particulars
thereof have been given. Both in the complaint petition and the
initial deposition of one of the witnesses, there is only reproduction
of part of the statutory provision giving rise to the offence of criminal
intimidation. This would constitute a mere bald allegation, short of any
particulars as regards to the manner in which threat was conveyed.
18. While it is true that at the stage of issuing summons a magistrate only
needs to be satisfied with a prima facie case for taking cognizance,
the duty of the magistrate is also to be satisfied whether there is
sufficient ground for proceeding, as has been held in the case of
Jagdish Ram (supra). The same proposition of law has been laid
down in the case of Pepsi Foods Ltd. and Anr. -vs- Special Judicial
Magistrate and Ors. [(1998) 5 SCC 749]. The learned Magistrate’s
order issuing summons records the background of the case in rather
longish detail but reflects his satisfaction in a cryptic manner. At the
stage of issue of summons, detailed reasoning as to why a Magistrate
is issuing summons, however, is not necessary. But in this case, we
are satisfied that the allegations made by the complainant do not
give rise to the offences for which the appellant has been summoned
for trial. A commercial dispute, which ought to have been resolved
through the forum of Civil Court has been given criminal colour by
lifting from the penal code certain words or phrases and implanting
them in a criminal complaint. The learned Magistrate here failed to
[2024] 1 S.C.R. 1149
Sachin Garg v. State of U.P. and Anr.
apply his mind in issuing summons and the High Court also failed
to exercise its jurisdiction under Section 482 of the 1973 Code to
prevent abuse of the power of the Criminal Court.
19. It is true that the appellant could seek discharge in course of the
proceeding itself before the concerned Court, but here we find that
no case at all has been made out that would justify invoking the
machinery of the Criminal Courts. The dispute, per se, is commercial
in nature having no element of criminality.
20. The appellant also wanted dismissal of the complaint and the orders
passed in ensuing proceeding on another ground. The respondent
no. 2’s allegations were against EIL, for whom he did the job-work.
The appellant’s argument on this point is that the complaint should
not have been entertained without arraigning the principal company
as an accused. The judgment relied upon on this point is a decision
of a Coordinate Bench in the case of Sharad Kumar Sanghi -vsSangita Rane [(2015) 12 SCC 781]. This was a case where complaint
was made by a consumer for being sold a damaged vehicle under
Section 420 of the 1860 Code. But arraigned as accused was the
managing director of the dealer, the latter being a corporate entity.
Cognizance was taken in that case and summons were issued. The
accused failed to get relief after invoking the High Court’s jurisdiction,
but two-judge Bench of this Court quashed the proceeding primarily
on the ground that the company was not made an accused. The
Coordinate Bench found that the allegations were made against
the company, which was not made a party. Allegations against the
accused (managing director of that company) were vague. So far the
present case is concerned, the ratio of the decision in the case of
Sharad Kumar Sanghi (supra) would not be applicable for ousting
the complaint at the threshold on this ground alone. The perceived
wrongdoing in this case has been attributed to the appellant, though
the complaint petition acknowledges that the job-work was being
done for EIL. Moreover, the allegation of criminal intimidation is
against the appellant directly – whatever be the value or quality of
such allegations. Thus, for that reason the complaint case cannot be
rejected at the nascent stage on the sole ground of not implicating the
company. But as otherwise we have given our reasons for quashing
the complaint and the summons, we do not find any reason to dilate
further on this point.
1150 [2024] 1 S.C.R.
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21. We accordingly set aside the impugned judgment and quash the
Criminal Complaint Case No.7990 of 2020 as also the summoning
order issued on 18.08.2021. The appeal stands allowed in the above
terms. All consequential steps in connection with the said proceeding
shall stand quashed.
Headnotes prepared by: Divya Pandey Result of the case: Appeal allowed.
