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Monday, January 22, 2018

UNION TERRITORY, CHANDIGARH ADMINISTRATION AND ORS. …Appellants Versus PRADEEP KUMAR AND ANOTHER ...Respondents - whether the candidature of the respondents who had disclosed their involvement in the criminal cases and also their acquittal could be cancelled by the Screening Committee on the ground that they are not suitable for the post of constable in Chandigarh Police and whether the court can substitute its views for the decision taken by the Screening Committee. Since the facts and issues are almost identical in all these appeals, they were heard together and shall stand disposed of by this common judgment = As held in Mehar Singh case, the decision of the Screening Committee must be taken as final unless it is mala fide.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 67 OF 2018
(Arising out of SLP(C) No.20750 of 2016)
UNION TERRITORY, CHANDIGARH
ADMINISTRATION AND ORS. …Appellants
Versus
PRADEEP KUMAR AND ANOTHER ...Respondents
WITH
CIVIL APPEAL NO. 68 OF 2018
(Arising out of SLP(C) No.23855 of 2016)
WITH
CIVIL APPEAL NO.69 OF 2018
(Arising out of SLP(C) No.23726 of 2016)
WITH
CIVIL APPEAL NO. 70 OF 2018
(Arising out of SLP(C) No.8905 of 2017)
J U D G M E N T
R. BANUMATHI, J.
Leave granted
2. The question involved in these appeals is whether the
candidature of the respondents who had disclosed their
involvement in the criminal cases and also their acquittal
could be cancelled by the Screening Committee on the ground
Page No. 1 of 15
that they are not suitable for the post of constable in
Chandigarh Police and whether the court can substitute its
views for the decision taken by the Screening Committee.
Since the facts and issues are almost identical in all these
appeals, they were heard together and shall stand disposed of
by this common judgment. For convenience, we would deal
with the facts in appeal arising out of SLP(C) No. 20750 of
2016
3. On 14.03.2010, an advertisement was issued by UT
Chandigarh Police through its Deputy Inspector General of
Police inviting applications from the candidates to fill up 1200
temporary posts of Constable (Executive) in Chandigarh Police
with essential qualification as prescribed in the advertisement
with instructions for filling online application form. The
recruitment was to be done as per guidelines thereon as well
as standing order governing the recruitment of constables.
Guideline No.2(A)(a) deals with the circumstances when the
candidate does not disclose the factum of his involvement in
the attestation form and the same is found subsequently from
the verification report. The candidature of such candidates
Page No. 2 of 15
will be cancelled as per aforesaid guideline without making
any reference to any Committee for further probe into the
conduct of the candidate. In Guideline No.2(A)(b), it is
prescribed that if a candidate has disclosed his involvement in
some criminal case in the attestation form, then such case will
be referred to Screening Committee to assess his suitability
for appointment in Chandigarh Police irrespective of the fact
that the case is under investigation, trial or resulted in
conviction or acquittal.
4. Respondents were declared successful in the recruitment
for the post of Constable (Executive) in Chandigarh Police
after clearing the Physical Efficiency Test, Physical
Measurement Test, written test and interview. However, the
respondents were denied the employment on the ground that
the respondents had been prosecuted in a criminal trial for
the offences under Section 323 IPC and Section 506 read with
Section 34 IPC and were acquitted by the trial court vide
judgment dated 29.01.2010 giving them benefit of doubt. The
case was referred to the Committee headed by Senior
Superintendent of Police and it was found that the
Page No. 3 of 15
respondents were not suitable for appointment as Constables
in the Chandigarh Police.
5. Aggrieved, respondents filed OA before CAT. CAT vide
order dated 24.07.2012 allowed the OA and set aside the
orders of the Screening Committee and directed the
competent authority to consider the names of the
respondents for appointment to the post of Constable. The
State filed writ petition before the High Court which came to
be dismissed for all the respondents except Ombir holding
that there was no concealment of criminal antecedents. Being
aggrieved, the State has preferred these appeals.
6. Contention of the appellant is that acquittal of a person
does not entitle him to be appointed as a matter of right and
the appointing authority may still find such a person unfit to
be appointed to the post. It was urged by the appellant that
even though the respondents were acquitted in the criminal
case, the appointment of the respondents to the post of
Constable in Chandigarh police which is a disciplined force,
was found not desirable by the appointing authority. It was
submitted that the respondents were not honourably
Page No. 4 of 15
acquitted of the offences and the acquittal was only based on
the extension of benefit of doubt. Contention of the appellant
is that the post of Constable in disciplinary force demands an
impeccable integrity and track record besides good character
and suitability. Further contention is that the court cannot
overreach the jurisdiction of the Screening Committee by
substituting its own view in the decision of the said
Committee and hence, the impugned judgment of the High
Court and the Tribunal is not sustainable.
7. Per contra, contention of the respondents is that the
criminal case against the respondents was a case of 'no
evidence' and the acquittal of the respondents is an
honourable acquittal and the same cannot be termed to be
the case of 'benefit of doubt'. Moreover, respondents had
fairly disclosed the factum of facing criminal trial by giving
complete details while applying for the job and there was no
suppression on the part of the respondents. On behalf of the
respondents, much reliance was placed upon Joginder Singh v.
Union Territory of Chandigarh and others (2015) 2 SCC 377.
Page No. 5 of 15
8. On the basis of the aforesaid rival contentions urged on
behalf of both the parties, the following points arise for
consideration:-
(i) Whether the contention of respondents that they
were honourably acquitted and that they should not be
deprived of being appointed to the post of Constable is
acceptable?
(ii) Whether the High Court was right in setting aside the
decision of the Screening Committee and directing the
authorities to consider the respondents to the post of
Constable in the disciplined police force?
9. On 23.06.2010, the Inspector General of police, UT
Chandigarh issued Standing Order No.44 of 2010 laying down
the guidelines to consider cases of candidates selected in
Chandigarh Police on having found involvement in criminal
cases in the past. This standing order deals with the cases of
candidates before issuance of appointment and after issuance
of appointment and joining. Relevant portion of the said
Guidelines reads as under:-
"GUIDELINES
(A) CASES BEFORE ISSUE OF APPOINTMENT
(a) The candidature will be cancelled in case the candidate
does not disclose the fact of his involvement and/or
arrest in criminal case(s), complaint case(s), preventive
proceedings etc. in the attestation form and the fact is
subsequently found out from any verification report
Page No. 6 of 15
received from the District authorities or for any/other
source.
(b) If a candidate has disclosed his involvement and/or
arrest in criminal cases(s), complaint case(s),
preventive proceedings etc. the case will be referred to
the Screening Committee to assess his suitability for
appointment in Chandigarh Police irrespective of the
fact that the case is under investigation, trial or
decided in conviction or acquittal.
........."
In Guideline 2(A)(b), it is prescribed that if a candidate has
disclosed his involvement in some criminal case in the
attestation form then such case will be referred to Screening
Committee to assess his suitability for appointment in
Chandigarh Police irrespective of the fact that the case is
under investigation, trial or decided in conviction or acquittal.
In the present case, in all the cases of respondents, the
aforesaid situation arises. On noticing the acquittal of the
candidates, the cases of respondents were referred to
Screening Committee. The Screening Committee carefully
examined the cases of the respondents and the reasonings for
their acquittal and the candidature of the respondents were
rejected finding them not suitable.
10. The acquittal in a criminal case is not conclusive of the
suitability of the candidates in the concerned post. If a person
Page No. 7 of 15
is acquitted or discharged, it cannot always be inferred that
he was falsely involved or he had no criminal antecedents.
Unless it is an honourable acquittal, the candidate cannot
claim the benefit of the case. What is honourable acquittal,
was considered by this Court in Deputy Inspector General of
Police and Another v. S. Samuthiram (2013) 1 SCC 598, in
which this Court held as under:-
"24. The meaning of the expression “honourable acquittal”
came up for consideration before this Court in RBI v.
Bhopal Singh Panchal (1994) 1 SCC 541. In that case, this
Court has considered the impact of Regulation 46(4)
dealing with honourable acquittal by a criminal court on
the disciplinary proceedings. In that context, this Court
held that the mere acquittal does not entitle an employee
to reinstatement in service, the acquittal, it was held, has
to be honourable. The expressions “honourable acquittal”,
“acquitted of blame”, “fully exonerated” are unknown to
the Code of Criminal Procedure or the Penal Code, which
are coined by judicial pronouncements. It is difficult to
define precisely what is meant by the expression
“honourably acquitted”. When the accused is acquitted
after full consideration of prosecution evidence and that
the prosecution had miserably failed to prove the charges
levelled against the accused, it can possibly be said that
the accused was honourably acquitted."
11. Entering into the police service required a candidate to
be of good character, integrity and clean antecedents. In
Commissioner of Police, New Delhi and Another v. Mehar
Singh (2013) 7 SCC 685, the respondent was acquitted
based on the compromise. This Court held that even though
Page No. 8 of 15
acquittal was based on compromise, it is still open to the
Screening Committee to examine the suitability of the
candidate and take a decision. Emphasizing upon the
importance of character and integrity required for joining
police force/discipline force, in Mehar Singh case, this Court
held as under:-
"23. A careful perusal of the policy leads us to conclude
that the Screening Committee would be entitled to keep
persons involved in grave cases of moral turpitude out of
the police force even if they are acquitted or discharged if
it feels that the acquittal or discharge is on technical
grounds or not honourable. The Screening Committee will
be within its rights to cancel the candidature of a candidate
if it finds that the acquittal is based on some serious flaw in
the conduct of the prosecution case or is the result of
material witnesses turning hostile. It is only experienced
officers of the Screening Committee who will be able to
judge whether the acquitted or discharged candidate is
likely to revert to similar activities in future with more
strength and vigour, if appointed, to the post in a police
force. The Screening Committee will have to consider the
nature and extent of such person’s involvement in the
crime and his propensity of becoming a cause for
worsening the law and order situation rather than
maintaining it. In our opinion, this policy framed by the
Delhi Police does not merit any interference from this Court
as its object appears to be to ensure that only persons with
impeccable character enter the police force.
24. We find no substance in the contention that by
cancelling the respondents’ candidature, the Screening
Committee has overreached the judgments of the criminal
court. We are aware that the question of co-relation
between a criminal case and a departmental enquiry does
not directly arise here, but, support can be drawn from the
principles laid down by this Court in connection with it
because the issue involved is somewhat identical, namely,
whether to allow a person with doubtful integrity to work in
the department. While the standard of proof in a criminal
Page No. 9 of 15
case is the proof beyond all reasonable doubt, the proof in
a departmental proceeding is preponderance of
probabilities. Quite often criminal cases end in acquittal
because witnesses turn hostile. Such acquittals are not
acquittals on merit. An acquittal based on benefit of doubt
would not stand on a par with a clean acquittal on merit
after a full-fledged trial, where there is no indication of the
witnesses being won over. In R.P. Kapur v. Union of India
AIR 1964 SC 787 this Court has taken a view that
departmental proceedings can proceed even though a
person is acquitted when the acquittal is other than
honourable.
25. The expression “honourable acquittal” was considered
by this Court in S. Samuthiram (2013) 1 SCC 598. In that
case this Court was concerned with a situation where
disciplinary proceedings were initiated against a police
officer. Criminal case was pending against him under
Section 509 IPC and under Section 4 of the Eve-Teasing Act.
He was acquitted in that case because of the
non-examination of key witnesses. There was a serious
flaw in the conduct of the criminal case. Two material
witnesses turned hostile. Referring to the judgment of this
Court in RBI v. Bhopal Singh Panchal (1994) 1 SCC 541,
where in somewhat similar fact situation, this Court upheld
a bank’s action of refusing to reinstate an employee in
service on the ground that in the criminal case he was
acquitted by giving him benefit of doubt and, therefore, it
was not an honourable acquittal, this Court held that the
High Court was not justified in setting aside the
punishment imposed in the departmental proceedings. This
Court observed that the expressions “honourable
acquittal”, “acquitted of blame” and “fully exonerated” are
unknown to the Criminal Procedure Code or the Penal
Code. They are coined by judicial pronouncements. It is
difficult to define what is meant by the expression
“honourably acquitted”. This Court expressed that when
the accused is acquitted after full consideration of the
prosecution case and the prosecution miserably fails to
prove the charges levelled against the accused, it can
possibly be said that the accused was honourably
acquitted.
................
33. So far as respondent Mehar Singh is concerned, his
case appears to have been compromised. It was urged that
acquittal recorded pursuant to a compromise should not be
Page No. 10 of 15
treated as a disqualification because that will frustrate the
purpose of the Legal Services Authorities Act, 1987. We see
no merit in this submission. Compromises or settlements
have to be encouraged to bring about peaceful and
amiable atmosphere in the society by according a quietus
to disputes. They have to be encouraged also to reduce
arrears of cases and save the litigants from the agony of
pending litigation. But these considerations cannot be
brought in here. In order to maintain integrity and high
standard of police force, the Screening Committee may
decline to take cognizance of a compromise, if it appears to
it to be dubious. The Screening Committee cannot be
faulted for that.
...............
35. The police force is a disciplined force. It shoulders the
great responsibility of maintaining law and order and public
order in the society. People repose great faith and
confidence in it. It must be worthy of that confidence. A
candidate wishing to join the police force must be a person
of utmost rectitude. He must have impeccable character
and integrity. A person having criminal antecedents will not
fit in this category. Even if he is acquitted or discharged in
the criminal case, that acquittal or discharge order will
have to be examined to see whether he has been
completely exonerated in the case because even a
possibility of his taking to the life of crimes poses a threat
to the discipline of the police force. The Standing Order,
therefore, has entrusted the task of taking decisions in
these matters to the Screening Committee. The decision of
the Screening Committee must be taken as final unless it is
mala fide. In recent times, the image of the police force is
tarnished. Instances of police personnel behaving in a
wayward manner by misusing power are in public domain
and are a matter of concern. The reputation of the police
force has taken a beating. In such a situation, we would not
like to dilute the importance and efficacy of a mechanism
like the Screening Committee created by the Delhi Police to
ensure that persons who are likely to erode its credibility
do not enter the police force. At the same time, the
Screening Committee must be alive to the importance of
the trust reposed in it and must treat all candidates with an
even hand."
Page No. 11 of 15
The same principle was reiterated in State of Madhya Pradesh
and Others v. Parvez Khan (2015) 2 SCC 591.
12. While considering the question of suppression of relevant
information or false information in regard to criminal
prosecution, arrest or pendency of criminal case(s) against the
candidate, in Avtar Singh v. Union of India and Others (2016)
8 SCC 471, three-Judges Bench of this Court summarized the
conclusion in para (38). As per the said decision in para
(38.5), "In a case where the employee has made declaration
truthfully of a concluded criminal case, the employer still has
the right to consider antecedents, and cannot be compelled to
appoint the candidate."
13. It is thus well settled that acquittal in a criminal case
does not automatically entitle him for appointment to the
post. Still it is open to the employer to consider the
antecedents and examine whether he is suitable for
appointment to the post. From the observations of this Court
in Mehar Singh and Parvez Khan cases, it is clear that a
candidate to be recruited to the police service must be of
impeccable character and integrity. A person having criminal
Page No. 12 of 15
antecedents will not fit in this category. Even if he is
acquitted or discharged, it cannot be presumed that he was
honourably acquitted/completely exonerated. The decision of
the Screening Committee must be taken as final unless it is
shown to be mala fide. The Screening Committee also must
be alive to the importance of the trust repose in it and must
examine the candidate with utmost character.
14. In the case in hand, the details of the criminal cases in
which the respondents were involved and the reasonings for
their acquittal and the consideration by the Screening
Committee are as under:-
Party
Name/
SLP No.
Allegations Reasons for acquittal Consideration
by the
Screening
Committee
Pradeep
Kumar
SLP(C)
No.
20750/16
• FIR under
Sections 148,
149, 323 and
506 IPC.
• Appeared
outside the
class room of
the
complainant
therein along
with other
people.
• Carrying lathis
and axe and
started
beating the
complainant
and other
persons of his
• PW-1
(complainant) and
PW-2 turned
hostile and denied
all the contents of
complaint.
• Witnesses
admitted their
signature on
complaint but
said that they
were obtained on
blank papers.
• IO did not appear.
• Therefore the trial
was closed as no
useful purpose
could be served
by examining the
• Accused
acquitted
because
star
witnesses
turned
hostile and
thus
accused got
benefit of
doubt.
• Appears
that
witnesses
have been
won over.
• Accused 19
years age
at the time
Page No. 13 of 15
village. remaining
witnesses.
of
commission
of offence.
Narender
Kumar
SLP (C)
No.20750
/16
• FIR under
Sections 148,
149, 323 and
506 IPC.
• Appeared
outside the
class room of
the
complainant
therein along
with other
people.
• Carrying lathis
and axe and
started
beating the
complainant
and other
persons of his
village.
• PW1
(complainant) and
PW2 turned
hostile and denied
all the contents of
complaint.
• Witnesses
admitted their
signature on
complaint but
said that they
were obtained on
blank papers.
• IO did not appear.
• Therefore the trial
was closed as no
useful purpose
could be served
by examining the
remaining
witnesses.
• Accused
acquitted
because
star
witnesses
turned
hostile and
thus
accused got
benefit of
doubt.
• Appears
that
witnesses
have been
won over.
• Accused 21
years age
at the time
of
commission
of offence.
Party
Name/
SLP No.
Allegations Reasons for acquittal Consideration
by the
Screening
Committee
Ajay
Kumar
SLP (C)
No.23855
/16
• FIR under
Sections 323,
307 and 34
IPC.
• Inflicted
severe injuries
to the sons of
the
complainant
by inflicting
blows with
hockey sticks
and kicks and
fist blows to
them.
• Delay of four days
in lodging the
complaint.
• Prosecution could
not come out with
clear motive.
• Two witnesses
were withheld by
the prosecution.
• Benefit of doubt
given to the
accused.
• Ajay Kumar
has been
involved in
commission
of heinous
bodily
injury.
• Acquitted
on the basis
of benefit of
doubt.
Paramjee
t Singh
SLP
(C)No.237
26/16
• FIR under
Sections 323
and 506 IPC.
• Appeared at a
satsang along
with other
accused.
Started
• Complainant/solit
ary eye witness
admitted the
evidence but
denied the
involvement of
accused.
• Stated that
• Accused
acquitted
as the
solitary eye
witness
turned
hostile.
• Considered
Page No. 14 of 15
creating
hindrance in
the same and
thereafter
upon the
complainant.
• Trying to stop
him gave knife
blows to the
complainant.
• Caused injury
to other
persons with
iron rod.
• Threatened to
kill the
persons with a
pistol.
assailants were
unidentified
persons.
• Stated his
signatures were
obtained by police
on blank papers.
the same to
be a case of
benefit of
doubt.
Ombir
SLP(C)
No.8905/
17
• FIR under
Sections 323,
354, 506/34
IPC.
• Allegation is
that Ombir
along with
other
co-accused
persons in
furtherance of
their common
intention
outraged the
modesty of
one Sudesh
(complainant).
• Caused hurt to
her, after
which the
complainant
was admitted
in the hospital.
• The complainant
and one Pradeep
(PW2) has turned
hostile and
therefore
prosecution
evidence was
closed and the
accused
acquitted.
• The
accused
was
acquitted
as the
complainan
t did not
support the
case of the
prosecution
.
• The
accused
has
committed
offence of
outraging
modesty of
woman and
has been
acquitted
on the
benefit of
doubt.
Page No. 15 of 15
15. From the above details, we find that the Screening
Committee examined each and every case of the respondents
and reasonings for their acquittal and taken the decision.
While deciding whether a person involved in a criminal case
has been acquitted or discharged should be appointed to a
post in a police force, nature of offence in which he is
involved, whether it was an honourable acquittal or only an
extension of benefit of doubt because of witnesses turned
hostile and flaws in the prosecution are all the aspects to be
considered by the Screening Committee for taking the
decision whether the candidate is suitable for the post. As
pointed out earlier, the Screening Committee examined each
and every case and reasonings for their acquittal and took
decision that the respondents are not suitable for the post of
Constable in Chandigarh Police. The procedure followed is as
per guideline 2(A)(b) and object of such screening is to ensure
that only persons with impeccable character enters police
force. While so, the court cannot substitute its views for the
decision of the Screening Committee.
Page No. 16 of 15
16. On behalf of the respondents, much reliance was placed
upon Joginder Singh v. Union Territory of Chandigarh and
Others (2015) 2 SCC 377. In the said case, the appellant
thereon was charged under Sections 148, 149, 323, 325 and
307 IPC but acquitted by the trial court holding that the
prosecution has failed to prove the charges levelled against
him since complainant as well as injured eye witnesses failed
to identify the assailants and the complainant had stated that
his signature was obtained on a blank sheet by the
Investigating Officer. The case involved was a family dispute.
In such facts and circumstances, this Court held that acquittal
of appellant Joginder Singh was an honourable acquittal and
hence, he should not be denied appointment to the post in
question. The decision in Joginder Singh case does not
advance the case of the respondents herein.
17. In a catena of judgments, the importance of integrity and
high standard of conduct in police force has been emphasized.
As held in Mehar Singh case, the decision of the Screening
Committee must be taken as final unless it is mala fide. In the
case in hand, there is nothing to suggest that the decision of
Page No. 17 of 15
the Screening Committee is mala fide. The decision of the
Screening Committee that the respondents are not suitable
for being appointed to the post of Constable does not call for
interference. The Tribunal and the High Court, in our view,
erred in setting aside the decision of the Screening Committee
and the impugned judgment is liable to be set aside.
18. In the result, the impugned judgment is set aside and the
appeals are allowed. The cancellation of candidature of the
respondents is upheld. No costs.
…....………………………..J.
 (R. BANUMATHI)
…....………………………..J.
 (UDAY UMESH LALIT)
New Delhi;
January 08, 2018
Page No. 18 of 15

though general reference to an earlier contract is not sufficient for incorporation of an arbitration clause in the later contract, a general reference to a standard form would be enough for incorporation of the arbitration clause.In view of the development of law after the judgment in M.R. Engineers’ case, we are of the opinion that a general reference to a consensual standard form is sufficient for incorporation of an arbitration clause. = M/S. INOX WIND LTD. .... Appellant Versus M/S THERMOCABLES LTD. .... Respondent

Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL No . 19 of2018
(Arising out of SLP (Civil) No.31049 of 2016)
M/S. INOX WIND LTD.
.... Appellant
Versus
M/S THERMOCABLES LTD. .... Respondent
J U D G M E N T
L. NAGESWARA RAO, J.
Leave granted.
2. This appeal is directed against the judgment of the High Court
of Judicature at Allahabad dismissing the application filed by the
Appellant under Section 11 (6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as ‘the Act’).
3. The Appellant is a manufacturer of wind turbine generators (WTGs).
The Respondent is engaged in the business of manufacture of wind
power cables and other types of cables. Two purchase orders dated
13.12.2012 and 02.02.2013 were issued by the Appellant to the
Respondent for supply of cables for their WTGs. According to the
Purchase Order, the supply was to be
according to the terms mentioned in the order and the Standard
Terms and Conditions that were attached thereto. Apart from the
1 | P a g e
other conditions, the Standard Terms and Conditions contain a
clause pertaining to dispute resolution. The said clause provides for
a dispute to be resolved by a sole arbitrator in accordance with the
provisions of the Arbitration and Conciliation Act, 1996. The material
on record indicates that the Respondent accepted all the terms and
conditions mentioned in the Purchase Order except the delivery
period as is evident from a letter dated 15.12.2012.
4. The Respondent, pursuant to the Purchase Order, supplied wind
power cables to the Appellant. While laying the cables supplied by
the Respondent-company, the Appellant discovered that the outer
sheaths of the cables of 150 sq. mm. were cracked. This forced
them to stop the WTGs so as to avert damage to expensive
equipment. According to the Appellant, the Respondent-company
did not replace the cables. The Appellant, therefore, was
constrained to issue a notice dated 30.10.2014 proposing the name
of a sole arbitrator in terms of the Standard Terms and Conditions.
In the absence of any response, the Appellant moved the High Court
of Judicature at Allahabad by filing an application under Section 11
(6) of the Act.
5. The High Court dismissed the said application by holding that an
arbitrator cannot be appointed as the Appellant did not prove the
existence of an arbitration agreement. The High Court relied upon
the judgment of this Court in M.R. Engineers and Contractors
Private Limited v. Som Datt Builders Limited, (2009) 7 SCC
696 to hold that there is no special reference to the arbitration
2 | P a g e
clause in the standard terms and conditions, so the arbitration
clause cannot be said to have been incorporated into the purchase
order.
6. We have heard the counsel for the Appellant and Respondent. The
judgment of this Court in M.R. Engineers’ case (supra) was relied
upon by both the parties. Before proceeding further, it would be
necessary to appreciate the ratio of the said judgment. A few facts
necessary to understand the dispute in the said case are that the
Appellant therein was a sub-contractor of the Respondent. The
Appellant was entrusted a part of the work by the
Respondent-contractor which pertained to ‘construction of project
directorate building’. It was mentioned in the sub-contract that it
shall be carried out as per the terms and conditions applicable to
the main contract. A dispute arose between the parties which made
the Appellant therein to approach the High Court for appointment of
an arbitrator under Section 11 (6) of the Arbitration and Conciliation
Act, 1996. The High Court of Kerala rejected the application on the
ground that the arbitration clause in the main contract was not
incorporated by reference in the contract between the Appellant
and Respondent therein. In the appeal before this Court, the
Appellant submitted that his case was squarely covered by Section
7 (5) of the Act and that the arbitration clause from the main
contract was incorporated by reference in the sub contract between
him and the Respondent.
7. This Court considered the scope of Section 7 (5) of the Act and held
3 | P a g e
that a conscious acceptance of the arbitration clause found in
another document is necessary for the purpose of incorporating it
into the contract. It was further held that general rules of
construction of contracts would have to be followed as there were
no guidelines in Section 7(5) regarding the conditions that need to
be fulfilled before construing a reference to a portion of a contract
as a reference incorporating the whole of it along with the
arbitration clause contained in it. While distinguishing ‘reference’ to
another document from ‘incorporation’, this Court observed that the
relevant factor was the intention of the parties either to adopt the
document in its entirety or to borrow specific portions of the said
document. In this connection, the Court held as follows: (M.R.
Engineers’ case, para 17-19)
“17. We will give a few instances of incorporation and mere reference to
explain the position (illustrative and not exhaustive). If a contract refers to
a document and provides that the said document shall form part and
parcel of the contract, or that all terms and conditions of the said
document shall be read or treated as a part of the contract, or that the
contract will be governed by the provisions of the said document, or that
the terms and conditions of the said document shall be incorporated into
the contract, the terms and conditions of the document in entirety will get
bodily lifted and incorporated into the contract. When there is such
incorporation of the terms and conditions of a document, every term of
such document (except to the extent it is inconsistent with any specific
provision in the contract) will apply to the contract. If the document so
incorporated contains a provision for settlement of disputes by arbitration,
the said arbitration clause also will apply to the contract.
18. On the other hand, where there is only a reference to a document in a
contract in a particular context, the document will not get incorporated in
entirety into the contract. For example, if a contract provides that the
specifications of the supplies will be as provided in an earlier contract or
another purchase order, then it will be necessary to look to that document
only for the limited purpose of ascertainment of specifications of the goods
to be supplied. The referred document cannot be looked into for any other
purpose, say price or payment of price. Similarly, if a contract between X
and Y provides that the terms of payment to Y will be as in the contract
between X and Z, then only the terms of payment from the contract
between X and Z, will be read as part of the contract between X and Y. The
other terms, say relating to quantity or delivery cannot be looked into.
19. Sub-section (5) of Section 7 merely reiterates these well-settled
principles of construction of contracts. It makes it clear that where there is
4 | P a g e
a reference to a document in a contract, and the reference shows that the
document was not intended to be incorporated in entirety, then the
reference will not make the arbitration clause in the document, a part of
the contract, unless there is a special reference to the arbitration clause so
as to make it applicable.”
8. Relevant passages from Russell on Arbitration 23rd
 Edition (2007)
which were relied upon by this Court for interpretation of Section 7
(5) of the Arbitration and Conciliation Act, 1996 are as under: (M.R.
Engineers’ case, para 20-21)
“20. The following passages from Russell on Arbitration throw
considerable light on the position while dealing with Section 6(2) of the
(English) Arbitration Act, 1996 corresponding to Section 7(5) of the Indian
Act. (See pp. 52-55, 23rd Edn.):
“Reference to another document.—The terms of a contract may
have to be ascertained by reference to more than one document.
Ascertaining which documents constitute the contractual
documents and in what, if any, order of priority they should be read
is a problem encountered in many commercial transactions,
particularly those involving shipping and construction. This issue
has to be determined by applying the usual principles of
construction and attempting to infer the parties' intentions by
means of an objective assessment of the evidence. This may make
questions of incorporation irrelevant, if for example it is clear that
the contractual documents in question are entirely separate and no
intention to incorporate the terms of one in the other can be
established. However, the contractual document defining and
imposing the performance obligations may be found to incorporate
another document which contains an arbitration agreement. If
there is a dispute about the performance obligations, that dispute
may need to be decided according to the arbitration provisions of
that other document. This very commonly occurs when the
principal contractual document refers to standard form terms
containing an arbitration agreement. However the standard form
wording may not be apt for the contract in which the parties seek
to incorporate it, or the reference may be to another contract
between parties at least one of whom is different. In these
circumstances it may be possible to argue that the purported
incorporation of the arbitration agreement is ineffective. The
draftsmen of the Arbitration Act, 1996 were asked to provide
specific guidance on the issue, but they preferred to leave it to the
court to decide whether there had been a valid incorporation by
reference. (Para 2.044)
***
Subject to drawing a distinction between incorporation of an arbitration
agreement contained in a document setting out standard form terms and
one contained in some other contract between different parties, judicial
thinking seems to have favoured the approach of Sir John Megaw in
Aughton, namely, that general words of incorporation are not sufficient.
Rather, particular reference to the arbitration clause needs to be made to
comply with Section 6 of the Arbitration Act, 1996, unless special
circumstances exist. (Para 2.047)
Reference to standard form terms.— If the document sought to be
incorporated is a standard form set of terms and conditions the
courts are more likely to accept that general words of incorporation
will suffice. This is because the parties can be expected to be more
5 | P a g e
familiar with those standard terms including the arbitration clause.”
(Para 2.048)
21. After referring to the view of Sir John Megaw in Aughton Ltd. v. M.F.
Kent Services Ltd. [(1991) 57 BLR 1] that specific words were necessary to
incorporate an arbitration clause and that the reference in a sub-contract
to another contract's terms and conditions would not suffice to incorporate
the arbitration clause into the sub-contract, followed in Barrett & Son
(Brickwork) Ltd. v. Henry Boot Management Ltd.[1995 CILL 1026] , Trygg
Hansa Insurance Co. Ltd. v. Equitas Ltd. [(1998) 2 Lloyds' Rep 439]
and AIG Europe (UK) Ltd. v. Ethniki [(2000) 2 All ER 566 (CA)] and Sea
Trade Maritime Corpn. v. Hellenic Mutual War Risks Assn. (Bermuda) Ltd.
No. 2 [2006 EWHC 2530] , Russell concludes:
“The current position therefore seems to be that if the arbitration
agreement is incorporated from a standard form a general
reference to those terms is sufficient, but at least in the case of
reference to a non-standard form contract in the context of
construction and reinsurance contracts and bills of lading a specific
reference to the arbitration agreement is necessary.”
9. This Court also discussed the scope of Section 7 (5) of the Act and
summarised as follows: (M.R. Engineers’ case, para 24)
“24. The scope and intent of Section 7(5) of the Act may therefore be
summarised thus:
(i) An arbitration clause in another document, would get incorporated into
a contract by reference, if the following conditions are fulfilled:
(1) the contract should contain a clear reference to the documents
containing arbitration clause,
(2) the reference to the other document should clearly indicate an
intention to incorporate the arbitration clause into the contract,
(3) the arbitration clause should be appropriate, that is capable of
application in respect of disputes under the contract and should not be
repugnant to any term of the contract.
(ii) When the parties enter into a contract, making a general reference to
another contract, such general reference would not have the effect of
incorporating the arbitration clause from the referred document into the
contract between the parties. The arbitration clause from another contract
can be incorporated into the contract (where such reference is made), only
by a specific reference to arbitration clause.
(iii) Where a contract between the parties provides that the execution or
performance of that contract shall be in terms of another contract (which
contains the terms and conditions relating to performance and a provision
for settlement of disputes by arbitration), then, the terms of the referred
contract in regard to execution/performance alone will apply, and not the
arbitration agreement in the referred contract, unless there is special
reference to the arbitration clause also.
(iv) Where the contract provides that the standard form of terms and
conditions of an independent trade or professional institution (as for
example the standard terms and conditions of a trade association or
architects association) will bind them or apply to the contract, such
standard form of terms and conditions including any provision for
arbitration in such standard terms and conditions, shall be deemed to be
incorporated by reference. Sometimes the contract may also say that the
parties are familiar with those terms and conditions or that the parties
have read and understood the said terms and conditions.
(v) Where the contract between the parties stipulates that the conditions
of contract of one of the parties to the contract shall form a part of their
contract (as for example the general conditions of contract of the
Government where the Government is a party), the arbitration clause
6 | P a g e
forming part of such general conditions of contract will apply to the
contract between the parties.”
10. It was ultimately found that the intention of the parties was not to
incorporate the main contract in its entirety into the sub-contract.
Further, this Court held that the arbitration clause in the main
contract was inapplicable to the contract between the parties as the
main contract was between the Public Works Department,
Government of Kerala and the contractor in which the arbitration
clause contemplated appointment of a committee of three
arbitrators, with one each to be appointed by the State of Kerala
and the Respondent therein and the third to be nominated by the
Director General Road Development, Ministry of Surface Transport
Roads in Government of India. Appointment of a committee of
arbitrators with representatives of State of Kerala and the
Government of India was totally irrelevant for the contract between
the contractor and the sub-contractor.
11. Section 6 (2) of the Arbitration Act, 1996 which extends to England,
Wales and Northern Ireland is in pari materia with Section 7 (5) of
the Arbitration and Conciliation Act, 1996 and it reads as under:-
“6. Definition of arbitration agreement.
...
(2) The reference in an agreement to a written form of arbitration clause
or to a document containing an arbitration clause constitutes an
arbitration agreement if the reference is such as to make that clause part
of the agreement.”
12. It will be useful to understand the interpretation of the incorporation
issue in England. The question whether the general words of
incorporation are sufficient to incorporate an arbitration agreement
arose for consideration of the High Court of Justice, Queen’s Bench
7 | P a g e
Division, Commercial Court in Sea Trade Maritime Corporation v.
Hellenic Mutual War Risks Association (Bermuda) Limited,
The Athena [2006] EWHC 2530 (Comm). In the said case the
difference between incorporation in a single contract case and a two
contract case was recognized. If there is a reference to a secondary
document in a contract between two parties and that secondary
document is a contract to which at least one party is different from
the parties to the contract in question, it would be a two contract
case. In other words, if the secondary document is between other
parties or if only one of the parties to the contract in dispute is party
to an earlier contract to which a reference is made, then it would be
a two contract case. In such a contract general reference to the
earlier contract would not be sufficient to incorporate the arbitration
clause. However, if the reference is to standard terms in a contract
that would be a case of ‘single contract’ and the use of general
words to incorporate the arbitration agreement by a reference is
permissible. As the reference in that case was to a standard form
of contract which was a single contract case, Justice Langley held
that the general words of incorporation were enough to incorporate
an arbitration clause.
13. The question of incorporation of the arbitration clause from an
earlier contract by general reference into a later contract came up
for consideration before the Queen’s Bench Division again in
Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v. Sometal
SAL [2010] EWHC 29 (Comm). The contract in the said case
8 | P a g e
pertained to sale of 10,000 metric tons of steel scrap. There were
several terms in the contract under the headings material, quantity,
price, shipment, discharge, rate, payment and final weight. Apart
from the said terms, the contract contained a clause which was in
the following terms: “All the rest will be same as our previous
contracts.”
14. The dispute that arose in that case was whether general words
mentioned above were capable of incorporating an arbitration
clause. The difference in approach between cases in which the
parties incorporate the terms of a contract between the other
parties or between one of them with a third party on the one hand
and those in which they incorporate the standard terms on the other
hand, was noticed. The following broad categories in which the
parties attempt to incorporate an arbitration clause were recognized
by the Court, which are as follows:
“(1) A and B make a contract in which they incorporate standard terms.
These may be the standard terms of one party set out on the back of an
offer letter or an order, or contained in another document to which reference
is made; or terms embodied in the rules of an organisation of which A or B or
both are members; or they may be terms standard in a particular trade or
industry.
(2) A and B make a contract incorporating terms previously agreed between
A and B in another contract or contracts to which they were both parties
(3) A and B make a contract incorporating terms agreed between A (or B)
and C. Common examples are a bill of lading incorporating the terms of a
charter to which A is a party; reinsurance contracts incorporating the terms
of an underlying insurance; excess insurance contracts incorporating the
terms of the primary layer of insurance; and building or engineering sub
contracts incorporating the terms of a main contract or sub-sub contracts
incorporating the terms of a sub contract.
(4) A and B make a contract incorporating terms agreed between C and D.
Bills of lading, reinsurance and insurance contracts and building contracts
may fall into this category.”
15. In Habas’s case (supra), Justice Christopher Clarke followed the
9 | P a g e
ratio in the case of ‘the Athena’ (supra) and held that in single
contract cases (categories 1 and 2), a general reference would be
sufficient for incorporation of an arbitration clause from a standard
form of contract. In cases falling under categories 3 and 4
mentioned above which are two contract cases, it was held that a
stricter rule has to be followed by insisting on a specific reference to
the arbitration clause from an earlier contract. Reliance placed on
the judgment of Sir John Megaw in Aughton v MF Kent Services
[1991] 31 Con L.R. 60 was repelled in the following terms:
“53 I do not regard myself as bound by the decisions of the Court of
Appeal in Aughton v Kent and The Ethniki to reach a different conclusion.
Both were two-contract cases. Further the judgments of Sir John Megaw
and Lord Justice Ralph Gibson are, in part in conflict so as to preclude
either of them being binding authority even in a two contract case. The
agreement of Evans LJ with Sir John Megaw's “ analysis of the authorities
with regard to arbitration clauses and specifically with regard to the
incorporation of charterparty arbitration clauses into bills of lading ” was
obiter.”
16. The point pertaining to the independent nature of an arbitration
clause being determinative of the dispute pertaining to
incorporation was also dealt with in the said judgment as follows:
“51 Like Langley J, however, I do not accept that, in a single contract case,
the independent nature of the arbitration clause should determine whether
it is to be incorporated. A commercial lawyer would probably understand
that an arbitration clause is a separate contract collateral to another
substantive contract and that the expression “arbitration clause” is, on
that account, something of a misnomer for “the arbitration contract which
is ancillary to the primary contract”. But a businessman would have no
difficulty in regarding the arbitration clause (as he would call it) as part of
a contract and as capable of incorporation, by appropriate wording, as any
other term of such a contract; and it is, as it seems to me to a
businessman's understanding that the court should be disposed to. give
effect. A businessman who had agreed with his counterparty a contract
with 10 specific terms under various headings and then agreed with the
same counterparty terms 1-5 under the same headings as before and, as
to the rest, that all the terms of the previous contract should apply, would,
I think, be surprised to find that “all” should be interpreted so as to mean
“all but the arbitration clause”.
17. For a better understanding of the single and two contract cases and
reference to standard form terms it is relevant to examine Russell
10 | P a g e
 on Arbitration 24th
 Edition (2015) which is as under: (See pp. 52-54, 24rd
Edn.)
“Reference to standard form terms, single and two contract cases. If the
document sought to be incorporated is a standard form set of terms and
conditions the courts are more likely to accept that general words of
incorporation will suffice. This is because the parties can be expected to
be more familiar with those standard terms, including the arbitration
clause. In Sea Trade Maritime Corp v. Hellenic Mutual War Risks
Association (Bermuda) Ltd, (The “Athena”) No.2 the Court drew a
distinction between what is described as a “two contract case”, that is
where the arbitration clause is contained in a secondary document which
is a contract to which at least one party is different from the parties to the
contract in question, and “a single contract case” where the arbitration
clause is in standard terms to be found in another document. Relying on
dictum of Bingham LJ in Federal Bulk Carries Inc v. C. Itoh & Co Ltd (The
“Federal Bulker”), Langley J stated that:
“In principle, English law accepts incorporation of standard terms
by the use of general words and, I would add, particularly so when
the terms are readily available and the question arises in the
context of dealings between established players in a well-known
market. The principle, as the dictum makes clear, does not
distinguish between a term which is an arbitration clause and one
which addresses other issues. In contrast, and for the very reason
that it concerns other parties, a “stricter rule” is applied in
charterparty/bills of lading cases. The reason given is that the
other party may have no knowledge nor ready means of
knowledge of the relevant terms. Further, as the authorities
illustrate, the terms of an arbitration clause may require
adjustment if they are to be made to apply to the parties to a
different contract.”
The Court therefore reinforced the distinction between incorporation by
reference of standard form terms and of the terms of a different contract,
and concluded that in a single contract case general words of
incorporation are sufficient, whereas by its nature a two contract case
may require specific reference to the other contract, unless the secondary
document is stated to be based on standard form terms containing an
arbitration agreement. In that case, presumably specific reference to the
arbitration clause would not be needed. As discussed below, this approach
has been endorsed in subsequent cases, albeit drawing a slightly different
but “material” distinction between incorporation of the terms of a separate
contract – standard or otherwise – made between the same parties which
are treated as “single contract” cases, even where there is in fact more
than one contract; and those where the terms to be incorporated are
contained in a contract between one or more different parties which are
treated as the “two contract” cases. (Para 2-049)
Extension of the single contract cases.
Recently, the courts appear to have extended the “single contract”
principle applicable to standard form contracts, where general words of
incorporation will suffice, to other types of contract where the same
rationale can be said to apply. Thus, if the document sought to be
incorporated is a bespoke contract between the same parties, the courts
have accepted this as a “single contract” case where general words of
incorporation will suffice, even though the other contract is not on
standard terms and constitutes an entirely separate agreement. The
rationale for this approach is that the parties have already contracted on
the terms said to be incorporated and are therefore even more likely to be
familiar with the term relied on than a party resisting incorporation of a
standard term. Put another way, if general words of incorporation are
sufficient for the latter, they should be even more so for the former. The
courts also appear to have accepted as a “single contract” case a situation
11 | P a g e
where the contract referred to is between one of the parties to the original
contract and a third party, where the contracts as a whole “were entered
into in the context of a single commercial relationship”.(Para 2-050)
[Emphasis Supplied]
18. This Court in M.R. Engineers’ case, which is discussed in detail
supra, held the rule to be that an arbitration clause in an earlier
contract cannot be incorporated by a general reference. The
exception to the rule is a reference to a standard form of contract by
a trade association or a professional institution in which case a
general reference would be sufficient for incorporation of an
arbitration clause. Reliance was placed by this Court on Russell on
 Arbitration 23rd
 Edition (2007). The development of law regarding
incorporation after the judgment in M.R. Engineers requires
careful consideration. It has been held in Habas Sinai Ve Tibbi
Gazlar Isthisal Endustri AS v Sometal SAL [2010] EWHC 29
(Comm) that a standard form of one party is also recognized as a
‘single contract’ case. In the said case, it was also held that in
single contract cases general reference is enough for incorporation
of an arbitration clause from a standard form of contract. There is
no distinction that is drawn between standard forms by recognized
trade associations or professional institutions on one hand and
standard terms of one party on the other. Russell on Arbitration
 24th
 Edition (2015) also takes note of the Habas’s case.
19. We are of the opinion that though general reference to an earlier
contract is not sufficient for incorporation of an arbitration clause in
the later contract, a general reference to a standard form would be
12 | P a g e
enough for incorporation of the arbitration clause. In M.R.
Engineers this Court restricted the exceptions to standard form of
contract of trade associations and professional institutions. In view
of the development of law after the judgment in M.R. Engineers’
case, we are of the opinion that a general reference to a consensual
standard form is sufficient for incorporation of an arbitration clause.
In other words, general reference to a standard form of contract of
one party will be enough for incorporation of arbitration clause. A
perusal of the passage from Russell on Arbitration 24th
 Edition
(2015) would demonstrate the change in position of law pertaining
to incorporation when read in conjunction with the earlier edition
relied upon by this Court in M.R. Engineers’ case. We are in
agreement with the judgment in M.R. Engineer’s case with a
modification that a general reference to a standard form of contract
of one party along with those of trade associations and professional
bodies will be sufficient to incorporate the arbitration clause.
20. In the present case, the purchase order was issued by the Appellant
in which it was categorically mentioned that the supply would be as
per the terms mentioned therein and in the attached standard
terms and conditions. The Respondent by his letter dated
15.12.2012 confirmed its acceptance of the terms and conditions
mentioned in the purchase order except delivery period. The
dispute arose after the delivery of the goods. No doubt, there is
nothing forthcoming from the pleadings or the submissions made by
the parties that the standard form attached to the purchase order is
13 | P a g e
of a trade association or a professional body. However, the
Respondent was aware of the standard terms and conditions which
were attached to the purchase order. The purchase order is a single
contract and general reference to the standard form even if it is not
by a trade association or a professional body is sufficient for
incorporation of the arbitration clause.
21. For the aforementioned reasons, the appeal is allowed and the
judgment of the High Court is set aside. Justice Sushil Harkauli is
appointed as the Arbitrator to adjudicate the dispute between the
parties.
 ........................................J.
 [S.A. BOBDE]
..……................................J.
 [L. NAGESWARA RAO]
New Delhi;
January 05, 2018
14 | P a g e

Leena Vivek Masal ….Appellant(s) VERSUS State of Maharashtra & Anr. ….Respondent(s) - seeking appellants’ prosecution for commission of the offences under theScheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act.

1
Non-REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 9 OF 2018
(Arising out of S.L.P.(Crl.)No.4678 of 2013)
Leena Vivek Masal ….Appellant(s)
VERSUS
State of Maharashtra & Anr. ….Respondent(s)
WITH
CRIMINAL APPEAL NO.10 OF 2018
(Arising out of S.L.P.(Crl.)No.4690 of 2013)
Manisha Uday Sonar ….Appellant(s)
VERSUS
State of Maharashtra & Anr. ….Respondent(s)
AND
CRIMINAL APPEAL NO.11 OF 2018
(Arising out of S.L.P.(Crl.)No.5207 of 2013)
Leena Vivek Masal ….Appellant(s)
VERSUS
State of Maharashtra & Anr. ….Respondent(s)

2
J U D G M E N T
Abhay Manohar Sapre, J.
1) Leave granted.
2) These appeals are filed by two accused persons
against the final judgment and order dated
21.02.2013 passed by the High Court of Judicature
at Bombay in Crl.W.P. Nos. 2252/2011, 2251/2011
and 652/2012 which, in turn, arise out of the order
dated 30.09.2008 passed by the Judicial
Magistrate, Fast Court, Uran in Regular Case No. 6
of 2008.
3) It is not necessary to set out the factual details
of the case in the light of the order that we are
passing.
4) The present proceedings arise out of interim
order dated 30.09.2008 passed by the Judicial
Magistrate in Regular Case No.6 of 2008 whereby
the Magistrate issued process summons against the
appellants herein in relation to the complaint filed
3
by respondent No. 2 under the provisions of the
Scheduled Castes and Scheduled Tribes (Prevention
of Atrocities) Act, 1989 (hereinafter referred to as
“the Act”) seeking appellants’ prosecution for
commission of the offences under the Act. The
complaint is pending for its final disposal on merits.
5) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to dispose of these appeals with
following observations:
6) First, as mentioned above, these appeals arise
out of an interim order passed by the Magistrate by
which he has issued process summons of the
complaint filed by respondent No. 2 against the
appellants; Second, when admittedly the complaint
filed by respondent No. 2 against the appellants is
pending consideration for its disposal on its merits
and the appellants will get an opportunity to file
reply and raise all the pleas and adduce evidence in
4
accordance with law, therefore, we do not consider
it proper to interfere in the impugned order; Third,
the complaint filed by respondent No. 2 would be
decided by the Magistrate on the basis of evidence
adduced by the parties keeping in view the law
applicable to the issues arising in the case; and
lastly, the order issuing process against the
appellants being purely interim in nature having
been passed in exercise of its discretionary powers
finding prima facie case to entertain the complaint
filed by respondent No. 2, cannot be interfered with
in our appellate jurisdiction under Article 136 of the
Constitution. It is more so when the appellants
would get full opportunity to raise all factual and
legal pleas in accordance with law while contesting
the complaint on merits.
7) So far as the observations made by the
Magistrate in its earlier order dated 30.06.2006 in
Regular Criminal Case No. 114/2005 is concerned,
5
all that we need to say is that it will be for the
Magistrate to decide its effect on the present
proceedings at the time of final disposal of the
complaint in accordance with law.
8) We make it clear that the Magistrate, who is
seized of the complaint, would decide it on merits
uninfluenced by any observations made by the High
Court in the impugned order.
9) With these observations, the appeals stand
disposed of finally.
10) Let the complaint be decided by the Magistrate
expeditiously, as directed above.
………...................................J.
[R.K. AGRAWAL]


…...……..................................J.
 [ABHAY MANOHAR SAPRE]
New Delhi;
January 5, 2018 

National Kamgar Union ….Appellant(s) VERSUS Kran Rader Pvt. Ltd. & Ors. …Respondent(s) - this order is applicable only to those workers who did not accept the compensation from respondent No.1.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.20 OF 2018
(Arising out of S.L.P.(C) No.18413 of 2015)
National Kamgar Union ….Appellant(s)
VERSUS
Kran Rader Pvt. Ltd. & Ors. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is filed by the appellant-Trade
Union against the final judgment and order dated
12.09.2014 passed by the High Court of Judicature
at Bombay in Writ Petition No.5241 of 2003
whereby the High Court allowed the writ petition
filed by respondent No.1-Kran Rader Pvt. Ltd. and
set aside the award dated 08.04.2003 passed by the
2
Industrial Court, Pune in a Complaint (ULP) No.544
of 1990 and, in consequence, dismissed the
complaint filed by the appellant herein.
3. In order to appreciate the short issue involved
in the appeal, it is necessary to set out few relevant
facts infra.
4. The appellant is the Trade Union registered
under the Trade Union Act, 1926 having several
members working in Factories. Respondent No.1
owned a factory (manufacturing unit) at Pune. This
Unit was originally owned by respondent Nos. 2 and
3 who, in turn, sold it to respondent No.4 in 1991
and then it was owned by respondent No.1. The
Unit was engaged in the manufacture of several
components like Traction Gears for supply to
Railways, forging for oil industries and other
manufacturing units etc. The members of the
appellant-Union were working in respondent No.1’s
factory at all relevant time.
3
5. In 1990, respondent No.1 suffered business
loss in running the said manufacturing unit and,
therefore, decided to close down the said unit
permanently. With that end in view, respondent
No.1 served a notice of closure to the State
Government (Maharashtra) under Section 25 FFA of
the Industrial Disputes Act, 1947 (in short, “ID Act”)
on 29.08.1990 with a copy to the appellant-Union
expressing therein their intention to close the
operation of the Unit on expiry of 60 days with effect
from 29.10.1990.
6. The appellant-Union, felt aggrieved of the
closure notice issued by respondent No.1, filed
complaint against respondent No.1 under Section
28 read with Items 9 and 10 of the Schedule IV of
the Maharashtra Recognition of Trade Unions and
Prevention of Unfair Labour Practices Act, 1971
(hereinafter referred to as “the Act”) in the Industrial
Court at Pune in October 1990 being
Complaint(ULP) No.544/1990.
4
7. In substance, the grievance of the appellant in
their complaint was that since respondent No.1 had
employed more than 100 workers on an average per
working day for preceding 12 months in their
manufacturing unit, the provisions of Chapter VB
(Section 25-K) of the ID Act and, in turn, all the
relevant provisions contained therein were
applicable to respondent No.1. It was alleged that
due to this reason, it was obligatory upon
respondent No.1 to have ensured compliance of all
the relevant provisions applicable for closure of the
Unit. It was alleged that since admittedly the
relevant provisions applicable to closure were not
complied with by respondent No.1, a case was made
out under the ID Act read with the Act to seek a
declaration that the intended closure declared by
respondent No.1, vide their notice dated
29.08.1990, is illegal under the ID Act read with the
Act with a further grant of all consequential reliefs
to each worker arising out of grant of such
5
declaration sought by the appellant in the
Complaint in their favour.
8. Respondent No.1 (employer) filed a reply and
denied therein the allegations made by the
appellant-Union in their complaint. According to
Respondent No.1 they never employed more than
100 workers in their Unit so as to attract the rigor
of Chapter VB and other related provisions of the ID
Act to give effect to the closure. In other words,
according to respondent No.1, the strength of
workers working in their Unit was always less than
100 in number, therefore, the provisions of Chapter
VB and the related provisions of the I.D. Act had no
application to respondent No.1. It was, therefore,
contended that the decision taken by respondent
No.1 to close the Unit with effect from 29.10.1990
was legal, proper and in accordance with law and
hence could not be faulted with.
9. The parties adduced evidence
(documentary/oral) in support of their respective
6
contentions. The Industrial Court, by its award
dated 08.04.2003, allowed the appellant's
complaint. It was held that respondent No.1 had
employed 115 workers at all relevant time in their
Unit, therefore, the provisions of Chapter VB of the
ID Act were required to be followed while effecting
the closure of the Unit. It was held that since the
relevant provisions were not complied with by
respondent No.1, the closure in question was bad in
law entitling the members of the appellant-Union to
claim all consequential benefits arising therefrom as
if there was no closure of the Unit.
10. Respondent No.1 felt aggrieved and filed a writ
petition before the Bombay High Court. By
impugned judgment, the Single Judge allowed the
writ petition and while setting aside of the award of
the Industrial Court dismissed the appellant's
complaint. The High Court held that the total
strength of the workers working at all relevant time
in respondent No.1’s Unit was 99 and not 115 as
7
held by the Industrial Court. It was held that due
to this reason, it was not necessary for respondent
No.1 to ensure compliance of the provisions of
Chapter VB of the ID Act while declaring the closure
of their Unit.
11. The appellant-Union felt aggrieved and filed
the present appeal by way of special leave in this
Court.
12. Heard Mr. B.H. Marlapalle, learned senior
counsel for appellant and Mr. D.J. Bhanage and Mr.
Sanjay R. Hegde, learned senior counsel for
respondents.
13. Having heard the learned counsel for the
parties at length and on perusal of the record of the
case, we find no good ground to interfere in the
impugned judgment of the High Court. In other
words, the reasoning assigned by the High Court
appears to be just and reasonable calling no
interference for the reasons mentioned hereinbelow.
8
14. The main question, which arises for
consideration in this appeal, is only one, viz., how
many workers were working in the Unit of
respondent No.1 at all relevant time, whether the
strength of the workers was above 100 or below
100. In other words, the question, which arises for
consideration, is whether the provisions of Section
25-K of Chapter VB of the ID Act were applicable to
respondent No. 1-Unit at the relevant time.
15. If the strength of the workers was above 100 at
the relevant time, in that event, the provisions of
Section 25-K were applicable to respondent No.1
whereas if the strength was below 100, in such
event, the provisions of Section 25K had no
application. In the case of former, the
appellant-Union succeeds and in the case of later,
respondent No.1 succeeds.
16. As mentioned above, the Industrial Court held
that 115 workers were found working at the
relevant time whereas the High Court held that 99
9
workers were found working in the Unit of
respondent No.1 at the relevant time.
17. There can be no dispute to the proposition that
the question as to what is the total strength of the
workers employed in the Unit or, in other words,
how many workers were working in a particular unit
is essentially a question of fact. Such question is
required to be decided by the Courts on
appreciation of evidence adduced by the parties.
18. Once the Courts record a finding on such
question, be that of concurrence or reversal, the
finding is usually held binding on this Court while
hearing the appeal under Article 136 of the
Constitution.
19. It is only when such finding is found to be
against any provision of law or evidence or is found
to be wholly perverse to the extent that no average
judicial person could ever record such finding, it
would not be held binding on the superior Court.
10
20. When the question arises as to what is the
status of a “workman”, this Court has held that it
has to be inferred as a matter of law from facts
found and if the question involved is one of drawing
a legal inference as to the status of a party from
facts found, it is not a pure question of fact. It is
held that if the inference drawn by the Tribunal in
regard to the status of the workman involved the
application of certain legal tests, it necessarily
becomes a mixed question of fact and law.
21. This Court has, however, cautioned that it
must be remembered that even if the question
raised is one of the mixed question of fact and law,
this Court would not readily interfere with the
conclusion of the Tribunal unless it is satisfied that
said conclusion is manifestly or obviously
erroneous. (See AIR 1967 SC 428)
22. With a view to examine the question from both
angels which is taken note of above, we perused the
evidence and also called upon the parties to file
11
additional evidence before this Court and it was
filed.
23. Having perused the record, we are not inclined
to interfere in the finding recorded by the High
Court though of reversal. In other words, we are
inclined to agree with the reasoning of the High
Court and accordingly hold that the total strength of
workers employed at the relevant time in
respondent No.1’s Unit was 99 and that the status
of 16 disputed employees could not be conclusively
proved to be that of a “workman” for the reasons
stated infra.
24. First, the High Court assigned the reasons as
to why the finding of the Industrial Court holding
the strength of workers as 115 is not factually and
legally sustainable. Second, the reasons assigned
are neither arbitrary nor against the record and nor
perverse to that event so as to call for any
interference by this Court. Third, in these
circumstances, this Court would be slow to
12
appreciate the entire evidence afresh on this
question in this appeal and lastly, such being a
question of fact or a mixed question of law and fact,
it is binding on this Court.
25. Inspite of this, we have gone through the
evidence with a view to find out as to whether the
High Court has committed any jurisdictional error
in reaching to its conclusion. In our view it is not.
We notice that the Industrial Court held that there
was no dispute regarding the status of 79 workers.
The dispute of status of an employee was confined
only to 36 employees, namely, whether their status
was that of the “worker” or “supervisor”. The
Industrial Court, however, held that the status of all
the 36 employees was that of “worker” and
accordingly recorded a finding that 79+36 = 115
employees were working as “worker” in the Unit at
the relevant time.
26. The High Court, however, while reversing the
aforementioned finding of the Industrial Court came
13
to a conclusion that out of 36 employees, only 20
employees could be regarded as “worker” and,
therefore, the total strength of workers at all
relevant time was 79+20 = 99. In our opinion, the
High Court rightly held that there was no cogent
evidence adduced by the appellant to prove the
status of remaining 16 employees as to whether
they also could be regarded as “worker” employed in
the Unit and, therefore, it was not possible to hold
that the total strength of the workers at the relevant
time was more than 100, i.e., 115.
27. We, while concurring with the reasoning of the
High Court, also find that since the Industrial Court
did not elaborately discuss the issue regarding the
status of 16 employees while holding the strength of
workers at 115 except clubbing 36(20+16) with 79,
the High Court was right in going into the evidence
to the extent permissible and reversed the finding of
Industrial Court. In our view, the Industrial Court
should have examined the status of each such
14
disputed employee independently for holding
whether they could also be regarded as “worker”. It
was, however, not done so.
28. Mr. B.H. Marlapalle, learned senior counsel for
the appellant-Union, strenuously argued with the
help of the entire evidence and the relevant
provisions of the Factories Act, 1948 and the
Payment of Wages Act including the statutory forms
prescribed in the two Acts for filing the details of
workers working in the Unit that the finding of the
Industrial Court appears to be more plausible and
reasonable as compared to the finding recorded by
the High Court on this question and hence the
finding of the Industrial Court deserves to be
restored.
29. We cannot accept this submission of learned
counsel for the appellant in the light of what we
have held above. In our view, the appellant, in order
to prove the status of 16 employees, did not adduce
any cogent evidence as against the evidence of the
15
respondent No.1. It is, therefore, not possible for
this Court to hold that the finding of the High Court
is wholly arbitrary or illegal or against the evidence.
We do not wish to go into this factual question any
more.
30. Learned counsel for the appellant then urged
that the High Court has committed a jurisdictional
error when it went on to re-appreciate the evidence
and then reversed the finding of the Industrial
Court under Article 227 of the Constitution. In our
view, it does not appear to be so.
31. It is the duty of the High Court while
exercising the supervisory jurisdiction to see that
the subordinate Court has exercised its powers in
accordance with law and did not commit any
illegality or perversity in reaching to its conclusion.
32. While recording a finding, if it is noticed by the
High Court that the subordinate Court has failed to
take into consideration the material evidence or
recorded a finding without there being any evidence,
16
then the High Court would be entitled to interfere in
such finding in exercise of its supervisory
jurisdiction under Article 227 of the Constitution.
Such is the case here.
33. In the light of foregoing discussion, we do not
consider proper to disturb the findings recorded by
the High Court which are more plausible and
reasonable rather than that of the Industrial Court.
34. In view of the foregoing discussion, we also
hold that respondent No.1 had employed 99 workers
in their manufacturing Unit at the time of declaring
the closure of the Unit in 1990. Since the strength
of workers was below 100, it was not necessary for
respondent No.1 to ensure compliance of Chapter
VB. In other words, in such circumstances, the
provisions of Section 25-K had no application to
respondent No.1.
35. This takes us to examine the next question as
to how much compensation and under which heads
17
the workers are entitled to receive from respondent
No.1 (Company).
36. Learned counsel for respondent No.1, however,
stated that out of total workers, most of the workers
have settled their claims by accepting the
compensation offered by respondent No.1
voluntarily. Learned counsel stated that the
compensation paid to each worker consisted of (i)
amount of Gratuity payable under the Payment of
Gratuity Act, (ii) closure compensation payable
under the I.D. Act, and over and above these two
statutory payments of compensation, the
respondent No.1 also paid 30 days’ wages for each
completed year of service as ex gratia payment to
each worker. It was also stated that now hardly 16
workers or so remain unpaid because they did not
accept the compensation when offered to them and
preferred to prosecute the present litigation.
18
37. Learned counsel for respondent No.1 stated
that the total compensation paid to every worker in
1990-1991 varies between Rs.1 lakh to Rs.2 lakhs.
38. Taking into consideration the aforementioned
background facts and circumstances of the case, we
consider it just and proper to award in lump sum a
compensation of Rs.2,50,000/- (Rs.Two Lakhs and
Fifty Thousand) to each worker who did not accept
the compensation.
39. Let Rs.2,50,000/- (Rs.Two Lakhs and Fifty
Thousand) be paid to each such worker after
making proper verification. If any worker is not
available for any reason, the amount payable to
such worker be paid to his legal representatives or
nearest relatives, as the case may be, after making
proper verification.
40. Respondent No.1 will, accordingly, deposit the
entire compensation payable to all such workers
with details in the Industrial Court, Pune. A notice
will then be served to each worker or his legal
19
representatives, as the case may be, by the
Industrial Court to enable the workers to withdraw
the amount from the Industrial Court.
41. The amount will be paid to every worker or his
nominee as the case may be by the demand draft
issued in his/her name or in the name of legal
representatives, as the case may be. It will be duly
deposited in his/her Bank account to enable
him/her to withdraw the same.
42. The appellant would submit necessary details
of each such worker before the Industrial Court.
The Industrial Court would ensure compliance of
the directions of this Court and complete all
formalities within three months from the date of this
order.
43. We make it clear that this order is applicable
only to those workers who did not accept the
compensation from respondent No.1.
20
44. In other words, those workers who already
accepted the compensation will not be entitled to get
any benefit of this order.
45. With these directions, the appeal stands
disposed of finally.

………...................................J.
[R.K. AGRAWAL]


…...……..................................J.
 [ABHAY MANOHAR SAPRE]
New Delhi;
January 5, 2018 

a challenge to an FIR- Dineshbhai Chandubhai Patel ….Appellant(s) VERSUS State of Gujarat & Ors. ….Respondent(s)

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 12 OF 2018
(Arising out of S.L.P.(Crl.)No.5155 of 2017)
Dineshbhai Chandubhai Patel ….Appellant(s)
VERSUS
State of Gujarat & Ors. ….Respondent(s)
WITH
CRIMINAL APPEAL NO.13 OF 2018
(Arising out of S.L.P.(Crl.)No.5322 of 2017)
Balubhai Ravjibhai Ahir ….Appellant(s)
VERSUS
State of Gujarat & Ors. ….Respondent(s)
CRIMINAL APPEAL NO.15 OF 2018
(Arising out of S.L.P.(Crl.)No.5476 of 2017)
Arjun Shankarbhai Rathod ….Appellant(s)
VERSUS
Harishbhai Ramanbhai Rathod
& Ors. Etc.Etc. ….Respondent(s)
2
CRIMINAL APPEAL NO. 14 OF 2018
(Arising out of S.L.P.(Crl.)No.5475 of 2017)
Manish Patel(Advocate) ….Appellant(s)
VERSUS
Harishbhai Ramanbhai Rathod
& Ors. Etc.Etc. ….Respondent(s)
CRIMINAL APPEAL NO.16 OF 2018
(Arising out of S.L.P.(Crl.)No.5500 of 2017)
Harishbhai Ramanbhai Rathod ….Appellant(s)
VERSUS
State of Gujarat & Anr. ….Respondent(s)
AND
CRIMINAL APPEAL NO. 17 OF 2018
(Arising out of S.L.P.(Crl.)No.5867 of 2017)
Manharbhai Muljibhai Kakadia ….Appellant(s)
VERSUS
State of Gujarat & Ors. ….Respondent(s)

3
J U D G M E N T
Abhay Manohar Sapre, J.
1) Leave granted.
2) These appeals are filed against the common
final judgment and order dated 10.07.2017 passed
by the High Court of Gujarat at Ahmedabad in
Criminal Misc. Application (for quashing and set
aside FIR/Order) No. 16731 of 2016 with Crl. Misc.
Appln. Nos. 13733, 14842/2016, SPCRA Nos. 4387,
4357, 4951/2016, Crl.Misc. Appln. No. 32440/2016
in Crl. Misc. Appln. No.16731/2016 whereby the
Single Judge of the High Court partly allowed the
application for quashing the FIR.
3) In order to appreciate the issues involved in
this bunch of appeals, it is necessary to state few
relevant facts. The facts are taken from the SLP
paper books.
4
4) The dispute arising between the parties to this
bunch of appeals essentially relates to a piece of
land bearing Survey No. 96/3/2, Block No. 121,
admeasuring 5281 sq. mts., Plot No. 71,
admeasuring 3475 sq. mts. of Town Planning
Scheme No. 36 (Althan), situated at village Althan,
Taluka & city -Surat (hereinafter referred to as "the
disputed land”).
5) The disputed land was jointly owned by the
members of one Rathore family, who according to
them, belonged to Halpai caste.
6) Six members of the Rathore Family
(hereinafter referred to as the Complainants) filed
one joint complaint to the Commissioner of Police,
Surat on 25.04.2011 (Annexure-P-2) complaining
therein that one person by name - Dineshbhai
Chandubhai Patel in conspiracy with several other
named persons jointly defrauded and deceived the
5
complainants by taking advantage of their illiteracy,
poverty and unawareness got executed bogus Power
of Attorney with bogus signatures in relation to the
disputed land. It was alleged that these persons
again in furtherance with the conspiracy got the
disputed land transferred in favour of several
persons and illegally got the construction maps
sanctioned to enable them to do construction over
the disputed land.
7) In short and in substance, the grievance of the
complainants was that the above named persons
conspired together and snatched away from the
complainants their aforementioned valuable land by
committing fraud, cheating, deception, breach of
trust etc. on them.
8) The complainants enclosed all disputed
documents along with their complaint to show
prima facie case alleged to have been committed by
6
the above-named persons and prayed to the
Commissioner of Police to investigate the entire case
in relation to their land and bring the investigation
to its logical end by first registering the FIR and
then after holding a proper investigation, file the
charge sheet in the competent Court against all
those found involved in the case and prosecute
them for the offences which they have allegedly
committed and punish them under the Indian Penal
Code and other related Acts.
9) This was followed by another complaint
(Annexure P-6) filed with the Collector (SIT), Surat
on 23.01.2012 against six named persons seeking
therein the prosecution of those persons for having
committed the alleged offences punishable under
Sections 34, 114, 120-B , 420 ,465 ,468, 471 and
476 of the Indian Penal Code, 1860 (hereinafter
referred to as “IPC”) read with Sections 3, 7 and 11
7
of the Scheduled Castes and Scheduled Tribes
(Prevention of Atrocities) Act, 1989. The complaint
also set out the allegations with details alike the
previous one with some new facts.
10) Yet another third complaint was filed with the
Collector, District Disputes Redressal Forum, Surat
(Annexure-P-13) on 07.10.2013 by one of the
complainants against 8 named persons making
more or less same allegations made in the first two
complaints with more detailed facts seeking to
prosecute them for the commission of offences
named in the earlier complaints.
11) It is these three complaints which led to
registration of the FIR (CR No.I.C.R. No. 90 of 2016)
on 06.06.2016 with Khatodara Police Station, Surat
giving rise to filing of several criminal applications,
bail petitions etc. one after the other at the
8
instances of the named accused persons and others
alleged to be involved in the cases.
12) These cases were filed in the lower Court, the
High Court and also in this Court one after the
other during the last 4 years. The Courts passed
several orders with observations made therein.
13) The present bunch of appeals arises out of the
criminal applications filed by the named accused
persons in the aforementioned three complaints
under Section 482 of the Code of Criminal
Procedure, 1973 (hereinafter referred to as “the
Code”) in the Gujarat High Court seeking therein a
prayer to quash the aforementioned FIR.
14) By impugned judgment dated 10.07.2017, the
Single Judge of the High Court partly allowed the
criminal applications and passed the following
operative portion of the judgment contained in Para
88 which reads as under:
9
 “(1) The First Information Report, so far as
the offence punishable under Sections 406,
420, 120B of the Indian Penal Code and the
Atrocities Act is concerned, is quashed. The
investigation as regards the allegations of
creating the two bogus power of attorneys
and erasing of 73AA is concerned, shall be
completed by the Commissioner of Police,
Surat in accordance with law.
(2) The Commissioner is also directed to
undertake the investigation as regards the
persons, who had approached the land
owners and had obtained the thumb
impressions on the complaints addressed to
the Commissioner of Police, Surat. To put it
in other words, I direct the Commissioner to
undertake proper investigation as regards the
allegations of blackmailing and extortion
leveled against the particular persons.”
15) It is against this judgment, both parties, i.e.,
the complainants and the accused persons have felt
aggrieved and filed these appeals.
16) So far as the accused persons are concerned,
they have challenged that part of the order by which
the High Court has dismissed their criminal
applications and declined to quash the FIR in
relation to some offences alleged against them.
According to the accused persons, the High Court
10
should have quashed the entire FIR instead of
quashing part of it.
17) So far as the complainants are concerned, they
have challenged that part of the judgment by which
the High Court has quashed the FIR in relation to
some offences. According to the Complainants, the
High Court should have upheld the entire FIR as it
being legal and proper, it should have been given
full effect in accordance with law against the
accused persons.
18) This is how, the entire controversy is now
again raised before this Court in this bunch of
appeals by way of special leave at the instance of
the complainants and accused persons in their
respective appeals.
19) Heard Mr. Mukul Rohtagi, Dr. A.M. Singhvi,
Mr. Yatin Oza, Ms. Meenakshi Arora and Mr.
Shamik Sanjanwala, learned senior counsel for the
11
accused persons and Mr. Dushyant Dave and Mr.
Harin P. Raval, learned senior counsel for the
complainants.
20) Mr. Mukul Rohatgi, Dr. A.M. Singhvi, Mr.
Yatin Oza and Ms. Meenakshi Arora, learned senior
counsel appearing for the accused persons, in their
respective appeals, strenuously contended that the
High Court had rightly quashed the FIR in part but
erred in not proceeding to quash the FIR in full
because in the light of the findings on which the FIR
was quashed in part, nothing then remained for the
investigating authorities to probe in the remaining
FIR which was upheld.
21) It is this submission, which was elaborated by
all the senior counsel by placing reliance on several
documents, observations of the High Court made in
the earlier round of litigation and in the impugned
judgment with a view to show that the entire FIR is
12
an abuse of legal process and caused harassment to
the accused persons. It was urged that FIR does not
make out any much less prima facie case against
any of the accused persons as the parties having
settled the matter in writing and the complainants
having accepted the huge consideration from the
accused persons, there does not arise any cause to
the Complainants to now file such belated FIR
against the accused persons in relation to the
subject matter in question. According to the
learned counsel, it is also barred.
22) In reply, learned senior counsel Mr. Dushyant
Dave and Harin P. Rawal appearing for the
complainants urged that the High Court should
have dismissed the criminal applications filed by the
accused persons and upheld the entire FIR as a
whole for being probed as, according to them, the
FIR did disclose prima facie cognizable offences
13
against the accused persons named therein. It was
urged that keeping in view the nature of the
offences, the law of limitation does not apply as has
been held by this Court in number of similar cases.
23) Learned counsel further urged that there was
no justification much less legal justification on the
part of the High Court to have quashed the FIR in
part and hence the judgment to that extent deserves
to be set aside.
24) It is this submission, which was elaborated by
the learned senior counsel by placing reliance on
several documents filed by them including placing
reliance on the observations of the High Court in
the earlier round of litigation and the impugned
judgment and at the same time also denied the
documents filed by the accused persons including
their contents and correctness.
14
25) Having heard the learned counsel for the
parties at length and on perusal of the record of the
case, we are inclined to accept the submissions of
the learned counsel appearing for the Complainants
finding force therein whereas we do not find any
merit in the submissions urged by the learned
counsel appearing for the accused persons.
26) The law on the question as to when a
registration of the FIR is challenged seeking its
quashing by the accused under Article 226 of the
Constitution or Section 482 of the Code and what
are the powers of the High Court and how the High
Court should deal with such question is fairly well
settled.
27) This Court in State of West Bengal & Ors.
vs. Swapan Kumar Guha & Ors. (AIR 1982 SC 949)
had the occasion to deal with this issue. Y.V.
Chandrachud, the learned Chief Justice speaking
15
for Three Judge Bench laid down the following
principle:
“Whether an offence has been disclosed
or not must necessarily depend on the facts
and circumstances of each particular case. If
on a consideration of the relevant materials,
the Court is satisfied that an offence is
disclosed, the Court will normally not
interfere with the investigation into the
offence and will generally allow the
investigation in the offence to be completed
for collecting materials for proving the
offence.
The condition precedent to the
commencement of investigation under S.157
of the Code is that the F.I.R. must disclose,
prima facie, that a cognizable offence has
been committed. It is wrong to suppose that
the police have an unfettered discretion to
commence investigation under S.157 of the
Code. Their right of inquiry is conditioned
by the existence of reason to suspect the
commission of a cognizable offence and they
cannot, reasonably, have reason so to suspect
unless the F.I.R., prima facie, discloses the
commission of such offence. If that
condition is satisfied, the investigation must
go on. The Court has then no power to stop
the investigation, for to do so would be to
trench upon the lawful power of the police to
investigate into cognizable offences.”
28) Keeping in view the aforesaid principle of law,
which was consistently followed by this Court in
16
later years and on perusing the impugned
judgment, we are constrained to observe that the
High Court without any justifiable reason devoted
89 pages judgment (see-paper book) to examine the
aforesaid question and then came to a conclusion
that some part of the FIR in question is bad in law
because it does not disclose any cognizable offence
against any of the accused persons whereas only a
part of the FIR is good which discloses a prima facie
case against the accused persons and hence it
needs further investigation to that extent in
accordance with law.
29) In doing so, the High Court, in our view,
virtually decided all the issues arising out of the
case like an investigating authority or/and appellate
authority decides, by little realizing that it was
exercising its inherent jurisdiction under Section
482 of the Code at this stage.
17
30) The High Court, in our view, failed to see the
extent of its jurisdiction, which it possess to
exercise while examining the legality of any FIR
complaining commission of several cognizable
offences by accused persons. In order to examine
as to whether the factual contents of the FIR
disclose any prima facie cognizable offences or not,
the High Court cannot act like an investigating
agency and nor can exercise the powers like an
appellate Court. The question, in our opinion, was
required to be examined keeping in view the
contents of the FIR and prima facie material, if any,
requiring no proof.
31) At this stage, the High Court could not
appreciate the evidence nor could draw its own
inferences from the contents of the FIR and the
material relied on. It was more so when the
material relied on was disputed by the
18
Complainants and visa-se-versa. In such a
situation, it becomes the job of the investigating
authority at such stage to probe and then of the
Court to examine the questions once the charge
sheet is filed along with such material as to how far
and to what extent reliance can be placed on such
material.
32) In our considered opinion, once the Court
finds that the FIR does disclose prima facie
commission of any cognizable offence, it should stay
its hand and allow the investigating machinery to
step in to initiate the probe to unearth the crime in
accordance with the procedure prescribed in the
Code.
33) The very fact that the High Court in this case
went into the minutest details in relation to every
aspect of the case and devoted 89 pages judgment
to quash the FIR in part lead us to draw a
19
conclusion that the High Court had exceeded its
powers while exercising its inherent jurisdiction
under Section 482 of the Code. We cannot concur
with such approach of the High Court.
34) The inherent powers of the High Court, which
are obviously not defined being inherent in its very
nature, cannot be stretched to any extent and nor
can such powers be equated with the appellate
powers of the High Court defined in the Code. The
parameters laid down by this Court while exercising
inherent powers must always be kept in mind else it
would lead to committing the jurisdictional error in
deciding the case. Such is the case here.
35) On perusal of the three complaints and the FIR
mentioned above, we are of the considered view that
the complaint and FIR, do disclose a prima facie
commission of various cognizable offences alleged
by the complainants against the accused persons
20
and, therefore, the High Court instead of dismissing
the application filed by the accused persons in part
should have dismissed the application as a whole to
uphold the entire FIR in question.
36) Learned counsel for the accused persons after
the arguments were over filed brief note and placed
reliance on 2 decisions of this Court reported in
(2015) 11 SCC 730 and (2011) 3 SCC 351 in
support of their contentions. We have perused the 2
decisions. In our view, both the decisions are
distinguishable on facts, whereas the decision on
which we have placed reliance is more on the point.
It is for the reason that in the first place, the 2
decisions relied on by the learned counsel for the
accused persons were the cases where a complaint
was filed in the Court under Section 138 of the
Negotiable Instruments Act and in other case under
some sections of IPC. It is this complaint which was
21
sought to be quashed by invoking the inherent
jurisdiction under Section 482 of the Code. Such is
not the case here. Secondly, the decision therefore
turned on the facts involved in respective cases.
37) In the case at hand, the challenge is especially
to registration of the FIR. This Court in Swapan
Kumar Guha (supra) case examined the exercise of
inherent powers of the High Court in the context of
a challenge to an FIR. In our view, therefore, the
law laid down in Swapan Kumar Guha (supra) is
directly applicable to the facts of this case as
against the law laid down in the two cited decisions.
38) In the light of foregoing discussion, it is now
necessary that the matter, which is subject matter
of FIR in question, needs to be investigated in detail
by the investigating authorities in accordance with
procedure prescribed in the Code.
22
39) We have purposefully refrained from making
any observation on the merits and also refrained
from giving our reasoning on factual issues arising
out of the case, else it may cause prejudice to the
parties and also hamper the on-going investigating
process undertaken by the police authorities.
40) Though learned senior counsel appearing for
the parties argued the issues touching the merits of
the case by referring to hundreds of documents but,
in our view, it is wholly unnecessary to enter into
the factual arena once we record a finding that a
prima facie case is made out on reading the FIR
including the documents enclosed therein. We,
therefore, do not consider it necessary to go in detail
of their submissions. Needless to say, all these
submissions and unproved and disputed
documents on which reliance was placed by the
23
parties would be dealt with at a later stage as and
when the occasion arises.
41) In view of foregoing discussion, the appeals
filed by the complainants, i.e., criminal appeals @
S.L.P. (Crl.) Nos. 5476 & 5475 of 2017 are allowed.
The impugned judgment is set aside. As a sequel to
our order, the appeals filed by the accused persons,
i.e., criminal appeals @ S.L.P.(Crl.) Nos. 5155, 5322,
5500 & 5867/2017 are dismissed.
42) As a consequence, the criminal applications
filed by the accused persons under Section 482 of
the Code out of which these appeals arise are
dismissed.
43) Since the FIR is pending for quite some time,
we direct the investigating authorities to complete
the investigation of the case without any bias and
prejudices strictly in accordance with law and
proceed ahead expeditiously.
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44) Before parting, we consider it proper to clarify
that this order should not be construed as having
decided any issue on merits either way. The
investigating authorities would not, therefore, be
influenced in any manner by any of the
observations made by the lower Courts and the
High Court in their respective orders while
investigating the matter.
………...................................J.
[R.K. AGRAWAL]


…...……..................................J.
 [ABHAY MANOHAR SAPRE]
New Delhi;
January 5, 2018