Factual aspects
Challenge is against the dismissal of quash petition against the compliant filed
1)The appellant in Criminal Appeal no.776 of 2024 is the accused no.2 in the complaint filed by the 1st respondent complainant under Section 200 of the Code of Criminal Procedure, 1973 (for short, ‘the Cr.P.C’) alleging the commission of offences under Sections 420, 406, 467, 468 and 472 read with Section 120B of the Indian Penal Code, 1860 (for short, ‘the IPC’) and Section 13 of the Essential Commodities Act, 1955. The appellants in Criminal Appeal no.777 of 2024 are the accused nos.1, 4 and 5 in the same Complaint. The appellants in these two appeals filed a petition under Section 482 of the Cr.P.C before the High Court of Punjab and Haryana at Chandigarh for quashing the said complaint and for quashing the summoning order dated 16th July 2013 passed on the said complaint. The High Court, by the impugned judgment dated 25th August 2014, dismissed the said petition.
2. On 23rd September 2002, under the Liquified Petroleum Gas (LPG) Distributorship Agreement (for short, ‘the Distributorship Agreement’), the accused no.1 – M/s.Energy Infrastructure (India) Limited (for short, ‘the accused company’) appointed the 2nd respondent accused no.7 (Arun Sharma, Proprietor of M/s.Arshya Max Agencies) as a distributor for distribution of LPG cylinders in the areas of Panchkula and Chandigarh. The 2nd respondent, on behalf of the accused company, purported to execute a Point of Sale agreement on 7th March 2003 (for short, ‘the POS agreement’) by which he purported to appoint the 1st Respondent complainant as a sales outlet (Point of Sale) in the town of Dhanas to sell MaxGas to the consumers. By the POS agreement, the 2nd respondent agreed to pay a flat rate commission per cylinder sold by the 1st respondent complainant. A demand draft in the sum of Rs.74,900/was issued in favour of the accused company by the 1st respondent complainant.
3. The accused company addressed a letter dated 3rd March 2004 to the 2nd respondent alleging serious lapses in customer services rendered by the 2nd respondent, which allegedly caused a big dent in the reputation of the accused company. Various instances of lapses in service were set out in the said letter. The accused company also stated that the 2nd respondent had illegally supplied the cylinders to the 1st Respondent complainant beyond the assigned territory in Punjab. It was specifically stated in the said letter that the name of the 1st respondent complainant was not reflected in the records of the accused company as a Point of Sale. The accused company alleged that, thus, the 2nd respondent had committed a breach of the Distributorship Agreement. Another allegation in the said letter was that a cheque issued by the 2nd respondent had been dishonoured.
5. The learned Judicial Magistrate, First Class, Chandigarh, from 17th November 2004 onwards, recorded the statements of the 1st respondent complainant and other witnesses. After examining the witnesses, on 15th December 2011, the learned Magistrate held that for proper adjudication of the case, it was necessary to send the complaint to the jurisdictional police station for investigation in accordance with Section 202 of the Cr.PC. According to the case made out by the appellant, a report under Section 202 of the Cr.PC was never submitted by the Police, and without waiting for the said report, the learned Magistrate passed the summoning order on 16th July 2013 for the offences punishable under Sections 420, 406, 467, 468 and 472 read with Section 120B of the IPC and Section 13 of the Essential Commodities Act, 1955. By the impugned judgment and order dated 25th August 2014, the High Court dismissed the quashing petition by holding that disputed questions of fact were involved in the petition, which can be dealt with only after recording evidence.
Consideration of submissions
Section 202 cr.p.c explained in detail
8. In this case, there is no dispute that some of the accused, including three of the appellants, were residing outside the territorial jurisdiction of the Court of the learned Magistrate before whom the complaint was filed by the 1st respondent–complainant. Subsection (1) of Section 202 of the Cr.PC was amended with effect from 23rd June 2006 by the Act No.25 of 2005. Subsection (1) of Section 202 of the Cr.PC, as amended, reads thus:
“202. Postponement of issue of process.—
(1) Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance or which has been made over to him under section 192, may, if he thinks fit, and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding:
Provided that no such direction for investigation shall be made,—
(a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or
(b) where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200.”
(emphasis added)
The portion starting from “and” and ending with “his jurisdiction” was added with effect from 23rd June 2006. The requirement of postponing the issue of the process was introduced on 23rd June 2006 which is applicable only when one of the accused stays outside the jurisdiction of the court. The said requirement is held to be mandatory. The mandatory requirement of postponing the issue of the process because the accused was residing at a place beyond the area where the learned Magistrate exercises his jurisdiction was not applicable when the complaint was filed in 2004. The mandate introduced with effect from 23rd June 2006 was not applicable on the date of filing of the complaint. We are not examining whether the amended provision will apply to a complaint filed before 23rd June 2006 in which the order of issue of process has been passed after 23rd June 2006.
Magistrate called for report under section 202 cr.p.c after evidence (sworn) was over
9) We may note here that when the order dated 15th December 2011, calling for the report from the concerned Police Station under Section 202 of the Cr.PC was passed, the learned Magistrate had already recorded the evidence of the 1st respondent complainant and two witnesses–S.C.Mahto (CW1) and Rajiv Kumar (CW3). Therefore, after recording the evidence of the three witnesses, the learned Magistrate was not satisfied that the material on the record of the complaint, including the testimony of the three witnesses, was sufficient to pass the summoning order. That is why the learned Magistrate had called for the report under Section 202 of the Cr.PC.
Police did not file the report under section 202 cr.p.c
10) Initially, some controversy was raised as the order dated 17th December 2012, passed by the learned Magistrate, records that a report was received. Therefore, we called for a soft copy of the record of the complaint. The record reveals that the report referred to in the order dated 17th December 2012 was submitted by the Police, seeking two more months to file the report. It is an admitted position that on record of the complaint, the report made by the Police under Section 202 of the Cr.PC was not received. In any case, Shri Kanwardeep Kaur, IPS, Senior Superintendent of Police, Union Territory of Chandigarh, in the affidavit filed on 24th October 2023, categorically stated that the Police did not file the report under Section 202 of the Cr.PC till 16th July 2013, when the summoning order was issued by the learned Magistrate.
Magistrate ought to have waited till the report was received but summoned the accused
11) After recording the evidence of the three witnesses and perusing the documents on record, the learned Magistrate passed the order calling for the report under Section 202 of the Cr.PC. He postponed the issue of the process. The learned Magistrate ought to have waited until the report was received. He had an option of conducting an inquiry contemplated by subsection (1) of Section 202 of the Cr.PC himself due to the delay on the part of the Police in submitting the report. But, he did not exercise the said option. For issuing the order of summoning, the learned Magistrate could not have relied upon the same material which was before him on 15th December 2011 when he passed the order calling for the report under Section 202 of the Cr.PC. The reason is that, obviously, he was not satisfied that the material was sufficient to pass the summoning order. It is not the case of the 1st respondent complainant that when the learned Magistrate passed the order dated 16th July 2013, there was some additional material on record. At least, the order of the learned Magistrate does not say so. The order does not even consider the earlier order dated 15th December 2011 calling for the report under subsection (1) of Section 202 of the Cr.PC. The order issuing process has drastic consequences. Such orders require the application of mind. Such orders cannot be passed casually. Therefore, in our view, the learned Magistrate was not justified in passing the order to issue a summons.
Remand is warranted
12) Therefore, an order of remand is warranted. But, we cannot overlook that the complaint subject matter of these appeals was filed on 17th July 2004, and the order of summoning was passed nine years thereafter, i.e. on 13th August 2013. The complaint is nearly twenty years old; even the summoning order was passed eleven years ago. Therefore, we allowed the learned senior counsel appearing for the parties to address us on merits. We may note that the High Court has not recorded cogent reasons for not entertaining the prayer for quashing the complaint. The only reason given by the High Court is that there were disputed questions of fact, and therefore, the controversy can be decided only after evidence is recorded.
Dispute is civil nature and no allegation that the accused company was involved in transaction between 2nd accused and 1st respondent-complaint
15) In fact, the entire dispute is of a civil nature arising out of a commercial transaction. Therefore, in our considered view, taking the complaint and documents relied upon by the 1st respondent–complainant as correct, no case was made in the complaint or in the evidence of the 1st respondent to proceed against the appellants. The evidence of CW3 (Rajiv Kumar) shows that he has stated that the 2nd, 5th and 6th respondents in the Criminal Appeal of accused no.2 had approached the 1st respondent–complainant and had represented that the accused company is a limited company and accused nos.2 to 4 are its Directors. There is no allegation that the accused company was involved, in any manner, with the transaction between the 2nd accused and the 1st respondent–complainant. Hence, continuing the complaint against the appellants will amount to an abuse of the process of law. Therefore, a case is made out for quashing the complaint as against the appellants.
Quash set-aside and allowed the appeal
16) Hence, the Appeals must succeed. The impugned judgment dated 25th August 2014 is set aside insofar as the appellants are concerned. The complaint bearing Criminal Complaint no.128 dated 17th July 2004 pending in the Court of Judicial Magistrate, 1st Class, Chandigarh is, hereby, quashed only insofar as the appellants are concerned. The complaint will proceed against the rest of the accused. The other accused can raise appropriate defences at the time of framing charge or Trial. The Appeals are partly allowed on the above terms with no order as to costs.
Party
Shiv Jatia … Appellant versus Gian Chand Malick & Ors … Respondents– CRIMINAL APPEAL NO.776 OF 2024 – February 23, 2024 – 2024 INSC 142
