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PETITIONER: ASHOK CHATURVEDI & ORS.

       Vs.

RESPONDENT: SHITUL H CHANCHANI & ANR.

DATE OF JUDGMENT:       13/08/1998

BENCH: SUJATA V. MANOHAR, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T PATTANAIK, J.      Leave granted.      The appellants  have been  arrayed as  accused  persons along  with  others  in    a  complaint  petition  filed  by respondent  No.1   alleging  offences   committed   by   the appellants under  Sections 406,  420, 468  and 120-B  of the Indian Penal Code, in respect of transfer of shares effected by Flex  Engineering Ltd.,  a public  limited  company.  The learned Magistrate  on receipt  of the petition of complaint examined the  complaint  on  oath  and  also  the  witnesses produced by  the complainant. On the basis of those material the Magistrate took cognizance of the offence under Sections 406, 620,  467, 468  and 120-B IPC by his order dated 5.2.96 and directed  issuance of  process  against  the  accused  - appellants. The  appellants then  moved the High Court under Section 482  of the  Code of Criminal Procedure for quashing the  cognizance,   inter  alia,   on  the  ground  that  the allegations made  in the  petition of  complaint even  being accepted on  its face  value no  offence can be said to have been made  out against  them. The High Court by the impugned judgment, however, being of the opinion that the allegations having been  made that  shares have  been transferred on the basis of forged and fabricated signatures a prima facie case has  been   made  out,   and  therefore,  it  would  not  be appropriate to  quash the order of cognizance in exercise of its jurisdiction  under Section  482 of the Code of Criminal Procedure, rejected other prayer of the appellants.      Mr. Ashok  Desai the  learned senior  counsel appearing for the  appellants submitted  that accused  Nos. 1 to 9 are Chairman, Directors  and Secretary  of the  Company  and  no allegation whatsoever  having been  made against them either in the  petition of  complaint or  in the  evidence  adduced before the  Magistrate, the  High  Court  committed  serious error in not quashing the cognizance merely because there is an allegation  of forgery  and being of the opinion that the same could  be substantiated  only during  trial. Mr.  Desai also contended  that in  a company having share capital of 5 crores of  50 lakh shares of Rs. 10/- each at the point when the alleged transfer of share of the complainant took place,

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it is  unimaginable  that  the  100  equity  shares  of  the complainant could  be transferred  against the wishes of the complainant  at  the  connivance  of  the  Director  to  the company. Mr.  Desai also  contended that  the dispute, if at all any  . is  a dispute of civil nature and the complainant himself has  already  filed  a  claim  petition  before  the Consumer Forum  and  the  criminal  proceedings,  therefore, cannot be  permitted to be continued as that would amount to an abuse  of the  process  of  court.  The  learned  counsel appearing for the complainant - respondent on the other hand contended that  on the  materials on  record, the High Court was fully justified in coming to the conclusion that a prima facie case has been made out, and therefore, it is not a fit case for quashing the order of cognizance in exercise of the inherent jurisdiction  of the court under Section 482 of the Code which  has to  be exercised  sparingly and  only when a conclusion is  arrived at  that non-exercise  of  the  power would ultimately lead to abuse of the process of court.      Having examined the rival submissions and the averments made in the petition of complaint as well as the evidence of the complainant  and the witnesses before the Magistrate, we are not  in a position to accept Mr. Desai’s contention that dispute essentially  is a  civil dispute, and therefore, the order of  cognizance should  be quashed.  A mere filing of a claim before the Consumer Forum could not make the dispute a civil dispute.  The aforesaid submission of Mr. Desai has to be rejected.      But the  question  yet  remains  for  consideration  is whether the  allegations made  in the  petition of complaint together with  statements made  by  the  complaint  and  the witness before  the Magistrate taken on their face value, do make  the   offence  for  which  the  Magistrate  has  taken cognizance of?  The learned  counsel for  the respondent  in this connection  had urged  that the  accused had a right to put this  argument at  the time  of framing  of charges, and therefore, this Court should not interfere with the order of Magistrate taking  cognizance, at this stage. This argument, however, does  not appeal  to us inasmuch as  merely because an accused  has a  right to  plead at the time of framing of charges that  there  is  no  sufficient  material  for  such framing of  charges  as  provided  in  Section  245  of  the Criminal Procedure  Code he is debarred from approaching the court even  at an earliest point of time when the Magistrate takes cognizance  of the  offence and summons the accused to appear to  contend that  the very  issuance of  the order of taking cognizance  is invalid  on the ground that no offence can be said to have been made out on the allegations made in the complaint  petition. It  has been  held in  a number  of cases that  power under  Section 482  has  to  be  exercised sparingly and  in the  interest of justice. But allowing the criminal proceeding  to continue  even where the allegations in the  complaint petition do not make out any offence would be tantamount  to an  abuse of  the process  of  court,  and therefore, there  cannot be  any dispute  that in  such case power under  Section 482  of  the  Code  can  be  exercised. Bearing in  mind the  parameters laid  down by this Court in several decisions for exercise of power under Section 482 of the Code,  we have  examined the  allegations  made  in  the complaint petition  and the statement of the complainant and the two  other witnesses made on oath before the Magistrate. We are clearly of the opinion that the necessary ingredients of any  of the  offence have not been made out so far as the appellants are  concerned. The  petition of  complaint is  a vague one  and excepting the bald allegation that the shares of the  complainant have  been  transferred  on  the  forged

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signatures, nothing  further has  been started  and there is not an  iota of material to indicate how all or any of these appellants are  involved  in  the  so-called  allegation  of forgery. The statement of the complainant on oath as well as his witnesses do not improve the position in any manner, and therefore, in our considered opinion even if the allegations made  in   the  complaint  petition  and  the  statement  of complaint and  his witnesses  are taken on their face value, the offence  under Sections  406, 420, 467, 468 and 120-B of the Indian  Penal Code cannot be said to have been made out. This being the position the impugned order of the Magistrate taking cognizance of the offence dated 5.2.1996 so far as it relates the appellants are concerned cannot be sustained and the High  Court also  committed error  in not  invoking  its power under  Section 482  of  the  Code.  In  the  aforesaid premises, the  impugned order  of the  High Court as well as the order  of the  Magistrate dated 5.2.96 taking cognizance of the offence as against the appellants stand quashed.      It is  true that  out of 9 officials of the company who are the  accused persons in the criminal case only 7 of them have preferred  this special leave petition and R.K. Sharma, Whole Time  Director, s  well  as  Capt.  G.P.S.  Choudhary, Director of the company have not preferred the special leave petition. But  in view of our conclusion, allegations in the complaint petition  do not  make out any offence against any of the  officers of  the company it would be futile to allow continuance of  the criminal  proceedings so far as the said two officers of the company are concerned.      In the  premises, as  aforesaid, we  quash not only the cognizance taken  by  the  Magistrate  of  the  offences  as against the  7 appellants  but also  against  the  said  two officers of  the company, namely, Shri R.K. Sharma and Capt. G.P.S. Choudhary. This appeal is accordingly allowed.