REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION CRIMINAL  APPEAL NO.    1979        OF 2010

(Arising out of S.L.P. (Crl.) No. 7336 of 2007)

MAHARASHTRA  STATE  ELECTRICITY  DISTRIBUTION  CO.  LTD. & ANR.

— APPELLANT (S)

VERSUS

DATAR SWITCHGEAR LTD. & ORS.  — RESPONDENT (S)

J U D G M E N T

D.K. JAIN, J.:

Leave granted.

2. This appeal, by special leave, is directed against the judgment, dated 9th  

October  2007,  delivered  by  the  High  Court  of  Bombay  in  Criminal  

Application No. 3715 of 2005, in a petition filed by the two appellants  

herein under Section 482 of the Code of Criminal Procedure, 1973 (in  

short  “the  Code”).  By  the  impugned  judgment,  the  High  Court  has  

declined to quash a criminal complaint filed by respondents No.1 to 3 in  

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this appeal against the appellants and others for offences under Sections  

192 and 199 read with Section 34 of the Indian Penal Code, 1860 (for  

short “the IPC”).

3. Shorn of unnecessary details, the facts, material for adjudication of the  

issue arising in this appeal may be stated thus:

Appellant  No.1,  viz.  Maharashtra  State  Electricity  Distribution  Co.  

Ltd.; constituted in terms of the provisions of the Electricity Act, 2003 is the  

successor  in  interest  of  Maharashtra  State  Electricity  Board  (for  short  

“MSEB”)  and  appellant  No.  2  is  its  Chairman.  Respondent  No.1  is  an  

incorporated company, viz. M/s Datar Switchgear Ltd. and respondents No.2  

and  3,  senior  officials  of  respondent  No.1,  are  the  complainants  and  

respondents No.4 to 7 are the co-accused.

4. Pursuant to various contracts entered into between respondent No. 1 and  

MSEB  in  the  year  1993-94  for  installation  of  “Low  Tension  Load  

Management Systems” (for short “LTLMS”), MSEB issued a work order  

on 27th March 1997 whereby respondent No. 1 was required to install at  

various locations and lease out 47,987 LTLMS to MSEB for a period of  

10 years at a monthly rent of  ` 825/- for the first six years, and about  `  

650/- per month for the remaining four years.  

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5. Clause 8.1 of the said contract stipulated that respondent    No.1 would  

send  intimation  to  the  Section-in-charge  of  MSEB  regarding  the  

installation of the equipment, and thereafter, a commissioning report was  

to  be  prepared  in  that  regard,  which  was  to  be  signed  jointly  by  the  

representative of the complainant and the concerned Section-in-charge of  

the MSEB.

6. During the validity period of the contract, various disputes arose between  

respondent No.1 and MSEB.  On 19th February 1999, respondent No.1  

partially terminated the contract, conveying to MSEB that it would not  

install any more LTLMS, and would only maintain the installed items.  

7. On 21st April 1999, respondent No.1 terminated the contract in entirety.  

Nevertheless,  they  offered  to  maintain  the  installed  objects  provided  

MSEB continued to pay rent during the duration of the work order.  As  

the dispute arose between respondent No. 1 and MSEB vide order dated  

5th May 1999, the High Court of Bombay referred the disputes to Arbitral  

Tribunal.

8. The  arbitration  proceedings  commenced  on  19th February  1999.  The  

controversy in the instant case pertains to the amended written statement  

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filed by the MSEB on 7th February 2000, the relevant extract of which  

reads as follows:

“9A.  The  Respondents  submit  that  the  Claimants  are  not  entitled to claim any amount from the Respondents as claimed  or otherwise.  In fact,  as stated hereinafter,  the Claimants  are  bound to refund to the Respondents all the amounts recovered  by them from the Respondents along with interest thereon. The  Respondents  submit  that  the  Claimants  are  guilty  of  having  practiced  fraud  upon  the  Respondents.  The  Claimants  have  fabricated documents as also are guilty of misrepresentation of  material facts in the matter of commissioning objects, installing  them, taking out  print  outs therefrom and submitting bills  in  respect thereof…. …. …. …. …. …. …. …. …. …. …. …. ….  …. …. …. …. …. …. …. …. …. ...

a) COMMISSIONING/COMMISSIONING REPORTS

The provisions of Clause 8.1 of the work order provided for  installation and commissioning of LTLMS systems in presence  of Section in Charge of every Section. The Claimants not only  did not inform the concerned/Section in Charge as required by  Clauses  (a)  and  (b)  thereof,  but  submitted  commissioning  reports for the LM systems making it appear as if the objects  were installed on a given date in presence of the representatives  of the Section in charge as mentioned in the said reports, and  thereafter submitted the same for the signature of the Sections  in  charge.  With  a  view that  the  sub divisions,  divisions  and  circles of the Respondents are not able to find out the same, the  Claimants  failed  and  neglected  to  send  copies  of  the  Commissioning reports  as  provided in Clause 8.0(d),  thereby  making it impossible for the officers mentioned in clause (e)  thereof to depute representatives to inspect the commissioned  objects  in  the  circle.  The  Claimants  thus  obtained  payments  from the dates  mentioned  in  the  said reports  fraudulently  by  misrepresentation of the facts….”

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9. The Arbitral Tribunal passed the final award on 18th June 2004 whereby  

it  directed  MSEB  to  pay  `185,97,86,399/-  as  damages  to  respondent  

No.1,  and  pay  interest  at  the  rate  of  10%  p.a.  on  the  sum  of  

`179,15,87,009/-.  The  award  contained  the  following  observations  

suggesting that the MSEB had introduced certain fabricated documents  

as evidence:

“As  regards  the  Commissioning  Reports  produced  by  the  Respondents at Exhs. C-64 and C-74, the Claimants submitted,  and with considerable merit that the Respondents had indulged  in tampering the commissioning reports produced on the record.  The submission is correct.”

10. On the basis of the said observations in the arbitral award, on 23rd June  

2004 respondent Nos. 1 to 3 filed criminal complaint No. 476 of 2004  

before  the  Judicial  Magistrate,  First  Class,  Nasik  for  offences  under  

Sections 192 and 199 read with Section 34 of the IPC.  The Judicial  

Magistrate, First Class, Nasik took cognizance of the said complaint and  

issued summons against all the accused named in the complaint.

11.Being aggrieved by the order of the Magistrate taking cognizance of the  

complaint,  appellants  preferred  the  afore-stated  petition  under  Section  

482 of the Code before the High Court of Bombay for quashing of the  

complaint.

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12. As  stated  above,  the  High  Court,  vide  the  impugned  judgment  has  

dismissed the said petition. The High Court has inter alia observed that a  

prima  facie  case  has  been  made  out  against  the  accused  and  the  

complaint  clearly  establishes  the  joint  action of  the  accused to  attract  

vicarious liability under the IPC. Hence, the present appeal by two of the  

accused.

13. Mr.  Vikas  Singh,  learned  senior  counsel  appearing  on  behalf  of  the  

appellants assailed the impugned judgment on the ground that the dispute  

between the parties was purely civil in nature, and the criminal justice  

system has been set in motion only to pressurize the appellants. In order  

to  buttress  the  contention  that  the  High  Court  would  be  justified  in  

exercising its powers under Section 482 of the Code to quash a vexatious  

criminal  complaint  to  prevent  an  abuse  of  the  process  of  the  Court,  

learned counsel commended us to the decisions of this Court in  Inder  

Mohan Goswami & Anr.  Vs.  State of  Uttaranchal and Ors.1, K.L.E.  

Society & Ors.  Vs.  Siddalingesh2, Baijnath Jha Vs.  Sita Ram & Anr.3,  

Suneet Gupta Vs. Anil Triloknath Sharma & Ors.4 and G. Sagar Suri &  

Anr. Vs. State of U.P. & Ors.5

1 (2007) 12 SCC 1 2 (2008) 4 SCC 541 3 (2008) 8 SCC 77 4 (2008) 11 SCC 670 5 (2000) 2 SCC 636

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14. Relying  on  the  decisions  in  Pepsi  Foods  Ltd.  &  Anr.  Vs.  Special   

Judicial  Magistrate  & Ors.6, S.M.S.  Pharmaceuticals  Ltd.  Vs.  Neeta  

Bhalla  &  Anr7 and  Keki  Hormusji  Gharda  &  Ors.  Vs.  Mehervan  

Rustom Irani & Anr.8, learned counsel contended that the IPC, save and  

except in some specific cases, does not contemplate vicarious liability of  

a person who is not directly charged for the commission of an offence,  

and a person cannot be made an accused merely by reason of his official  

position. Further,  it  was contended that in order to launch prosecution  

against the officers of a company, the complainant must make specific  

averments as to the role played by each of the officials accused in the  

complaint.  In  order  to  buttress  the  contention,  learned  counsel  placed  

reliance on the decisions of this Court in N.K. Wahi Vs. Shekhar Singh  

& Ors.9, Sharon Michael & Ors. Vs. State of Tamil Nadu10, S.K. Alagh  

Vs.  State of Uttar Pradesh & Ors.11 and  Maksud Saiyed  Vs.  State of   

Gujarat & Ors.12.

15. Mr. Ashok Desai, learned senior counsel appearing for respondents No.1  

& 2, on the other hand, while emphasizing that power under Section 482  

6 (1998) 5 SCC 749 7 (2005) 8 SCC 89 8 (2009) 6 SCC 475 9 (2007) 9 SCC 481 10 (2009) 3 SCC 375 11 (2008) 5 SCC 662 12 (2008) 5 SCC 668

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of the Code is to be exercised sparingly and with circumspection, argued  

that  in  the  instant  case,  in  light  of  the  averments  in  the  complaint,  a  

prima facie case is made out against the appellants and, therefore, the  

High Court  was  fully  justified  in  declining to  exercise  its  jurisdiction  

under the said provision.  In the written submissions filed on behalf of the  

respondents reliance is placed on the decisions of this Court in  Sunita  

Jain  Vs.  Pawan  Kumar  Jain13 and  Som  Mittal  Vs.  Government  of   

Karnataka14  to contend that the present case does not fall in the category  

of “rarest of rare” cases, warranting exercise of jurisdiction by the High  

Court under Section 482 of the Code. Learned counsel contended that the  

offence of fabrication of false evidence cannot be described as a civil act,  

and in any event, the existence of a civil remedy does not preclude the  

maintainability of criminal complaint.

16. Relying  on  the  decisions  of  this  Court  in  Tarun  K.  Shah  Vs.  C.R.  

Alimchandani & Ors.15 and K.M. Mathew Vs. K.A. Abraham & Ors.16, it  

was next contended that it was not necessary to allege an overt act by  

each of the accused, and in that regard, the averments in the complaint  

were sufficient.  Moreover,  the use of the expression “whoever  causes  

13 (2008) 2 SCC 705 14 (2008) 3 SCC 574 15 (2001) 9 SCC 728 16 (2002) 6 SCC 670

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any  circumstance  to  exist”  in  Section  192  of  the  IPC  indicates  that  

vicarious  liability  is  in-built  within  the  Section,  and  the  complaint  

contains specific averments to that effect.  

17. Learned counsel urged that the offences under Sections 192 and 199 IPC  

were  complete  when  the  accused  had  adduced  the  fabricated  

commissioning  reports  in  proceedings  before  the  arbitrators,  who  had  

adversely commented on the conduct of the appellants. It was argued that  

the  said  offences  would  survive  irrespective  of  the  sustenance  or  

otherwise of the arbitral award. Commending us to the decisions of this  

Court  in  In  Re:  Suo  Moto  Proceedings  Against  R.  Karuppan,   

Advocate17,  Sushil Kumar  Vs.  Rakesh Kumar18 and Murray & Co.  Vs.  

Ashok Kr. Newatia & Anr.19, learned counsel pleaded that the offences  

of  perjury and fabrication of false evidence require stern action to be  

taken against persons indulging in such acts.

18.Before embarking on an evaluation of the rival submissions, it would be  

apposite to briefly examine the nature of the power of the High Court  

under Section 482 of the Code.  

17 (2001) 5 SCC 289 18 (2003) 8 SCC 673 19 (2000) 2 SCC 367

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19. It is well settled that though the inherent powers of the High Court under  

Section 482 of the Code are very wide in amplitude, yet they are not  

unlimited. However, it is neither feasible nor desirable to lay down an  

absolute rule which would govern the exercise of inherent jurisdiction of  

the Court. Nevertheless, it is trite that powers under the said provision  

have to be exercised sparingly and with caution to secure the ends of  

justice and to prevent the abuse of the process of the Court. Where the  

allegations in the first information report  or the complaint taken at its  

face value and accepted in their  entirety do not constitute the offence  

alleged, the High Court would be justified in invoking its powers under  

Section 482 of the Code to quash the criminal proceedings. (See:  R.P.  

Kapur Vs. State of Punjab20 and Rupan Deol Bajaj & Anr. Vs. Kanwar  

Pal Singh Gill & Anr.21.)  

20. In Som Mittal  (supra),  a three judge bench of this Court, while holding  

that  the  power  under  Section  482  of  the  Code  to  quash  criminal  

proceedings should be used sparingly,  and with  circumspection  in the  

“rarest of rare cases”,  observed that:

“When  the  words  “rarest  of  rare  cases”  are  used  after  the  words “sparingly and with circumspection” while describing  the scope of Section 482, those words merely emphasise and  

20 AIR 1960 SC 866 21 (1995) 6 SCC 194

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reiterate  what  is  intended  to  be  conveyed  by  the  words  “sparingly  and  with  circumspection”.  They  mean  that  the  power under Section 482 to quash proceedings should not be  used  mechanically  or  routinely,  but  with  care  and  caution,  only when a clear case for quashing is made out and failure to  interfere  would  lead  to  a  miscarriage  of  justice.  The  expression “rarest of rare cases” is not used in the sense in  which it  is  used with  reference  to  punishment  for  offences  under Section 302 IPC, but to emphasise that the power under  Section 482 CrPC to quash the FIR or criminal proceedings  should be used sparingly and with circumspection. Judgments  are not to be construed as statutes. Nor words or phrases in  judgments to be interpreted like provisions of a statute. Some  words  used  in  a  judgment  should  be  read  and  understood  contextually and are not intended to be taken literally. Many a  time a judge uses a phrase or expression with the intention of  emphasising a point  or  accentuating a principle  or  even by  way  of  a  flourish  of  writing  style.  Ratio  decidendi  of  a  judgment is not to be discerned from a stray word or phrase  read in isolation.”

21. Thus,  the  question  for  consideration  is  whether  or  not  in  light  of  the  

allegations in the complaint against the appellants, the High Court was  

correct in law in declining to exercise its jurisdiction under Section 482  

of the Code?  

22.In order to appreciate  the rival  contentions of the parties,  it  would be  

expedient to refer to the relevant portions of the complaint:

“5. In the said Arbitration proceedings it was falsely contended  by the Accused at para 9(A)(a) of the Written Statement that the  Complainant  No.  1  had  submitted  false  and  fabricated  Commissioning  Reports  and  the  equipment  particularized  therein  was  installed  without  the  presence  of  the  MSEBs  Section-in-Charge and the Accused relied upon a copy of the  

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Commissioning Report inter alia pertaining to Shirpur Section  in Dhule Circle. The said Commissioning Report as relied upon  by the Accused was tendered as Exhibit ‘C-64’ by the witness  examined  on  behalf  of  the  Accused  No.  1.  The  said  Commissioning Report contained an endorsement ‘not installed  in presence’ to allege that the Commissioning of the equipment  particularized in the said Commissioning Report at Exhibit ‘C- 64’ was not done in the presence of MSEBs Section Officer.  The said Commissioning Report contained the signature of the  representative  of  the  Complainant  No.  1  and  the  said  endorsement  was  made  above  the  said  signature  of  the  Complainant No. 1’s representative in a manner to depict as if  the Complainant  No. 1’s representative had accepted the fact  alleged in the said endorsement.

6. On the other hand, the Complainant No. 1 brought on record  their copy of the Commissioning Report pertaining to Shirpur  Section in Dhule Circle as Exhibit ‘C-74’ which had no such  endorsement as is found on the face of Exhibit ‘C-74’. It is the  case of the Complainant No.1  that the Accused with common  criminal intent caused the impugned endorsement “not installed  in presence” to be superscribed on Exhibit ‘C-64’ after it was  duly signed by the representative of the Complainant No. 1 and  the Section in charge of MSEB so as to convey the impression  that  the  Complainant  No.1’s  representative  had  accepted  the  fact alleged in the said endorsement. The said falsification and  fabrication of the record was brought to the notice of the Ld.  Arbitrators  in  the  Arbitration  proceedings  and  the  Ld.  Arbitrators  observed  in  their  award  dated  18.06.2004  as  under:…. …. …. …. …. …. …. …. …. …. …. …. …. …. ….  …. …. …. …. …. …. …. … The Complainants say and submit that the Ld. Arbitrators have  thus  held  that  the  said  endorsement  was  fabricated  and  was  admittedly tendered in  evidence by  the Accused No.1 acting  under the control and management of Accused Nos. 2, 3, 4 and  5.  The  Accused  No.  6  was  particularly  responsible  for  the  conduct  of the MSEBs officers in the Shirpur Section which  falls  under  the  Dondaicha  Division  of  Dhule  District. The  Complainants  say  and  submit  that  the  Accused  acted  with  common  criminal  intent  to  falsify  and  fabricate  the  said  

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endorsement  with  the  intention  to  support  the  case  of  the  Accused  No.  1  that  the  equipment  was  installed  by  the  Complainant No. 1 without the presence of the officers of the  MSEB. The Complainants say and submit that the said action  was therefore clearly intended to pervert the course of justice  and  misled  (sic)  the  Ld.  Arbitrator  into  entertaining  in  erroneous  opinion  touching  upon  the  point  of  material  determination  as  to  whether  the  Complainant  No.  1  had  installed  the  equipment  without  the  presence  of  the  MSEBs  Section-in-charge.  The Complainants  say and submit that  the  Accused fabricated false evidence which has been tendered by  them  in  the  course  of  judicial  proceedings  before  the  Ld.  Arbitrators and the Accused are guilty of offence u/s 192, 199  r/w Sec. 34 of the Indian Penal Code. The Complainants say  and  submit  that  the  Accused  acted  with  common  criminal  intention to play fraud on the Ld. Arbitral Tribunal and deny  justice to the Complainant No. 1.”

(Emphasis supplied by us)

23.It  is  manifest  that  the  allegation  against  the  appellants  herein  is  that  

appellant No.1 had, acting under the control and management of all the  

accused,  including  appellant  No.  2  and  in  particular  accused  No.  6,  

superscribed  an  endorsement  on  Exhibit  C-64  with  an  intention   to  

support  its  case  and  tendered  the  same  in  the  course  of  judicial  

proceedings before the Arbitral Tribunal, thereby committing offence of  

fabricating  false  evidence  in  terms of  Section 192 and 199 read with  

Section 34 IPC.

24.At this juncture, it  would be apposite to refer to the relevant statutory  

provisions and examine the legal position.

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25.Sections 192 and 199 IPC, read as follows:

“192.  Fabricating  false  evidence.-Whoever  causes  any  circumstance to exist or makes any false entry in any book or  record,  or  electronic  record  or  makes  any  document  or  electronic  record  containing  a  false  statement,  intending  that  such circumstance, false entry or false statement may appear in  evidence in a judicial proceeding, or in a proceeding taken by  law before a public servant as such, or before arbitrator,  and  that  such  circumstance,  false  entry  or  false  statement,  so  appearing  in  evidence,  may  cause  any  person  who  in  such  proceeding is to form an opinion upon the evidence, to entertain  an erroneous opinion touching any point material to the result  of such proceeding, is said “to fabricate false evidence”.”

“199. False statement made in declaration which is by law  receivable as evidence.-  Whoever, in any declaration made or  subscribed by him, which declaration any Court of Justice, or  any public servant or other person, is bound or authorized by  law to receive  as evidence of any fact,  makes any statement  which is false, and which he either knows or believes to be false  or does not believe to be true, touching any point material to the  object  for  which  the  declaration  is  made  or  used,  shall  be  punished in the same manner as if he gave false evidence.”

26.It  is  plain that  for constituting an offence under Section 192 IPC, the  

following ingredients must be satisfied:

(i) Causing any circumstance to exist, or making any false entry  in any book or record or making any document containing a  false statement.  

(ii) Doing one of the above acts with the intention that it may  appear in evidence in a judicial proceeding, or in a proceeding  taken by law before a public servant or an arbitrator.

(iii)  Doing such act  with the intention that it  may cause any  person, who in such proceeding, is to form an opinion upon the  evidence to entertain an erroneous opinion touching any point  

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material  to  the  result  of  such proceeding.  (See:  Babulal  Vs.   State of Uttar Pradesh & Ors.22.)  

27.Similarly,  Section  199  IPC  requires  the  following  ingredients  to  be  

established:

“(i) Making of a declaration which a Court or a public servant  is bound or authorised by law to receive in evidence.

(ii) Making of a false statement in such declaration knowing or  believing it to be false.

(iii) Such false statement must be touching any point material to  the object for which the declaration is made or used.”

28. A bare perusal of the complaint shows that the gravamen of the allegation  

is that a fabricated document containing the offending endorsement was  

tendered in evidence before the Arbitral Tribunal on behalf of MSEB by  

accused No. 6, who was in-charge of Shirpur section.  It is evident from  

the afore-extracted paragraphs of the complaint that other accused have  

been  named  in  the  complaint  because,  according  to  the  complainant,  

MSEB-accused No. 1 was acting under their control and management.  It  

bears repetition that the only averment made against appellant No. 2 is  

that  appellant  No.1,  i.e.  MSEB  was  acting  under  the  control  and  

management of appellant No. 2 along with other three accused. There is  

no denying the fact that appellant No. 2 happened to be the Chairman of  

22 AIR 1964 SC 725.  

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MSEB at the relevant time but it is a settled proposition of law that one  

cannot draw a presumption that a Chairman of a company is responsible  

for all acts committed by or on behalf of the Company. In the entire body  

of the complaint there is no allegation that appellant No. 2 had personally  

participated in the arbitration proceedings or was monitoring them in his  

capacity as the Chairman of MSEB and it was at his instance the subject  

interpolation was made in Exhibit C-64.  At this stage, we may refer to  

the extract of a Board resolution, pressed into service by the respondents  

in  support  of  their  plea  that  appellant  No.  2  was  responsible  for  the  

conduct  of  business  of  appellant  No.  1.   The  said  resolution  merely  

authorises  the Chief-Engineer  to file counter  claim before the Arbitral  

Tribunal in proceedings between appellant No. 1 and respondent No. 1.  

It  rather  demonstrates  that  it  was  the  Chief  Engineer  who was  made  

responsible for looking after the interest of the appellant No. 1 in those  

proceedings.   In  this  regard,  it  would  be  useful  to  advert  to  the  

observations  made  by  a  three  judge  bench  of  this  Court  in  S.M.S.  

Pharmaceuticals (supra) :-

“There is no universal rule that a director of a company is in  charge  of  its  everyday  affairs.  We have  discussed  about  the  position of  a director  in a company in order  to illustrate  the  point that there is no magic as such in a particular word, be it  director,  manager  or  secretary.  It  all  depends  upon  the  respective  roles  assigned  to  the  officers  in  a  company.  A  

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company  may  have  managers  or  secretaries  for  different  departments, which means, it may have more than one manager  or secretary.”

29. It is trite law that wherever by a legal fiction the principle of vicarious  

liability  is  attracted  and  a  person  who  is  otherwise  not  personally  

involved in the commission of an offence is made liable for the same, it  

has to be specifically provided in the statute concerned.  In our opinion,  

neither Section 192 IPC nor Section 199 IPC, incorporate the principle of  

vicarious liability, and therefore, it was incumbent on the complainant to  

specifically  aver the role  of  each of  the accused in the complaint.   It  

would be profitable to extract the following observations made in  S.K.   

Alagh (supra) :-  

“As, admittedly,  drafts  were drawn in the name of the  Company,  even  if  the  appellant  was  its  Managing  Director, he cannot be said to have committed an offence  under  Section  406  of  the  Penal  Code.  If  and  when  a  statute  contemplates  creation  of  such a  legal  fiction,  it  provides  specifically  therefor.  In  absence  of  any  provision  laid  down under  the  statute,  a  Director  of  a  Company  or  an  employee  cannot  be  held  to  be  vicariously  liable  for  any  offence  committed  by  the  Company itself.”

30. Therefore, we are of the view that even the Board Resolution, adduced by  

the complainant, does not establish that appellant No.2 was involved in  

the  alleged  fabrication  of  false  evidence  or  adducing  the  same  in  

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evidence before the arbitral tribunal. In the absence of any such specific  

averment demonstrating the role of appellant No.2 in the commission of  

the offence, we find it difficult to hold that the complaint, even assuming  

it to be correct in its entirety, discloses the commission of an offence by  

appellant No.2 under Sections 192 and 199 of IPC.

31. However, in so far as the case of appellant No.1 company is concerned,  

bearing  in  mind  the  fact  that  Exhibit  C-64  was  submitted  with  the  

intention to support the averments in the written statement filed on their  

behalf,  which  could  possibly  influence  the  decision  of  the  arbitral  

tribunal  in  relation  to  the  conduct  of  the  respondent  No.  1  while  

discharging  their  obligations  under  the  contract  between  them  and  

appellant No. 1, we are unable to hold that prima facie, a case of offences  

under Sections 192 and 199 IPC is not  made out  against  them.  It  is  

evident from the observations of the Tribunal quoted in para 9 (supra)  

that had the tribunal not doubted the veracity of the said document,  it  

could  have  made  a  material  difference  to  the  result  of  the  arbitral  

proceedings.  

32.It was faintly argued that the arbitral award on the basis whereof the said  

complaint has been filed has been set aside and therefore, the complaint  

is liable to be quashed on this ground.  The submission is untenable as  

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the  offences  under  Sections  192  and  199  IPC,  if  made  out,  exist  

independent of the final arbitral award. We are, therefore, of the opinion,  

that it is not a fit case for the exercise of power under Section 482 of the  

Code, in favour of appellant No. 1.

33.We shall now examine whether appellant No.2 could be made liable for  

the afore-mentioned offences by operation of Section 34 of IPC. It is trite  

that  Section  34  IPC does  not  constitute  a  substantive  offence,  and  is  

merely in the nature of a rule of evidence, and liability is fastened on a  

person who may have not been directly involved in the commission of  

the offence on the basis of a pre-arranged plan between that person and  

the  persons  who  actually  committed  the  offence.  In  order  to  attract  

Section 34 IPC, the following ingredients must be established:

“(i) there was common intention in the sense of a pre-arranged  plan;

(ii) the person sought to be so held liable had participated in  some  manner  in  the  act  constituting  the  offence.”  (See:  Chandrakant  Murgyappa  Umrani  &  Ors.  Vs.  State  of   Maharashtra23; Hamlet @ Sasi & Ors.  Vs.  State of Kerala24;   Surendra Chauhan Vs. State of M.P.25)

34. It is manifest that common intention refers to a prior concert or meeting  

of minds, and though, it is not necessary that the existence of a distinct  

23 1998 SCC (Cri) 698 24 (2003) 10 SCC 108 25 (2000) 4 SCC 110

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previous plan must be proved, as such common intention may develop at  

the spur of the moment, yet the meeting of minds must be prior to the  

commission of offence suggesting the existence of a pre-arranged plan.  

Therefore, in order to attract Section 34 of the IPC, the complaint must,  

prima facie,  reflect a common prior concert or planning amongst all the  

accused.   In  our  opinion,  in  the  present  case,  the  complaint  does  not  

indicate the existence of any pre-arranged plan whereby appellant No. 2  

had,  in  collusion,  with  the  other  accused  decided  to  fabricate  the  

document  in  question  and  adduce  it  in  evidence  before  the  arbitral  

tribunal.   There is not even a whisper in the complaint indicating any  

participation of appellant No. 2 in the acts constituting the offence, and  

that being the case we are convinced that Section 34 IPC is not attracted  

in his case.   

35. In the final analysis, we are of the opinion that no prima facie case has  

been  made  out  against  appellant  No.2  in  respect  of  offences  under  

Sections 192 and 199 of the IPC, even with the aid of Section 34 of the  

IPC.   Therefore,  it  was a  fit  case  where  the  High Court  should have  

exercised  its  powers  under  Section  482  of  the  Code  by  quashing  the  

complaint against appellant No. 2.

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36.For the aforegoing reasons, the appeal is dismissed qua appellant No. 1; it  

is allowed in relation to appellant No.2; and consequently order of the  

Magistrate  taking  cognizance  against  appellant  No.  2  in  Complaint  

No.476 of 2004 is quashed.  

.……………………………………J.            (D.K. JAIN)  

                             .…………………………………….J.           (H.L. DATTU)

NEW DELHI; OCTOBER 8, 2010

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