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CASE NO.: Appeal (crl.)  1133 of 2006

PETITIONER: Sohan Lal Juneja & Ors

RESPONDENT: State of Punjab

DATE OF JUDGMENT: 09/11/2006

BENCH: ARIJIT PASAYAT & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T (Arising out of SLP (Crl.) No.3112 of 2006)

ARIJIT PASAYAT, J.

       Leave granted.

Challenge in this appeal is to the orders passed by the  Punjab and Haryana High Court dealing with the appellants’  application in terms of Section 438 of the Code of Criminal  Procedure, 1973 (in short the ’Cr.P.C.’) in Criminal Case No.  27303-M of 2006.  The First Information Report (in short ’FIR’)  was lodged against the appellants and others for their alleged  involvement in mis-appropriation of stock.  According to the  appellants, the dispute essentially revolves around contractual  liability and is of a civil nature.  In an arbitration proceeding  the matter is under examination.  The High Court by order  dated 8th May, 2006 granted interim protection in terms of  Section 438 Cr.P.C. on the condition that a sum of  Rs.10,00,000/- shall be deposited with Markfed i.e. the  complainant in the case. Subsequently because of non-deposit  of the amount as directed, notwithstanding the issuance of  notice by this Court the protection was denied and prayer in  terms of Section 438 Cr.P.C. was rejected.

Learned counsel for the appellants submitted that in view  of the decision of this Court in Bal Kishan Das v. P.C. Nayar  [1991 Suppl. (2) SCC 412] the proceedings are not  maintainable and the condition of depositing a huge sum of  Rs.10,00,000/- as directed by the High Court cannot stand  scrutiny in law.

Learned counsel for the respondent-State on the other  hand submitted that a huge loss was caused to the  complainant because of the conspiracy of the appellants and  other employees of the complainant.  This is basically not a  case of civil dispute and even if arbitration proceedings are in  progress, that cannot stand in the way of the criminal  proceedings, can be pursued.    We find that the High Court has not considered the  relevant aspects and has also not indicated any reason as to  why it felt necessary to direct deposit of Rs.10,00,000/-.   Further the ambit of Section 438 Cr.P.C. as delineated by this  Court has not been kept in view.

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In the circumstances, we set aside the orders of the High  Court dated 8.5.2006 and 7.8.2006 and remit the matter to it  for fresh consideration.  Needless to say while dealing with the  matter the High Court shall keep in view the principles  indicated by this Court relating to  Section 438 in Adri Dharan  Das v. State of W.B. [2005 (4) SCC 303] and the relevance and  applicability of the decision in Bal Kishan Das’s case (supra)  while dealing with the application in terms of Section 438  Cr.P.C.

The appeal is disposed of accordingly.