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PETITIONER: AMAR CHAND AGARWALLA

       Vs.

RESPONDENT: SHANTI BOSE AND ANOTHER ETC.

DATE OF JUDGMENT22/12/1972

BENCH: VAIDYIALINGAM, C.A. BENCH: VAIDYIALINGAM, C.A. ALAGIRISWAMI, A. DUA, I.D.

CITATION:  1973 AIR  799            1973 SCR  (3) 179  1973 SCC  (4)  10  CITATOR INFO :  R          1973 SC1274  (17)  E          1973 SC2145  (8)  E&R        1978 SC   1  (15)  R          1979 SC 663  (9)  R          1986 SC1721  (9)

ACT: Code  of  Criminal Procedure (Act 5 of 1898),  ss.  439  and 561APower  of High Court to quash charges  and  proceedings- Scope of.

HEADNOTE: As a result of a judicial enquiry in relation to a complaint by the appellant against the four respondents, summons  were issued  to  the  respondents,  and  before  the  Magistrate, evidence,   oral  and  documentary,  was  adduced   by   the complainant  (appellant)  in the presence of  the  accused (respondents).   On a consideration of those materials,  the Magistrate  framed  charges against I all the  four  accused under  ss.  120  B/409 1. P.C. and  under  s.  409,  against accused  1 to 3, in September 1968.  Thereafter,  the  trial proceeded,  a large volume of oral and documentary  evidence was let in, and all that remained was the examination of two prosecution witnesses and a court-witness before closing the trial.   All the prosecution witnesses, examined  till  then were also cross-examined by the respondents.  At that stage, in  March  1969, the 4th accused moved the  High  Court  for quashing the proceedings and the other accused followed with similar petitions. The  High  Court, in spite of the  complainant  representing that  the  trial  had almost come to  a  close  quashed  the charges and proceedings on the grounds that, the complainant had  suppressed  material facts, that  the  two  prosecution witnesses  should  not  be allowed to be  examined  ’in  the circumstances  of  the case’, that the’ examination  of  the court  witness was not necessary as it would only  prejudice the  accused and under the effect of cross-examination,  and that the evidence on record ruled out any offence of  breach of trust or a conspiracy to commit it. Allowing the appeal to this Court, HELD : The High Court was in error

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(a)  It is not as if the accused had moved the High Court at the earliest stage when summons was issued to them.  Nor had they  ,approached  the High Court when charges  were  framed against  them.   If  the case of the accused  was  that  the allegations  try  the  complaint  did  not  constitute   the offences  complained  of or that the complainant was  to  be quashed  on any other ground available in law,  the  accused should  have  approached the High Court at  least  when  the charges were framed. [186DE] (b)  Assuming  there was a suppression of material facts  by the  complainant that was a matter to be considered  by  the trial  Court.   Similarly, whether the  evidence  on  record established  that  an  offence  of  breach  of  trust  or  a conspiracy  to  commit it, had been committed,  Is  again  a matter for the trial court to come to a conclusion after, an appraisal  of the entire evidence let in by the  prosecution and the defence.  The High Court was not justified, at  that stage,  to  have  embarked  upon  an  appreciation  of   the evidence. [187AC] (c)  The  accused  never challenged the order of  the  trial court regarding the examination of prosecution witnesses  or the court-witness, and 180 the High Court was not justified in holding that they should not  be  examined,  and hence,  the  order  regarding  their examination should stand. Jamatraj Kewalji Govani v. The State of Maharashtra,  [1963] 3 S.C.R. 415, referred to. (d)  If  the  High Court had passed the order  quashing  the charges   and  proceedings  in  exercise  of  its   inherent jurisdiction under s.561A, Cr. P.C. then the exercise of the power  by  the High Court was not  justified,  because,  the present  case  does  not  come  within  the  ambit  of   the principles  laid down by this Court, in R. K. Kapur  v.  The State of Punjab, [1960] 3 S.C.R. 388. [188 A-C] (e)  Even  assuming  that  the  High  Court  was  exercising jurisdiction under s. 439, Cr.  P.C., the present was not a. case  for interference by the High Court.  The  jurisdiction of  the  High  Court is to be exercised  nearly,  under  the section,  only in exceptional cases when there is a  glaring defect  in the procedure or there is a manifest error  on  a point  of  law and consequently a  flagrant  miscarriage  of justice. [188D]

JUDGMENT: CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 101 to 103 of 1970. Appeals  by special leave from the judgment and order  dated October  10,  1969 of the Calcutta High  Court  in  Criminal Revision Nos. 238, 289 and 290 of 1969. D.   Mukherjee  and S. Ghosh for the appellants (in all  the appeals). A.   N.  Mulla,  J. M. Khanna, Vishnu Bahadur  Saharaya  and Yogindra  Khushalani for the respondents, (in Cr.   A.  Nos. 101 & 103/70). R.   A. Gupta for respondent (in Cr.  A. No. 102/70). S.   C. Mazumdar for the State (in all the appeals). The Judgment of the Court was delivered by VAIDIYALIGAM,  J. These three appeals by the  complaint,  by special  leave,  are against the common judgment  and  order dated  August  10,  1969,  of the  Calcutta  High  Court  in Criminal  Revisions Nos. 238, 289 and 290 of  1969,  setting aside  the charge under section 120B read with  section  409

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I.P.C.  framed against all the four accused and  the  charge under section 409 IPC framed against accused Nos 1 to 3. The High  Court  by the same judgment, quashed  the  proceedings based  upon the said charges, which were pending before  the Presidency  Magistrate,  7th  Court, Calcutta  in  case  No. C/3443 of 1967. The  appellant in all these three appeals, Amar Chand  Agar- walla,  filed  a  complaint  before  the  Chief   Presidency Magistrate, Calcutta, on November 21, 1967, on the basis  of which the four 181 accused  persons, namely, Paramanada Agarwalla, Madan  Mohan Gour,  Jhumermal Agarwala and Shanti Bose, were required  to answer  charges under section 120B/409 and 409  IPC.   These persons  will be referred to as accused Nos. 1, 2, 3  and  4 respectively.   The  case was later on  transferred  to  the Presidency  Magistrate, 7th Court, Calcuttta, for  disposal. The 7th Presidency Magistrate, after recording the  evidence of  ten prosecution witnesses, framed a charge on  September 7, 1968, under section 120B/409 against all the four accused and a charge under section 409 IPC against accused Nos. 1 to 3. The allegations in the complaint were briefly as follows The  complainant was a partner of M/s.  Kalinga Bakery  Bis- cuit Confectionery and Mineral Water Company of Rourkela  in Orissa  and  was  granted actual users’  import  licence  on November 18, 1966, by the Joint ’Chief Controller of imports and Exports, Calcutta, for import of skimmed milk powder and other  commodities  upto the value of  Rs.  60,000/-.   This commodity  was  for  the  purpose  of  being  used  in   the licensee’s  factory.  The complainant appointed  M/s.   Arun Importer (P) Ltd., owned, managed and controlled by  accused Nos.   1  to 3, as his agents to import 52.5  bags  of  milk powder  from New Zealand.  The first accused wrote a  letter dated  July  25, 1967, informing the  complainant  that  the goods  had  already  been shipped and  that  they  would  be arriving very shortly.  Accused Nos.  1 to 3 also offered to assist the complainant with a loan of Rs. 25,000/- to enable him to clear the shipping documents from the Bank.  The  4th accused  was  introduced by the other accused as  a  Customs Clearing  Agent  and on their suggestion,  the,  complainant appointed  him  as his clearing agent.  After  clearing  the shipping documents with the assistance of the loan  provided by  the accused, the complainant, however, was not  informed about  the  actual  arrival of the  ship.   The  complainant addressed  a letter dated August 19, 1967, to accused No.  4 asking for information about the arrival of the goods.  None of the accused gave any intimation about the arrival of  the goods.   However, to his surprise, the complainant  read  in the newspaper a report on August 22, 1967, about the  police having recovered from the various parts of Calcutta  several bags  of  milk powder stated to have been  imported  on  his account.   The complainant rushed to Calcutta and  contacted the  accused  but  was  not able  to  get  any  information. Accused  No.  4  flatly  declined  to  even  recognise   the complainant  or talk to him; accused Nos. 1 to  3,  however, professed  ignorance about the whole thing and  hinted  that accused  No.  4  might  have diverted  the  goods  to  other persons.   On  August  26, 1967, an  application  was  filed before the Chief Presidency Magistrate to direct the  police to  make  an  investigation  under  section  156(3)  of  the Criminal Procedure Code re- 182 garding  the  missing quantity of milk powder. In  the  said application, however, only Shanti Bose (the present  accused No.  4) was cited as an accused, as the complainant did  not

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have  any  reason to suspect the other  accused.   The  milk powder  seized  by the police was later on  directed  to  be returned  to  the  complainant  by the  High  Court  on  his furnishing  security.  Accused Nos.  1 to 3, coming to  know about  this proceeding, instituted on September 25, 1967,  a suit  against  the complainant in the High Court  (Suit  No. 2283  of 1967) praying for a declaration that the  plaintiff was  the pledge of 316 bags of milk powder of the  defendant and  prayed for a decree in the sum of Rs.  26,744.87.  They also  asked for various interim reliefs.   The  complainant, during  the  pendency of the proceedings  before  the  Chief Presidency  Magistrate,  came to know that all  the  accused persons  had  taken  away on August  19,  1967,  the  entire quantity of 525 bags of milk powder, which had been imported on   his   account  without  his   knowledge,   consent   or instructions  and that they had also mis-appropriated  about 200 bags before the police could raid their premises.  On an ascertainment  of these facts, the complainant withdrew  his original  complaint  with the permission of  the  court  and instituted the present complaint against all the accused. On receipt of the complaints the Chief Presidency Magistrate ordered a judicial enquiry to be held by the 9th  Presidency Magistrate.  In the judicial enquiry held by the latter, the complainant  had  brought  on record  various  documents  to substantiate  his allegations.  As a result of the  enquiry, the  Chief  Presidency  Magistrate  on  December  26,  1967, summoned  all  the  four  accused  persons  under   sections 120B/409 and 409 an transferred the case for disposal to the 7th  Presidency Magistrate, The learned Magistrate, after  a consideration  of  the materials placed before  him  by  the complainant, framed on September 7, 1968 charges against all the  accused under sections 120B/409 IPC and a charge  under section 409 IPC against accused Nos.  1 to 3. None of the accused persons moved the High Court against the order of the Magistrate issuing process or against the order dated  7-9-1968  framing charges against them.  It  is  seen from the records that a large volume of oral and documentary evidence  had already been lot in and the trial  itself  had almost come to the closing stage.  What remained was only to examine  two more witnesses on the side of the  prosecution, as  per order dated 24-21969, and also to examine one  Durga Dutt  Chowdhury  as  a  court  witness  under  section  540, Criminal  Procedure Code, as per order dated 7-3-1969.   The witnesses  examined so far by the prosecution had also  been cross-examined, by the defence. 183 While  matters  stood thus, the 4th accused moved  the  High Court in Criminal Revision No. 238 of 1969 for quashing  the charges  and  the entire proceedings that  had  taken  place before  the  Magistrate.   There was also a  prayer  in  the alternative  for stay of the criminal proceedings  till  the disposal of Civil Suit No. 2283 of 1967 Accused No. 2  filed a similar Revision No. 289 of 1969, followed by accused Nos. 1 and 3, who were the, petitioners in Criminal Revision  No. 290 of 1969. All the three Criminal Revisions were, heard together by the High Court and have been dealt with in its common  judgment. On behalf of the accused, five contentions were urged before the  High  Court  for quashing the charges as  well  as  the entire proceedings pending before the Presidency Magistrate. The  first contention related to the maintainability of  the present proceedings by the complainant, when he himself  was an  accused  in a case under section 5 of  the  Imports  and Exports (Control) Act 1947, stated by the Central Bureau  of Investigation,  Economic Offences wing, Calcutta, in  B.  C.

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case  No. 23/W/67. it was urged before the High  Court  that though  he  had  been discharged, he  is,  nevertheless,  an interested  complainant.   The  High  Court  rejected   this contention  and  held  that, on that  account,  the  present proceedings cannot be quashed. The  second contention of the accused related to the  effect of ,the order of withdrawal of the earlier complaint on  the present  proceedings.  It was pleaded that the dismissal  of the, first complaint operates as a bar to these proceedings. However, this contention also was rejected by the High Court on the ground that an order of dismissal under section  203, Criminal Procedure Code, is no bar to the entertainment of a second  complainant  on  the similar facts,  though  such  a complaint   can  be  entertained,  only  under   exceptional circumstances.   The  High Court ultimately  held  that  the present proceedings are not unwarranted of unable in view of the  first  order of discharge in the circumstances  of  the present case. The third contention that was taken before the High Court by the accused was that the factum of entrustment has not  been established by clear and cogent evidence and as such,  there cannot  be  any  breach of trust,  for  less  any  dishonest conversion leading to a conspiracy.  The learned Judge  held that  it  is  difficult,  at that  stage,  on  the  evidence adduced,  to hold that there has not been  any  entrustment, especially as the whole case depends upon on appreciation of the  entire evidence for coming to a conclusion one  way  or the  other.   On this reasoning, this  contention  also  was rejected. 184 It must be noted that the third contention was an invitation to  the High Court to consider the evidence already  adduced before  the Magistrate and to come to a conclusion  that  no entrustment  had been established.  The High Court,  in  our opinion, ,quite rightly, declined at that stage, to go  into that  question  of  tact and left it to  the  Magistrate  to assess and appreciate the evidence and come to a  conclusion one way or the other.  We are particularly referring to this aspect  because,  as  will be seen later,  ,the  High  Court adopted  a different criteria when it dealt with  the  fifth contention of the accused. The fourth contention of the accused was that both the first and   the  second  complaints  suppressed  material   facts, vitiating the present proceedings.  The fifth contention, as the  High  Court  itself observes, related  to  the  merits, namely,  that the evidence on record does not establish  the offences  with  which the accused are  charged.   These  two contentions have found favour with the High Court.  It is on the  basis of the acceptance of these contentions  that  the entire proceedings have been quashed. The   fourth  contention  of  the  accused  was   that   the complainant had suppressed material facts, which were within his  knowledge, in the first complaint filed on  August  26, 1967.   Particularly, it was stressed that  the  complainant had  not  even referred to the Civil Suit No. 2283  of  1967 instituted  against him.  The said complaint also  does  not refer to the complainant having taken a loan of Rs. 25,000/- from  the  accused.   The learned Judge  has  accepted  this criticism as justified.  It is not necessary for us to refer to, what according to the learned Judge were, certain  omis- sions  made  by the complainant in  his  original  complaint filed  on August 26, 1967.  But it is enough to  state  that the view of the learned Judge that even the suit  instituted against  the  complainant had not been referred to,  is  not justified.   The  complaint was filed on  August  26,  1967,

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whereas  the  suit  against the  complainant  was  filed  on September  26,  1967.  It is also the view  of  the  learned Judge  that  the present complaint also. does not  refer  to certain matters, which were within the knowledge of the com- plainant.   We  do  not  propose even  to  advert  to  these matters. According to the High Court, there has been a suppression of some  material facts in the two petitions of complaint  and, therefore,  the present proceedings must be held to  be  bad and  repugnant  effecting their maintainability.   The  High Court  has  referred  in  this case to  a  decision  of  the Calcutta  High Court which, in our opinion, has no  bearing. The  decision  is  in Sunder Das  Loghani  v.  Farun  Rustom Iran(1).  That was a case of (1) A.I.R. 1939 Calcutta 320. 185 discharge  of  the  accused under section  253  (2)  of  the Criminal  Procedure  Code,  as the  Magistrate  was  of  the opinion  that  the complainant had  deliberately  suppressed several  facts and  that the complaint  was  a  thoroughly dishonest  one. in the end the High Court has held that  the Present  Proceedings are bad and improper and,  therefore, they have to be quashed. The  fifth  and the last contention taken on behalf  of  the accused  relates,  as the High Court itself states,  to  the merits of the case and is based Upon the evidence on record, both oral and documentary.  After a consideration of certain items  of  evidence,  the learned Judge has  held  that  the evidence on record rules out any offence of breach of trust. or  a conspiracy to commit the same, by the accused  persons and, therefore, the present croceedings are not maintainable and have to be quashed. A representation appears to have been made on behalf of  the complainant  that  a  large volume  of  evidence,  oral  and documentary, has already been adduced and the trial has gone on  for  a  long time and that  only  two  more  prosecution witnesses  and  a court witness remain to be  examined.   On this  basis  it  was pressed before the High  Court  by  the complainant that the High Court should allow the proceedings to go on and to come to its logical conclusion and that the. High Court should not interfere at that stage.  The  learned Judge, however, considered this representation and held that the  two  remaining  prosecution  witnesses  should  not  be allowed  to be examined ’in the facts and  circumstances  of the  case, as they cannot possibly have any material  effect on the merits of the case.  The High Court further held that even  the proposed examination of the court witness  is  not necessary,  as it will only prejudice the accused  and  undo the  effect of their cross-examination.  On this basis,  the representation  made  on  behalf  of  the  complainant   was rejected. On   behalf  of  the  appellant,  Mr.  D.   Mookerjee   very strenuously  attacked  the reasoning of the High  Court  for quashing  the  charges framed against the  accused  and  the entire   proceedings  that  head  taken  place  before   the Presidency Magistrate.  On the other hand, Mr. A. N.  Mulla, learned  counsel  on behalf of the accused, urged  that  the High Court was justified, in the circumstances, in  quashing the  charges  well as the entire proceedings  so  far  taken place before the Presidency Magistrate.  The learned counsel appearing  for the State supported the appellant and  urged that  the High Court was not justified in  interfering  with the   proceedings  when  the  trial  had  gone  on   for   a considerably long time and was due to close, We have already referred to the 4th and the 5th  contentions

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urged on behalf of the accused which have found favour with 186 the  High  Court.   We have already  pointed  out  that  the learned Judge quite rightly declined, when dealing with  the third  contention,  to  consider,  on  an  appreciation   of evidence, whether an entrustment has been proved.  This, the High Court has properly left to be decided by the Magistrate after the entire evidence is closed.  But when dealing  with the  fifth  contention, which the High  Court  itself  says, relative to the merits of the case, and has to be decided on the  basis  of  the  evidence  on  record,  both  oral   and documentary,  the  High Court instead of adopting  the  same test,  as  it did when dealing with  the  third  contention, embarked  upon  a  fairly  elaborate  appreciation  of   the evidence  on  record and ultimately came to  the  conclusion that the evidence on record does not establish any breach of trust,  or a conspiracy to commit the same, by  the  accused persons.   Regarding the fourth contention, which  also  has found acceptance at the hands of the High Court, it  relates to what according to the accused was, suppression of certain material facts by the complainant in his two complaints. In  our  opinion, the High Court was not justified,  in  the particular  circumstances  of  this case,  in  quashing  the charge,  as  well as the entire proceedings that  had  taken place before the Magistrate. it is not as if the accused had moved  the  High  Court  at  the  earliest  stage  when  the Presidency Magistrate issued sommons to them.  Nor had  they approached  the High Court when charges were framed  against them.   The  accused had ’been summoned,  after  a  judicial enquiry  by the Chief Presidency Magistrate on December  26, 1967,  under  sections  120B/409 and 409  IPC.   Before  the Magistrate, the evidence. oral and documentary, was  adduced by  the  complainant in the presence of the accused.   On  a consideration  of such materials, the Presidency  Magistrate framed  charges  against all the four accused  as  early  as September 7, 1968.  If the case of the accused was that the allegations  in the complaint do not constitute the  offence complained  of or that the complaint has to be  quashed  for any ground available in law. they should have approached the High Court, at any rate. immediately after the charges  were framed.   The  records  disclose  that  it  was  the  fourth accused, who moved the High Court to quash the proceeding on March  17,  1969, earlier than the other accused.   Even  by that date, several prosecution witnesses, had been  examined and  they  had  also been  cross-examined  by  the  accused. Several  items of documentary evidence had already been  let in  during the trial.  Only two prosecution witnesses and  a court witness remained to be examined.  The proper course at that stage to be adopted by the High Court was to allow  the proceedings to go on and to come to its logical  conclusion, one  way or the other,. and decline to interfere with  those proceedings.    The   fourth  contention  related   to   the suppressions of certain 187 material in the complaint. We do not propose to express  any opinion on that aspect because, even assuming that there has been  suppression, that is a matter to be considered by  the Trial Magistrate.  Similarly, as to whether the evidence  on record  establishes that an offence of breach of  trust  has been  committed,  or not, is again a matter  for  the  Trial Court  to come to a conclusion, one way or the other,  after an  appraisal of the entire evidence that is let in  by  the prosecution and by the defence, if any.  The High Court  was not  justified  at  that  stage to  have  embarked  upon  an appreciation of the evidence.  Here again, we do not express

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any  opinion, on merits, as the matter is to be,  considered by the Trial Magistrate. The  High  Court was also equally not justified  in  holding that  the two prosecution witnesses should, not be  examined on the ground that their evidence will not have any material effect  on the merits.  The further view of the  High  Court that the examination of the court witness will prejudice the accused,  is  also  without any basis.  In  fact,  the  High Courts  decision  on.  the question of  these  witnesses  is really on a representation made on behalf of the complainant that the trial is almost coming to a close and that only two more  prosecution witnesses and one court witness remain  to be examined.  So far as we could see, the’ accused have  not challenged  the order of the Magistrate dated  February  24, 1969,  allowing  the  prosecution  to  examine   Satanarayan Agarwalla  and an officer of the Directorate of  Industries, Government  of  Orissa; nor have they challenged  the  order dated  March 7, 1969, of the Magistrate allowing the  prayer of  the prosecution for examining Durga Dutt Chowdhury as  a court  witness  under  section 540.   In  holding  that  the proposed  examination  of Durga Dutt Chowdhury, as  a  court witness, will pre-judice the accused, the High Court has not given  due consideration to the decision of ;this  Court  in Jamatraj Kewalji Govani v.The State of Maharastra(1). It is not clear whether the High Court passed the order,  in question,  under  section 561A or under section 439  of  the Code.  of Criminal Procedure.  This Court has laid down  the principles  in R.,P. Kapur v. The State of Punjab(2),  which have to beborne in mind by the High Court when its  inherent jurisdiction under section 561A is invoked for quashing  the proce edings  pending  before a subordinate court.   It  has been  ’emphasised  that the inherent jurisdiction  could  be exercised  to quash proceedings in a proper case, either  to prevent the abuse of the.process of any court or  otherwise to  secure  the  ends  of  justice.   This  Court  has  also indicated some of the categories of case where- (1) [1967] 3 S.C.R. 415. (2) [1960] 3 S.C.R. 388. 188 the  inherent jurisdiction could and should be exercised  to quash  proceedings.  However, the exercise of the  power  by the High Court, in the case before us, does not come  within the  ambit of the-principles laid down by this Court in  the above  decision. For instance, the second contention  taken before  the  High  Court  by  the  accused  related  to  the maintainability  of  the second complaint,  when  the  first complaint  had  been  withdrawn and the accused  had  been discharged.   If the High Court had accepted the  contention of the accused in that regard, it may be that the High Court was justified in quashing ;the proceedings, though at a very late stage.  But on that point, the High Court’s decision is in  favour of the complainant.  The other points taken  into account by the High Court do not justify the exercise of its power  under section 561A and that too at a very late  stage of the proceedings. Even   assuming   that  the  High   Court   was   exercising jurisdiction under section 439, in our opinion, the  present was  not  a case for interference by the  High  Court.   The jurisdiction  of the High Court is to be exercised  normally under   section  439,  Criminal  Procedure  Code,  only   in exceptional  cases,  when there is a glaring defect  in  the procedure  or there is a manifest error of point of law  and consequently  there  has  been  a  flagrant  miscarriage  of justice.  The High Court has not found any of these circums- tances  to  exist  in the case before us  for  quashing  the

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charge and the further proceedings. The  judgment  and  order of the  High  Court  quashing  the ,charges  framed  against the accused as well as  the  other proceedings  based thereon, pending in case No. C/344  3  of 1967, are set aside.  The learned Presidency Magistrate will proceed   with  the  further  trial  and  give  it  a   very expeditious disposal.  We make it clear that the  directions given  by  the  Chief Presidency  Magistrate  regarding  the examination of two more prosecution witnesses and the  court witness will stand, subject to any modifications that may be made  by  that Court in regard to the directions  I  already given by it.  In the result, the appeals are allowed. V.P.S.                                               Appeals allowed. 189