REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 779 OF 2007
Rajeswar Tiwari & Ors. .... Appellant (s)
Versus
Nanda Kishore Roy .... Respondent(s)
J U D G M E N T
P. Sathasivam, J.
1) This appeal is directed against the final order dated
31.01.2007 passed by the High Court of Calcutta in C.R.R. No. 2774
of 2005 with C.R.R. No. 2772 of 2005 whereby the High Court
dismissed the applications filed under Section 482 of the Criminal
Procedure Code (hereinafter referred to as `the Code’) by the
appellants to quash the criminal proceedings pending before the
Judicial Magistrate, 2nd Court, Asansol, being Case No. C/438 of 2003
under Section 406/120B of IPC corresponding to T.R. No. 167 of 2003.
2) The facts leading to the present appeal are as under:
a) In 1973, the respondent joined the Indian Iron and Steel
Company Ltd., (renamed IISCO Steel Plant), a unit of Steel Authority
of India Ltd., at Burnpur, near Asansol in West Bengal. In 1989, he
was appointed as Assistant Foreman. In 1991 he filed a writ petition
being C.O. No. 9954(W) of 1991 before the High Court of Calcutta
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seeking direction for considering his claim for promotion to the
post of Senior Mechanic alleging that he was superseded by his
juniors. On 19.01.1995, the respondent filed another writ petition
praying for interim order restraining the appellants from filling up
the post of Assistant Foreman. The High Court, in the said writ
petition, directed for maintaining status quo. In June 1996, the
respondent filed a contempt petition on the ground of violating the
said status quo order by the appellants herein. In the said
contempt petition, the High Court directed for personal appearance
of the concerned officers of the Company and ultimately after
hearing them, dismissed the contempt petition.
b) On 06.12.2003, the respondent filed a private complaint being
C/438 of 2003 before the Additional Chief Judicial Magistrate,
Asansol under Sections 461/468/406 read with Section 120B of IPC
against the appellants herein alleging discrimination by unduly
deducting Rs.1,640/- p.m. from the monthly salary as Income Tax. It
was also stated in the complaint that the amount so deducted was not
deposited with the Income Tax Authority and should be refunded back.
It was also mentioned in the complaint about the wrongful deduction
of the amount on account of cooperative loan issued by the
appellants/Company. On examination of the witnesses under Section
200 of the Code of Criminal Procedure, the Magistrate directed the
Officer-in-Charge P.S. Hirapur to cause an inquiry into the
allegations made in the complaint. On 30.04.2004, the appellants
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informed that the amount of income tax deducted in consonance with
Section 192 of the Income Tax Act being deposited in due course as
tax to the credit of employee/respondent in terms of Section 199 of
the Income Tax Act as uniformly done in respect of every employee
and also produced Form No-16 of the respondent for the period from
01.04.2003 to 31.03.2004. On 15.07.2004 & 30.01.2005, the police
submitted two inquiry reports, inter alia, stating the previous
conduct of the respondent and also stated that the complaint in
issue is civil in nature. On 31.01.2005, after taking into
consideration the inquiry reports of the police, the Judicial
Magistrate, Asansol directed issuance of summons against the
appellants for an offence under Section 406/120B of the Indian Penal
Code. In response to the summons, the appellants made an
application under Section 205 of the Code before the Judicial
Magistrate and the same was rejected by an order dated 26.07.2005.
Subsequently, vide order dated 12.09.2005, the Judicial Magistrate
issued warrant of arrest against the appellants. The appellants
filed application being C.R.R. No. 2774 of 2005 before the High
Court of Calcutta under Section 482 of the Code for quashing of the
complaint and prayed for staying of proceedings in the complaint
bearing No. C/438 of 2003. The appellants also filed another
application under Section 482 being C.R.R. No. 2772 of 2005 seeking
quashing of the order dated 12.09.2005. The High Court, by order
dated 31.01.2007, rejected the prayer for quashing the criminal
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proceedings and disposed of both the applications with a direction
to the trial Court to dispose of the matter within a period of six
months. Aggrieved by the same, the appellants have preferred this
appeal by special leave before this Court.
3) Heard Mr. Ranjit Kumar, learned senior counsel for the
appellants and Mr. Yashank Adhyaru, learned senior counsel for the
respondent.
4) In order to test the claim of both the parties as well as the
correctness of the impugned order of the High Court, it is useful to
refer the details of the complaint dated 06.12.2003 filed by the
respondent. He described himself as an employee of ME Steel, IISCO,
Burnpur and he made the following officers as accused persons:
1. A.K. Jaiswas EDI/C.Cum M.D. IISCO Ltd. Burnpur Works
2. Rajeswar Tiwari GM [P&A]
3. Robin Roy DGM (MM) SMS Deptt.
4. P. Karmakar, AGM [MM] SMS Deptt.
5. Sukumar Mukherjee, Manager Finance
6. Shivaji Roy DGM [PL]
7. Tarit Pal GM [IS]
All are of IISCO Burnpur PS Hirapur Distt. Burdwan
In the complaint, he mentioned about the filing of writ petition in
1991 before the High Court of Calcutta and the order passed therein
in 2003. He also referred to his contempt petition before the High
Court. He alleged that due to the direction of the High Court,
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which was issued at his instance, the abovesaid officers entered
into a criminal conspiracy and with a view to pressurize him for
withdrawing the said contempt, starting giving threats to him in
various manners. According to him, due to such attitude towards
him, the accused persons with a view to get their object fulfilled,
started illegal deduction of Rs. 1640/- per month from his monthly
salary as income tax w.e.f. May 2003. In this way, the accused
persons had deducted an amount of Rs. 13,120/- from his salary on
account of income tax and the said amount had not been deposited
with the income tax authority. The appellant also stated that he
does not fall within the category of taxable income, and in any
event, not to the tune of Rs. 1640/. He also claimed that he sent a
notice under registered post with acknowledgement due on 17.11.2003
to accused Nos. 1 to 5 requesting them to return the money so
deducted illegally from his salary. On receipt of the notice, the
accused persons abused him in the presence of witnesses and others
and also threatened him with dire consequences. He also pointed out
that a sum of Rs. 3050/- had been deducted from his salary illegally
on account of cooperative loan although, on the previous month,
deduction was only to the extent of Rs. 50. With these allegations,
he claimed that accused persons have committed offence under
Sections 467, 468, 403 and 406 read with Section 120B IPC and prayed
for issuance of summons.
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5) We have adverted to almost all the averments/allegations made by
the respondent herein in respect of accused nos. 1 to 5 who are
appellants before us. From this, we are able to understand that the
respondent has grievance against the management in respect of his
non promotion at the relevant time, moving to the High Court of
Calcutta, obtaining certain orders, filing of contempt petition etc.
It is also alleged that the appellants have deducted income tax to
the extent of Rs. 1,640/- per month from his monthly salary as
income tax but according to the respondent, he was not liable to pay
income tax.
6) Mr. Ranjit Kumar, learned senior counsel for the appellants has
pointed out that there is no lapse on their part in respect of the
allegation relating to non promotion of the respondent. In fact,
according to him, the respondent had been held guilty by the CBI in
a case for using fabricating documents for the purpose of promotion.
He also pointed out that though the High Court has permitted to take
action against him according to law, the management did not take any
action against him. He also pointed out that in view of statutory
provisions of the Income Tax Act, particularly, Sections 192, 200,
206, 271C and 276B-BB, like other employees, the respondent was
liable to pay income tax and the appellant as an employer
statutorily bound to deduct an amount from his salary as per the
above provisions. Whatever may be, inasmuch as appellants have
performed their statutory obligation, it is not a case for
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adjudication by the Magistrate on criminal side. He further
contended that the High Court also failed to exercise its
jurisdiction under Section 482 for quashing the summoning order. On
the other hand, Mr. Yashank Adhyaru supported the order of the
Magistrate based on the complaint of the respondent and also
submitted that the High Court has not committed any wrong in
rejecting the petition under Section 482 of the Code.
7) At the relevant time, i.e on 06.12.2003, when the respondent
made a complaint to the Magistrate, he was an employee of IISCO,
Burnpur. There is no dispute about the same.
8) Chapter XVII of the Income Tax Act deals with Collection and
Recovery of Tax. Section 192 speaks about deduction at source from
Salary.
“192. (1) Any person responsible for paying any income
chargeable under the head “Salaries” shall, at the time of
payment, deduct income-tax [***] on the amount payable at
the average rate of income-tax [***] computed on the basis
of the [rates in force] for the financial year in which
the payment is made, on the estimated income of the
assessee under this head for that financial year.”Section 200 relates to duty of person deducting tax.
“200. (1) Any person deducting any sum in accordance with [the
foregoing provisions of this Chapter shall pay within the
prescribed time, the sum so deducted to the credit of the
Central Government or as the Board directs.(2) Any person being an employer, referred to in sub-section
(1A) of section 192 shall pay, within the prescribed time, the
tax to the credit of the Central Government or as the Board
directs.(3) Any person deducting any sum on or after the 1st day of
April, 2005 in accordance with the foregoing provisions of7
this Chapter or, as the case may be, any person being an
employer referred to in sub-section (1A) of section 192 shall,
after paying the tax deducted to the credit of the Central
Government within the prescribed time, [prepare such
statements for such period as may be prescribed] and deliver
or cause to be delivered to the prescribed income-tax
authority or the person authorised by such authority such
statement in such form and verified in such manner and setting
forth such particulars and within such time as may be
prescribed.”Section 206 mandates persons deducting tax to furnish prescribed
returns.
“206. (1) The prescribed person in the case of every
office of Government, the principal officer in the case of
every company, the prescribed person in the case of every
local authority or other public body or association, every
private employer and every other person responsible for
deducting tax [before the 1st day of April, 2005] under
the foregoing provisions of this Chapter [shall, within
the prescribed time after the end of each financial year,
prepare and deliver or cause to be delivered] to the
prescribed income-tax authority [or such other authority
or agency as may be prescribed, such returns in such form
and verified in such manner and setting forth such
particulars as may be prescribed:”Section 271 C deals with penalty for failure to deduct tax at
source.
” 271C. [(1) If any person fails to–
(a)deduct the whole or any part of the tax as required
by or under the provisions of Chapter XVII-B; or(b)pay the whole or any part of the tax as required by
or under–(i)sub-section (2) of section 115-O; or
(ii)the second proviso to section 194B,
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then, such person shall be liable to pay, by way of
penalty, a sum equal to the amount of tax which
such person failed to deduct or pay as aforesaid.”Section 276 B and 276 BB speaks about failure to pay tax to the
credit of Central Government and failure to pay the tax collected at
source.
“276B. If a person fails to pay to the credit of the
Central Government,–(a)the tax deducted at source by him as required by or
under the provisions of Chapter XVII-B; or(b)the tax payable by him, as required by or under–
(i)sub-section (2) of section 115-O; or
(ii)the second proviso to section 194B,
he shall be punishable with rigorous imprisonment for a term
which shall not be less than three months but which may
extend to seven years and with fine.
276BB. If a person fails to pay to the credit of the Central
Government, the tax collected by him as required under the
provisions of section 206C, he shall be punishable with
rigorous imprisonment for a term which shall not be less than
three months but which may extend to seven years and with
fine.”
9) A glance of these provisions make it clear that it is obligatory
on the part of the persons responsible for paying any income
chargeable under the head “salaries”, at the time of payment, deduct
income tax computed on the basis of the rates in force for the
financial year on the estimated income of the assessee and pay the
same to the authority concerned. It also make clear that failure to
deduct tax at source shall be liable to pay, by way of penalty, a
sum equal to the amount of tax which such person failed to deduct or
pay. It also shows that failure to pay tax to the credit of Central
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Government in certain cases or pay the tax collected at source under
Section 276 BB shall be punishable with imprisonment.
10) In the case on hand, it is the categorical stand of the
appellants-management that the amount of tax that has been deducted
from the respondent’s salary as TDS under the head “Salaries” in
terms of Section 192 is uniformly done in respect of each and every
employee of the company. It is also asserted that the amount of tax
so deducted, deposited to the credit of the employees including the
respondent in terms of Section 199. They also produced a copy of
Form No-16 being the certificate under Section 203 of the Income Tax
Act, 1961 for the tax deducted at source from the income chargeable
under the head “salaries” in respect of the respondent relating to
period from April 1st, 2003 to March 31st, 2004.
11) In the light of the factual scenario, let us see the initial
direction of the Judicial Magistrate, Asansol to the IO concerned,
the report of the police officer as well as ultimate order dated
31.01.2005 by the Additional Chief Judicial Magistrate issuing
summons upon the appellants/accused persons for offence under
Section 406 read with 120B IPC in terms of Section 204 of the Code.
When the complaint was forwarded to the SI Hirapur, Police Station,
he conducted an inquiry, recorded statements of IISCO officials,
perused the documents concerned and also noted that the tax was
deducted as per their company norms. After making such a note, the
SI Hirapur has concluded that “the matter is civil in nature” and
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forwarded the same to Additional CJM with a request to clarify the
same. On the basis of the said report, by order dated 31.01.2005,
the Additional CJM, after recording the stand of the complainant
about illegal deduction of Rs. 1640/- per month from his salary as
income tax and the same had not been deposited by the accused
persons to the income tax authority month by month, has concluded
“on perusal of the same, it appears to me that there is sufficient
ground for proceeding against the accused persons under Section
406/120 B IPC.” First of all, it is not clear how the Additional
CJM has concluded that “there is sufficient ground for proceeding
against the accused under Section 406/120 B IPC”, more particularly,
when the inquiry report by the SI Hirapur shows that the issue
raised in the complaint is civil in nature.
12) We have already adverted to the relevant provisions from the
Income Tax Act, particularly, duty of the employer in deducting tax
at source and forwarding the same to the authority concerned i.e. to
the credit of Central Government as well as failure to do so results
in prosecution. From the materials placed, particularly, the
contents of the complaint, relevant statutory provisions of the
Income Tax Act, report of the SI Hirapur, we are of the view that
the complaint does not disclose any case to proceed against the
accused persons as arrived by the Additional CJM. Even if the
respondent had some grievance with the appellants about non-
promotion, direction of the High Court, pendency of contempt etc. it
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is not a case for criminal prosecution. If he is very much
interested to vindicate his grievance, the respondent could have
very well approached the officer concerned of the IISCO or to the IT
authority concerned. Though in the complaint, it is stated that the
respondent had sent a notice under registered post with
acknowledgment due on 17.11.2003, admittedly, no such proof had been
placed before the Court. In fact, the appellants stoutly denied the
receipt of such a notice.
13) Inspite of all the details and materials since the Additional
CJM issued summons, the appellants approached the High Court under
Section 482 of the Code for quashing the same. The High Court, by
the impugned order, without adverting to any of the above mentioned
relevant materials passed a cryptic order in one line “I am not
inclined to quash the criminal proceeding pending before the
Additional CJM, Asansol”. No doubt, after dismissing the petition
issued certain directions for protection relating to personal
appearance of the appellants before the Magistrate.
14) This Court, in a series of decisions, has emphasized the
inherent power of the High Court to pass appropriate orders to
prevent the abuse of process of court or to secure the ends of
justice. Though, inherent jurisdiction under Section 482 has to be
exercised sparingly, carefully and with caution when adequate
materials are available which clearly shows that the proceeding is
either of civil nature, cannot be adjudicated by the criminal court
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or if it is an abuse of process of court, the High Court is well
within its power to exercise its inherent jurisdiction and quash the
same.
15) Contours of the power under Section 482 CrPC have been
explained in a series of decisions by this Court. In Nagawwa v.
Veeranna Shivalingappa Konjalgi, (1976) 3 SCC 736, it was held that
the Magistrate while issuing process against the accused should
satisfy himself as to whether the allegations in the complaint, if
proved, would ultimately end in the conviction of the accused. It
was held that the order of Magistrate issuing process against the
accused could be quashed under the following circumstances:
“(1) Where the allegations made in the complaint or the
statements of the witnesses recorded in support of the
same taken at their face value make out absolutely no case
against the accused or the complaint does not disclose the
essential ingredients of an offence which is alleged
against the accused;
(2) Where the allegations made in the complaint are
patently absurd and inherently improbable so that no
prudent person can ever reach a conclusion that there is
sufficient ground for proceeding against the accused;
(3) Where the discretion exercised by the Magistrate in
issuing process is capricious and arbitrary having been
based either on no evidence or on materials which are
wholly irrelevant or inadmissible; and
(4) Where the complaint suffers from fundamental legal
defects, such as, want of sanction, or absence of a
complaint by legally competent authority and the like.”
16) In State of Haryana vs. Bhajan Lal, 1992 Supp. (1) SCC 335, a
question came up for consideration as to whether quashing of the FIR
filed against the respondent Bhajan Lal for the offences under
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Sections 161 and 165 IPC and Section 5(2) of the Prevention of
Corruption Act was proper and legal. Reversing the order passed by
the High Court, this Court explained the circumstances under which
such power could be exercised. Apart from reiterating the earlier
norms laid down by this Court, it was further explained that such
power could be exercised where allegation made in the FIR or
complaint are so absurd and inherently improbable on the basis of
which no prudent person can ever reach a just conclusion that there
is sufficient ground for proceeding against the accused. No doubt,
at the stage of quashing an FIR or complaint the High Court is not
justified in embarking upon an inquiry as to the probability,
reliability or genuineness of the allegation made therein.
17) In Sardar Trilok Singh and others vs. Satya Deo Tripathi (1979)
4 SCC 396, when the financer seized the truck in question due to
default in payment of instalment, buyer of the vehicle launched
criminal prosecution, this Court held it as an abuse of process of
the court since the dispute was essentially of a civil nature and
quashed the entire proceedings.
18) In G. Sagar Suri and another vs. State of U.P. and others,
(2000) 2 SCC 636, this Court has held:-
“8. Jurisdiction under Section 482 of the Code has to be
exercised with great care. In exercise of its jurisdiction
the High Court is not to examine the matter superficially. It
is to be seen if a matter, which is essentially of a civil
nature, has been given a cloak of criminal offence. Criminal
proceedings are not a short cut of other remedies available
in law. Before issuing process a criminal court has to
exercise a great deal of caution. For the accused it is a
14
serious matter. This Court has laid certain principles on the
basis of which the High Court is to exercise its jurisdiction
under Section 482 of the Code. Jurisdiction under this
section has to be exercised to prevent abuse of the process
of any court or otherwise to secure the ends of justice.”
19) In Alpic Finance Ltd. vs. P. Sadasivan and another (2001) 3 SCC
513, this court reiterated that the complaint must disclose
essential ingredients of the offence. After adverting to Nagawwa
(supra), and State of Haryana vs. Bhajan Lal (supra), and after
finding that in the complaint there is no allegation that there was
fraud or dishonest inducement on the part of the respondents and
thereby the respondents parted with the property, it is trite law
and common sense that an honest man entering into a contract is
deemed to represent that he has the present intention of carrying it
out but if, having accepted the pecuniary advantage involved in the
transaction, he fails to pay his debt, he does not necessarily evade
the debt by deception, upheld the order of the High Court quashed
the proceedings and dismissed the appeal.
20) In Indian Oil Corporation vs. NEPC India Ltd. and Others,
(2006) 6 SCC 736, the following paragraphs are relevant:-
“13. While on this issue, it is necessary to take notice of a
growing tendency in business circles to convert purely civil
disputes into criminal cases. This is obviously on account of
a prevalent impression that civil law remedies are time
consuming and do not adequately protect the interests of
lenders/creditors. Such a tendency is seen in several family
disputes also, leading to irretrievable breakdown of
marriages/families. There is also an impression that if a
person could somehow be entangled in a criminal prosecution,
there is a likelihood of imminent settlement. Any effort to
15
settle civil disputes and claims, which do not involve any
criminal offence, by applying pressure through criminal
prosecution should be deprecated and discouraged.
“It is to be seen if a matter, which is essentially of a
civil nature, has been given a cloak of criminal offence.
Criminal proceedings are not a short cut of other remedies
available in law. Before issuing process a criminal court has
to exercise a great deal of caution. For the accused it is a
serious matter. This Court has laid certain principles on the
basis of which the High Court is to exercise its jurisdiction
under Section 482 of the Code. Jurisdiction under this
section has to be exercised to prevent abuse of the process
of any court or otherwise to secure the ends of justice.”
14. While no one with a legitimate cause or grievance should
be prevented from seeking remedies available in criminal law,
a complainant who initiates or persists with a prosecution,
being fully aware that the criminal proceedings are
unwarranted and his remedy lies only in civil law, should
himself be made accountable, at the end of such misconceived
criminal proceedings, in accordance with law. One positive
step that can be taken by the courts, to curb unnecessary
prosecutions and harassment of innocent parties, is to
exercise their power under Section 250 CrPC more frequently,
where they discern malice or frivolousness or ulterior
motives on the part of the complainant.”
21) In the light of the above mentioned well established
principles, we are of the view that the High Court has committed an
error, firstly, in not assigning any reason and passing a cryptic
order and secondly, failed to exercise its jurisdiction under
Section 482 when the complaint does not disclose any offence of
criminal nature. For the sake of repetition, we reiterate, though
the respondent had some grievance about his non promotion, certain
orders passed by the High Court including filing of contempt etc.,
in view of the statutory provisions of the Income Tax Act, the
assertion of the appellants that deductions were being made for all
16
the persons who are liable to pay tax in terms of the Income Tax
Act, the proper remedy for the respondent is to approach the
authority/officer concerned and not by filing complaint as mentioned
above. We have already adverted to the report of SI Hirapur holding
that the matter in issue is civil in nature.
22) Considering all these materials and in the light of the various
principles enunciated, we hold that the High Court committed an
error in not exercising its jurisdiction and dismissing the petition
filed under Section 482. Consequently, we quash the criminal
proceedings pending before the trial Court being Case No. C/438 of
2003 initiated against the appellants. The criminal appeal is
allowed.
……………………………………J.
(P. SATHASIVAM)
……………………………………J.
(DR. B.S.CHAUHAN)
NEW DELHI;
AUGUST 19, 2010.
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ITEM NO. 1-A COURT No.9 SECTION II
( For Judgment )
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CRIMINAL APPEAL NO.779 OF 2007
RAJESWAR TIWARI & ORS. .. Appellant(s)
Versus
NANDA KISHORE ROY .. Respondent(s)
DATE : 19/08/2010 This APPEAL was called
on for pronouncement of judgment today.
For Appellant(s) Mr. Sunil Kumar Jain, Adv.
For Respondent(s) Ms. Sarla Chandra, Adv.
Mr.Rajesh Srivastava, Adv.
---
Hon’ble Mr. Justice P. Sathasivam pronounced the
judgment of the Bench comprising Self and Hon’ble Dr.
Justice B.S. Chauhan.
The appeal is allowed.
[ Usha Bhardwaj ] [ Savita Sainani ]
Court Master Court Master
[ Signed reportable judgment is placed on the file ]
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