REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL No..............OF 2009
(Arising out of SLP (Crl.) No. 6482 of 2006)
Ravindra Kumar Madhanlal Goenka & Anr. .....Appellants
Versus
M/s. Rugmini Ram Raghav Spinners P.Ltd. .....Respondent
JUDGMENT
Dr. Mukundakam Sharma, J.
1. Leave granted.
2. This appeal arises out of the judgment and order dated 30.08.2006
passed by the Madras High Court in Criminal Original Petition No. 4556
of 2006 whereby the learned Single Judge of the High Court dismissed
the petition filed under Section 482 of the Code of Criminal Procedure
(in short `CrPC’) by the appellants for quashing criminal complaint filed
Page 1 of 14
against them by the respondents before the Judicial Magistrate,
Coimbatore, Tamil Nadu.
3. Facts in brief, as alleged by the appellants, are as follows:
Ravindera Kumar Madhanlal Goenka – Accused No. 1 ( 1st appellant
herein) is the proprietor of M/s. Ravindera Kumar Madhanlal having its
office at Shri Ganesh Complex, Kothadi Bazar, Akola – 444001,
Maharashtra and is a General Merchant and Commission Agent for various
food items like sugar, jaggery, oil seeds, oil, grains, pulses and cotton etc. It
was dealing in cotton as commission agent for various persons belonging to
different places in different states including Coimbatore in Tamil Nadu.
The proprietorship of the 1st appellant is registered with the Sales Tax
Department of Maharashtra. Srimathi Ravindra Kumar Madhanlal Goenka –
Accused No. 2 (2nd appellant herein) is stated to be a partner in the firm.
Accused-2 is a broker cum dealer and Accused-3 his wife, a partner and
Accused-4 is his sub-broker/agent. The present appeal has been filed by
Accused-1 (1st appellant) and Accused-2 (2nd appellant).
4. The respondent through his agents approached the 1st appellant by
personally visiting Akola and ordered cotton bales to manufacture yarn.
The agents had stayed for about 45 days at Akola and after examining
the quality of cotton and after their approval the cotton was transported
Page 2 of 14
to the respondent for which the respondent offered 1% commission to
the 1st appellant. The 1st appellant by raising bank loan gave the same to
the cotton manufacturers and dealers and bought from them and
thereafter, as requested by the respondent, transported the same to
Coimbatore. It was a practice that entire advance amount was to be paid
at the time of ordering cotton. The respondent after gaining confidence
of the 1st appellant some time used to send even lesser amount than the
actual value of the cotton but even then the 1st appellant used to send
cotton bales over and above the advance amount paid by the respondent.
The advance amount used to be sent by the respondent by telegraph
transfer and every transfer was accounted by both the respondent as well
as 1st appellant.
5. During the course of their business transaction the respondent had
developed some problem with their two commission agents belonging to
Coimbatore with regard to the payment of compensation and other
expenses. The appellant had sent a fax message on 12.2.2004 to the
respondent giving statement of accounts by showing that the amount
lying with him is Rs. 4,74,521/- and requested him to send balance
money for sending 100 bales and also requested to send the `C’ Form. In
response to the above fax, on 15.02.2004, the respondent sent a fax
Page 3 of 14
stating that the closing balance with the 1st appellant is Rs. 4,76,521/-.
Thereafter, the respondent through his agents requested the 1st appellant
to send totaling 145 bales of cotton and it was confirmed by the fax
messages dated 18.2.2004 of his agent Mr. Srinivas R. Lele wherein he
made specific request to send the 145 bales after receiving the entire
amount and also by deducting = % commission payable to him. The 1st
appellant, vide his fax message dated 20.2.004 requested the respondent
to send the remaining amount for lifting of 145 bales, which was
weighed by his new controller and also requested him to settle all the
amount by sending the statement of account along with the fax.
However, the respondent by return fax disputed the 1st appellant’s claim
and allegedly made some false statement. Again, the 1st appellant by
another fax requested the respondent to send the remaining balance
including the late fee in accordance with the terms and conditions. The
second condition in the invoice was that 24% interest would be levied
upon accounts remaining unpaid 30 days from the date of dispatched
goods. The 1st appellant claimed late fee interest in accordance with the
above terms. However, the respondent did not make such payment.
Some further dispute arose between the parties.
Page 4 of 14
6. Subsequently, the 1st appellant approached the Akola Police for filing a
complaint. However, the same was not entertained and registered stating
that the transaction was purely commercial and civil in nature and the
business disputes cannot be resolved by criminal prosecution. In the
meanwhile, the respondent filed a complaint under Section 200 CrPC
before the Judicial Magistrate No. 1 at Coimbatore for offences u/s 406,
420 and 384 of the Indian Penal Code (in short `IPC’. The court vide
order dated 2.8.2004 issued an order directing the Thudiyalur Police to
register a case under Section 406, 420 and 384 IPC and submit their final
report within 3 months. The case was registered on 21.8.2004 after
receipt of the court order on 9.8.2004. Subsequently, the respondent also
filed a private complaint under Section 190 and 200 Cr.PC for offences
punishable under Sections 120-B, 406, 420 and 384 IPC by implicating
the 2nd appellant, who is the wife of the 1st appellant and one Srinivasa
Lele who is the agent of the respondent. The Judicial Magistrate No. 1
at Coimbatore on the basis of such complaint issued summons to the
appellants to appear before the court on 17.2.2006.
7. Aggrieved by the aforesaid order of the learned Judicial Magistrate No.
1, the appellants approached the High Court for quashing the criminal
proceedings against them by filing Criminal Original Petition No. 4556
Page 5 of 14
of 2006 which was dismissed by the High Court. The High Court held
that a perusal of allegations mentioned against the accused show that a
prima facie case is made out but only the trial court may have to look
into the defence materials produced by the appellants and admittedly,
there was business transaction wherein 900 bales of cotton were already
dispatched but 100 bales of cotton were yet to be dispatched.
Accordingly, the High Court refused to quash the proceeding.
8. Aggrieved by the said order of the High Court, the present SLP has been
preferred. It is the case of the appellant the no criminal proceeding can
be initiated as the matters are essentially civil in nature and business
disputes cannot be resolved by criminal prosecution. It is the case of the
appellant that 1st appellant at the request of the respondent procured 145
bales and kept for long time with the dealers place and as the respondent
failed to make payment despite for waiting long duration, the 1st
appellant had stored the 145 bales of cotton in the Central Ware House at
Akola on 18.03.2004 by paying regular rent and it was being extended
from time to time and still the bales procured for him is remain at Central
Ware House, Akola. It was contended that had the respondent paid the
entire amount for the 145 bales, the 1st appellant could have dispatched
the bales to the respondent. It is the case of the appellant that the entire
Page 6 of 14
amount had already been invested in procuring bales for him by
investing additional amount of another Rs. 10 lakhs by raising bank loan
by the 1st appellant. Hence, there was no cheating or fraud played by the
1st appellant. In view of the same it was contended that it was an alleged
breach of contract that’s also only at the last stage of the performance of
the agreement which was due to dispute of payment of the entire advance
amount. In view of this, the High Court ought to have quashed the
criminal proceedings initiated by the respondents.
9. The scope of power under Section 482 CrPC has 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: (SCC p. 741, para 5)
“(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;
Page 7 of 14
(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.”
10. In State of Haryana v. 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 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
the allegations 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. However, this Court in Rupan Deol Bajaj v. Kanwar Pal
Page 8 of 14
Singh Gill [1995 (6) SCC 194] held (at SCC p. 209, para 23) that “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 allegations made therein”.
11. In Pratibha Rani v. Suraj Kumar [1985 (2) SCC 370], the question
arose that when the civil as well as the criminal remedy is available to a
party, can a criminal prosecution be completely barred. In this case, the
matter related to the stridhan property. The complainant alleged that her
husband, father-in-law and other relatives misappropriated her jewellery
and other valuable articles entrusted to them by her parents at the time of
marriage. The complainant alleged that these dowry articles were meant
for her exclusive use and that the accused misbehaved and maltreated her
and ultimately he turned her out without returning the dowry articles.
The accused filed a criminal miscellaneous petition under Section 482
for quashing the criminal proceedings and the High Court quashed the
same. The accused contended that the dispute was of a civil nature and
no criminal prosecution would lie. Under that circumstance, this Court
held in para 21 at pp. 382-83 as under:
“21. There are a large number of cases where criminal law and
civil law can run side by side. The two remedies are not
Page 9 of 14
mutually exclusive but clearly coextensive and essentially
differ in their content and consequence. The object of the
criminal law is to punish an offender who commits an offence
against a person, property or the State for which the accused,
on proof of the offence, is deprived of his liberty and in some
cases even his life. This does not, however, affect the civil
remedies at all for suing the wrongdoer in cases like arson,
accidents, etc. It is an anathema to suppose that when a civil
remedy is available, a criminal prosecution is completely
barred. The two types of actions are quite different in content,
scope and import.”
12. This Court in the case of Indian Oil Corpn. v. NEPC India Ltd. [2006
(6) SCC 736], at page 747 has observed as under :
“12. The principles relating to exercise of jurisdiction under
Section 482 of the Code of Criminal Procedure to quash
complaints and criminal proceedings have been stated and
reiterated by this Court in several decisions. To mention a few
—Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao
Angre, State of Haryana v. Bhajan Lal, Rupan Deol Bajaj v.
Kanwar Pal Singh Gill, Central Bureau of Investigation v.
Duncans Agro Industries Ltd., State of Bihar v. Rajendra
Agrawalla, Rajesh Bajaj v. State NCT of Delhi, Medchl
Chemicals & Pharma (P) Ltd. v. Biological E. Ltd., Hridaya
Ranjan Prasad Verma v. State of Bihar, M. Krishnan v. Vijay
Singh and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful
Haque.. The principles, relevant to our purpose are:
(i) A complaint can be quashed where the allegations made in
the complaint, even if they are taken at their face value and
accepted in their entirety, do not prima facie constitute any
offence or make out the case alleged against the accused.
For this purpose, the complaint has to be examined as a
whole, but without examining the merits of the allegations.
Neither a detailed inquiry nor a meticulous analysis of the
Page 10 of 14
material nor an assessment of the reliability or genuineness of
the allegations in the complaint, is warranted while examining
prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse
of the process of the court, as when the criminal proceeding is
found to have been initiated with mala fides/malice for
wreaking vengeance or to cause harm, or where the allegations
are absurd and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or
scuttle a legitimate prosecution. The power should be used
sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the
legal ingredients of the offence alleged. If the necessary factual
foundation is laid in the complaint, merely on the ground that a
few ingredients have not been stated in detail, the proceedings
should not be quashed. Quashing of the complaint is warranted
only where the complaint is so bereft of even the basic facts
which are absolutely necessary for making out the offence.
(v) A given set of facts may make out: (a) purely a civil wrong;
or (b) purely a criminal offence; or (c) a civil wrong as also a
criminal offence. A commercial transaction or a contractual
dispute, apart from furnishing a cause of action for seeking
remedy in civil law, may also involve a criminal offence. As
the nature and scope of a civil proceeding are different from a
criminal proceeding, the mere fact that the complaint relates to
a commercial transaction or breach of contract, for which a
civil remedy is available or has been availed, is not by itself a
ground to quash the criminal proceedings. The test is whether
the allegations in the complaint disclose a criminal offence or
not.”
Page 11 of 14
13. The appellant has placed reliance on a decision of this Court in the case
of Uma Shankar Gopalika v. State of Bihar [2005 (10) SCC 336], at
page 338, wherein this Court has observed as follows :
“7. In our view petition of complaint does not disclose any
criminal offence at all much less any offence either under
Section 420 or Section 120-B IPC and the present case is a case
of purely civil dispute between the parties for which remedy
lies before a civil court by filing a properly constituted suit. In
our opinion, in view of these facts allowing the police
investigation to continue would amount to an abuse of the
process of court and to prevent the same it was just and
expedient for the High Court to quash the same by exercising
the powers under Section 482 CrPC which it has erroneously
refused.”
14. In the abovementioned case, this Court has taken the view that when the
complaint does not disclose any criminal offence, the proceeding is
liable to be quashed under Section 482 CrPC. However, the same is not
the situation in the present case. There is no denial of the fact that though
900 bales of cotton was already dispatched, but 100 bales of cotton are
yet to be dispatched. The defence raised by the appellant hereinabove
can be urged and proved only during the course of trial. While
entertaining a petition under Section 482 CrPC, the materials furnished
by the defence cannot be looked into and the defence materials can be
entertained only at the time of trial. It is well settled position of law that
Page 12 of 14
when there are prima facie materials available, a petition for quashing
the criminal proceedings cannot be entertained. The investigating agency
should have had the freedom to go into the whole gamut of the
allegations and to reach a conclusion of its own. Pre-emption of such
investigation would be justified only in very extreme cases.
15.While considering the facts of the present case, we are of the considered
opinion that the present case is not one of those extreme cases where
criminal prosecution can be quashed by the court at the very threshold.
A defence case is pleaded but such defence is required to be considered
at a later stage and not at this stage. The appellants would have ample
opportunity to raise all the issues urged in this appeal at an appropriate
later stage, where such pleas would be and could be properly analysed
and scrutinized.
16.In view of the aforesaid position, we decline to interfere with the
criminal proceeding at this stage. The appeal is consequently dismissed.
………………………..J.
[S.B. Sinha]
Page 13 of 14
…………………………J.
[Dr. Mukundakam Sharma]
New Delhi,
April 13, 2009
Page 14 of 14