As observed by this Court in the case of Pepsi Foods Ltd. v.
Special Judicial Magistrate, (1998) 5 SCC 749 and even thereafter in
catena of decisions, summoning of an accused in a criminal case is a serious matter. Criminal Law cannot be set into motion as a matter of course. In paragraph 28 in Pepsi Foods Limited (supra), it is observed and held as under:
“28. Summoning of an accused in a criminal case is a serious matter.
Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient
for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.”
8.3 As held by this Court in the case of India Infoline Limited (supra), in the order issuing summons, the learned Magistrate has to record his satisfaction about a prima facie case against the accused who are Managing Director, the Company Secretary and the Directors of the Company and the role played by them in their respective capacities which is sine qua non for initiating criminal proceedings against them.
Looking to the averments and the allegations in the complaint, there are no specific allegations and/or averments with respect to role played by them in their capacity as Chairman, Managing Director, Executive Director, Deputy General Manager and Planner & Executor. Merely because they are Chairman, Managing Director/Executive Director and/or Deputy General Manager and/or Planner/Supervisor of A1 & A6, without any specific role attributed and the role played by them in their capacity, they cannot be arrayed as an accused, more particularly they cannot be held vicariously liable for the offences committed by A1 & A6.
9. From the order passed by the learned Magistrate issuing the
process against the respondents herein – accused nos. 1 to 8, there does not appear that the learned Magistrate has recorded his satisfaction about a prima facie case against respondent nos. 2 to 5 and 7 & 8. Merely because respondent Nos. 2 to 5 and 7 & 8 are the Chairman/Managing Director/Executive Director/Deputy General Manager/Planner & Executor, automatically they cannot be held vicariously liable, unless, as observed hereinabove, there are specific allegations and averments against them with respect to their individual role. Under the circumstances, the High Court has rightly dismissed the revision applications and has rightly confirmed the order passed by the learned Sessions Court quashing and setting aside the order passed by the learned Magistrate issuing process against respondent nos. 1 to 8 herein – original accused nos. 1 to 8 for the offences punishable under Sections 427, 447, 506 and 120B read with Section 34 IPC.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS.1047-1048/2021
Ravindranatha Bajpe Vs Mangalore Special Economic Zone Ltd. & Others
Author: M.R. SHAH, J.
Dated: SEPTEMBER 27, 2021.
Citation: 2021 SCC OnLine SC 806
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 28.09.2015 passed by the High Court of Karnataka at
Bengaluru in Criminal Petition No. 3989/2014 and Criminal Petition No.
3990/2014, by which the High Court has dismissed the said revision
petitions and has confirmed the judgment and order passed by the
learned Sessions Court, by which the learned Sessions Court set aside
the order passed by the learned Judicial Magistrate, First Class,
Mangalore dated 24.09.2013 issuing summons against original accused
1
nos. 1 to 8 – respondents herein, the original complainant has preferred
the present appeals.
2. The facts leading to the present appeals in nutshell are as under:
That the appellant herein – original complainant filed a private
complaint against in all thirteen accused (accused nos. 1 to 13) in the
Court of the learned Judicial Magistrate, First Class, Mangalore being
P.C. No. 119/2013 for the offences punishable under Sections 406, 418,
420, 427, 447, 506 and 120B read with Section 34 IPC. It was the case
on behalf of the complainant that he is the absolute owner and in
possession & enjoyment of the immovable property described in the
schedule attached to the private complaint and the schedule properties
were surrounded by a stone wall as boundary. That the schedule
properties are abutting Mangalore-Bajpe Old Airport Road. It was stated
that there were valuable trees on the schedule properties.
2.1 It was contended that the accused No.1 is a company incorporated
under the Companies Act and accused No.2 being Chairman and
accused No.3 being Managing Director and accused No.4 being Deputy
General Manager (Civil & Env.) of accused No.1 and accused No. 5 was
the planner and executor of the project work of accused No. 1.
2.2 It was stated that accused No. 6 is also a Company incorporated
under Companies Act. Accused No.7 was its chairman. Accused No 8
2
was the Executive Director, Accused No. 9 was the Site supervisor of
accused No.6. Accused No.10 was the sub-contractor under accused
No.6 and accused Nos. 11 to 13 were the employees of accused No.10.
2.3 It was contended by the complainant that accused No.1 intended
to lay water pipeline by the side of Mangalore-Bajpe Old Airport Road
abutting the schedule properties. In that regard, he had obtained
permission from the Department of Public Works, Mangalore. Accused
No.2 on behalf of accused No.1 appointed accused No.6 as a contractor
for execution of the said project of laying the water pipe line. Accused
No.6 in turn authorized accused Nos. 7 and 8 to execute and oversee
the said work. They in turn had appointed accused No.9 as site
supervisor and the accused No.10 being the sub-contractor engaged
accused Nos. 11 to 13 as labourers. Accused Nos. 4 and 5 were
entrusted the work of supervision and overseeing the pipeline works
carried out by accused Nos. 6, 7 and 8 through accused Nos. 9 and 10
to 13. Accused Nos. 6 to 8 had put into service heavy machineries and
excavators and their vehicles for carrying out the work. It was contended
that accused Nos. 2 to 5 and 7 to 13 had conspired with common
intention to lay the pipeline beneath the schedule properties belonging to
the complainant without any lawful authority and right whatsoever. In
furtherance thereof, they had trespassed over the schedule properties
3
and demolished the compound wall which was having the height of 7
feet and foundation of 2 feet to a distance of 500 metres. They had cut
and destroyed 100 valuable trees and laid pipeline beneath the schedule
properties. It was contended that when this high-handed act was
committed by the accused, the complainant was out of station and he
came back on 21.4.2012 and noticed the destructive activities. The
accused have committed the act of mischief and waste and caused
pecuniary loss of more than Rs.27 lakhs to the complainant. All the
accused are jointly and severally liable to make good the loss to the
complainant.
2.4 It was contended that the complainant had questioned the accused
about their high-handed acts. But they were indulged in criminal
intimidation by threatening the complainant of taking away his life if he
insists for making good the loss. Thereafter, the complainant filed a
complaint on 21.4.2012 before the SHO, Bajpe Police Station. No proper
enquiry was held by the police. But accused No.5 gave a statement
admitting the guilt and also undertaking to pay adequate compensation
to the complainant towards the damages caused to the property. The
said undertaking given by accused No.5 is binding on all the other
accused. But thereafter, the accused have not come forward to make
4
good the loss and thereby, they have committed an act of criminal
breach of trust and cheating.
2.5 It was contended that the accused were having no right
whatsoever to commit trespass over the schedule properties and to
cause damage. Each one of the accused had common intention to lay
the pipeline by damaging the property of the complainant. With that
intention, they have committed criminal trespass and caused damages.
Therefore, the complainant prayed the learned trial Court to take
cognizance of the matter and to issue process against the accused. The
schedule properties described as immovable property were situated at
Malavur Bajpe Village of Mangalore Taluk comprised in Sy.No. 56/2,
measuring 7.50 acres, Sy. No, 178/2C measuring 1.76 acres, Sy.No.
50/6B measuring 1.15 acres with trees standing thereon.
2.6 That the complainant was examined on oath before the Court. As
many as nine documents came to be marked as ‘Exhibit C1 to C9’. That
the learned Judicial Magistrate, First Class, Mangalore by order dated
24.09.2013 directed to register the case against all the accused, i.e,
accused nos. 1 to 13 for the offences punishable under Sections 427,
447, 506 and 120B read with Section 34 IPC.
At this stage, it is required to be noted that original accused no.1
was a company incorporated under the Companies Act, original accused
nos. 2 & 3 being Chairman and Managing Director of Accused no.1-
company and accused no.4 was arrayed as an accused being Deputy
General Manager (Civil & Env.) of accused no.1. Accused No.5 was the
Planner and Executor of the project work of accused no.1. Likewise,
accused no. 6 was also a company incorporated under the Companies
Act, accused nos. 7 & 8 were arrayed as an accused being Chairman
and Executive Director respectively of accused no.6. Accused no.9 was
the Site Supervisor of accused no.6 and accused no.10 was the Sub-
Contractor under accused no.6 and accused nos. 11 to 13 were the
employees of accused no.10.
3. Feeling aggrieved and dissatisfied with the summoning order
passed by the learned Judicial Magistrate, First Class, Mangalore for the
offences punishable under Sections 427, 447, 506 and 120B read with
Section 34 IPC, original accused nos. 1 to 5 preferred Criminal Revision
Petition No. 244/2013 and accused nos. 6 to 9 preferred Criminal
Revision Petition No. 245/2013 before the learned Sessions Court.
3.1 That the learned Sessions Court by its order dated 7.4.2014
allowed criminal revision petition no. 244/2013 and partly allowed
criminal revision petition no. 245/2013 and quashed and set aside the
order passed by the learned Judicial Magistrate, First Class, Mangalore
insofar as same was against original accused nos. 1 to 8. The learned
Sessions Court thus confirmed the order passed by the learned Judicial
Magistrate, First Class, Mangalore insofar as accused no. 9 is
concerned.
4. Feeling aggrieved and dissatisfied with the common judgment and
order passed by the learned Sessions Court passed in Criminal Revision
Petition Nos. 244/2013 and 245/2013, the original complainant preferred
the present revision applications before the High Court and by the
impugned judgment and order, the High Court has dismissed the said
revision applications. Hence, the present appeals by the original
complainant.
5. Shri Shailesh Madiyal, learned Advocate appearing on behalf of
the original complainant has vehemently submitted that in the facts and
circumstances of the case both, the High Court as well as the learned
Sessions Court have materially erred in quashing and setting aside the
order passed by the learned Magistrate summoning accused nos. 1 to 8
which was issued for the offences punishable under Sections 427, 447,
506 and 120B read with Section 34 IPC.
5.1 It is vehemently submitted that the High Court has not properly
appreciated and considered the fact that earlier the complainant filed an
FIR before the concerned police station but nothing was done and
therefore the complainant – appellant herein was constrained to file a
private complaint under Section 200 Cr.P.C.
5.2 It is submitted that the learned Magistrate after examining the
appellant – complainant on oath and after considering the
evidence/material on record issued summons against accused nos. 1 to 13 for the offences punishable under Sections 427, 447, 506 and 120B read with Section 34 IPC. It is submitted that therefore the learned Sessions Court was not justified in setting aside the order passed by the learned Magistrate summoning the accused.
5.3 It is further submitted that at the stage of summoning the accused, what is required to be considered is whether a prima facie case is made out on the basis of the statement of the complainant on oath and the material produced at this stage and the detailed examination on merits is not required.
5.4 It is further submitted by the learned counsel appearing on behalf
of the complainant that even otherwise there was a specific allegation in the complaint that accused nos. 1 to 8 conspired with the co-accused to lay the pipeline under the property of the complainant and therefore at the stage of issuing process/summons, the revisional court could not have interfered with the order passed by the learned Magistrate summoning the accused. It is submitted that being the administrators of the companies, all the executives are vicariously liable.
5.5 Making the above submissions, it is prayed to allow the present
appeals and quash and set aside the orders passed by the High Court
and the learned Sessions Court and restore the order passed by the
learned Magistrate.
6. Shri Nishanth Patil, learned counsel appearing on behalf of
accused nos. 1 to 5 and Shri P.P. Hegde, learned counsel appearing on
behalf of accused nos. 6 to 8 respectively have vehemently submitted
that in the facts and circumstances of the case and more particularly
when it was found that there are no specific allegations and the role
attributed to the accused except the bald statement that all of them have
connived with each other, the learned Sessions Court was absolutely
justified in setting aside the order passed by the learned Magistrate
issuing the process/summons against accused nos. 1 to 8.
6.1 It is submitted that as held by this Court in catena of decisions that
issuing summons/process by the Court is a very serious matter and
therefore unless there are specific allegations and the role attributed to each accused more than the bald statement, the Magistrate ought not to have issued the process.
6.2 It is submitted that so far as accused nos. 2 to 5 are concerned,
they were arrayed as an accused being Chairman, Managing Director, Deputy General Manager (Civil & Env.) of accused no.1 and accused no.5 is the Planner and executor of the project work and all of them were
stationed at Hyderabad at the time of the commission of the alleged
offence and there are no allegations that at the time of commission of
the alleged offence, they were present. It is submitted that similarly
accused nos. 7 & 8 were arrayed as an accused being Chairman and
Executive Director of accused no.6 who also were stationed at
Hyderabad at the time of commission of the alleged offence and there
are no allegations even against them that at the time of commission of
the alleged offence, they were present. It is submitted that even
accused no.7 was aged 82 years. Therefore, the learned Sessions
Court has rightly quashed and set aside the order passed by the learned
Magistrate issuing the process against accused nos. 1 to 8 herein for the
offences punishable under Sections 427, 447, 506 and 120B read with
Section 34 IPC. Heavy reliance is placed on the decisions of this Court
in the cases of GHCL Employees Stock Option Trust v. India Infoline
Limited, (2013) 4 SCC 505; and Sunil Bharti Mittal v. Central Bureau of Investigation, (2015) 4 SCC 609.
7. We have heard the learned counsel for the respective parties at
length. We have also gone through and considered the allegations in
the complaint. It is required to be noted that the learned Magistrate
issued the process against the respondents – accused nos. 1 to 8 for the offences punishable under Sections 427, 447, 506 and 120B read with Section 34 IPC. In the complaint, after narrating the description of the accused, in paragraphs I to VIII, it is alleged in paragraph IX and XIII as under:
IX. The accused Nos.2 to 5 and 7 to 13 have conspired with common
intention to lay the pipeline beneath the schedule properties belonging to the complainant, without any lawful authority and right whatsoever. In furtherance thereof they have committed trespass into schedule property and demolished the stone compound wall of 7 feet height foundation of 3 feet height beneath the ground and 2 feet wide to the extent of about 500 meters and also cut and destroyed about 100 valuable trees and laid pipeline beneath the schedule properties about to the extent of 500 meters. They have used heavy machineries for the above said destructive activities in the schedule properties. When those accused have committed the said offence the complainant was not in station and when he came back on 21-4-2012, he noticed the above said destructive activities in his properties. The accused have committed an act of mischief apart from other offenses which caused the pecuniary loss not less than
Rs.27,00,000/- to the complainant. The complainant was not able to
cultivate his lands due to the threat of stray cattle's and animals and
thereby he had suffered loss of 2 years paddy crops and vegetable
cultivation. As a result, the complainant has suffered nearly about
Rs.9,00,000/- and he will continue to suffer same loss till the compound is
reconstructed as before. All the accused jointly and severally are to make
good past and future loss to the complainant in terms of pecuniary
measures.
XIII. It is very pertinent to note that the accused had/has no right
whatsoever to commit to trespass into the schedule property and cause
damage thereto as stated supra. Each one of them with common intention
to lay the pipeline by damaging the property of the complainant and
improvements thereof, have committed criminal trespass into the schedule
property and remained inside the property till the act of devastation was
complete.
7.1 Except the above allegations, there are no further allegations in the
complaint. It was not even the case on behalf of the complainant that at
the time when the compound wall was demolished and trees were cut,
accused nos. 2 to 5 and 7 & 8 were present. Except the bald statement
that accused nos. 2 to 5 and 7 & 8 have conspired with common
intention to lay the pipeline within the schedule properties belonging to
the complainant, without any lawful authority and right whatsoever and in
furtherance they have committed to trespass into the schedule properties
of the complainant and demolished the compound wall, there are no
other allegations that at that time they were present. Accused nos. 2 to 5
and 7 & 8 are stationed at Hyderabad. There are no further allegations
that at the command of A2 to A5 and A7 & A8, the demolition of the
compound wall has taken place. All of them are arrayed as an accused
as Chairman, Managing Director, Deputy General Manager (Civil & Env.),
Planner & Executor, Chairman and Executive Director respectively.
Therefore, as such, in absence of any specific allegations and the
specific role attributed to them, the learned Magistrate was not justified in
issuing process against accused nos. 1 to 8 for the offences punishable
under Sections 427, 447, 506 and 120B read with Section 34 IPC.
8. In the case of Sunil Bharti Mittal (supra), it is observed by this
Court in paragraphs 42 to 44 as under:
“(iii) Circumstances when Director/person in charge of the affairs of
the company can also be prosecuted, when the company is an
accused person
42. No doubt, a corporate entity is an artificial person which acts through
its officers, Directors, Managing Director, Chairman, etc. If such a
company commits an offence involving mens rea, it would normally be the
intent and action of that individual who would act on behalf of the
company. It would be more so, when the criminal act is that of conspiracy.
However, at the same time, it is the cardinal principle of criminal
jurisprudence that there is no vicarious liability unless the statute
specifically provides so.
43. Thus, an individual who has perpetrated the commission of an offence
on behalf of a company can be made an accused, along with the
company, if there is sufficient evidence of his active role coupled with
criminal intent. Second situation in which he can be implicated is in those
cases where the statutory regime itself attracts the doctrine of vicarious
liability, by specifically incorporating such a provision.
44. When the company is the offender, vicarious liability of the Directors
cannot be imputed automatically, in the absence of any statutory provision
to this effect. One such example is Section 141 of the Negotiable
Instruments Act, 1881. In Aneeta Hada v. Godfather Travels & Tours (P)
Ltd., (2012) 5 SCC 661, the Court noted that if a group of persons that
guide the business of the company have the criminal intent, that would be
imputed to the body corporate and it is in this backdrop, Section 141 of the
Negotiable Instruments Act has to be understood. Such a position is,
therefore, because of statutory intendment making it a deeming fiction.
Here also, the principle of “alter ego”, was applied only in one direction,
namely, where a group of persons that guide the business had criminal
intent, that is to be imputed to the body corporate and not the vice versa.
Otherwise, there has to be a specific act attributed to the Director or any
other person allegedly in control and management of the company, to the
13
effect that such a person was responsible for the acts committed by or on
behalf of the company.”
8.1 In the case of Maksud Saiyed v. State of Gujarat, (2008) 5 SCC
668, in paragraph 13, it is observed and held as under:
“13. Where a jurisdiction is exercised on a complaint petition filed in terms
of Section 156(3) or Section 200 of the Code of Criminal Procedure, the
Magistrate is required to apply his mind. The Penal Code does not contain
any provision for attaching vicarious liability on the part of the Managing
Director or the Directors of the Company when the accused is the
company. The learned Magistrate failed to pose unto himself the correct
question viz. as to whether the complaint petition, even if given face value
and taken to be correct in its entirety, would lead to the conclusion that the
respondents herein were personally liable for any offence. The Bank is a
body corporate. Vicarious liability of the Managing Director and Director
would arise provided any provision exists in that behalf in the statute.
Statutes indisputably must contain provision fixing such vicarious liabilities.
Even for the said purpose, it is obligatory on the part of the complainant to
make requisite allegations which would attract the provisions constituting
vicarious liability.”
8.2 As observed by this Court in the case of Pepsi Foods Ltd. v.
Special Judicial Magistrate, (1998) 5 SCC 749 and even thereafter in
catena of decisions, summoning of an accused in a criminal case is a
serious matter. Criminal Law cannot be set into motion as a matter of
course. In paragraph 28 in Pepsi Foods Limited (supra), it is observed and held as under:
“28. Summoning of an accused in a criminal case is a serious matter.
Criminal law cannot be set into motion as a matter of course. It is not that
the complainant has to bring only two witnesses to support his allegations
in the complaint to have the criminal law set into motion. The order of the
Magistrate summoning the accused must reflect that he has applied his
mind to the facts of the case and the law applicable thereto. He has to
examine the nature of allegations made in the complaint and the evidence
both oral and documentary in support thereof and would that be sufficient
for the complainant to succeed in bringing charge home to the accused. It
is not that the Magistrate is a silent spectator at the time of recording of
preliminary evidence before summoning of the accused. The Magistrate
has to carefully scrutinise the evidence brought on record and may even
himself put questions to the complainant and his witnesses to elicit
answers to find out the truthfulness of the allegations or otherwise and
then examine if any offence is prima facie committed by all or any of the
accused.”
8.3 As held by this Court in the case of India Infoline Limited (supra), in the order issuing summons, the learned Magistrate has to record his satisfaction about a prima facie case against the accused who are Managing Director, the Company Secretary and the Directors of the Company and the role played by them in their respective capacities which is sine qua non for initiating criminal proceedings against them.
Looking to the averments and the allegations in the complaint, there are
no specific allegations and/or averments with respect to role played by
them in their capacity as Chairman, Managing Director, Executive
Director, Deputy General Manager and Planner & Executor. Merely
because they are Chairman, Managing Director/Executive Director
and/or Deputy General Manager and/or Planner/Supervisor of A1 & A6,
without any specific role attributed and the role played by them in their
capacity, they cannot be arrayed as an accused, more particularly they
cannot be held vicariously liable for the offences committed by A1 & A6.
9. From the order passed by the learned Magistrate issuing the
process against the respondents herein – accused nos. 1 to 8, there
does not appear that the learned Magistrate has recorded his
satisfaction about a prima facie case against respondent nos. 2 to 5 and
7 & 8. Merely because respondent Nos. 2 to 5 and 7 & 8 are the
Chairman/Managing Director/Executive Director/Deputy General
Manager/Planner & Executor, automatically they cannot be held
vicariously liable, unless, as observed hereinabove, there are specific
allegations and averments against them with respect to their individual
role. Under the circumstances, the High Court has rightly dismissed the
revision applications and has rightly confirmed the order passed by the
learned Sessions Court quashing and setting aside the order passed by
the learned Magistrate issuing process against respondent nos. 1 to 8
herein – original accused nos. 1 to 8 for the offences punishable under
Sections 427, 447, 506 and 120B read with Section 34 IPC.
10. In view of the above and for the reasons stated above, the present
appeals deserve to be dismissed and are accordingly dismissed.
Needless to say, that the learned Magistrate shall proceed with the
complaint against original accused nos. 9 to 13 on its own merits, in
accordance with law.
…………………………………J.
[M.R. SHAH]
NEW DELHI; ………………………………….J.
SEPTEMBER 27, 2021. [A.S. BOPANNA]
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