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 REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

   CRIMINAL   APPEAL NO. 133 OF 2016

(Arising out of S.L.P.(Crl.) No.2554 of 2011)

RAMESH RAJAGOPAL Appellant(s)

       Versus

DEVI POLYMERS PRIVATE LIMITED Respondent(s)

        JUDGMENT S.A.BOBDE, J. 1. We have heard learned counsel for the parties.

2. Leave granted.

3. The appellant has preferred this appeal against the  judgment  passed  by  the  Madras  High  Court  in Criminal O.P. No. 4404 of 2010 refusing to quash the criminal proceedings initiated against him.

4. The appellant was prosecuted by the respondent under Sections 409, 468 and 471 of the Indian Penal Code (in short 'the IPC') read with Sections 65 and 66 of the Information Technology Act, 2000 read with Section  120(b)  of  the  IPC.   The  appellant  is  a Director  in  Devi  Polymers  Private  Limited,  Chennai

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which  is  a  leader  in  Polyester  Moulding  Compound (PMC),  Sheet  Moulding  Compound  (SMC)  and  Dough Moulding Compound (DMCO) in India.

It  is  also  manufacturing  SMC  and  DMC  moulded components for the electrical, automotive and various other industries.  The company is also supplying SMC and DMC compounds and components to almost all the leading  electrical  switch  gear  industries  and automotive industries in India.

5. It has three Units – A, B and C.  Unit 'C' is being headed by the appellant.  It is not disputed that  the  Unit  'C'  primarily  renders  consultancy services.  However, all the three Units are units of one entity i.e. Devi Polymers Private Limited.

6. In the course of business, the appellant thought of improving the consultancy services and apparently contacted a consultant known as Michael T Jackson. He  also  contacted  the  regular  consultants  of  the Company  i.e.  Devi  Polymers  Private  Limited.   The consultants  apparently  advised  the  creation  of  a separate  entity  known  as  Devi  Consultancy  Services and accordingly, in the web page that was created by the consultant, this name occurred.  Since an invoice was  raised  by  the consultant Michael T Jackson  in

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the sum of 10,857.50 US Dollars, the said amount was paid from the funds of Devi Polymers Private Limited amounting  to  Rs.5,57,207/-.  The  amount  of Rs.17,000/-has been paid by the Devi Polymers Private Limited to M/s Easy Link.  These amounts were paid as advised by the appellant.  It is significant that no amount  has  been  paid  or  received  by  Unit  C separately, independently  of  Devi  Polymers  Private Limited.  All  this,  namely  the  engaging  of consultants and payments to them was apparently done at the behest of the appellant.

7. The  relationship  being  strained  between  the respondent  and  the  appellant,  who  are  relatives, several proceedings seem to have been initiated in the Company Law Board pertaining to oppression and mismanagement.   As  of  now,  it  is  said  that  the appellant's  petition  for  mismanagement  has  been dismissed but an appeal is pending.  We are, however, not concerned with those proceedings.

8. However,  in  the  course  of  disputes  and  the pending  proceedings,  the  respondent  initiated  the instant  criminal  complaint  against  the  appellant. The main circumstances which are relied upon by the respondent in the complaint is that in the website for Devi Consultancy Services that was created on the

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advice  of  the  consultant  is  shown  as  a  separate division  independent  of  Devi  Polymers  Private Limited.   According  to  the  complainant,  this  has resulted in forgery, since there is no such thing as Devi  Consultancy  Services;  though  the  existence  of Unit C of Devi Polymers Private Limited, which deal with  consultancy  is  not  denied.   The  second circumstance seems to be the payment made by the Devi Polymers  Private  Limited  to  the  consultants  from their own account.  The former is said to be forgery and  the  latter  is  said  to  be  mis-appropriation  of funds and breach of trust.

9. Having  given  our  anxious  consideration  to  the dispute,  we  find  that  none  of  the  aforesaid circumstances can lead to an inference of commission of an offence under the IPC at any rate none of the offence alleged.  As far as the website is concerned, though  undoubtedly,  Devi  Consultancy  Services  (DCS) is mentioned, it is made clear in the website itself that DCS is a part of Devi Polymers Private Limited which  is  apparent  from  a  link  which  shows  Devi Polymers Private Limited, in the website itself, are shown  as  Devi  Polymers  Private  Limited, the  main Company  and  Devi  Consultancy  Services  as  a  sister Company.  Similarly, in the website of Devi Polymers Private Limited, which was moved by the consultant,

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there  is  a  link  which  shows  that  Devi  Consultancy Services is a sister concern and it is stated that viewers  may  visit  that  site.  The  address  of  Devi Consultancy Services is shown to be the same address as that of Devi Polymers Private Limited.  We are satisfied  that  there  is  no  attempt  whatsoever  to project the Devi Consultancy Services as a concern or a Company which is independent and separate from Devi Polymers Private Limited, to which both the parties belong. In any case it is not possible to view the act as an act of forgery.

10. It  might  have  been  possible  to  attribute  some criminal intent to the projection of the Unit C as Devi  Consultancy  Services  in  the  website,  if  as  a result of such projection, the appellant had received any amounts separate from the Devi Polymers Private Limited, but a perusal of the complaint shows that this is not so.  Not a single rupee has been received by the appellant in his own name or even separately in the name of Unit C, which he is heading.  All amounts have been received by Devi Polymers Private Limited.  

11. Section  463  of  the  Indian  Penal  Code  defines forgery which reads as follows:-

“463.  Forgery.—  Whoever  makes  any  false

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documents or false electronic record or part of  a  document  or  electronic  record,  with intent  to  cause  damage  or  injury,  to  the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied  contract,  or  with  intent  to  commit fraud or that fraud may be committed, commits forgery.”

12. It is not possible to view the contents of the website showing the Devi Consultancy Services as a concern which is separate from Devi Polymers Private Limited  in  view  of  the  contents  of  the  website described  above.   Moreover,  it  is  not  possible  to impute any intent to cause damage or injury or to enter  into  any  express  or  implied  contract  or  any intent  to  commit  fraud  in  the  making  of  the  said website.   The  appellant  has  not  committed  any  act which fits the above description.  Admittedly, he has not received a single rupee or nor has he entered into any contract in his own name on the basis of the above website. 13. Section 468 of the IPC reads as follows:-

“468. Forgery  for  purpose  of cheating  —  Whoever  commits  forgery, intending  that  the  document  or electronic record forged shall be used for the purpose of cheating, shall be punished  with  imprisonment  of  either description for a term which may extend to  seven  years,  and  shall  also  be liable to fine.”

14. In the absence of any act in pursuance of the website  by  which  he  has  deceived  any  person

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fraudulently  or  dishonestly,  induced  any  one  to deliver any property to any person, we find that it is  not  possible  to  attribute  any  intention  of cheating  which  is  a  necessary  ingredient  for  the offence under Section 468.

15. We find that the allegations that the appellant is guilty of an offence under the aforesaid section are inherently improbable and there is no sufficient ground  of  proceedings  against  the  accused.   The proceedings have been initiated against the appellant as a part of an ongoing dispute between the parties and seem to be due to a private and personal grudge.

16.  In State of Haryana and Ors. v. Bhajan Lal and Ors.  reported  in  1992  Supp(1)  SCC  335,  this  Court laid down the following guidelines where the power under Section 482 should be exercised.  They are:-

“102. In the backdrop of the interpreta- tion of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of de- cisions relating to the exercise of the extra- ordinary power under Article 226 or the inher- ent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of il- lustration  wherein  such  power  could  be  exer- cised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down  any  precise,  clearly  defined  and  suffi- ciently  channelised  and  inflexible  guidelines or  rigid  formulae  and  to  give  an  exhaustive

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list  of  myriad  kinds  of  cases  wherein  such power should be exercised.

(1)  Where  the  allegations  made  in  the first information report or 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 a case against the accused. (2) Where the allegations in the first in- formation report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an inves- tigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Sec- tion 155(2) of the Code. (3)  Where  the  uncontroverted  allegations made in the FIR or complaint and the evi- dence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not  constitute  a  cognizable  offence  but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as  contemplated  under  Section  155(2)  of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no pru- dent person can ever reach a just conclu- sion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution  and  continuance  of  the  pro- ceedings and/or where there is a specific provision  in  the  Code  or  the  concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is mani- festly  attended  with  mala  fide  and/or where the proceeding is maliciously insti- tuted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”

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We find that the High Court ought to have exercised its power under Clause (1), (3) and (5) of the above said judgment.

17. In  Madhavrao  Jiwajirao  Scindia  and  Ors.  v. Sambhajirao Chandrojirao Angre and Ors.,  reported in (1988) 1 SCC 692, this Court observed as follows:-

“7. The  legal  position  is  well  settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to per- mit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court  chances  of  an  ultimate  conviction  are bleak  and,  therefore,  no  useful  purpose  is likely to be served by allowing a criminal pros- ecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage.”

18. This Court in  Janata Dal v. H.S. Chowdhary and Ors.,  reported  in  (1992)  4  SCC  305,  observed  as follows:-

“132. The criminal courts are clothed with inherent power to make such orders as may be necessary for the ends of justice. Such power though unrestricted and undefined should not be capriciously or arbitrarily exercised, but should be exercised in appropriate cases, ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist. The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Courts

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must be careful to see that its decision in exercise of this power is based on sound prin- ciples.”

We reiterate the same caution having found that this is  an  appropriate  case  for  the  exercise  of  such powers.

19. The entire law on the subjects was reviewed by a three  Judges  Bench  of  this  Court  in  Inder  Mohan Goswami and Anr. v. State of Uttaranchal and Ors.,

reported in (2007) 12 SCC 1 vide paragraphs 23 to 39. Thereafter, the law was reiterated in  R. Kalyani v. Janak C. Mehta and Ors. reported in (2009) 1 SCC 516 vide paragraphs 15 and 16.

20. In all the cases the principle that the accused must be relieved from the prosecution, even if the allegations  are  taken  at  their  face  value  and accepted  in  their  entirety  do  not  constitute  any offence  has  been  upheld,  and  thereafter  in  Umesh Kumar v. State of Andhra Pradesh and anr.,  reported in (2013) 10 SCC 591.

21. As regards the commission of offences under the Information Technology Act, 2000 the allegations are that the appellant had, with fraudulent and dishonest intention on the website of Devi Consultancy Services

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i.e.  www.devidcs.com  that  the  former  is  a  sister concern of Devi Polymers.  Further, that this amounts to creating false electronic record.  In view of the finding above we find that no offence is made out under Section 66 of the I.T. Act, read with Section 43.  The appellant was a Director of Devi Polymers and nothing is brought on record to show that he did not have any authority to access the computer system or the computer network of the company.  That apart there is nothing on record to show the commission of offence under Section 65 of the I.T. Act, since the allegation is not that any computer source code has been  concealed,  destroyed  or  altered.   We  have already observed that the acts of the appellant did not  have  any  dishonest  intention  while  considering the allegations in respect of the other offences.  In the circumstances, no case is made out under Sections 65 and 66 of the I.T. Act, 2000.

22. The High Court seems to have over looked these circumstances and has merely dismissed the petition under Section 482 of the Criminal Procedure Code on the ground that it requires evidence at a trial to come to any conclusion.  We, however, find that the criminal  proceedings  initiated  by  the  respondent constitute an abuse of process of Court and it is necessary to meet the ends of justice to quash the

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prosecution against the appellant.

23. Accordingly, the appeal succeeds. The prosecution is quashed.  

            ........................J.                             (S.A. BOBDE)

                        ........................J.                                (AMITAVA ROY)

New Delhi, April 19,2016