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REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

    CRIMINAL APPEAL NO. 1297 OF 2004

VIJAYANDER KUMAR & ORS.      ... APPELLANTS

VS.

STATE OF RAJASTHAN & ANR.  ... RESPONDENTS

J U D G M E N T

SHIVA KIRTI SINGH, J.

The  appellants  have  preferred  this  appeal  

against  the  dismissal  of  their  petition  under  

Section  482  of  the  Criminal  Procedure  Code  (for  

brevity `Cr.P.C.’) by the High Court of judicature  

for Rajasthan at Jodhpur.  The High Court declined  

to  interfere  with  the  order  of  learned  Chief  

Judicial  Magistrate,  Sriganganagar,  dated  

22.05.2000 in Case No. 63/2000, taking cognizance

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of offence under Section 420 read with Section 120-

B of the Indian Penal Code.

2. Respondent  No.2,  Surendra  Singhla,  lodged  a  police case against the appellants as well as one  

Satish  Singhla  on  28.04.1998.  According  to  the  

averments and allegations in the written report,  

the  informant  is  a  partner  of  the  Firm  M/s.  

Rajshree Cotton Corporation, Sriganganagar, working  

as  broker  as  well  as  dealer  in  the  sale  and  

purchase of cotton.  The appellants are Directors  

of  M/s.  R.P.  Taxfab  Limited,  Modi  Nagar,  who  

purchased cotton through informant firm from time  

to time. As per the accounts, the informant firm  

was to receive a sum of Rs.47,28,115.80/-.  The  

accused persons without taking the informant into  

confidence, entered into an agreement for transfer  

of management, assets and liabilities of M/s. R.P.  

Taxfab Limited in favour of accused Satish Singhla  

and two others who became the new Directors.  The  

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management  of  the  Company  was  transferred  on  

24.02.1998  and  on  27.02.1998  the  informant  was  

called  by  the  appellants  and  told  that  the  

outstanding amount payable by the appellants shall  

be paid by the new Directors.  The informant did  

not agree to this.  On next date, the appellants  

through a demand draft for Rs.10,00,000/- (rupees  

ten  lacs)  and  returned   cotton  yarn  worth  

Rs.13,26,560/- settled the dues in part and for the  

remaining  dues  they  persuaded  the  informant  to  

accept four post-dated cheques issued by the new  

Director Satish Singhla.  The informant accepted  

the cheques on being assured by the accused persons  

that when presented on due dates the cheques shall  

be honoured.  On such persuasion and trust, the  

informant signed some typed papers showing that he  

had agreed to receive the balance amount from the  

new Directors of the Company and had received draft  

and goods from the appellants.

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3. Besides the aforesaid allegations and averments  in the written information, the informant has also  

alleged  that  he  would  not  have  signed  the  said  

papers nor received the post-dated cheques but for  

the  assurances  given  by  the  accused  persons  in  

presence of two witnesses.  It is further alleged  

that  when  the  informant  presented  cheque  dated  

25.03.1998 for a sum of Rs.5,00,000/- (rupees five  

lacs)  through  his  bank,  the  said  cheque  was  

dishonoured because accused Satish Singhla had got  

the payment of the cheque stopped and  that all the  

accused by mutual consent (conspiracy) have played  

a fraud and cheated him by making false statement  

and holding false assurances whereby they induced  

him to sign some papers.  Allegedly, the accused  

had full knowledge even before issuing the cheques  

that these shall not be honoured and they had such  

dishonest intention from the beginning.

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4. It  is  not  in  dispute  that  when  the  cheque  bounced, the respondent no.2 gave a legal notice  

and initiated a separate complaint under Section  

138  of  the  Negotiable  Instruments  Act,  1881,  

besides lodging of the present FIR on 28.4.1998.  

The complaint filed against the appellants under  

the Negotiable Instruments Act stands quashed by  

the  High  Court  on  the  basis  that  they  had  not  

issued the cheques in question.  The appellants’  

earlier petition under Section 482 of the Cr.P.C.  

for  quashing  of  FIR  vide  Criminal  Miscellaneous  

Petition No. 466 of 1998 was dismissed by the High  

Court by order dated 12.02.1999 which is reported  

in  1999  Criminal  law  Journal  1849  (Vijayander  Kumar and Ors. Vs. State of Rajasthan and Another).  A perusal of that judgment discloses that the High  

Court  considered  in  detail  the  averments  and  

allegations in the FIR and came to the conclusion  

that  in  view  of  allegations  and  attending  

circumstances, at that stage it was not possible to  

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hold  that  the  appellants  cannot  be  liable  for  

commission of any offence.  The High Court held  

that there was a case worth investigation.

5. Subsequently,  the  police  concluded  investigation  and  submitted  final  report  to  the  

effect  that  the  case  is  of  civil  nature.   The  

learned  Chief  Judicial  Magistrate,  Sriganganagar,  

rejected  the  final  report  and  after  hearing  the  

parties  took  cognizance  of  the  offence  under  

Section  420  read  with  Section  120-B  of  the  IPC  

against all the five accused vide his order dated  

22.05.2000.

6. The challenge to that order through a petition  under Section 482 of the Cr.P.C. has been rejected  

by the High Court by the order under Appeal.

7. Learned senior counsel for the appellants drew  our attention to some letters and communications  

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such as annexure P.1 and P.2 both dated 27.02.1998  

and annexure P.10 dated 24.02.1998 to support his  

contention that on 24.02.1998 itself the change in  

the management was brought to the notice of the  

informant with an intimation that  a liability of  

Rs.23,00,000/- (rupees twenty three lacs) has been  

transferred to the new management which they shall  

pay  and  thereafter,  on  27.02.1998  the  informant  

received  payment  from  the  appellants  as  well  as  

accepted  the  post-dated  cheques  on  27.02.1998  

itself.  On that basis it has been contended that  

wrong averments and allegations have been made in  

the FIR. It is further case of the appellants that  

the allegations and averments do not make out any  

criminal offence.

8. On behalf of the appellants reliance has been  placed upon judgments of this Court in the case of  

Thermax  Limited  and  Others Vs.  K.M.Johny  and  Others  1      and in case of Dalip Kaur and Others vs.  1 (2011)  13 SCC 412

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Jagnar Singh and another  2  .  There can be no dispute  with the legal proposition laid down in the case of  

Anil Mahajan vs.  Bhor Industries Limited  3    which  has been discussed in paragraph 31 in the case of  

Thermox  Limited (supra)  that  if  the  complaint  discloses  only  a  simple  case  of  civil  dispute  

between  the  parties  and  there  is  an  absolute  

absence of requisite averment to make out a case of  

cheating, the criminal proceeding can be quashed.  

Similar is the law noticed in the case of  Dalip  Kaur (supra). In this case the matter was remanded  back to the High Court because of non-consideration  

of relevant issues as noticed in paragraph 10, but  

the law was further clarified in paragraph 11 by  

placing reliance upon judgment of this Court in  

R.Kalyani vs.  Janak C.Mehta  4  .  It is relevant to  extract paragraph 11 of the judgment which runs as  

follows:        

“11.There  cannot  furthermore  be  any  doubt that the High Court would exercise its  

2 (2009) 14 SCC 696 3 (2005) 10 SCC 228 4 (2009) 1 SCC 516

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inherent jurisdiction only when one or the other  propositions of law, as laid down in R. Kalyani  v. Janak C. Mehta is attracted, which are as  under:

“(1) The High Court ordinarily would  not exercise its inherent jurisdiction to  quash  a  criminal  proceeding  and,  in  particular,  a  first  information  report  unless the allegations contained therein,  even if given face value and taken to be  correct  in  their  entirety,  disclosed  no  cognizable offence.

(2) For the said purpose the Court,  save  and  except  in  very  exceptional  circumstances,  would  not  look  to  any  document relied upon by the defence.

(3) Such a power should be exercised  very sparingly.  If the allegations made  in  the  FIR  disclose  commission  of  an  offence, the court shall not go beyond the  same and pass an order in favour of the  accused to hold absence of any mens rea or  actus reus.

(4)  If  the  allegation  discloses  a  civil dispute, the same by itself may not  be  ground  to  hold  that  the  criminal  proceedings  should  not  be  allowed  to  continue.”

9. Learned senior counsel for the appellants also  placed reliance upon judgment of this Court in the  

case  of  Devendra  and  Others vs.  State  of  Uttar  

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Pradesh  and  Another  5  ,  only  to  highlight  that  a  second petition under Section 482 of the Cr.P.C.  

can  be  entertained  because  order  of  Magistrate  

taking  cognizance  gives  rise  to  a  new  cause  of  

action.  This  issue  does  not  require  any  

deliberation because learned senior counsel for the  

respondent no.2, the informant, has not raised any  

objection to the maintainability of petition under  

Section 482 of the Cr.P.C.

10. Contra  the  submission  advanced  on  behalf  of  the appellants, learned counsel for the respondent  

no.2 has submitted that there is no merit in the  

contention  advanced  on  behalf  of  the  appellants  

that the FIR discloses only a civil case or that  

there is no allegation or averment making out a  

criminal offence. For that purpose he relied upon  

judgment of the High Court rendered in the facts of  

this  very  case  reported  in  1999  Criminal  Law  

Journal, 1849, already noted earlier. 5 (2009) 7 SCC 495

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11. No  doubt,  the  views  of  the  High  Court  in  respect of averments and allegations in the FIR  

were in the context of a prayer to quash the FIR  

itself but in the facts of this case those findings  

and observations are still relevant and they do not  

support  the  contentions  on  behalf  of  the  

appellants.   At  the  present  stage  when  the  

informant  and  witnesses  have  supported  the  

allegations made in the FIR, it would not be proper  

for  this  Court  to  evaluate  the  merit  of  the  

allegations on the basis of documents annexed with  

the memo of appeal. Such materials can be produced  

by the appellants in their defence in accordance  

with  law  for  due  consideration  at  appropriate  

stage.

12. Learned counsel for the respondents is correct  in contending that a given set of facts may make  

out a civil wrong as also a criminal offence and  

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only because a civil remedy may also be available  

to the informant/complainant that itself cannot be  

a ground to quash a criminal proceeding. The real  

test is whether the allegations in the complaint  

discloses  a  criminal  offence  or  not.   This  

proposition is supported by several judgments of  

this Court as noted in paragraph 16 of judgment in  

the  case  of  Ravindra  Kumar  Madhanlal  Goenka  and  Another vs.  Rugmini  Ram  Raghav  Spinners  Private  Limited  6    

13. On considering the facts of the present case it  is found that the facts were properly noticed by  

the High Court on earlier occasion while examining  

the  petition  preferred  by  the  appellants  for  

quashing of FIR of this case.  The same view has  

been  reiterated  by  the  High  Court  in  the  order  

under appeal for not interfering with the order of  

cognizance by the learned Magistrate.  Hence, we do  

not  find  any  good  ground  to  interfere  with  the  6 (2009) 11 SCC 529

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criminal proceedings against the appellants at this  

stage.  The  appeal  is,  therefore,  dismissed.   No  

costs.

14. It is, however, made clear that observations in  this order or in the order under appeal are only  

for deciding the issues raised at the present stage  

and shall not affect the defence of the appellants  

at a subsequent stage of the proceeding.

     ……………………………………………C.J.I.   (P. SATHASIVAM)

……………………………………………………J.  (RANJAN GOGOI)

……………………………………………………J.  (SHIVA KIRTI SINGH)

New Delhi; February 11, 2014.

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