REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.       875     OF 2019 (Arising out of SLP(Crl.) No.9053 of 2016)

BIRLA CORPORATION LIMITED                   ...Appellant

VERSUS

ADVENTZ INVESTMENTS AND HOLDINGS           ...Respondents LIMITED & OTHERS

WITH CRIMINAL APPEAL NO.  877          OF 2019

(Arising out of SLP(Crl.) No.4609 of 2019 @ D. No.6405 of 2019)

BIRLA BUILDINGS LIMITED                     ...Appellant

VERSUS

BIRLA CORPORATION LIMITED                        ...Respondent

WITH CRIMINAL APPEAL NO.  876          OF 2019

(Arising out of SLP(Crl.) No. 4608 of 2019 @ D. No.6122 of 2019)

GOVIND PROMOTERS PVT. LTD.                       ...Appellant

VERSUS

BIRLA CORPORATION LIMITED                        ...Respondent

J U D G M E N T

R. BANUMATHI, J.

Leave granted.

2. These appeals arise out of the judgment dated 15.05.2015

passed by the High Court of Calcutta in C.R.R. No.323 of 2011 in

1

and  by  which  the  High  Court  quashed  the  complaint  of  the

appellant-Company filed under Sections 379, 403 and 411 IPC

read with Section 120-B IPC qua documents No.1 to 28 of the

Schedule. Insofar as documents No.29 to 54 of the Schedule, the

High Court remitted the matter to the trial court to proceed with

the matter in accordance with law.  

3. Being  aggrieved  by  quashing  of  the  complaint  qua

documents No.1 to 28, the appellant-complainant has preferred

appeal  (SLP  (Crl.)  No.9053  of  2016).  Being  aggrieved  by

remitting the matter to the trial court qua documents No.29 to 54,

the respondents have filed appeal [SLP(Crl.) D No.6405 of 2019

and  SLP(Crl.)  D.  No.6122  of  2019].  Though  the  SLPs  by  the

respondents are filed with delay, in the interest of justice, delay in

filing the SLPs are condoned.   

4. These appeals arise out of the criminal complaint filed by

the  appellant-Company  which  belong  to  Madhav  Prasad  Birla

(MPB)  Group,  now  under  the  control  of  respondent  No.17-

Harshvardhan Lodha who is the son of Rajendra Singh Lodha.

The  impugned  complaint  has  a  background  of  multitude  of

litigations filed by the respondents and others. Brief facts which

led to filing of these appeals are that one Priyamvada Devi Birla

2

(PDB)  and  her  husband  Madhav  Prasad  Birla  (MPB)  were  in

control and management of several corporate entities which are

collectively referred to as the M.P. Birla Group of Industries. They

did not have any children. They have created several trusts for

undertaking  charitable  activities  in  particular  on  the  education

side. PDB died on 03.07.2004 and MPB had predeceased her.

There  is  an  ongoing  dispute  over  legality  of  a  Will  allegedly

executed by Priyamvada Devi Birla (PDB) dated 18.04.1999  in

favour  of  Rajendra Singh Lodha and respondent  No.17-son of

said Rajendra Singh Lodha. On 19.07.2004, a petition was filed

by Rajendra Singh Lodha, father of respondent No.17 for grant of

probate of the purported Will before the High Court at Calcutta.

The Probate Petition has been converted into a testamentary suit

for grant of Letters of Administration. Krishna Kumar Birla (KKB),

Basant  Kumar  Birla  (BKB),  Ganga  Prasad  Birla  (GPB)  and

Yashovardhan Birla (YB) have filed caveats to oppose the grant

of probate of the said Will dated 18.04.1999.  The High Court held

that  Ganga Prasad Birla  (GPB) has  a caveatable  interest  and

therefore, he has a right to oppose the grant of probate of the

said Will.  The said testamentary suit  is pending. Subsequently,

Krishna  Kumar  Birla  (KKB),  Kashi  Nath  Tapuriah  (KNT)  and

3

Pradip  Kumar  Khaitan  (PKK)  filed  an  application  for  grant  of

probate  of  the  1982  Will  of  Madhav  Prasad  Birla  (MPB)  and

Ganga  Prasad  Birla  (GPB);  Kashi  Nath  Tapuriah  (KNT)  and

Pradip Kumar Khaitan (PKK) have filed an application for grant of

probate of the 1982 Will of Madhav Prasad Birla (MPB) before the

High Court at Calcutta and the said testamentary proceedings are

also pending.  

5. Respondents  No.1  to  5  who  are  shareholders  of  the

appellant  Company  and  the  trust-Birla  Education  Trust

represented by respondent No.6, had filed a Company petition in

CP No.1/2010 under Sections 397 and 398 of the Companies Act,

1956 before the Company Law Board (CLB) alleging oppression

and mismanagement being perpetrated by respondent No.17 who

is  in  administration  and  operation  of  the  said  Company.  The

petition before the CLB has been filed through respondents No.6

to 9 who are shown as accused Nos.6 to 9 in the complaint.  

6. On 24.03.2010, respondents No.12 to 16 have filed five civil

suits in the High Court of Calcutta (CS Nos.73-77/2010) under

Section 92 of the Code of Civil Procedure stating that in the year

1988,  MPB  and  PDB  had  created  five  mutual  and  reciprocal

trusts  to  leave  the  estate  covered  by  these  trusts  for  charity.

4

These trusts are said to have been revoked just three days prior

to  the alleged Will  dated 18.04.1999.   In  the said  suits  in  CS

No.73-77/2010,  respondents  No.12  to  16  have  challenged  the

revocation  of  the  five  trusts  and  prayed  for  recovery  of  the

properties of the public charity and for enforcement of the public

trust obligations of the properties vested in the said five trusts.

7. The  company  petition  in  CP No.1/2010  was  filed  before

CLB (now pending  before  NCLT)  on  10.03.2010.   In  the  said

company petition, documents No.1 to 54 have been filed.  The

advance  copy  of  the  company  petition  and  the  copies  of  the

documents  have  been  served  upon  the  appellant-Company.

Document No.1-Internal Audit Report of the appellant Company

was  filed  in  the  civil  suits  filed  by  respondents  No.12  to  16

challenging the revocation of the five trusts created by MPB and

PDB.  Alleging  theft  and misappropriation  of  all  the  documents

No.1 to 54, the appellant Company filed the criminal complaint

under Sections 379, 403, 411 read with Section 120B IPC against

respondents No.1 to 16 and in the said complaint, appellant was

represented  by  Shri  Samir  Ganguly  who is  the  Vice-President

(Legal)  of  the  appellant-company.  The  gravamen  of  the

allegations in the complaint is that copies of 54 documents were

5

used before the Company Law Board (CLB) in C.P. No.1 of 2010

filed  by  respondents  No.1  to  5  and  Birla  Education  Trust

represented by respondent  No.6.  Copy of  one such document

viz.,  Internal  Audit  Report  of  Chanderia  Unit  of  the  appellant

Company has been filed along with the interlocutory applications

filed by respondents No.13 to 16 in the civil suits which were filed

challenging the revocation of trusts and for recovery of properties

vested in the trust.

8. Let  us  understand  the  array  of  the  parties.  Each  one of

respondents  No.1  to  5  are  the  shareholders  of  the  appellant-

Company.  Respondent No.6-Pradip Kumar Khaitan is a reputed

lawyer and a trustee of Birla Education Trust.  Respondent No.7-

Akshay  Poddar  is  a  Director  of  respondent  No.1-Adventz

Investments  &  Holdings  Limited.   Respondent  No.8-Santosh

Kumar Poddar is the Director of respondent No.3-Britex (India)

Limited.   Respondent No.9-Bal Kishan Toshniwal is the Director

of  respondent  No.2-Govind  Promoters  Private  Limited.

Respondent  No.10-Birla  Buildings  Limited  is  in-charge  of  the

overall  maintenance  and  upkeep  of  Birla  Buildings  where  the

appellant Company is located. Respondent No.11-S. Chakrabarty

is the Chief Executive Officer of respondent No.10.  Respondents

6

No.12 to 16 are ones who have filed the suits CS No.73-77/2010

under  Section  92  CPC  before  the  High  Court  at  Calcutta

challenging the revocation of the trusts and for recovery of the

properties of the public charity.  Respondent No.17-Harshvardhan

Lodha  is  the  son  of  late  Rajendra  Singh  Lodha  and  now the

Director-cum-Chairman of the appellant-Company against whom

C.P. No.1 of 2010 has been filed.

9. The allegations in the complaint in brief are as under:-

The complaint  contains a  list  of  fifty-four  documents  with

their  brief  description  given  in  the  Schedule  of  the  complaint.

Document No.1 is an Internal Audit Report of Chanderia unit of

the appellant Company for the period ending November, 2009.

According  to  the  appellant-complainant,  keeping  in  mind  the

confidential nature of the report, only six copies were made. Out

of  which,  five  sets  were  sent  to  officers  of  the  Company

individually  named  and  one  was  retained  by  the  Auditor.  The

Internal Audit Report produced by the respondents is the copy of

one of the original five sets which was sent to one Bachh Raj

Nahar-Executive  Director  and  Chief  Executive  Officer  of  the

Company.  It  is  alleged  that  respondents  No.1  to  16  have

stolen/misappropriated  documents  No.2  to  28  from  the

7

appellant’s premises and that after photocopying the documents,

they were kept back in the appellant’s premises. It is alleged that

documents No.29 to 54 have been stolen/misappropriated from

the  appellant’s  premises  and  that  after  photocopying  the

documents, they were not returned in the appellant’s premises

and the originals are still in the possession of the respondents.

Before  making  the  complaint,  the  complainant-appellant  had

conducted an internal enquiry to find out how these documents

reached the respondents.

10. These  documents  have  at  all  times  been  kept  at  the

registered  office  of  the  appellant-Birla  Buildings.  These

documents  have  restricted  access  and  are  meant  for  the

consumption of designated and specified individuals only. These

documents include intra-company correspondence, internal audit

reports, agreements etc. in relation to operations of the Company.

The  appellant-complainant  alleges  that  respondents  No.1  to  9

and 12 to 16 gained access to the Internal Audit Report and other

documents unauthorizedly and illegally with the aid of respondent

No.10-Birla  Buildings  Limited  and  respondent  No.11-S.

Chakrabarty, CEO who are in-charge of upkeep of the building in

which the office of the appellant-complainant is situated.  

8

11. The  appellant  further  averred  that  by  letter  dated

29.03.2010, the Company through its advocate called upon the

advocate of respondents No.1 to 6 to disclose as to how they

obtained  the  documents  mentioned  in  the  Schedule  of  the

complaint.  The  respondents  sent  reply  dated  30.03.2010  and

evaded giving any response to the said query on the premise that

there was no procedure of the Company Law Board (CLB) for

seeking such information. Appellant-Company sent a letter dated

17.04.2010  to  respondents  No.12  to  16  calling  upon  them to

explain as to how they came in possession of the documents; but

there was no reply. In the rejoinder filed by respondents No.1 to

6, they again failed and/or refused to state how they procured

these documents.

12. Appellant alleged that without the consent of the appellant

Company,  the  respondents/accused  have  dishonestly

stolen/misappropriated the documents and thus committed theft

and  conspiracy  to  commit  theft.  It  is  also  averred  that  the

respondents/accused dishonestly received or retained the stolen

property knowing and having reason to believe the same to be

stolen property and as such committed the offence punishable

under Section 411 IPC. It is alleged that the respondents/accused

9

thus dishonestly  committed theft  of  the documents  No.1 to  54

belonging to the appellant Company and misappropriated them

by converting the same for their own use and thus committed the

offences  punishable  under  Sections  379,  403  IPC  read  with

Section 120-B IPC.

13. Complainant  Shri  Samir  Ganguly  was  examined  on

06.10.2010. Since some of  the accused persons are residents

beyond local jurisdiction of the court, the trial court/the Magistrate

fixed  the  matter  for  enquiry  under  Section  202  Cr.P.C.  on

08.10.2010.  An employee of the appellant Company by name

P.B.  Dinesh  was  examined  on  08.10.2010.  Considering  the

averments  in  the  complaint  and the  statement  of  Complainant

Shri Samir Ganguly and P.B. Dinesh, the learned Magistrate vide

order dated 08.10.2010 found that there are sufficient grounds for

proceeding  against  all  the  sixteen  respondents  and  ordered

issuance  of  summons  to  the  respondents  for  the  offences

punishable under Sections 380, 411 and 120B IPC.

14. Aggrieved  by  the  summoning  order  dated  08.10.2010,

respondents filed petition under Section 482 Cr.P.C. before the

High  Court  for  quashing  the  criminal  proceedings.  Insofar  as

10

compliance of the procedure in taking cognizance of the offences,

the High Court held that upon perusal of the averments in the

complaint  and the statement  of  representative of  the company

Shri  Samir  Ganguly and P.  B.  Dinesh,  the Magistrate  satisfied

himself that there were sufficient grounds for proceeding against

the accused and ordered to issue process against  the sixteen

accused and the High Court held that on the procedural aspect,

the Magistrate did not commit any error. The High Court held that

since originals of documents No.1 to 28 are still in the custody of

the complainant, taking away the information contained in such

documents cannot be considered to be “movable property” and

the  temporary  removal  of  the  documents  for  taking  away  the

contents thereon by itself cannot be the subject of the offence of

theft  or  dishonest  misappropriation  of  property  as  well  as

dishonest receiving of the stolen property. On those findings, the

High Court held that the complaint would not survive in respect of

the documents No.1 to 28. Insofar as documents No.29 to 54 are

concerned,  the  High  Court  held  that  as  the  originals  of  those

documents are missing, the complaint discloses ingredients of the

offence of theft. The High Court held that insofar as documents

No.29 to 54 are concerned, the complainant can proceed against

11

the respondents and accordingly remitted the matter to the trial

court.

15. On  behalf  of  the  appellant,  Mr.  C.A.  Sundaram,  learned

senior counsel submitted that the appellant discharged the initial

burden placed upon it by adducing pre-summoning evidence by

examining two witnesses and based upon the averments in the

complaint  and the  statement  of  witnesses Shri  Samir  Ganguly

and P.B. Dinesh, the Magistrate satisfied himself that there are

sufficient  grounds for  proceeding  against  the accused and the

High  Court  rightly  held  that  there  was  no  irregularity  in  the

procedure followed by the Magistrate in issuing process against

the  respondents.   The  learned  senior  counsel  submitted  that

respondents No.1 to 9 have produced the documents before the

Company Law Board and respondents  No.12 to  16  have filed

document No.1-Internal Audit Report which are highly confidential

documents  and  having  not  disclosed  the  source  for  the

accusation/possession  of  the  documents,  prima  facie case  in

dishonest removal of the documents have been made out and the

Magistrate  rightly  found  that  there  are  sufficient  grounds  for

proceeding  against  the  respondents/accused  and  took  the

12

cognizance of the offences under Sections 380, 411 and 120-B

IPC.  

16. The learned senior counsel for the appellant submitted that

when the Magistrate has taken cognizance of  the offence,  the

High  Court  ought  not  to  have  substituted  its  views  for  the

summoning order passed by the Magistrate qua documents No.1

to 28.  In support  of  his  submission,  reliance was placed upon

Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi and Others

(1976)  3  SCC  736 and  number  of  other  decisions.  It  was

submitted  that  the  High  Court  was  not  right  in  quashing  the

criminal complaint qua documents No.1 to 28.  

17. In appeal preferred by the respondents, they assailed the

order  of  issuance  of  process  against  the  respondents  by  the

Magistrate contending that there were no adequate materials so

as  to  arrive  at  satisfaction  of  the  Magistrate  that  there  were

sufficient grounds for proceeding against the respondents. It was

submitted that the production of the copies of the documents in

the Company Law Petition and in the civil suits would not amount

to theft and the averments in the complaint and the statement of

the complainant and witness P.B. Dinesh would not  attract  the

ingredients of theft and there was no application of mind of the

13

learned  Magistrate  and  the  Magistrate  mechanically  issued

process  against  the  respondents  and the  High  Court  ought  to

have quashed the proceedings in toto.

18. On behalf of respondents No.1 to 5, Mr. Kapil Sibal, learned

senior counsel submitted that the complaint lacks specification as

to the time and manner of the commission of the offence and who

committed theft of the documents and when and how the same

was  detected.  The  learned  senior  counsel  contended  that  the

averments in the complaint do not make out a prima facie case of

theft  and that  the materials  placed before the Magistrate were

inadequate and there were no sufficient grounds for proceeding

against  the  respondents  and  the  High  Court  ought  to  have

quashed  the  entire  proceedings  in  toto.  The  learned  senior

counsel  further  submitted  that  document  No.1-Internal  Audit

Report  of  the  appellant  Company  and  other  documents  have

been filed by the respondents in the company petition before the

CLB  to  substantiate  their  case  of  oppression  and

mismanagement,  which  can  never  amount  to  theft.  Learned

senior counsel contended that when the documents are produced

in the proceedings before the Company Law Board for vindication

of  their  rights  or  defence,  the  criminal  complaint  filed  by  the

14

appellant is nothing but a “legal thumb screw” and the High Court

rightly quashed the criminal proceedings qua documents No.1 to

28. It was submitted that since there was neither application of

mind by the Magistrate nor any reasoned order has been passed

disclosing  the  satisfaction  of  the  mind,  the  entire  proceedings

before the Magistrate is liable to be quashed.

19. Mr.  Mukul  Rohatgi,  learned  senior  counsel  appearing  on

behalf of respondent No.10 and Mr. Amit Desai, learned senior

counsel appearing on behalf of respondent No.11 submitted that

respondent  No.10  has  the  overall  responsibility  of  the

management  and  maintenance  of  the  “building”  in  which  the

office  of  the  appellant  is  situated  and  there  are  no  specific

allegations in the complaint as to how respondents No.10 and 11

had access to  these documents  which were in  the custody of

designated employees of the complainant. It was submitted that

in  the  absence  of  allegations  in  the  complaint  to  prove

commission of offence by respondents No.10 and 11, the mere

fact  that  respondents  No.10  and  11  are  responsible  for  the

maintenance of the building by itself, cannot lead to an inference

that respondents No.10 and 11 are responsible for the theft.  

15

20. On  behalf  of  respondent  No.11,  learned  senior  counsel

submitted  that  respondent  No.11  is  the  CEO  of  respondent

No.10-Company  and  is  overall  administrative  in-charge  of  the

company’s affairs in Birla Building and in the absence of specific

allegations against him, the mere official position of respondent

No.11  will  not  automatically  make  him  vulnerable  to  criminal

prosecution.  The learned senior  counsel  further  submitted  that

the  doctrine  of  vicarious  liability  is  based  upon  a  legal

presumption and creates fictional liability and since the doctrine of

vicarious liability is not available (as a matter of law) in regard to

offences under the IPC, the complainant cannot rely upon a legal

presumption of an act or mensrea to proceed against respondent

No.11 in a criminal case.  

21. On behalf of respondents No.13 to 16, Mr. Ranjit Kumar and

Mr.  Debal  Banerjee,  learned senior  counsel  submitted that  the

trial court had not applied its mind to the materials on record and

the  averments  in  the  complaint  and  the  statement  of  the

witnesses do not make a  prima facie case and the Magistrate

mechanically issued process against respondents No.12 to 16. It

was submitted that filing a document in the judicial proceedings

can  never  be  termed  as  an  act  of  “theft”  or  “dishonest

16

misappropriation” so as to attract the ingredients of Sections 380

and 411 IPC read with Section 120-B IPC.

22. Reiterating  the  contention  of  other  respondents,  Mr.  K.V.

Viswanathan,  learned  senior  counsel  appearing  on  behalf  of

respondent No.6 submitted that respondent No.6 is a well reputed

lawyer  and  a  trustee  of  the  Birla  Education  Trust  which  is  a

shareholder  of  the  appellant  Company.  The  learned  senior

counsel  further  submitted  that  in  the  absence  of  specific

allegations  against  respondent  No.6,  he  cannot  be  made

vicariously liable merely because he is adorning the position of

trustee  in  Birla  Education  Trust.  It  was  submitted  that  the

complaint  filed  by  the  appellant  is  intended  to  arm  twist  the

respondents  from  ventilating  the  legitimate  rights  before  the

appropriate judicial  forum and in the absence of materials,  the

proceedings  initiated  against  respondent  No.6  is  liable  to  be

quashed.  

23. On behalf  of respondents No.7 to 9, Mr. Sidharth Luthra,

learned  senior  counsel  submitted  that  absolutely  there  are  no

averments as to how the said documents had gone out of the

possession of the appellant-complainant and mere possession of

the copy of  the  documents  will  not  amount  to  theft  nor  would

17

amount to conspiracy. It was submitted that even assuming that

the evidence was illegally obtained, the same cannot be shut out

and it cannot amount to theft.

24. We have considered the submissions of the learned senior

counsel appearing on behalf of the appellant and the respondents

and carefully perused the impugned judgment and materials on

record.  

25. The  following  questions  arise  for  consideration  in  these

appeals:-

(i) Whether  the  allegations  in  the  complaint  and  the

statement of the complainant and other materials before

the Magistrate were sufficient to constitute  prima facie

case  to  justify  the  satisfaction  of  the  Magistrate  in

issuing process against the respondents?

(ii) Whether the respondents are right in contending that in

taking cognizance of the offences under Sections 380,

411 and 120-B IPC and ordering issuance of  process

against  the  respondents  is  vitiated  due  to  non-

application of mind?

(iii) Whether  the  High  Court  was  right  in  quashing  the

criminal proceedings qua documents No.1 to 28 on the

ground  that  mere  information  contained  in  the

documents  cannot  be  considered  as  “moveable

18

property”  and cannot  be the subject  of  the offence of

theft or receipt of stolen property?

(iv) Whether  filing  of  the  documents  in  question  in  the

petition before the Company Law Board to substantiate

their  case  of  oppression  and  mismanagement  and

document No.1 in the civil suits challenging revocation

of the trust deeds would amount to theft justifying taking

cognizance of the offences?

(v) Whether  there  is  dishonest  moving  of  documents

causing  wrongful  loss  to  the  appellants  and  wrongful

gain to the respondents?

(vi) Whether filing of documents in the judicial proceedings

can be termed as an act of theft causing wrongful gain

to oneself and wrongful loss to the opponent so as to

attract the ingredients of Section 378 IPC?

26. Complaint filed under Section 200 Cr.P.C. and enquiry

contemplated  under  Section  202  Cr.P.C.  and  issuance  of

process:-  Under Section 200 of the Criminal Procedure Code,

on presentation of the complaint by an individual, the Magistrate

is  required  to  examine  the  complainant  and  the  witnesses

present, if any.  Thereafter, on perusal of the allegations made in

the  complaint,  the  statement  of  the  complainant  on  solemn

affirmation and the witnesses examined, the Magistrate has to get

himself satisfied that there are sufficient grounds for proceeding

19

against the accused and on such satisfaction, the Magistrate may

direct for issuance of process as contemplated under Section 204

Cr.P.C. The purpose of the enquiry under Section 202 Cr.P.C. is

to determine whether a prima facie case is made out and whether

there is sufficient ground for proceeding against the accused.   

27. The  scope  of  enquiry  under  this  section  is  extremely

restricted  only  to  finding  out  the  truth  or  otherwise  of  the

allegations made in the complaint in order to determine whether

process should be issued or not  under Section 204 Cr.P.C.  or

whether  the  complaint  should  be  dismissed  by  resorting  to

Section  203  Cr.P.C.  on  the  footing  that  there  is  no  sufficient

ground  for  proceeding  on  the  basis  of  the  statements  of  the

complainant and of his witnesses, if any.  At the stage of enquiry

under Section 202 Cr.P.C., the Magistrate is only concerned with

the allegations made in the complaint or the evidence in support

of the averments in the complaint to satisfy himself that there is

sufficient ground for proceeding against the accused.   

28. In  National  Bank  of  Oman  v.  Barakara  Abdul  Aziz  and

Another (2013) 2  SCC 488,  the  Supreme Court  explained the

scope of enquiry and held as under:-

20

“9. The duty of a Magistrate receiving a complaint is set out in

Section 202 CrPC and there is an obligation on the Magistrate to

find out if there is any matter which calls for investigation by a

criminal  court.  The  scope  of  enquiry  under  this  section  is

restricted only to find out the truth or otherwise of the allegations

made in the complaint in order to determine whether process has

to  be issued or  not.  Investigation under Section 202 CrPC is

different from the investigation contemplated in Section 156 as it

is only for holding the Magistrate to decide whether or not there

is  sufficient  ground  for  him to  proceed  further.  The  scope  of

enquiry  under  Section  202  CrPC  is,  therefore,  limited  to  the

ascertainment of truth or falsehood of the allegations made in the

complaint:

(i) on the materials placed by the complainant before the

court;

(ii) for the limited purpose of finding out whether a prima

facie case for issue of process has been made out; and

(iii) for deciding the question purely from the point of view

of the complainant without at all adverting to any defence

that the accused may have.”

29. In  Mehmood Ul Rehman v. Khazir Mohammad Tunda and

Others (2015) 12 SCC 420, the scope of enquiry under Section

202 Cr.P.C. and the satisfaction of the Magistrate for issuance of

process has been considered and held as under:-

“2.   Chapter  XV  Cr.P.C.  deals  with  the  further  procedure  for

dealing  with  “Complaints  to  Magistrate”.  Under  Section  200

Cr.P.C,  the  Magistrate,  taking  cognizance  of  an  offence  on  a

complaint,  shall  examine  upon  oath  the  complainant  and  the

witnesses, if any, present and the substance of such examination

21

should be reduced to writing and the same shall be signed by the

complainant,  the witnesses and the Magistrate.  Under Section

202 Cr.P.C, the Magistrate, if required, is empowered to either

inquire into the case himself or direct an investigation to be made

by a competent person “for the purpose of deciding whether or

not there is sufficient ground for proceeding”. If, after considering

the statements recorded under Section 200 Cr.P.C and the result

of  the  inquiry  or  investigation  under  Section  202  Cr.P.C,  the

Magistrate is of the opinion that there is no sufficient ground for

proceeding,  he  should  dismiss  the  complaint,  after  briefly

recording the reasons for doing so.   

3.  Chapter  XVI  Cr.P.C  deals  with  “Commencement  of

Proceedings  before  Magistrate”.  If,  in  the  opinion  of  the

Magistrate taking cognizance of  an offence,  there is  sufficient

ground  for  proceeding,  the  Magistrate  has  to  issue  process

under Section 204(1) Cr.P.C for attendance of the accused.”  

30. Reiterating  the  mandatory  requirement  of  application  of

mind in the process of taking cognizance, in Bhushan Kumar and

Another v. State (NCT of Delhi) and Another (2012) 5 SCC 424, it

was held as under:-  

“11. In Chief Enforcement Officer v.  Videocon International Ltd.

(2008)  2  SCC  492 (SCC  p.  499,  para  19)  the  expression

“cognizance” was explained by this Court as “it  merely means

‘become aware of’ and when used with reference to a court or a

Judge, it  connotes ‘to take notice of judicially’.  It  indicates the

point  when a court  or a Magistrate takes judicial  notice of  an

offence with a view to initiating proceedings in respect of such

offence said to have been committed by someone.” It is entirely

a  different  thing from initiation  of  proceedings;  rather  it  is  the

22

condition  precedent  to  the  initiation  of  proceedings  by  the

Magistrate or the Judge. Cognizance is taken of cases and not of

persons. Under Section 190 of the Code, it is the application of

judicial mind to the averments in the complaint that constitutes

cognizance.  At  this  stage,  the  Magistrate  has  to  be  satisfied

whether  there  is  sufficient  ground  for  proceeding  and  not

whether  there  is  sufficient  ground for  conviction.  Whether  the

evidence  is  adequate  for  supporting  the  conviction  can  be

determined only at the trial and not at the stage of enquiry. If

there is sufficient ground for proceeding then the Magistrate is

empowered for issuance of process under Section 204 of the

Code.”

31. Under the amended sub-section (1) to Section 202 Cr.P.C.,

it  is  obligatory upon the Magistrate that before summoning the

accused residing beyond its jurisdiction, he shall enquire into the

case himself or direct the investigation to be made by a police

officer  or  by  such other  person as he thinks fit  for  finding out

whether or not there is sufficient ground for proceeding against

the accused.

32. By Cr.P.C. (Amendment) Act, 2005, in Section 202 Cr.P.C.

of the Principal Act with effect from 23.06.2006, in sub-section (1),

the words “…and shall, in a case where accused is residing at a

place beyond the area in which he exercises jurisdiction…” were

inserted  by  Section  19  of  the  Criminal  Procedure  Code

(Amendment) Act, 2005.  In the opinion of the legislature, such

23

amendment was necessary as false complaints are filed against

persons residing at far off places in order to harass them. The

object of the amendment is to ensure that persons residing at far

off places are not harassed by filing false complaints making it

obligatory  for  the  Magistrate  to  enquire.   Notes  on  Clause 19

reads as under:-

“False complaints  are  filed  against  persons residing at  far  off

places simply to harass them.  In order to see that the innocent

persons are not harassed by unscrupulous persons, this clause

seeks  to  amend  sub-section  (1)  of  Section  202  to  make  it

obligatory  upon  the  Magistrate  that  before  summoning  the

accused residing beyond his jurisdiction he shall enquire into the

case himself or direct investigation to be made by a police officer

or by such other person as he thinks fit, for finding out whether or

not  there  was  sufficient  ground  for  proceeding  against  the

accused.”  

33. Considering  the  scope  of  amendment  to  Section  202

Cr.P.C.,  in  Vijay  Dhanuka  and  Others  v.  Najima  Mamtaj  and

Others (2014) 14 SCC 638, it was held as under:-  

“12. ….The use of the expression “shall” prima facie makes the

inquiry  or  the  investigation,  as  the  case  may  be,  by  the

Magistrate mandatory. The word “shall” is ordinarily mandatory

but sometimes, taking into account the context or the intention, it

can be held to be directory. The use of the word “shall”  in all

circumstances  is  not  decisive.  Bearing  in  mind  the  aforesaid

principle, when we look to the intention of the legislature, we find

that it is aimed to prevent innocent persons from harassment by

24

unscrupulous  persons  from  false  complaints.  Hence,  in  our

opinion, the use of the expression “shall”  and the background

and the purpose for which the amendment has been brought, we

have no doubt in our mind that inquiry or the investigation, as the

case may be, is mandatory before summons are issued against

the  accused  living  beyond  the  territorial  jurisdiction  of  the

Magistrate.”

Since  the  amendment  is  aimed  to  prevent  persons  residing

outside the jurisdiction of the court from being harassed, it was

reiterated that holding of enquiry is mandatory.  The purpose or

objective  behind  the  amendment  was  also  considered  by  this

Court  in  Abhijit  Pawar  v.  Hemant  Madhukar  Nimbalkar  and

Another (2017)  3  SCC  528 and  National  Bank  of  Oman  v.

Barakara Abdul Aziz and Another (2013) 2 SCC 488.   

34. 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.   The application of  mind has to be

indicated by disclosure of mind on the satisfaction.  Considering

the duties on the part of the Magistrate for issuance of summons

to accused in a complaint case and that there must be sufficient

indication as to the application of  mind and observing that  the

Magistrate is not to act as a post office in taking cognizance of

the complaint, in Mehmood Ul Rehman, this Court held as under:-

25

“22. ….the Code of Criminal Procedure requires speaking order

to be passed under Section 203 Cr.P.C. when the complaint is

dismissed and that too the reasons need to be stated only briefly.

In other words, the Magistrate is not to act as a post office in

taking cognizance of each and every complaint filed before him

and  issue  process  as  a  matter  of  course.  There  must  be

sufficient indication in the order passed by the Magistrate that he

is  satisfied  that  the  allegations  in  the  complaint  constitute  an

offence  and  when  considered  along  with  the  statements

recorded and the result of inquiry or report of investigation under

Section 202 Cr.P.C., if any, the accused is answerable before the

criminal  court,  there  is  ground  for  proceeding  against  the

accused  under  Section  204  Cr.P.C.,  by  issuing  process  for

appearance.  The application of  mind is  best  demonstrated by

disclosure  of  mind  on  the  satisfaction.  If  there  is  no  such

indication  in  a  case  where  the  Magistrate  proceeds  under

Sections  190/204  Cr.P.C.,  the  High  Court  under  Section  482

Cr.PC. is bound to invoke its inherent power in order to prevent

abuse of the power of the criminal court. To be called to appear

before  the  criminal  court  as  an  accused  is  serious  matter

affecting one’s dignity, self-respect and image in society. Hence,

the process of  criminal  court  shall  not  be made a weapon of

harassment.”

35. In  Pepsi  Foods  Ltd.  and  Another  v.  Special  Judicial

Magistrate and Others (1998) 5 SCC 749, the Supreme Court has

held that summoning of an accused in a criminal case is a serious

matter  and  that  the  order  of  the  Magistrate  summoning  the

accused must reflect that he has applied his mind to the facts of

26

the case and law governing the issue.  In para (28), it was 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.”

The principle that summoning an accused in a criminal case is a

serious matter and that as a matter of course, the criminal case

against  a  person  cannot  be  set  into  motion  was  reiterated  in

GHCL Employees  Stock  Option  Trust  v.  India  Infoline  Limited

(2013) 4 SCC 505.

36. To be summoned/to appear before the Criminal Court as an

accused is a serious matter affecting one’s dignity and reputation

27

in  the  society.  In  taking  recourse  to  such  a  serious  matter  in

summoning the accused in a case filed on a complaint otherwise

than on a police report, there has to be application of mind as to

whether  the  allegations  in  the  complaint  constitute  essential

ingredients  of  the  offence  and  whether  there  are  sufficient

grounds for proceeding against the accused.  In Punjab National

Bank and Others v. Surendra Prasad Sinha 1993 Supp (1) SCC

499,  it  was  held  that  the  issuance  of  process  should  not  be

mechanical nor should be made an instrument of oppression or

needless harassment.   

37. At  the  stage of  issuance of  process  to  the  accused,  the

Magistrate is not required to record detailed orders.  But based on

the  allegations  made  in  the  complaint  or  the  evidence  led  in

support of the same, the Magistrate is to be prima facie satisfied

that  there  are  sufficient  grounds  for  proceeding  against  the

accused.   In  Jagdish  Ram v.  State  of  Rajasthan  and Another

(2004) 4 SCC 432, it was held as under:-

“10.  ….The  taking  of  cognizance  of  the  offence  is  an  area

exclusively within the domain of a Magistrate. At this stage, the

Magistrate has to be satisfied whether there is sufficient ground

for  proceeding  and  not  whether  there  is  sufficient  ground  for

conviction. Whether the evidence is adequate for supporting the

conviction,  can be determined only  at  the trial  and not  at  the

28

stage  of  inquiry.  At  the  stage  of  issuing  the  process  to  the

accused, the Magistrate is not required to record reasons.”

38. Extensive reference to the case law would clearly show that

the allegations in the complaint and complainant’s statement and

other materials must show that there are sufficient grounds for

proceeding  against  the  accused.   In  the  light  of  the  above

principles,  let  us  consider  the  present  case  whether  the

allegations in the complaint and the statement of the complainant

and other materials before the Magistrate were sufficient enough

to  constitute  prima-facie case  to  justify  the  Magistrate’s

satisfaction  that  there  were  sufficient  grounds  for  proceeding

against  the  respondents-accused  and  whether  there  was

application  of  mind  by  the  learned  Magistrate  in  taking

cognizance  of  the  offences  and  issuing  process  to  the

respondents.

39. Respondents  No.1  to  5  are  minority  shareholders  in  the

appellant-Company.  Respondent No.6 is a lawyer and a trustee

of Birla Education Trust.  Respondent No.6 had been empowered

to file petition before the CLB.  Respondents No.7, 8 and 9 are

the  Directors  of  respondents  No.1,  3  and  2  respectively.  On

10.03.2010, Company Petition CP No.1/2010 was filed before the

29

Company Law Board under Sections 235, 237, 247, 250, 397,

398, 402 and 403 of the Companies Act, 1956 by respondents

No.1 to 5 who are the shareholders of the appellant Company

alleging  oppression  and  mismanagement.  M/s  Birla  Education

Trust  (represented  by  respondent  No.6)  is  also  one  of  the

petitioners  in  the  Company  Petition.  Along  with  the  Company

Petition, the copy of the documents in question i.e. documents

No.1 to 54 including document No.1-Internal Audit Report were

filed and advance copy of the Company Petition and copy of the

documents were given to the appellant.

40. On 24.03.2010, respondents No.12 to 16 have filed five civil

suits under Section 92 of Code of Civil Procedure before the High

Court of Calcutta being CS Nos.73-77 of 2010 challenging the

revocation  of  five  public  charitable  trusts  created  by  Madhav

Prasad Birla (MPB) and Priyamvada Devi Birla (PDB) in 1988.

Respondents  No.  12  to  16  have  averred  that  the  trusts  have

assets worth thousands of crores of rupees which are vested with

the  trusts  dedicated  for  charity.  In  the  said  suits,  respondents

No.12 to  16  have challenged the  revocation  of  the  trusts  and

sought for recovery of the property that are vested in the public

charity through the five trusts set up by MPB and PDB and the

30

said  suits  are  pending.   On  29.03.2010,  five  interlocutory

applications  have  been  filed  in  the  aforesaid  suits  praying  for

interim reliefs and in those applications, respondents No.12 to 16

annexed photocopy of the document No.1-Internal Audit Report of

the  Chanderia  unit  of  Birla  Corporation  Limited  for  the  period

ending  November,  2009.   About  seven  months  thereafter  on

04.10.2010, criminal complaint was filed by the appellant against

respondents No.1 to 16 under Sections 379, 403 and 411 read

with  Section  120-B  IPC  alleging  theft  of  the  documents  and

receipt of stolen property and dishonest misappropriation of the

documents. Of the sixteen accused, six are corporate entities and

rest  are  natural  persons.   Respondents  No.1  to  5  are  the

shareholders who filed the Company Petition CP No.1 of 2010.

Respondents No.12 to 16 are the plaintiffs who have instituted

civil  suits  challenging  the  revocation  of  the  five  trusts  and  for

recovery of the properties that are vested in the public charity.

41. Respondents  No.3,  6,  12  and  some  of  the  other

respondents are the residents beyond the local limits of the trial

court – 10th Metropolitan Magistrate, Calcutta.  Since number of

accused are residents beyond the local limits of the trial court, as

per  amended  provision  of  Section  202  Cr.P.C.,  it  is  obligatory

31

upon the Magistrate that before summoning the accused, he shall

enquire into the case or direct the investigation to be made by a

police officer or by such other person as he thinks fit for finding

out  whether  or  not  there are sufficient  grounds for  proceeding

against the accused.  In the present case, the learned Magistrate

has opted to hold such enquiry himself.

42. The  complaint  alleges  that  the  respondents  have  gained

unauthorized access and possession of the documents No.1 to

54.   It  is  alleged  that  documents  No.1  to  28  have  been

stolen/misappropriated  from the  premises  of  the  appellant  and

that after photocopying the documents, they were kept back in the

premises. In so far as documents No.29 to 54, it is alleged that

they  have  been  stolen/misappropriated  and  have  not  been

returned and are still in the possession of the respondents.  It is

alleged  that  respondents  No.1  to  16  had  gained  unauthorized

access and exercised to control over the said documents.  It is

further alleged that by letter dated 29.03.2010, on being called

upon to  disclose as to  how the respondents  had obtained the

documents, the respondents by letter dated 30.03.2010 evaded

making response to the query on the premise that there was no

procedure of the CLB for seeking such information.   

32

43. The gist of the allegations in the complaint are:-

(i) Respondent No.10-Company is in-charge of day to day

maintenance of the building which houses office of the

complainant and others.  Respondent No.11 is the CEO

In-charge of respondent No.10 and responsible for the

day to day administration of respondent No.10.

(ii) Respondents  No.1  to  9  are  in  possession  of

photocopies of documents No.1 to 28 and stated to be

in possession of originals of documents No.29 to 54;

(iii) Use  of  photocopies  of  documents  No.1  to  24  by

respondents No.1 to 9 in the company petition before

the  CLB  and  use  of  document  No.1-Internal  Audit

Report by respondents No.12 to 16 in the civil suits filed

by them;  

(iv) The documents  are  highly  confidential  and meant  for

use/consumption  only  of  designated  and  specified

individuals  of  the  appellant  Company  and  the

respondents  have gained unauthorized  access  to  the

documents and exercise of control over the documents;

and  

(v) Omission to explain the source of copies of documents

in  spite  of  issuance  of  notice  dated  29.03.2010  to

respondents No.1 to 9 and notice dated 01.04.2010 to

respondents No.12 to 16.

44. With reference to document No.1-Internal Audit  Report  of

Chanderia  Unit,  it  is  alleged  that  one  copy  of  the  original  of

document  No.1  was  marked  to  Bachh  Raj  Nagar  and  it  was

claimed to be still with them.  With reference to documents No.2

33

to  28,  in  para  No.(20)  of  the  complaint,  it  is  alleged  that  the

documents were kept in the premises on the 3rd and 4th floor with

the  concerned  individuals  or  their  secretaries  and  the

respondents have gained unauthorised access and had control

over the documents.  The allegations against the respondents is

that  respondents  No.10  and  11  are  under  the  control  and

management  of  the  Birla  Buildings  and  has  security  and  the

overall responsibility of the management and maintenance of the

same.   It  is  alleged  that  the  respondents  in  connivance  with

respondents No.10 and 11 have gained unauthorised access to

the documents and thus the documents have been stolen from

the premises and then misappropriated.  The averments in the

complaint  even  if  taken  at  its  face  value  and  accepted  in  its

entirety do not constitute  prima facie offence under Section 378

IPC.

45. After  referring to  filing  of  CP No.1/2010 where  the  xerox

copies of the documents were annexed, the complaint alleges as

under:-

“9. ….The Company submits that the said documents are highly

confidential  internal  records  and  correspondence  of  Company

and its officers.  These documents were at all time kept inside

the  registered  office  of  the  Company  at  the  said  premises.

34

These documents have restricted access and are meant for the

perusal  and  consumption  only  of  designated  and  specified

individuals.   These  documents  and  the  information  contained

therein is the property of company over which no unauthorized

person has any right.”

46. On 06.10.2010, Vice-President (Legal) - Power of Attorney

of the complainant Company, Shri Samir Ganguly was examined

as a representative of the Company under Section 200 Cr.P.C.

Shri Samir Ganguly has stated “that the accused persons have

filed various litigations before various forums.  These accused

persons  have  committed  a  serious  crime  of  theft  of  various

documents which I have mentioned in my compliant.”  Shri Samir

Ganguly has further stated as under:-

“….Our office situated at Birla Building, 9/1, R.N. Mukherjee at

3rd & 4th Floor.  Accused No.10 has full control of maintenance

and security to each and every floor….”

“.….In normal  course,  the accused persons could never have

access  to  those  documents  except  by  illegal  means.  The

documents are highly confidential like internal audit report of one

of  our  units  which is  not  supposed to  be in  their  possession.

Other accused persons have filed five civil suits basing on those

stolen  documents,  from  which  I  apprehend  that  all  accused

persons  in  connivance  with  each  other  have  procured  those

documents by theft……”

47. Being the Vice-President (Legal) and a representative of the

Company, Shri Samir Ganguly may not have personal knowledge

35

of the averments made in the complaint and he has not attributed

any  specific  overt  act  to  any  of  the  respondents.  Shri  Samir

Ganguly has only alleged that he apprehends that all the accused

persons  in  connivance  with  each  other  have  procured  the

documents.  The allegations in the statement of the complainant

are vague and lack material particulars as to the commission of

the theft.  Complainant Shri Samir Ganguly has neither attributed

to any facts nor material particulars as to the commission of theft.

48. Respondent No.10-Birla Buildings Limited is responsible for

the  day  to  day  affairs  of  the  maintenance  of  the  building.

Respondent  No.11-S.  Chakrabarty  is  the  CEO  of  Respondent

No.10-Birla  Buildings  Limited.   In  the  complaint,  there  are  no

specific averments against respondents No.10 and 11 as to how

they had access to the 3rd and 4th floors of the building owned by

the appellant Company and as to how they are responsible in

moving the documents  out  of  the possession of  the appellant.

Likewise,  no  specific  overt  act  of  “dishonest  removal”  of  the

documents is attributed to the other respondents.  The mere fact

that respondents No.10 and 11 are responsible for security and

maintenance  of  the  building  cannot  lead  to  an  inference  that

respondents No.10 and 11 are responsible for the theft.

36

49. So far as respondent No.11 who is the CEO of respondent

No.10-Company is concerned, it is stated that he is responsible

for the day to day affairs of respondent No.10-Company and the

complainant  invoked  the  doctrine  of  vicarious  liability.   The

learned  senior  counsel  Mr.  Desai  has  submitted  that  for

proceeding against respondent No.11, the complaint must show

“active role”  of the natural  person.  Reliance was placed upon

Sunil  Bharti  Mittal  v.  Central  Bureau  of  Investigation (2015)  4

SCC 609, wherein it was held as under:-

“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…..”  

50. As  rightly  submitted  by  learned  senior  counsel  for

respondents  No.10 and 11, it  is  inconceivable that  respondent

No.11,  CEO  of  respondent  No.10-Company,  if  committed  the

offence of theft,  would have been permitted to continue in that

profession.  Be it noted, the complainant-appellant Company is

also  a shareholder  in  respondent  No.10-Company and had its

nominee  Mr.  S.N.  Prasad  on  the  Board  of  Directors  of  the

appellant at the relevant time till his death in December, 2012.  It

is pertinent to note that no complaint has ever been made against

37

respondent No.11 against alleged theft or any other overt act.  In

the absence of particulars or prima-facie case in the complaint or

the statement of Shri Samir Ganguly against respondents No.10

and 11, the satisfaction of the Magistrate appears to be on the

presumptive footing that respondents No.10 and 11 are in-charge

of maintenance of the building.  Likewise, issuance of process to

other respondents is only on the presumptive footing that they

have filed copies of the documents in CP No.1/2010 and in the

civil suits filed challenging revocation of the trusts.

51. In his order dated 06.10.2010, the Magistrate observed that

since  some of  the  accused  persons  are  residents  beyond the

local  jurisdiction of  the court,  the matter  further  requires to be

enquired into under Section 202 Cr.P.C. and therefore, fixed the

matter  for  further  enquiry  on  08.10.2010.  On  08.10.2010,  P.B.

Dinesh, employee of the appellant Company was examined who

have stated that respondent No.14-Kumar Mangalam Birla is the

Chairman of  Aditya  Birla  Group having  their  office in  Mumbai;

respondent No.15-Sidharth Birla is also a part of that Company

and he resides at Alipore, Calcutta; respondent No.13-Rajendra

Prasad Pansari is a resident of Calcutta who has now joined Birla

Group.  Witness P.B. Dinesh has stated that these respondents

38

have  procured  documents  stolen  from  the  appellant’s  custody

and filed case before the Company Law Board on the basis of

those documents.

52. Based  on  the  allegations  in  the  complaint  and  the

statements  of  Shri  Samir  Ganguly  and  P.B.  Dinesh,  the

Metropolitan Magistrate took cognizance and directed issuance of

summons to respondents No.1 to 16.  As pointed out earlier, as

per Notes on Clause 19, the object  behind the amendment to

Section 202 Cr.P.C. is to ensure that innocent persons who are

residing  at  far  off  places  are  not  harassed  by  unscrupulous

persons.  The amendment therefore, makes it obligatory upon the

Magistrate that before summoning the accused residing beyond

the  jurisdiction,  the  Magistrate  has  to  enquire  the  case  either

himself or direct investigation to be made by the police officer and

is  required  to  apply  his  mind  and  record  his  satisfaction  with

reasons.   

53. As pointed our earlier, P.B. Dinesh had merely stated that

respondent No.14-Shri Kumar Mangalam Birla is the Chairman of

Aditya Birla Group having their office in Mumbai and respondent

No.15-Shri Sidharth Birla is a part of the Company and resides at

Alipore.   P.B.  Dinesh  has  also  stated  that  respondent  No.13-

39

Rajendra Prasad Pansari stays in Calcutta and that he was an

ex-employee of  Birla  Corporation and now he has joined Birla

Group.   P.B.  Dinesh  has  thus  stated  about  residence  of

respondent No.14 being at Mumbai and residence of respondents

No.13  and  15  at  Calcutta.   There  are  no  specific  allegations

against respondent No.14 or against any other respondents who

are  residing  outside  the  jurisdiction.   Likewise,  no  specific

allegation as to how respondent No.14 or other respondents who

are residing outside the jurisdiction have gained entry into  the

building  of  the  appellant  Company  and committed  theft  of  the

documents  nor  any  specific  allegation  as  to  the  alleged

conspiracy.   

54. In  the  statement  of  P.B.  Dinesh,  there  is  only  a  bare

statement that respondents No.13 to 15 have filed case before

the  Company  Law  Board  that  the  documents  are  highly

confidential  and that they have procured the documents stolen

from  the  custody  of  the  appellant.  There  are  no  specific

allegations against respondents No.13 to 15.  Likewise, there are

no specific allegations against the other accused who are residing

outside  the  jurisdiction  of  the  court  and  how  and  when  they

committed  theft  of  the  documents  that  how  they  entered  into

40

conspiracy. Considering the various litigations pending between

the parties before issuing summons, the learned Magistrate ought

to have considered the complaint and statement of witnesses and

satisfied himself that there are prima facie materials showing the

ingredients  of  the  offence of  theft  (house theft)  and receipt  of

stolen property.   

55. While  ordering  issuance of  process  against  the  accused,

the Magistrate must take into consideration the averments in the

complaint, statement of the complainant examined on oath and

the statement of witnesses examined.  As held in  Mehmood Ul

Rehman, since it is a process of taking a judicial notice of certain

facts which constitute an offence, there has to be application of

mind  whether  the  materials  brought  before  the  court  would

constitute the offence and whether there are sufficient grounds for

proceeding against the accused.  It is not a mechanical process.   

56. As held in  Chandra Deo Singh v. Prokash Chandra Bose

alias Chabi Bose and Another AIR 1963 SC 1430 and in a series

of  judgments  of  the  Supreme Court,  the  object  of  an  enquiry

under Section 202 Cr.P.C. is for the Magistrate to scrutinize the

material produced by the complainant to satisfy himself that the

complaint  is  not  frivolous  and  that  there  is  evidence/material

41

which forms sufficient  ground for  the Magistrate  to  proceed to

issue process under Section 204 Cr.P.C.   It  is  the duty of  the

Magistrate to elicit every fact that would establish the bona fides

of the complaint and the complainant.

57. The  order  of  the  Magistrate  dated  08.10.2010  reads  as

under:-

“The  representative  of  the  complainant  Company  is  present.

This court takes the case record up for enquiry under Section

202 Cr.P.C. itself.  Witness P.B. Dinesh is examined during the

enquiry and his statement has been recorded.  Purpose of the

enquiry seems to have been meted out.  Perused the affidavit

filed  for  that  purpose  on  behalf  of  the  complainant  company.

Perused  the  documents  (both  original  and  xerox  copies)

suppolied and relied on by the complainant company in support

of its case.  Considering all above I find sufficient grounds for

proceeding  against  all  the  sixteen  accused  persons  for

commission of an offence under Sections 380, 411, 120B IPC.

Cognizance  is  taken.   Issue  summons  accordingly  upon  the

accused  persons  fixing  10.12.2010  for  S/R  and  appearance.

Requisites at once.”

For taking cognizance of the offence, the Magistrate thus  inter

alia relied upon the statement of the complainant and P.B. Dinesh

to  arrive at  a  conclusion that  a  prima facie case is  made out

against  the  respondents.   As  discussed  earlier,  neither  the

statement of the complainant nor the statement of P.B. Dinesh

42

contain  the particulars  as to  the commission of  the offence to

have satisfied the Magistrate that there were sufficient grounds

for  proceeding against  the accused.   By perusal  of  the above

order  passed by  the  Magistrate,  we  find  absolutely  nothing  to

indicate application of mind in taking cognizance of the offence

against respondents No.1 to 16 including the respondents who

are  residents  beyond  the  jurisdiction  of  the  court.  Though

speaking or elaborate reasoned orders are not required at this

stage,  there  must  be  sufficient  indication  that  there  was

application of mind by the Magistrate to the facts constituting the

commission of offence.  

58. There are no averments in the complaint nor allegations in

the statement of the complainant or witness P.B. Dinesh as to

when and how the theft was committed. The complaint has been

filed  alleging  commission  of  the  offence  punishable  under

Sections  380,  411  and  120B IPC.   The  Magistrate  has  taken

cognizance under Sections 380, 411 and 120B IPC.  The offence

under Section 380 IPC in the case instituted otherwise than on a

police report  is  a warrant case triable by the Magistrate under

Chapter  XIX – Trial  of  warrant  cases by Magistrates,  XIX-B –

Cases instituted otherwise than on police report.  For the offences

43

triable  under  Chapter  XIX  –  trial  of  warrant  cases  by  the

Magistrate,  the court has to frame the charge.  As per Section

212 Cr.P.C., the charge shall contain such particulars as to the

time and place of  the  alleged offence and the  person against

whom or the thing in respect of which, the offence was committed

as are  reasonably  sufficient  to  give  the  accused notice  of  the

matter  with  which  he  is  charged.   In  the  present  case,  the

complaint lacks particulars as to time and the place of theft or the

person who has committed theft.  There are no averments in the

complaint alleging that how the documents had gone out of the

possession of the complainant.  There are only mere statement of

the complainant Shri Samir Ganguly that respondents No.12 to

16 have filed civil suits basing on the stolen documents and that

he apprehends that all the accused persons in connivance with

each other must have procured the documents by theft.  In the

absence of particulars, by mere possession of the documents or

mere production of  the documents in the Company Petition or

civil suits, it cannot be said that sufficient grounds were made out

to  proceed against  the  accused or  that  the  satisfaction  of  the

Magistrate was well founded justifying issuance of process.

44

59. As held in Pepsi Foods Limited, summoning the accused for

a criminal offence is a serious matter and the respondents are

answerable in the criminal court. The non-application of mind as

to  the  materials  cannot  be  brushed  aside  as  a  procedural

irregularity.  There is no indication in the order of the Magistrate

dated 08.10.2010 as to  application of  the mind and as to  the

satisfaction  of  the  Magistrate  as  to  the  sufficient  ground  for

proceeding against the respondents under Sections 380, 411 and

120-B IPC.

60. The High Court  held that  witness P.B. Dinesh has stated

about alleged involvement of some of the accused and there is no

fundamental error committed by the Magistrate in following the

procedure under Chapter XIX of the Criminal Procedure Code.

The High Court further observed that the flaw at the worst would

be a procedural irregularity.  The order dated 08.10.2010 taking

cognizance of the offence under Sections 380, 411 and 120B IPC

against respondents No.1 to 16 are liable to be set aside. The

Magistrate who is conducting an investigation under Section 202

Cr.P.C. has full power in collecting the evidence and examining

the  matter.  We  are  conscious  that  once  the  Magistrate  is

exercised his discretion, it  is not for the Sessions Court or the

45

High  Court  to  substitute  its  own  discretion  for  that  of  the

Magistrate to examine the case on merits. The Magistrate may

not  embark  upon  detailed  enquiry  or  discussion  of  the

merits/demerits  of  the  case.  But  the  Magistrate  is  required  to

consider whether a  prima case  has been made out or not and

apply the mind to the materials before satisfying himself that there

are sufficient grounds for proceeding against the accused. In the

case in hand, we do not find that the satisfaction of the Magistrate

for issuance of summons is well founded.

61. The object of investigation under Section 202 Cr.P.C. is “for

the purpose of deciding whether or not there is sufficient ground

for  proceeding”.  The  enquiry  under  Section  202  Cr.P.C.  is  to

ascertain the fact whether the complaint has any valid foundation

calling for issuance of process to the person complained against

or whether it is a baseless one on which no action need be taken.

The law imposes  a serious  responsibility  on  the  Magistrate  to

decide  if  there  is  sufficient  ground  for  proceeding  against  the

accused. The issuance of process should not be mechanical nor

should be made as an instrument of harassment to the accused.

As discussed earlier, issuance of process to the accused calling

upon them to appear in the criminal case is a serious matter and  

46

lack of material particulars and non-application of mind as to the

materials cannot be brushed aside on the ground that it is only a

procedural irregularity.  In the present case, the satisfaction of the

Magistrate in ordering issuance of process to the respondents is

not well founded and the order summoning the accused cannot

be sustained.  The impugned order of the High Court holding that

there was compliance of the procedure under Section 202 Cr.P.C.

cannot be sustained and is liable to be set aside.

Production of copies of documents in the Company Petition – whether would amount to theft:   

62. So  far  as  documents  No.1  to  28  filed  in  the  company

petition,  the  High  Court   held   that   since   originals   of

documents No.1 to 28 are still  in the custody of the  appellant

Company-complainant,  temporary  removal  of  those documents

and  the  subject  of  alleged  removal  was  “the  information”

contained in those documents, the same cannot be considered to

be “movable property”. The High Court took the view that such

temporary removal of documents and use of information cannot

be  the  subject  of  the  offence  of  theft  or  dishonest

misappropriation of property as well as dishonest receiving of the

stolen property.  

47

63. Insofar as documents No.1 to 28 are concerned, the point

falling for  consideration is whether the temporary removal of the

documents  and  filing  of  photocopies  and  use  of  the

information/contents of the documents can be the subject matter

of theft.  

64. Contention of the appellant is that the very act of moving the

documents  out  of  the  possession  of  the  appellant-Company

would amount to theft.  It was submitted that the loss need not be

caused by permanent deprivation of the property; but loss due to

theft may be caused even by temporary moving of the property. In

support  of  this  contention,  the  learned  senior  counsel  for  the

appellants  placed  much  reliance  upon  Pyare  Lal  Bhargava  v.

State of Rajasthan AIR 1963 SC 1094. In the said case, wherein

the appellant-Pyare Lal Bhargava, a superintendent in the Chief

Engineer’s Office, at the instance of one Ram Kumar Ram got a

file from the Secretariat through a clerk and took the file to his

house, made it available to said Ram Kumar Ram who replaced

the same documents in the file with other papers and thereafter,

returned the file the next day.  In the said case, the arguments

was  advanced  contending  that  appellant/accused  Pyare  Lal

Bhargava was one of the officers working in the department and

48

the facts do not constitute the offence of theft for the reason that

there was no intention to take it dishonestly as he had taken it

only for the purpose of showing the documents to Ram Kumar

Ram and returned it on the next day to the office and therefore,

he had not taken the said file out of the possession of any person.

Rejecting  the  said  contention,  the  Supreme  Court  held  that

“………To  commit  theft,  one  need  not  take  movable  property

permanently out of the possession of another with the intention

not to return it to him. It would satisfy the definition if he took any

movable property out of the possession of another person though

he intended to return it later on……..”.  In the light of the ratio laid

down  in  Pyare  Lal  Bhargava, temporary  removal  of  original

documents  for  the  purpose  of  replicating  the  information

contained in them in some other medium would thus fulfill  the

requirement of “moving” of property which is the actus reus of the

offence of theft as defined under Section 378 IPC.

65. In  Pyare Lal Bhargava, yet another contention raised was

that the accused did not intend to take it dishonestly as he did not

receive any “wrongful gain” or caused any “wrongful loss” to any

other  person.  Rejecting  the  said  contention,  in  Pyare  Lal

Bhargava, the Supreme Court held as under:-

49

“8. ………. To commit theft one need not take movable property

permanently out of the possession of another with the intention

not to return it to him. It would satisfy the definition if he took any

movable  property  out  of  the  possession  of  another  person

though he intended to return it later on. We cannot also agree

with learned Counsel that there is no wrongful loss in the present

case.  Wrongful  loss  is  loss  by  unlawful  means of  property  to

which the person losing it is legally entitled. It cannot be disputed

that the appellant unauthorizedly took the file from the office and

handed it over to Ram Kumar Ram. He had, therefore, unlawfully

taken  the  file  from  the  department,  and  for  a  short  time  he

deprived the Engineering Department of the possession of the

said  file.  The  loss  need  not  be  caused  by  a  permanent

deprivation of property but may be caused even by temporary

dispossession, though the person taking it intended to restore it

sooner  or  later.  A  temporary  period  of  deprivation  or

dispossession  of  the  property  of  another  causes  loss  to  the

other………...”  

66. One of the foremost components of theft is that the subject

matter of the theft needs to be a “moveable property”. “Moveable

property” is defined in Section 22 IPC which includes a corporeal

property of every description. It is beyond doubt that a document

is a “moveable property” within the meaning of Section 22 IPC

which  can  be  the  subject  matter  of  theft.   A “document”  is  a

“corporeal  property”.   A thing  is  “corporeal”  if  it  has  a  body,

material  and  a  physical  presence.   As  per  Section  29  IPC,

“Document” denotes  “any matter expressed or described upon

50

any substance by means of letters, figures or marks or by more

than one of those means, intended to be used, or which may be

used as evidence of that matter”. The first Explanation to Section

29 IPC provides that it is immaterial by what means or upon what

substance these are formed. This definition would include within

its ambit photocopy of a document.  As per Explanation No.2 of

Section 29 IPC, letters, figures or marks shall be deemed to be

expressed by such letters, figures or marks within the meaning of

the Section.  Such letters, figures or marks thus have a material

and physical presence. Therefore, it can also be inferred that the

said information would be deemed to fall  within the purview of

“Document” – a corporeal property.  

67. Information contained in a document, if replicated, can be

the subject of theft and can result in wrongful loss, even though

the  original  document  was  only  temporarily  removed  from  its

lawful  custody  for  the  purpose  of  extracting  the  information

contained  therein.  In  the  case  of  K.N.  Mehra  vs.  State  of

Rajasthan AIR 1957 SC 369,  this Court  held that gain or loss

contemplated need not be a total acquisition or a total deprivation

but it is enough if it is a temporary retention of property by the

51

person wrongfully gaining or a temporary keeping out of property

from person legally entitled.  

68. The High Court, in our view, was not right in holding that the

replication  of  the  documents  or  use  of  information  in  the

documents No.1 to 28 and the contents thereon are not corporeal

property and would not amount to theft qua documents No.1 to

28. The documents and the replication of the documents and the

contents  thereon  have  physical  presence  and  therefore,  are

certainly “corporeal property” and the same can be the subject

matter of theft.  

69. The main question falling for consideration is whether in the

facts and circumstances of the case in hand whether temporary

removal  of  the  documents  and  using  them  in  the  litigations

pending between the parties  would amount  to  theft  warranting

lodging of a criminal complaint.   

70. Admittedly, documents No.1 to 54 including the Document

No.1-Internal  Audit  Report  of  Chanderia  unit  of  the  appellant

Company  has  been  filed  by  the  respondents  in  the  company

petition.  These  documents  are  intra-company  correspondence,

internal  audit  reports,  agreements,  etc.  in  relation  to  the

52

operations  of  the  appellant  Company.  Admittedly,  these

documents have been produced in the company petition by the

shareholders of the appellant-Company to substantiate their case

of oppression and mismanagement by respondent No.17 and for

vindication  of  their  rights.  As  discussed  infra  in  the  facts  and

circumstances of the case in hand, in our view taking away of the

documents temporarily and using them in the pending litigations

between the parties would not amount to theft.

71. In the criminal complaint,  by order dated 08.10.2010, the

Magistrate has taken the cognizance of the offence under Section

380 IPC - “Theft in dwelling house, etc.”.  In order to constitute

theft, the following ingredients are essential:-

i. Dishonest intention to take property; ii. The property must be moveable; iii. It should be taken out of the possession of another

person;

iv. It  should  be  taken  without  the  consent  of  that

person;

v. There  must  be  some  removal  of  the  property  in

order to accomplish the taking of it.

72. Intention is the gist of the offence. It is the intention of the

taker which must determine whether taking or moving of a thing is

theft.  The intention to  take “dishonestly”  exists  when the taker

53

intends to cause wrongful  loss to any other which amounts to

theft. It is an essential ingredient of the offence of “theft” that the

movable  property  should  have  been  “moved”  out  of  the

possession  of  any  person  without  his  consent.  “Movable

property” is defined in Section 22 of IPC, which reads as under:-

“Movable  property –  The  words  “movable  property”  are

intended to  include corporeal  property  of  every  description,

except land and things attached to the earth or permanently

fastened to anything which is attached to the earth.”

“Dishonestly” has been defined in Section 24 IPC, which reads as

under:-

“Dishonestly - Whoever does anything with the intention of

causing  wrongful  gain  to  one  person  or  wrongful  loss  to

another person, is said to do that thing “dishonestly”.

“Wrongful gain” and “Wrongful loss” have been defined in Section

23 IPC which read as under:-

“Wrongful gain” - “Wrongful gain” is gain by unlawful means

of property to which the person gaining is not legally entitled.  

“Wrongful  loss” -  “Wrongful  loss”  is  the  loss  by  unlawful

means  of  property  to  which  the  person  losing  it  is  legally

entitled.  

Gaining wrongfully, losing wrongfully - A person is said to

gain wrongfully when such person retains wrongfully, as well

as when such person acquires wrongfully. A person is said to

lose wrongfully when such person is wrongfully kept out of any

54

property, as well as when such person is wrongfully deprived

of property.”

73. In the facts and circumstances of the case, it is to be seen in

using the documents in the litigation, whether there is “dishonest

intention”  on  the  part  of  the  respondents  in  causing  “wrongful

loss”  to the appellant  Company and getting “wrongful  gain”  for

themselves.  Respondents No.1 to 5 are the shareholders of the

appellant-Company and they have produced the photocopies of

the documents No.1 to 54 in the CLB proceedings which were

filed by them on the ground of oppression and mismanagement.

Merely because the respondents have produced the copies of the

documents  in  the CLB proceedings,  it  cannot  be said  that  the

respondents  have  removed  the  documents  with  “dishonest”

intention.  Copies of  documents  are produced in  support  of  the

case of respondents No.1 to 5 and to enable the Court to arrive at

the truth in a judicial proceeding involving alleged oppression and

mismanagement  in  the  affairs  of  the  appellant  Company  by

respondent  No.17.  A person  can  be  said  to  have  “dishonest

intention”  if  in taking the property it  is  the intention to wrongful

gain  by unlawful  means or  to  cause wrongful  loss by unlawful

means.  As discussed earlier, the complaint does not allege that

55

there was any wrongful gain to the respondents or wrongful loss

to the appellant-Company so as to constitute ingredients of theft

under Section 378 IPC. The complaint only alleges that the copies

of  the  document  were  used  in  the  CLB  proceedings  by

respondents No.1 to 5.  There is no allegation of “wrongful gain”

to the respondents or “wrongful loss” to the appellant.  

74. As pointed out earlier, documents No.1 to 54 are filed in the

Company Petition to  substantiate  their  case of  oppression and

mismanagement. Filing of documents in the CLB proceedings is

only to assert their claim of oppression and mismanagement of

the appellant Company.  According to the respondents, there is a

bona  fide  dispute  of  oppression  and  mismanagement  and  the

documents No.1 to 54 are filed only to substantiate their  case.

When  a  bona  fide  dispute  exists  between  the  parties  as  to

whether  there  is  oppression  and  mismanagement,  there  is  no

question of “wrongful gain” to the respondents or “wrongful loss”

to  the  appellant.   In  using  the  documents,  when  there  is  no

dishonest intention to cause “wrongful  loss”  to the complainant

and “wrongful gain” to the respondents, it cannot be said that the

ingredients of theft are made out.  

56

75. As discussed earlier, respondents No.12 to 16 have filed five

civil suits challenging the cancellation of the trusts for recovery of

the property  that  had vested in public  charity  through the trust

deeds.  Respondents No.12 to 16 have filed copy of document

No.1-Internal  Audit  Report  of  Chanderia  Unit  of  the  appellant

Company.  By the time, the document was filed in the interlocutory

applications filed in the civil suits, the document was already filed

in CP No.1/2010.  Here again, there is a bona fide dispute as to

the correctness of cancellation of the revocation of the trusts deed

and to  substantiate  the averments  in  the complaint  and in  the

interlocutory applications.  It cannot be said that the respondents

No.1 to 16 had dishonest intention in using the documents so as

to  cause  “wrongful  loss”  to  the  appellant  or  “wrongful  gain”  to

themselves so as to attract the ingredients of theft under Section

378 IPC.

76. How the respondents had access to the documents may be

one thing. It may perhaps have bearing on the evidentiary value

to be attached to the documents. But to say that it amounts to

theft and seeking to prosecute the respondents is nothing but an

attempt to cow down their defence in the litigation or to deprive

the  respondents  of  their  valuable  defence.  In Pooran  Mal  v.

57

Director  of  Inspection  (Investigation),  New  Delhi  and  Others

(1974) 1 SCC 345, it has been held by the Constitution Bench

that even in case of illegal search and seizure, the documents

obtained cannot be shut out from consideration as long as they

are relevant to the matters in issue.  In the present case, the

documents are used in good faith in the legal proceedings i.e.

Company  Petition  filed  by  respondents  No.1  to  5  alleging

oppression and mismanagement and the other suits are the civil

suits challenging the cancellation of the Trusts. These cases are

pending and both the parties are hotly contesting those cases.

Use of the documents in judicial proceeding by the respondents is

to substantiate the case of oppression and mismanagement of

the  appellant-Company.  Absolutely,  no  “dishonest  intention”  or

“wrongful gain” could be attributed to the respondents.  Likewise,

there is no “wrongful loss” to the appellants so as to attract the

ingredients of Sections 378 and 380 IPC.

77. The intention under Section 24 IPC “dishonestly” must be to

cause “wrongful loss” to the other or to have “wrongful gain” for

oneself. In determining whether a person has acted dishonestly

or  not,  it  is  the  intention  which  has  to  be  seen.  By  filing  the

documents in the legal proceedings, there is no intention on the

58

part of the respondents to cause “wrongful loss” to the appellant

nor intention to make “wrongful gain” to themselves. Filing of the

documents in the legal proceedings is only to vindicate their stand

in the company petition. We find much force in the submission of

the learned senior counsel, Mr. Sibal, appearing for respondents

No.1 to 5 that the attempt of the appellant in trying to prosecute

the  respondents  appears  to  arm-twist  the  respondents  in  an

attempt to shut out the relevant material documents before the

CLB proceedings by prosecuting respondents No.1 to 9 and in

the civil suits.

78. Whether  respondents  should  have  called  for  the

documents  in  accordance  with  various  provisions:-

Contention on behalf of the appellant is that despite there being

adequate provisions under Section 10-E of Companies Act and

Section 91 Cr.P.C. relating to summoning of documents and of

discovery,  interrogatories  and  inspection  of  documents  under

Order XI CPC, the respondents resorted to dubious methods to

procure the documents and thus, cannot skirt the liability for their

actions by contending that since the documents were used for a

legal proceeding, it cannot be theft.  

59

79. Undoubtedly, adequate provisions have been provided in all

the laws concerned with the instant case to enable a party to a

suit  or  the  concerned  court  to  require  the  production  of  all

documents and materials considered necessary or desirable for

proper  adjudication  of  the  dispute  at  hand.   If  a  document  in

possession  is  not  produced  after  notice,  there  is  further

presumption  under  Section  114  illus.(g)  that  the  evidence  if

produced would have been unfavourable to the opposite party.

80. The  respondents  herein  are  alleged  to  have  used  the

documents of appellant-Corporation without calling upon them to

produce the documents in accordance with law.  Of course, the

litigants  and  their  counsel  are  expected  to  comply  with  the

provisions  of  law  and  court  discovery  rules  in  producing  the

documents.  But merely because the respondents have not called

for the documents as per the provisions, it cannot be said that

they have committed “theft”. It may be that the respondents have

not  issued  notice  calling  upon  the  appellant-Corporation  to

produce  the  documents  or  may  not  have  taken  steps  in

accordance with various provisions of law calling upon them to

produce documents.  This may probably be the point to be raised

in appropriate proceedings so as to advance arguments as to the

60

evidentiary value to be attached to the documents.  But it would

be  far-fetched  to  say  that  the  respondents  have  dishonestly

removed the documents and committed the offence of theft and

that  they  are  to  face  criminal  prosecution  for  theft  of  the

documents.  It would only be an arm-twisting tactics to deprive

the  respondents  from  pursuing  their  defence  with  relevant

evidence and materials.  Since we have held that there are no

sufficient ground for proceeding against the respondents and that

the order of issuance of summons itself is not sustainable, we are

not inclined to go further deep on this aspect; nor express our

views as to the evidentiary value to be attached to the documents

in the relevant proceedings.  Lest, it would amount to expressing

our views in the pending proceedings between the parties.  

81. Whether  the  criminal  prosecution  against  the

respondents be permitted to continue:-  As discussed earlier,

admittedly  the  parties  are  entangled  in  several  litigations.

Allegations  of  theft  and  misappropriation  are  relating  to  the

documents No.1 to 28 and the documents No.1 to 54 which are

filed in the company petition and filing of Internal Audit Report in

the  civil  suits.  As  discussed  earlier,  there  are  no  specific

allegations as to  when,  where and how the respondents  have

61

committed  theft;  nor  are  there  specific  allegations  against  the

respondents accused. Allegations in the complaint, being taken at

their  face  value,  do  not  disclose  prima-facie case  nor  the

ingredients of the offence of house theft or misappropriation are

made out.  

82. Exercise  of  power  under  Section  482  Cr.P.C.  envisages

three  circumstances  in  which  the  inherent  jurisdiction  may  be

exercised namely:-  (i) to give effect to an order under the Code;

(ii) to prevent abuse of the process of court; and (iii) to otherwise

secure the ends of justice. Inherent jurisdiction under Section 482

Cr.P.C. though wide has to be exercised sparingly, carefully and

with caution.  

83. It is well settled that the inherent jurisdiction under Section

482 Cr.P.C. is designed to achieve a salutary purpose and that

the criminal proceedings ought not to be permitted to degenerate

into a weapon of harassment. When the Court is satisfied that the

criminal proceedings amount to an abuse of process of law or

that  it  amounts  to  bringing  pressure  upon  the  accused,  in

exercise  of  the  inherent  powers,  such  proceedings  can  be

quashed. In  Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi

62

and Others (1976) 3 SCC 736, the Supreme Court reviewed the

earlier decisions and summarised the principles as to when the

issue of process can be quashed and held as under:-

“5. ………….. Once the Magistrate has exercised his discretion it is not for the High Court, or even this Court, to substitute its own

discretion for that of the Magistrate or to examine the case on

merits with a view to find out whether or not the allegations in the

complaint,  if  proved,  would  ultimately  end in  conviction of  the

accused. These considerations, in our opinion, are totally foreign

to the scope and ambit of an inquiry under Section 202 of the

Code  of  Criminal  Procedure  which  culminates  into  an  order

under Section 204 of the Code. Thus it may be safely held that in

the following cases an order of the Magistrate issuing process

against the accused can be quashed or set aside:

(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.

63

The cases mentioned by us are purely illustrative and provide

sufficient guidelines to indicate contingencies where the High

Court can quash proceedings.”

84.  In  State of Haryana and Others v. Bhajan Lal and Others

1992  Supp  (1)  SCC  335,  the  Supreme  Court  considered  the

scope of inherent powers of the Court and after referring to earlier

decisions, the Supreme Court enumerated categories of cases by

way  of  illustration  where  the  extraordinary  jurisdiction  under

Article 226 of the Constitution of India can be exercised by the

High Court to prevent abuse of process of Court or otherwise to

secure ends of justice. It was held that “where the uncontroverted

allegations  made  in  the  FIR  or  complaint  and  the  evidence

collected in support of the same do not disclose the commission

of any offence and make out a case against the accused.”

85. In the present case, it is one thing to say that the documents

have not been secured in accordance with the law and no value

could be attached to them. But merely because documents have

been produced from one source or other, it cannot be said that

documents have been dishonestly removed to obtain “wrongful

gain”  to  the  respondents  and  cause  “wrongful  loss”  to  the

appellant. Where it appears that the criminal complaint has been

64

filed to bring pressure upon the respondents who are shown as

accused in the criminal case, the complaint is to be quashed.

86. In Indian Oil Corpn. v. NEPC India Ltd. and Others (2006) 6

SCC  736,  the  Supreme  Court  after  observing  that  there  is  a

growing  tendency  in  business  circles  to  convert  powerful  civil

disputes in criminal cases held as under:-

“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.

Be that as it may.”

87. In Madhavrao Jiwajirao Scindia and Others v. Sambhajirao

Chandrojirao Angre and Others (1988) 1 SCC 692,  it  was held

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 was further held that “while considering the matter,

the court is to take into consideration any special feature which

65

appear in a particular case showing whether or not it is expedient

in the interest of justice to permit a prosecution to continue.”  

88. The FIR or the criminal proceedings can be quashed if the

allegations do not make out a prima-facie case or allegations are

so improbable that  no prudent person would ever reach a just

conclusion  that  there  are  sufficient  grounds  for  proceeding

against the accused.  So far as, the allegation of retention of the

documents No.29 to 54, in our view, no allegation as to when and

how the original documents were removed and retained by the

respondents. Where on the admitted facts no prima-case case is

made  out  against  the  accused  for  proceeding  or  when  the

Supreme Court is satisfied that the criminal proceedings amount

to abuse of process of court, Supreme Court has the power to

quash  any  judicial  proceedings  in  exercise  of  its  power  under

Article 136 of the Constitution of India. In our view, the present

case is a fit case for exercising the power in quashing the criminal

complaint qua the documents No.29 to 54 also.

89. We summarise our conclusions as under:-

66

 By the order of the Magistrate dated 08.10.2010, cognizance

was taken against respondents No.1 to 16 for commission of

the offences under Sections 380, 411 and 120B IPC.  There

are no averments in the complaint nor are there allegations

in  the  statement  of  the  complainant  or  the  witness  P.B.

Dinesh as to when and how the theft was committed and the

order of the Magistrate dated 08.10.2010 taking cognizance

of  the  criminal  case  against  respondents  No.1  to  16  qua

documents No.1 to 54 is liable to be set aside.

 It is held that the “document” as defined in Section 29 IPC is

a “moveable property” within the meaning of Section 22 IPC

which can be the subject matter of theft.  The information

contained thereon in the documents would also fall within the

purview of the “corporeal property” and can be the subject

matter  of  the  theft.   The  findings  of  the  High  Court  is

modified to that extent.

 In the facts and circumstances of the present case, use of

documents No.1 to 28 and documents No.29 to 54 by the

respondents in judicial proceedings is to substantiate their

case  namely,  “oppression  and  mismanagement”  of  the

administration of appellant-Company and their plea in other

pending proceedings and such use of the documents in the

litigations pending between the parties would not amount to

theft.  No “dishonest intention” or “wrongful gain” could be

attributed to the respondents and there is no “wrongful loss”

to the appellant so as to attract the ingredients of Sections

378 and 380 IPC.

67

 Considering the facts and circumstances of the present case

and the number of litigations pending between the parties, in

our  considered  view,  continuation  of  the  criminal

proceedings would be an abuse of the process of the court.

The  order  of  the  Magistrate  dated  08.10.2010  taking

cognizance of the offences and the issuance of summons to

respondents  No.1  to  16  and  the  criminal  proceedings

thereon are liable to be quashed.

90. In  the  result,  the  impugned  judgment  of  the  High  Court

dated 15.05.2015 qua Documents No.29 to 54 is set aside and

the  appeals  arising  out  of  SLP(Crl.)  D.Nos.6405  and  6122  of

2019  preferred  by  the  respondents  are  allowed.  The  appeal

arising  out  of  SLP(Crl.)  No.9053  of  2016  preferred  by  the

appellants qua Documents No.1 to 28 is dismissed.

…………………………..J.                                                                   [R. BANUMATHI]

…………………………..J. [R. SUBHASH REDDY]

New Delhi; May 09, 2019

68