IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE [ENTITY] WEDNESDAY, THE 21ST DAY OF JUNE 2017/31ST JYAISHTA, 1939 Crl.MC.No. 930 of 2013 () CC. NO.1205/2012 OF JUDICIAL FIRST CLASS MAGISTRATE COURT, IRINJALAKUDA. PETITIONER(S)/PETITIONERS/ACCUSED 1 TO 4: 1. AYURDHANYA INDUSTRIES CO-OPERATIVE SOCIETY LTD. (ADVISING BOARD HOUSING PROJECT), RAYS COMPLEX, SANKARAYYAR ROAD, THRISSUR, REPRESENTED BY MANAGING DIRECTOR SAJAN EDWARD, S/O. RAJU, PERINGULATH HOUSE, THRIKKAIPETTAP.O., THRIKKAIPETTA VILLAGE, VYTHIRI TALUK, WAYANAD DISTRICT. 2. JOY, S/O LAZAR, PRESIDENT,AYURDHANYA INDUSTRIES CO-OPERATIVE SOCIETY LTD. (ADVISING BOARD HOUSING PROJECT), RAYS COMPLEX, SANKARAYYAR ROAD, THRISSUR, RESIDING AT ALUKKAL HOUSE, CHITTISSERI P.O., NENMONIKKARA VILLAGE, MUKUNDAPURAM TALUK. 3. LEENA EDWARDS, W/O SAJAN EDWARD, DIRECTOR, AYURDHANYA INDUSTRIES CO-OPERATIVE SOCIETY LTD., (ADVISING BOARD HOUSING PROJECT), RAYS COMPLEX, SANKARAYYAR ROAD, THRISSUR, RESIDING AT PERINGULATH HOUSE, THRIKKAIPETTAP.O., THRIKKAIPETTA VILLAE, VYTHIRI TALUK, WAYANAD DISTRICT. 4. ANNAMMA, W/O JOY, DIRECTOR, RAW HOUSE-3, SAMARATH NAGAR, VADAGAON SHARRY, PUNE-14, CHITTISSERY DESOM, CHITTISSERY P.O., NENMANIKKARA VILLAGE, MUKUNDAPURAM TALUK. -DO-DO- BY SRI.P.VIJAYA BHANU, SENIOR ADVOCATE. ADVS. SRI.M.REVIKRISHNAN, SRI.VIPIN NARAYAN. Crl.MC.No. 930 of 2013 RESPONDENTS/COMPLAINANT AND STATE: 1. POULOSE, S/O RAPPAI (LATE), KAITHARATH HOUSE, KALPARAMBU DESOM, POOMANGALAM VILLAGE, MUKUNDAPURAM TALUK, PIN-680 013. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R1 BY SMT.P.R.REENA. R2 BY PUBLIC PROSECUTOR SRI.SAIGI JACOB PALATTY. THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 21-06-2017, ALONG WITH CRL.MC. 4985 OF 2013, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: rs. Crl.MC.No. 930 of 2013 APPENDIX PETITIONER'S ANNEXURES:- ANNEXURE A COPY OF THE COMPLAINT IN C.C. NO.1205 OF 2012 OF THE COURT OF JUDICIAL FIRST CLASS MAGISTRATE, IRINJALAKUDA. ANNEXURE B COPY OF THE ASSIGNMENT DEED IN DOCUMENT NO.1834 OF 2011 OF VADAKKUMKARA SRO, DATED 21/07/2011. ANNEXURE C COPY OF THE ASSIGNMENT DEED IN 1835/2011 OF VADAKKUMKARA SRO, DATED 21/07/2011. ANNEXURE D COPY OF THE JUDGMENT IN [CASE NUMBER] OF THE COURT OF [ENTITY]. RESPONDENT'S ANNEXURES:- NIL. TRUE COPY [ENTITY] rs. "C.R" [ENTITY], J. [CASE NUMBER] Dated this the 21st day of June, 2017. O R D E R
The petitioners herein are the 4 accused in [CASE NUMBER] and [CASE NUMBER] on the file of the Judicial First Class Magistrate Court, Irinjalakkuda, alleging offence punishable under [SECTION] of the [ACT]. The complainant in both these cases is the 1st respondent in these cases. The petitioners seek quashment of these complaints. Both the complaints relate to the same alleged liability arising out of landed property transaction covered by Anxs-B & C sale deeds. Anx-A is the copy of the respective complaints in these cases and both the complaints are more or less similarly worded except the details of cheque, formalities taken in pursuance thereof, etc. It is averred in the complaints that the complainant and the Managing Director of the 1st accused Co-operative society were friends and that the 1st respondent complainant is the owner of 1.20 acres of land comprised in Sy.Nos.846/5 and 776/1 of Poomangalam Village, Thrissur District, and that the complainant 2
[CASE NUMBER] agreed to sell the same to the 1st accused and the total sale consideration for the above said land was fixed at Rs.99 lakhs. That the accused persons agreed to pay Rs.5 lakhs in cash and that the balance Rs.94 lakhs to be paid in instalments through cheques. Pursuant to this understanding Anx-B sale deed No.1834/2011 of Vadakkekkara SRO was executed and registered on 21.7.2011 for 17.80 ares of the above said land and Anx-C sale deed No.1835/2011 of Vadakkekkara SRO was also executed and registered on 21.7.2011 for 30.35 ares of land and that the entire extent of the above said 1.20 acres was conveyed by the complainant to the accused. Towards the balance sale consideration of Rs.94 lakhs, 3 cheques were issued. Out of the said three cheques, cheque No.283090 dated 21.11.2011 for Rs.25 lakhs issued by the accused in favour of the complainant was dishonoured and that after following the statutory formalities, Anx-A complaint in [CASE NUMBER] was filed. The second dishonoured cheque is in respect of Rs.59 lakhs as per cheque No.283088 dated 21.7.2012 was issued by the accused in favour of the complainant which was also dishonoured, etc., which led to the institution of Anx-A complaint in [CASE NUMBER]. The cheque for balance Rs.10 lakhs was alleged to be issued by the accused in favour of the mother of the 3
[CASE NUMBER] complainant and it appears that the complaint is silent as to whether the said cheque was dishonoured and whether the payee of that cheque has taken any action for initiating private criminal complaint against the accused persons herein. However, it is pointed out on behalf of the petitioners that to the best of their knowledge, no such complaint has been initiated by the payee of the 3rd dishonoured cheque for Rs.10 lakhs at the behest of the mother of the present 1st respondent complainant. It is further averred in the impugned complaints that the dishonoured cheques involved in these 2 cases were executed and signed by the Managing Director of the 1st petitioner Society and by that of the 2nd petitioner, who is stated to be the President of the said co- operative society. The complaints proceed as if the above said 2 cheques have been drawn from the account of the 1st accused Society. So, the drawer of the dishonoured cheques in question happened to be the 1st accused Society, etc. Petitioners would mainly contend that the complaints are liable to be quashed on two grounds. Firstly, there are no averments in the impugned complaints that the petitioners 2 to 4 (accused 2 to 4) were in charge of and responsible for the affairs of the business of the 1st accused Society at the relevant time and therefore the complaint as against them is liable to be quashed. The second ground is 4
[CASE NUMBER] on the basis of various aspects arising out of Anxs-B & C sale deeds as well as Anx-D judgment of the civil court. Detailed aspects in regard to these contentions would be adverted to later.
2. Heard Sri.[ENTITY], learned Senior Counsel, instructed by Smt.[ENTITY], learned counsel appearing for the petitioners in these cases, Smt.[ENTITY], learned counsel appearing for the 1st respondent and Sri.[ENTITY], learned Prosecutor appearing for R-2 State.
3. As per the specific case projected in the impugned complaints, the dishonoured cheques in question were issued from the account maintained by the 1st accused-Society and that the signatories of the said cheques are the Managing Director of the 1st petitioner Society and the 2nd accused, who is the President of the 1st petitioner Society. A mere perusal of both the complaints would disclose that there are no averments anywhere in those complaints that petitioners 2 to 4 (accused 2 to 4) were in charge of and responsible for the affairs of the business of the Society as conceived in [SECTION] of the [ACT] so as to invoke vicarious liability of office bearers of body corporates as envisaged in that section. It would be profitable to refer to [SECTION] of the [ACT] which reads as follows:
[CASE NUMBER] '[SECTION].Offences by companies. (1) If the person committing an offence under [SECTION] is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he has exercised all due diligence to prevent the commission of such offence.
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Governemnt or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation: For the purposes of this Section,-
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.'
4. The Apex Court has held in the land mark Three-Judge Bench decision in [PRECEDENT], that there should be specific and cogent averments in the complaint alleging offence punishable under [SECTION]/[SECTION] of the [ACT] and that in cases where drawer of the 6
[CASE NUMBER] dishonoured cheque is a body corporate like company, partnership, etc., then the co-accused persons, who are officials or office bearers of such body corporates can be mulcted with vicarious liability only if there are cogent and specific averments that the said persons were in charge of and responsible for the affairs of the business of the company at the time of commission of the offence. It would be profitable to refer to paras 1 & 19 of the Three-Judge Bench decision of the Apex Court in [PRECEDENT], which read as follows:
'1. This matter arises from a reference made by a two-Judge Bench of this Court for determination of the following questions by a larger Bench:
"(a) Whether for purposes of [SECTION] of the [ACT], it is sufficient if the substance of the allegation read as a whole fulfil the requirements of the said section and it is not necessary to specifically state in the complaint that the person accused was in charge of, or responsible for, the conduct of the business of the company.
(b) Whether a director of a company would be deemed to be in charge of, and responsible to, the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary.
(c) Even if it is held that specific averments are necessary, whether in the absence of such averments the signatory of the cheque and or the managing directors or joint managing director who admittedly would be in charge of the company and responsible to the company for conduct of its business could be proceeded against."' xxx xxx xxx
19. In view of the above discussion, our answers to the questions posed in the reference are as under:
(a) It is necessary to specifically aver in a complaint under [SECTION] that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of [SECTION] and has to be made in a complaint. Without this averment being made in a complaint, the requirements of [SECTION] cannot be said to be satisfied.
[CASE NUMBER]
(b) The answer to the question posed in [SECTION] has to be in the negative.
Merely being a director of a company is not sufficient to make the person liable under [SECTION] of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of [SECTION] is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.
(c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under [SECTION] of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under [SECTION]. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under [SECTION].' The said position has again been reiterated by the Apex Court in the judgment in [PRECEDENT], in para 39 thereof (SCC report p.p. 345-346, etc.), which reads as follows:
"39. From the above discussion, the following principles emerge:
(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.
(ii) [SECTION] does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.
(iii) Vicarious liability can be inferred against a company registered or incorporated under the [ACT] only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.
[CASE NUMBER]
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.
(v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.
(vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in the complaint.
(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases."
5. It can be seen from a perusal of both the complaints that the 1st accused is "Ayurdhanya Industries Co-operative Society Ltd"
(Advising Board Housing Project), represented by the Managing Director, [ENTITY] and his address is shown as "Peringulath House, Thrikkaipetta P.O., Thrikkaipetta Village, Vythiri Taluk, Wayanad District".
Accused 2 to 4 are petitioners 2 to 4 herein. Thus it can be seen that though the Co-operative Society has been arrayed as principal offender/accused No.1., Sri.[ENTITY], who is stated to be the Managing Director of the Society, has not been separately arrayed as co-accused in his individual capacity. Though the Apex Court has held that in the case of Managing Director/Joint Managing Director of a company, it is not necessary to make specific averments in the complaint that they were in charge of and responsible for the affairs of the said company, and that a person in the position of Managing 9
[CASE NUMBER] Director/Joint Managing Director, as the designation in their office so held, is in charge of and responsible for the conduct of business of the company is entitled to get covered under [SECTION]. It has also been held by the Apex Court in [PRECEDENT], that as far as the signatory of a dishonoured cheque is concerned, he is clearly responsible for the incriminating act inasmuch as if the Director or official of the company, who has signed the cheque, then also it is not necessary to raise such averments in the complaint. Since the Managing Director of the1st accused Society, who happens to be the first signatory of the cheque, has not been separately arrayed as an accused in his individual capacity, there is no question of the complainant getting the benefit of the above said legal position. However, the 2nd petitioner, who is stated to be the President of the society, is alleged to be the second signatory of the alleged cheque in question. Therefore, there need not be any specific averments in the complaint that he was in charge of and responsible for the affairs of the company at the relevant time. The above said judgment of the Apex Court has been reiterated and reaffirmed in a catena of rulings and it is not necessary to cite such subsequent precedents. Accordingly, in the light of the above said legal principles flowing from 10
[CASE NUMBER] the above referred judgments of the Apex Court in [PRECEDENT] and [PRECEDENT], the continuance of the prosecution proceedings as against petitioners 3 & 4 (accused 3 & 4) is not legally permissible and the complaints to the extent the petitioners 3 & 4 have been arrayed as accused 3 & 4 therein are liable to be quashed on that ground alone.
6. As regards the 2nd contention urged by the petitioners, the following aspects are to be borne in mind. Petitioners would mainly place reliance on Anxs.B & C which are registered sale deeds referred to in the impugned complaints. Anx-D is the appellate judgment of the Principal Sub Judge, Irinjalakuda in [CASE NUMBER]. Before the petitioners would place great reliance on these aspects flowing out from Anxs-B, C & D in order to urge their prayer for quashment of the entire impugned criminal proceedings as against all the accused, it will be pertinent to consider the scope and limitations of considering such additional materials and documents, while considering the plea for quashment under [SECTION] of the [ACT] It has been held by the Apex Court in [PRECEDENT] 11
[CASE NUMBER], that in exceptional cases, the High Court can look into those documents which are unimpeachable and can be legally translated into relevant evidence under the provisions in [SECTION] of the [ACT] It has also been observed in para 21 of the judgment of the Apex Court in [PRECEDENT], that in rare and exceptional cases, the High Court could consider the unimpeachable evidentiary materials while exercising the powers for quashing the criminal proceedings under [SECTION] of the [ACT] It was also observed in para 29 of the decision in [PRECEDENT], that the width and scope of the powers of the High Court in [SECTION] of the [ACT] and [SECTION] of the [ACT] are unlimited whereunder in the interests of justice the High Court can make such orders as may be necessary to prevent abuse of the process of any court or otherwise to secure the ends of justice within the parameters laid down in State of Haryana & ors. v. [ENTITY] & ors., reported in (1992) supp. 1 SCC 335 = 1992 Cri. SCC 426, etc. In paras 36 & 37 of the judgment in [PRECEDENT], their Lordships of the High Court have considered the power of the High Court under [SECTION] to consider the materials other 12
[CASE NUMBER] than produced by the prosecution in proceedings under [SECTION] of the [ACT] and that the width of the powers of the High Court under [SECTION] [ACT] and [SECTION] of the Constitution is unlimited whereunder in the interest of justice, the High Court could make such order as may be required to secure the ends of justice and to prevent abuse of the process of any court. It has been held in paras 25 & 26 of the judgment in [PRECEDENT], that in appropriate cases, if on the face of the documents, which are beyond suspicion or doubt, placed by the accused, the accusations against him cannot stand, it would be travesty of justice if the accused is relegated to trial and he is asked to prove his defence before the trial court. In such a matter, for promotion of justice or to prevent injustice or abuse of process, the High Court may look into the materials which have significant bearing on the matter at prima facie stage. Further it has been observed therein that criminal prosecution is a serious matter;
it affects the liberty of a person and no greater damage can be done to the reputation of a person than dragging him in a criminal case and the the High Court fell into grave error in not taking into consideration the uncontroverted documents relating to the appellant's resignation from the post of Director of the Company and that had those documents been 13
[CASE NUMBER] considered by the High Court, it would have been apparent that the appellant has resigned much before the cheques were issued by the Company.
7. In a land mark judgment in [PRECEDENT], the Apex Court has dealt with the scope of considering additional materials relied on by the accused in support of the plea for quashment sought under [SECTION] of the [ACT] It is observed therein that the High Courts in exercise of jurisdiction under [SECTION] [ACT] must make just and rightful choices and at that stage, neither the truthfulness of the allegations levelled by the complainant can be evaluated nor can weight of the defence evidence be determined and where allegations bring out all ingredients of charges levelled and materials placed before the court prima facie show truthfulness of the allegations, even when accused is successful in raising such doubt in the allegations levelled. This is so because it would result in giving finality to the accusation levelled by the complainant, without allowing the prosecution or the complainant to adduce evidence to substantiate the same. So it was held that to invoke inherent jurisdiction under [SECTION] [ACT] to quash proceedings on the basis of defence materials, the High Court has to be fully satisfied where 14
[CASE NUMBER] the materials produced or relied on by the accused; (a) lead to the conclusion that his or her defence is based on sound, reasonable and indubitable facts; (b) rule out assertions contained in the charges leveled against the accused without necessity of recording any evidence;
(c) should not have been refuted or alternatively cannot be justifiably refuted, being of sterling and impeachable quality, ie., a reasonable man should be persuaded to dismiss and condemn actual basis of accusation as false; and (d) whether proceeding with the trial would result in the abuse of process of court and would not serve ends of justice. In the facts of that case, it was found that the evidence adduced by the accused/husband, based on a postmortem report, chemical analysis report inquest report, letter written by the brother of the deceased just four days before the death and the telephone bills substantiating consistent and regular amicable and cordial contact between the families of husband and deceased wife were not refuted or contested by respondent/complainant. More over, the complainant himself was uncertain about the manner in which his daughter had allegedly died.
In such circumstances, it was held that High Court should have viewed the matter keeping in mind the agony of a father who lost his daughter within one year of her marriage (due to heart disease) and should have 15
[CASE NUMBER] ascertained whether the complaint was activated by malice or for wrecking vengeance. It was also found that the mother of the deceased had failed to appear in inquest despite repeated opportunities. In these facts and circumstances, it was held by the Apex Court that the High Court had erred in not exercising its inherent powers to quash the impugned proceedings. Accordingly the Apex Court had restored the discharge order of the Sessions Court and the impugned proceedings were quashed.
8. In paragraph 30 of the [PRECEDENT]'s case (supra) the Apex Court laid down the steps that may be followed by the High Court to determine the veracity of the prayer for quashing proceedings raised by invoking the power vested under [SECTION] [ACT] It would be profitable to refer to paragraphs 25 to 30 of the judgment of the Apex Court in [PRECEDENT]'s case (supra) which read as follows:
'25. [SECTION] [ACT] is being extracted hereunder:
"482. Saving of inherent powers of High Court. Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice."
The discretion vested in a High Court under [SECTION] [ACT] can be exercised suo motu to prevent the abuse of process of a court, and/or to secure the ends of justice.
26. This Court had an occasion to examine the matter in [PRECEDENT] (incidentally the said judgment was heavily relied upon by the learned counsel for the respondent complainant), wherein it was held thus: (SCC p. 581, para 29) "29. Regarding the argument of the accused having to face the trial despite being in a position to produce material of unimpeachable character of 16
[CASE NUMBER] sterling quality, the width of the powers of the High Court under [SECTION] of the Code and [SECTION] of the [ACT] is unlimited whereunder in the interests of justice the High Court can make such orders as may be necessary to prevent abuse of the process of any court or otherwise to secure the ends of justice within the parameters laid down in [ENTITY] case."
(emphasis supplied)
27. Recently, this Court again had an occasion to examine the ambit and scope of [SECTION] [ACT] in [PRECEDENT] wherein in the main order it was observed that the width of the powers of the High Court under [SECTION] [ACT] and under [SECTION] of the [ACT], was unlimited. In the said judgment, this Court held that the High Court could make such orders as may be necessary to prevent abuse of the process of any court, or otherwise to secure the ends of justice. In a concurring separate order passed in the same case, it was additionally observed that under [SECTION] [ACT], the High Court was free to consider even material that may be produced on behalf of the accused, to arrive at a decision whether the charge as framed could be maintained. The aforesaid parameters shall be kept in mind while we examine whether the High Court ought to have exercised its inherent jurisdiction under [SECTION] [ACT] in the facts and circumstances of this case.
28. The High Court, in exercise of its jurisdiction under [SECTION] [ACT], must make a just and rightful choice. This is not a stage of evaluating the truthfulness or otherwise of the allegations levelled by the prosecution/complainant against the accused. Likewise, it is not a stage for determining how weighty the defences raised on behalf of the accused are. Even if the accused is successful in showing some suspicion or doubt, in the allegations levelled by the prosecution/complainant, it would be impermissible to discharge the accused before trial. This is so because it would result in giving finality to the accusations levelled by the prosecution/complainant, without allowing the prosecution or the complainant to adduce evidence to substantiate the same. The converse is, however, not true, because even if trial is proceeded with, the accused is not subjected to any irreparable consequences. The accused would still be in a position to succeed by establishing his defences by producing evidence in accordance with law. There is an endless list of judgments rendered by this Court declaring the legal position that in a case where the prosecution/complainant has levelled allegations bringing out all ingredients of the charge(s) levelled, and have placed material before the Court, prima facie evidencing the truthfulness of the allegations levelled, trial must be held.
29. The issue being examined in the instant case is the jurisdiction of the High Court under [SECTION] [ACT], if it chooses to quash the initiation of the prosecution against an accused at the stage of issuing process, or at the stage of committal, or even at the stage of framing of charges. These are all stages before the commencement of the actual trial. The same parameters would naturally be available for later stages as well. The power vested in the High Court under [SECTION] [ACT], at the stages 17
[CASE NUMBER] referred to hereinabove, would have far-reaching consequences inasmuch as it would negate the prosecution's/complainant's case without allowing the prosecution/complainant to lead evidence. Such a determination must always be rendered with caution, care and circumspection. To invoke its inherent jurisdiction under [SECTION] [ACT] the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under [SECTION] [ACT] to quash such criminal proceedings, for that would prevent abuse of process of the court, and secure the ends of justice.
30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashment raised by an accused by invoking the power vested in the High Court under [SECTION] [ACT]:
30.1. Step one: whether the material relied upon by the accused is sound, reasonable, and indubitable i.e. the material is of sterling and impeccable quality?
30.2. Step two: whether the material relied upon by the accused would rule out the assertions contained in the charges levelled against the accused i.e. the material is sufficient to reject and overrule the factual assertions contained in the complaint i.e. the material is such as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false?
30.3. Step three: whether the material relied upon by the accused has not been refuted by the prosecution/complainant; and/or the material is such that it cannot be justifiably refuted by the prosecution/complainant?
30.4. Step four: whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice?
30.5. If the answer to all the steps is in the affirmative, the judicial conscience of the High Court should persuade it to quash such criminal proceedings in exercise of power vested in it under [SECTION] [ACT]. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as proceedings arising therefrom) specially 18
[CASE NUMBER] when it is clear that the same would not conclude in the conviction of the accused.' The above said judgment of the Apex Court in [ENTITY]'s case reported in [PRECEDENT], has been subsequently followed in [PRECEDENT]. The above said decision in [PRECEDENT]'s case (supra) has been relied on by this Court in [PRECEDENT]. [PRECEDENT]'s case (supra) and [PRECEDENT]'s case (supra) have been followed by this Court in [PRECEDENT], para 8.
9. Now, coming to the the facts of this case, it is seen that there are specific averments by none other than the complainant in impugned Anx- A complaint that the liability to pay the amount of the dishonoured cheques in question is on account of the sale of the above said immovable properties as per Anxs-B & C sale deeds and it is the specific case of the complainant that only Rs.5 lakhs was paid in cash and the balance Rs.94 lakhs was promised to be paid through cheques and that two cheques in question for Rs.25 lakhs and Rs.59 lakhs have been issued in respect of the balance sale consideration that is payable by the petitioners in respect of sale transactions covered by Anxs-B and C sale deeds. Anxs-B and C are the registered sale deeds in that regard.
[CASE NUMBER] It is clearly recited in Anx-B sale deed that the total sale consideration is only Rs.17,85,000/- and that the entire sale consideration has been duly paid by Mr.[ENTITY] and petitioners 2 to 4. The recital in Anx-C sale deed is only to the effect that the total sale consideration to that transaction is Rs.14,57,000/- and that the entire sale consideration in that regard has been fully paid by the above said [ENTITY] and petitioners 2 and 4 prior to the execution and registration of such sale deed. The complainant has no case against the correctness of the recitals in those sale deeds. Moreover, the specific case in these complaints is that sale has taken place in terms of Anxs-B & C sale deeds and so those documents cannot be said to be extraneous materials. These documents are executed and registered in terms of the mandatory provisions contained in the [ACT]. Therefore, the recitals in Anxs-B and C would falsify or at least highly improbabilise the version of the complainant that the actual sale consideration was for Rs.99 lakhs and that only Rs.5 lakhs has been paid and that balance amount was sought to be paid by the cheques in question. Secondly, it is to be noted that the clear recital in Anxs-B and C sale deeds that the complainant has sold the property concerned only to Sri.[ENTITY] and petitioners 2 to 4 herein in their individual capacities. There is no 20
[CASE NUMBER] reference in Anxs-B and C sale deeds that the conveyance was made to the co-operative society and that the petitioners are in any way related to the said co-operative society. Though the petitioners have a case that the cheques were issued by the co-operative society as the society wanted to collaborate with the petitioners to develop the property through the complainant and that the cheques were issued only for the proposed development of the property and not for the sale consideration, etc., this Court need not go into those aspects. The complainant has no explanation for these serious discrepancies in the clear recitals in Anxs-B and C sale deeds. Therefore, this would also falsify or at least improbabilise the case of the complainant that the properties were actually sold to the 1st accused co-operative society.
10. Thirdly, it is brought to the notice of this Court that the complainant before executing Anxs-B and C sale deeds to the petitioners have not disclosed about the partition of the very same properties, which was then pending before the Munsiff Court, as [CASE NUMBER]. It is averred that only when the petitioners had received summons from the court of Principal Sub Judge, Irinjalakuda to be impleaded as additional respondents in [CASE NUMBER] (arising out of [CASE NUMBER] of Munsiff court, Irinjalakuda) that the petitioners for 21
[CASE NUMBER] the first time became aware of the said suit for partition. The petitioners were impleaded as additional respondent vide order dated 04.10.2011 in [CASE NUMBER]. Further, as per Anx-D judgment dated 03.12.2012, the Principal Sub Judge, Irinjalakuda has allowed [CASE NUMBER], whereby suit was decreed and it has been decreed that the petitioners are entitled to get only 2/15 share of the father of the complainant, whereas, the clear recitals in Anxs-B and C sale deeds were that the complainant was having full title over those properties. It is now pointed out by both sides that the property is under the attachment of the civil court. These materials in terms of Anxs-B, C and D are certainly materials of sterling and unimpeachable quality, which can be considered as an additional material for considering the plea of quashment under initiating [SECTION] of the [ACT] Therefore, this Court is of the view that the initiation of the impugned criminal proceedings by the complainant against the petitioners would be a grave abuse of the process of court and it would result in serious injustice to the accused persons and that the principles laid down by the Apex Court in the above said judgments could be invoked in the facts and circumstances of this case. For all these reasons, it is ordered, in the interest of justice that the impugned complaints at Anx-A in both these 22
[CASE NUMBER] cases, which have led to the institution of [CASE NUMBER] and [CASE NUMBER] on the file of the Judicial First Class Magistrate, Irinjalakuda, and all proceedings taken in pursuance thereof against all the accused persons therein will stand quashed. The petitioner will produce certified copy of this order before the trial court for necessary information.
With these observations and directions these Crl.M.Cs stand finally disposed of.
[ENTITY], Judge.
bkn/DG True copy P.A to Judge