*HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU +CRIMINAL REVISION CASE NOs.623 & 624 OF 2008 %24.08.2010 +CRIMINAL REVISION CASE NO.623 OF 2008 #Mr.Vijay Agarwal …… Petitioner. And: $The State of A.P., rep. by PP, High Court of A.P., and another …..Respondents !Counsel for the Petitioner : Sri Ch.Samson Babu Counsel for the 1st Respondent: Public Prosecutor Counsel for the 2nd respondent: Sri C. Praveen Kumar +CRIMINAL REVISION CASE NO.624 OF 2008 #Smt Komaraju Jaya …… Petitioner. And: $The State of A.P., rep. by PP, High Court of A.P., and another …..Respondents !Counsel for the Petitioner : Sri T. Pradyumna Kumar Reddy Counsel for the 1st Respondent: Public Prosecutor Counsel for the 2nd respondent: Sri C. Praveen Kumar <Gist : >Head Note: ? Cases referred: 1. (2000) 3 SCC 262: 200 SCC (Cri) 609 2. 2004 Supreme Court Cases (Cri) 2093 3. (2007) 14 Supreme Court Cases 544 4. (1983) 1 SCC 1: 1983 SCC (Cri) 115 5. (2009) (3) Supreme Court Cases 329 6. (2009) 16 Supreme Court Cases 785 7. (2009)16 Supreme Court Cases 46 8. (2009)13 Supreme Court Cases 608 9. (2009)14 Supreme Court Cases 25 HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL REVISION CASE NOs.623 & 624 OF 2008 DATE:24.08.2010 CRIMINAL REVISION CASE NO.623 OF 2008 Between: Mr.Vijay Agarwal …… Petitioner. And: The State of A.P., rep. by PP, High Court of A.P., and another …..Respondents CRIMINAL REVISION CASE NO.624 OF 2008 Between: Smt Komaraju Jaya …… Petitioner. And: The State of A.P., rep. by PP, High Court of A.P., and another …..Respondents HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL REVISION CASE NOs.623 & 624 OF 2008 COMMON ORDER: 1. Originally the 2nd respondent/defacto-complainant filed private complaint against A-1 to A-3 alleging offences punishable under Sections 379, 381, 403, 408, 120-B and 34 IPC and it was registered by the then IV Metropolitan Magistrate, Hyderabad as C.C.No.759 of 2003. Subsequent to reorganisation of courts at Hyderabad, the case has been pending on the file of II Additional Chief Metropolitan Magistrate, Hyderabad. During trial of that case, P.W.1 was examined-in-chief from 20.04.2007 to 14.09.2007 on different dates in piecemeal manner. Cross-examination of P.W.1 was deferred at request of the defence counsel for A-1 to A-3. At that stage, the 2nd respondent/defacto-complainant filed Criminal MP No.5860 of 2007 in the trial court under Section 319 Cr.P.C to add Vijay Agarwal and Kommaraju Jaya (who are the petitioners in both the revision petitions respectively) as A-4 and A-5 and proceed with the case to punish them along with A-1 to A-3 after trial. The proposed A-4 and A-5 who are petitioners herein filed counter opposing the said petition. The trial court by order dated 30.01.2007 dismissed Criminal MP No.5860 of 2007 holding “that there is no prima facie case, much less any material evidence, suggesting reasonable probability of commission of any offence by respondents 1 and 2 and to issue process adding them as proposed accused 4 and 5 respectively”. As against the said order, the 2nd respondent/defacto-complainant filed Criminal Revision Petition No.26 of 2008 in the IV Additional Metropolitan Sessions Judge Court, Hyderabad which court by order dated 19.03.2008 allowed the said revision petition to add the petitioners herein as A-4 and A-5 and to proceed against them with A-1 to A-3 according to law. The said order is being questioned by the petitioners herein. 2. The complainant is Regency Ceramic Limited, Hyderabad engaged in Manufacturing and Marketing of all kinds of Ceramic Porcelain, glazed wall and floor tiles etc. The complainant’s unit is at Yanam. The complainant set up another Manufacturing Unit at Kariakal. A-1 joined in the complainant company as Vice- President (Marketing) and became President heading the Marketing Department. A-2 joined in the complainant company as Manager (Electrical) and became General Manager (Products). A-3 joined in the complainant company as Junior Stenographer and became Junior Manager (Management Information Systems). A-1 retired from service of the complainant on 02.10.2002. In spite of it, A-1 continued to work as President of the company on the same terms and conditions. It is alleged that A-1 availed casual leave for three days from 23.01.2003 to 25.01.2003 and that without resuming to work thereafter A-1 gave E-mail on 03.02.2003 expressing his inability to continue in Superannuated service and that A-1 never bothered to hand over charge and that therefore on 10.02.2003 office room separately allotted to A-1 was opened and it was found to be empty and that no relevant papers were found and nothing was found in his computer’s memory and the confidential information relating to production, planning, costing based on body glaze information etc., besides whole of marketing information found erased. On 12.02.2003, A-2 tendered his resignation as General Manager (Products) and it was accepted immediately. A-3 sent resignation on 26.04.2003. It is alleged that sequence of the above events one after the other gave reasonable suspicion that A-1 to A-3 together left the employment pursuant to an understanding among themselves and that when department of MIS (Management Information Systems) was checked, it was found that A-3 had stolen all the information of the key areas of product formulations, optimisation of cost manufacture of the product, sources of the raw-materials, their chemical composition etc. which are the key areas. 3. It is the complainant’s case that in and around the year 1997, the complainant intending to set up a manufacturing plant near Kaikaluru/Lingala, got study conducted to explore possibility of setting up a plant by incurring huge sum of money and finding the same viable, got project report prepared and submitted the same to ONGC (Oil and Natural Gas Commission) for allocation of Gas from isolated wells and also made a presentation before the Task Force of A.P., Government and also applied GAIL (Gas Authority of India Limited) for allotment of natural gas. It is alleged that the project report comprehensively contained very vital and necessary information required for implementation of the proposed plant at Kaikaluru/Lingala. It is stated that as Natural Gas was not allotted on firm basis, the complainant kept the said project on hold though other facilities for setting up the plant were available, and intending to set up the plant as and when there is availability of Natural Gas and as the complainant was setting up Karaikal unit, the complainant deferred Kaikalur project for the time being and decided to revive the proposal after Karaikal unit became self-sufficient. The complainant suspected that A-1 to A-3 colluded with each other and committed theft of intellectual property relating to setting up of another manufacturing unit at Kaikaluru/Lingala, which was within the knowledge of A-1 and A-2. 4. According to the complainant, one of its competitors in business is M/s. H.R. Johnson (India) Limited (in short, HRJL) which is multi national company. It is alleged that Managing Director of HRJL mooted a proposal in the year 1994 to have a stake with the complainant, and it was turned out by the Managing Director of the complainant. It is alleged that A-1 intending to set up a plant in Krishna District for manufacturing of Ceramic tiles etc. forged an unholy alliance with HRJL while working in the complainant’s company, for setting up a Ceramic tiles plant and got M/s.Sentini Ceramica Private Limited (in short, SCPL) incorporated on 11.01.2002 with himself and his family members subscribing to 35,000 equity shares out of 50,000 shares and joined hands with HRJL. It is contended that A-1 to A-3 by virtue of their employment came into possession of documents, material and information relating to affairs of the complainant and which constituted property of the complainant and that the same cannot be utilised for the purpose of promoting their self interest determental to the interest of the complainant and that trade secretes, technical know how, marketing information, formulations etc., cannot be shared with competitor of the complainant. It is further alleged that SCPL separately reproduced memorandum of association of the complainant and submitted project report prepared by the complainant for setting up of factory at Kaikaluru/Lingala region by copying the same to financial institutions with little modifications. 5. In the examination-in-chief of Manager (Public Relations) of the complainant as P.W.1, he marked Exs.P-1 to P-15 and C-1. At this stage, it may be noted that after filing of the complaint, the complainant obtained search warrant from the Magistrate for search of corporate office of SCPL at Hyderabad. During search of SCPL office at Hyderabad, the police seized Ex. C-1 copy of letter from that office and produced the same in court. Ex.C-1 reads as follows: “Mr. Vijay Aggarwal, Find enclosed the report from Mr. Veerabhadra Rao, which can form a feasibility report for Kaikalur plant. What I understand from the M.D., is after completing Kariikal plant with 20,000 sq. mts, by end of September 2003, they will initiate to take up the unit at Kaikalur around September 2004. Application already made to ONGC and letter for allotment of Natural Gas is under preparation. Naturally, they will have preference in getting the allotment over others. We better speed up the matters. Veerabhadra Rao assured the support of crucial manpower to implement the project. Needless to say I have several loyalists among marketing and dealer network. The letter I am to receive from you in support to our application to GAIL is awaited. Regency developed Vitrified samples with local raw material which is equally good with low cost of production. You may have a look at these during my next visit to Mumbai. Regards.” Vijay Agarwal to whom original of Ex.C-1 is stated to have been addressed is Managing Director of HRJL, Mumbai and he was sought to be impleaded as A-4 in this case. The proposed A-5 is no other than daughter of A-1. She was sought to be impleaded as A-5 on the ground that she became Managing Director of SCPL and she is beneficiary of the conspiracy, theft etc. of intellectual property belonging to the complainant. 6. The Supreme Court rendered catena of decisions touching scope of Section 319 Cr.P.C, of the stage and circumstances when Section 319 Cr.P.C can be invoked by the trial court and also conditions precedent for invocation of 319 Cr.P.C in a particular case. In Michael Machado v. Central Bureau of Investigation[1], the Supreme Court held that power of the court under Section 319 Cr.P.C is discretionary and should be exercised only to achieve criminal justice and that the court should not turn against another person whenever it comes across evidence connecting that other person also with the offence and that a judicial exercise is called for keeping a conspectus of the case, including the stage at which the trial has already proceeded and the quantum of evidence collected till then and also the amount of time which the court had spent for collecting such evidence. Quoting Michael Machado (1 supra) with approval, the supreme Court in a subsequent decision in Krishnappa v state of karnataka[2] observed as follows: “The court, while examining an application under Section 319 Cr.P.C, has also to bear in mind that there is no compelling duty on the court to proceed against other persons. In a nutshell, it means that for exercise of discretion under Section 319 Cr.P.C, all relevant factors, including the one noticed above, have to be kept in view and an order is not required to be made mechanically merely on the ground that some evidence had come on record implicating the person sought to be added as an accused.” In Mohd Shafi v. Mohd Rafiq[3], the Supreme Court followed earlier Division Bench of the same court in MCD v. Ram Kishan Rohtagi[4] wherein it was observed: “We would hasten to add that this is really an extraordinary power which is conferred on the court and should be used very sparingly and only if compelling reasons exist for taking cognizance against the other person against whom action has not been taken.” Thus, power to be exercised under Section 319 Cr.P.C by the trial court is an extraordinary power and it has to be sparingly invoked for compelling reasons and not as a matter of course. The Supreme Court in Brindaban Das v. State of W.B[5] while cautioning that in exercise of power under Section 319 Cr.P.C, each case has to be considered on its own set of facts and circumstances, further held: “In matters relating to invocation of powers under Section 319, the court is not merely required to take note of the fact that the name of a person who has not been named as an accused in the FIR has surfaced during the trial, but the court is also required to consider whether such evidence would be sufficient to convict the person being summoned.” “26. Although a somewhat discordant note was struck in Rajendra Singh Case the views expressed in the majority of decisions of this Court on the point subscribe to the view that the power under Section 319 Cr.PC is to be invoked, not as a matter of course, but in circumstances where the invocation of such power is imperative to meet the ends of justice. 27. The fulcrum on which the invocation of Section 319 Cr.P.C rests is whether the summoning of persons other than the named accused would make such a difference to the prosecution as would enable it not only to prove its case but to also secure the conviction of the persons summoned.” “29. Section 319 Cr.P.C contemplates a situation where the evidence adduced by the prosecution not only implicates a person other than the named accused but is sufficient for the purpose of convicting the person to whom summons is issued.” Thus, in Brindaban Das( 5 supra) apart from reiterating that evidence should not be sufficient to convict the person being summoned, added another note to Section 319 Cr.P.C to the effect that summoning persons other than the accused would make such a difference to the prosecution as would enable it not only to prove its case but also secure conviction of the persons summoned. In Hardeep Singh v. State of Punjab[6], two Honourable Judges Bench of the Supreme Court referred the flowing two questions for consideration of a Bench of three Honourable Judges: “(1) When the power under sub-section (1) of Section 319 of the code of addition of the accused can be exercised by a court? Whether application under Section 319 is not maintainable unless the cross- examination of the witness is complete?” (2) What is the test and what are the guidelines of exercising power under sub-section (1) of Section 319 of the Code? Whether such power can be likelihood would be convicted? It is stated that the said reference is yet to be answered by a Bench of three Honourable Judges of the Supreme Court. After surveying previous pronouncements, the Supreme Court in Sarabjit Singh V. State of Punjab[7] finally came to the following conclusion: “21. an order under Section 319 of the Code, therefore, should not be passed only because the first informant or one of the witnesses seeks to implicate other person (s ). Sufficient and cogent reasons are required to be assigned by the court so as to satisfy the ingredients of the provisions. Mere ipse dixit would not serve the purpose. Such an evidence must be convincing one at least for the purpose of exercise of the extraordinary jurisdiction. For the aforementioned purpose, the courts are required to apply stringent tests; one of the tests being whether evidence on record is such which would reasonably lead to conviction of the person sought to be summoned.” “23. Whether a higher standard be set up for the purpose of invoking the jurisdiction under Section 319 of the Code is the question. The answer to these questions should be rendered in the affirmative. Unless a higher standard for the purpose of forming an opinion to summon a person as an additional accused is laid down, the ingredients thereof, viz. , (i) an extraordinary case and (ii) a case for sparingly exercise of jurisdiction, would not be satisfied.” 7. While observing that Mohd Shafi (3 supra) is not in authority for the proposition that in each and every case the Court must wait till the cross-examination is over, the Supreme Court in Harbhajan Singh V. State of Punjab[8] held that in all cases, the Court may not wait till cross-examination is over for the purpose of exercising its jurisdiction under Section 319 Cr.P.C. 8. Finally, in Ram Singh V. Ram Niwas[9] the Supreme Court held: “20. THE High Court, in our opinion, however, has committed a serious error in proceeding on the premise that mere existence of a prima facie case would be sufficient to exercise the court's jurisdiction under Section 319 of the Code. We have noticed hereinbefore the importance of the word `appears'. What is, therefore, necessary for the court is to arrive at a satisfaction that the evidence adduced on behalf of the prosecution, if unrebutted, would lead to conviction of the persons sought to be added as accused in the case.” 9. Thus, the Apex Court time and again cautioned that power under Section 319 Cr.P.C to add new persons as the accused in a trial case in order to try them also along with the existing accused persons for the offences, is an extraordinary power and that it has to be sparingly exercised by the trial Courts. As the matter now stands (awaiting decision of larger bench of the Supreme Court in a reference noted supra), such power can be exercised even when cross-examination of the witness(s) was over or not. The yardstick for exercising that power in favour of the prosecution or the complainant is that the evidence adduced on behalf of the prosecution till then, if un-rebutted, would lead to conviction of the persons sought to be added as accused in that case. In the light of the above, fact situation in the case on hand has to be examined. 10. If Ex.C-1 which is set out in para-5 supra is scrutinised, it is evident that it does not bear date or signature muchless name of author of the said letter. Simply because Ex.C-1 was seized from office of S.C.P.L, no assumptions are permissible in criminal law that any of the existing accused or the newly added accused addressed that letter to the proposed A-4. There is no evidence to show that the said letter was posted to the addressee and it was received by the addressee muchless it was acted upon by the addressee. It is examination-in-chief of P.W-1 that K.Jaya (A-5) is present Managing Director of S.C.P.L and that she is daughter of A-1 and that she thoroughly protested and did not cooperate with the police pursuant to the Court order and that apart from A-1 to A-3, Vijay Agarwal (A-4) and K.Jaya (A-5) also conspired in this case and that therefore they are required to be added as A-4 and A-5 for the reason that they are the ultimate beneficiaries of the entire acts of crime along with A-1 to A-3. As per Ex.P-15 corporate profile of S.C.P.L, K.Jaya (A-5) was appointed as Managing Director of the company in May, 2005 which is long subsequent to filing of the criminal case by the complainant in the lower Court. Contention of the complainant that she should not have accepted Managing Directorship of S.C.P.L because S.C.P.L was established as result of crime committed by A-1 to A-3, is a far fetched one. It has to be seen whether there is any evidence for the complainant to show that she also participated in any of the offences alleged in the complaint prior to its institution in the lower Court. Except as daughter of A-1, A-5 had absolutely no role in this case muchless in S.C.P.L prior to May, 2005. Though in Ex.C-1 undated unsigned letter contains name of A-4, it does not throw any light on the alleged conspiracy of A-4’s participation in the conspiracy. Observation of the IV Additional Metropolitan Sessions Judge, Hyderabad in the impugned order that Exs.P- 15 and C-1 supports evidence of P.W-1 about role of the proposed accused for the offences for which the case was filed, is not sufficient ground for allowing the complainant to implead A-4 and A-5 as new accused persons for being tried along with A-1 to A-3 in this case. This Court is of the opinion that even if Exs.A-15, C-1 and examination-in-chief of P.W-1 are taken on their face value, they do not drive the trial Court to arrive at a satisfaction that the said evidence would lead to conviction of A-4 and A-5. Thus, both on factual as well as on legal matrices, the impugned order of the IV Additional Metropolitan Sessions Judge does not stand to scrutiny. 11. In the result, both the revision petitions are allowed setting aside the impugned order of the IV additional Sessions Judge, Hyderabad. ___________________________________ SAMUDRALA GOVINDARAJULU, J August 24, 2010 GK/KSH HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL REVISION CASE NOs.623 & 624 OF 2008 Date:24.08.2010 GK/KSH. [1] (2000) 3 SCC 262: 200 SCC (Cri) 609 [2] 2004 Supreme Court Cases (Cri) 2093 [3] (2007) 14 Supreme Court Cases 544 [4] (1983) 1 SCC 1: 1983 SCC (Cri) 115 [5] (2009) (3) Supreme Court Cases 329 [6] (2009) 16 Supreme Court Cases 785 [7] (2009)16 Supreme Court Cases 46 [8] (2009)13 Supreme Court Cases 608 [9] (2009)14 Supreme Court Cases 25