Case: P.S. Meherhomji Vs. K.T.Vijay Kumar

caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. 18. The relevant paragraphs of the complaint filed by the respondent in the present case are reproduced hereinbelow: - That the complainants company chemical Biotech Ltd., with an intention to go in with public issue engaged Ashika Capital Limited, a company based in Mumbai as Lead Managers to handle their public issue and in the course of their due diligence act they have sought for certain clarifications and information in respect of the Complainant Companys credentials so as to go ahead with the publication of the prospectus, as the 1st accused earlier made a representation against the Complainants to SEBI. That the 2nd accused representing the 1st Accused Company through a letter dated 14.12.2006 addressed to Mr. Hari Surya, Manager -MBD, Ashika Capital Limited, Nariman Point, Mumbai, have made very wild false and absolutely baseless allegations against the complainants 1 and 2 only with a malicious intention to cause wrongful loss to the complainants company for the simple reason and fact that it has become a strong competitor in the State of Andhra Pradesh to the business of the Accused Company. The said letter is also forwarded by the 2nd Accused by marking a copy of the same to 1) Managing Director, Ashika Capital Limited, 2) The Secretary, Indian Banks Association, Mumbai, 3) The Chairman, Securities and Exchange Board of India, 5) Finance Minister, Government of India, New Delhi, 6) State Minister of Finance (Banking), Govt. of India, New Delhi, 7) Secretary, Ministry of Finance, New Delhi, 8) Secretary (Banking) Government of India, New Delhi, 9) Joint Secretary Banking, Government of India, Nerw Delhi and 10) Joint Secretary (CM), Department of Economic Affairs, New Delhi. That the said letter is in turn forwarded by Ashika Capital Limited, Mumbai to the complainants to their Registered Office at Vijayawada, Andhra Pradesh on 21.12.2006 and the Complainants were shocked and surprised to read the contents of the same at Vijayawada. The allegations contained in the said letter in so far as it refers to the Complainants are absolutely false and baseless and are written with intent to defame the complainants and malign their reputation. The impugned words Cheat and Dupe the common man via the I.P.O. mode and finally to embezzle crores of rupee and These habitual cheats had been made part of the conspiracy in the proposed initial public offer referring to the complaints directly or per -se defamatory and derogatory and the very letter dated 14.12.2006 on the face of it is calculated to harm the reputation of the complainants without any valid foundation. The said letter is couched in a wild and unrestrained language and written in scurrilous imputing dishonest character to the complaints. 19. The trial court after considering the allegations made in the complaint and the statement recorded on oath came to the conclusion that prima facie a case is made out for summoning the appellant and the case was taken on file. Concluding portion of the order as contained in paragraph no.5 is quoted hereinbelow: - As per the Statement of Complaint, they also got issued legal notice to the accused questioning the letter on 13.12.2006 and it is duly acknowledged by the accused, but they did not respond for the reasons best known. Copy of legal notice and postal acknowledgments were also filed along with the complaint. Evidence spoken by the complainant and the documents enclosed including the documents referred above, prima facie made out the case for the offences U/sec. 499 and 500 IPC. Except the vague averments made in the complaint, probably to attract the offences against A.3 to A.9 who are only directors of the company, no material is places to substantiate their active participation in releasing the letter dt.14.12.2006 by a.2 who is Company Secretary of a.1 company. A.1 is a company represented by; its Managing Director. It is a legal entity. Company is sued arraying as A.1 in the name of its Managing Director and author of the letter is arrayed as A.2. In these circumstances, A.1 company and A.2 Secretary of A.1 company are only necessary and proper parties. No overacts against the other accused (A.3 to A.9) who are only directors of a.1 company. In the circumstances, case is taken on file for the offences U/Sec.499 and 500 IPC against A.1 and A.2 dismissing the complaint U/Sec.203 Cr.P.C. against A.3 to A.9. It appears A.3 to A.9 are arrayed as parties only to cause harassment to them unnecessarily. No material is placed to substantiate their active participation in releasing the letter by A.2 on behalf of A.1 company. No prima facie case against A.3 to A.9 for the offences /sec. 499 and 500 IPC. 20. Dr. Singhvi, for the first time before this Court tried to make out a case that the letter dated 14.12.2006 which is the basis of taking cognizance was allegedly sent from the office of Respondent No.4 Company under the signature of one colleague of the appellant without the knowledge or prior permission of the appellant and the said letter was never signed by the present appellant. In our view, if that is so, it is open to the appellant to take a defense and prove their contention during trial. Needless to say that the trial court shall consider the said contention during trial and record its findings. 21. After giving our thoughtful consideration in the matter we are of the view that the High Court rightly refused to quash the criminal proceedings in exercise of power under Section 482 Cr.P.C. 22.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]11. Indisputably, judicial process should not be an instrument of oppression or needless harassment. The court should be circumspect and judicious in exercising discretion and should take all the relevant facts and circumstances into consideration before issuing process lest it would be an instrument in the hands of private complainant as vendetta to harass the persons needlessly12. It is equally well settled that summoning of an accused in a criminal case is a serious matter and the order taking cognizance by the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. Section 482 of the Code of Criminal Procedure empowers the High Court to exercise its inherent powers to prevent abuse of the process of court and to quash the proceeding instituted on complaint but such power could be exercised only in cases where the complaint does not disclose any offence or is vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance is taken by the Magistrate it is open to the High Court to quash the same in exercise of power under Section 48213. So far as the complaint alleging offence under Section 499 IPC is concerned, if on consideration of the allegations the complaint is supported by a statement of the complainant on oath and the necessary ingredients of the offence are disclosed, the High Court should not normally interfere with the order taking cognizanceDr. Singhvi, for the first time before this Court tried to make out a case that the letter dated 14.12.2006 which is the basis of taking cognizance was allegedly sent from the office of Respondent No.4 Company under the signature of one colleague of the appellant without the knowledge or prior permission of the appellant and the said letter was never signed by the present appellant. In our view, if that is so, it is open to the appellant to take a defense and prove their contention during trial. Needless to say that the trial court shall consider the said contention during trial and record its findingsAfter giving our thoughtful consideration in the matter we are of the view that the High Court rightly refused to quash the criminal proceedings in exercise of power under Section 482 Cr.P.C