Case: Rajiv Modi Vs. Sanjay Jain

3) The admitted facts are, that, on 1.4.1999 M/s. Dhriti Agro Farms Private Limited (DAFPL), a company owned by the appellant, had entered into an agreement with Rajasthan Breweries Limited (RBL), a company owned by respondent Nos. 1 and 2. The agreement provides for appointment of DAFPL as their C&F Agent for the State of Rajasthan. It also provides the payment that requires to be made by the appellant for supply of raw materials to the suppliers of the respondents on behalf of the respondents and the respondents would supply the finished goods to the appellant for sale in Rajasthan.4) It is the case of the appellant that he had visited his in-laws in Patna in the month of February, 1998 and there the respondents had met him and had projected a lucrative picture of their business and assured the appellant the high returns for his investments. The appellant had agreed to become the C&F Agent of the respondents company for State of Rajasthan. Subsequently, the respondents handed over the Letter of Appointment of the appellant at the residence of his in-laws at Patna. It is the case of the appellant, that, pursuant to the agreement it has made several payments for supply of raw materials to different suppliers of the respondent but the respondents have not made any payment of the same till date. It is its further grievance that appellant though had made repeated requests to the respondent to return the money paid, the respondents have not acceded to the request so made.5) In view of the inaction of the police authorities, the appellant was constrained to file a private complaint before the Chief Judicial Magistrate, inter alia alleging commission of the offences by the respondents under Sections 406 and 420 read with Section 120-B of the Indian Penal Code.6) After recording the statements of the appellant and his witnesses and being convinced that a prima facie case has been made out against the respondents, for the offences, under Sections 420, 406 and 120(b) of the Indian Penal Code, the learned Magistrate has taken cognizance of the complaint and has issued summons to the respondents.7) Aggrieved by the aforesaid order, the respondents had approached the High Court by filing a petition under Section 482 of the Cr.P.C., inter alia, requesting the court to quash the proceedings pending before the Judicial Magistrate, Patna.8) Before the High Court, the learned Counsel for the respondents had submitted that, no part of cause of action arose within the territorial jurisdiction of Patna and as such the Judicial Magistrate, Patna could not have taken cognizance and passed the impugned order. It was further argued that the appellant had also filed a complaint before the Deputy Commissioner of Police, Economic Wing, Crime Branch, New Delhi and also before the Mehrauli Police Station, New Delhi, but when both the authorities did not respond to his complaint, he has filed the present complaint before the Judicial Magistrate, Patna, only to harass the respondents. It was also submitted that the complainant/appellant himself had approached the respondents for execution of the agreement and therefore, a Letter of Appointment was sent to him at his New Delhi address and, therefore, the learned Judicial Magistrate has erred in taking cognizance of the complaint and ordering issue of summons to the respondents.9) The High Court by the impugned order has quashed the proceedings pending before the learned Magistrate primarily on the ground that no cause of action arose within the territorial jurisdiction of Chief Judicial Magistrate at Patna, and while elaborating on this issue, the Court has also observed that although there is an allegation that the respondents had induced the appellant to part with huge amount of money, but no such inducement was made at Patna or the appellant parted with any part of his money at Patna or the respondents were required to account for any property at Patna or any agreement was executed within the jurisdiction of Patna and even if it is accepted that the Letter of Appointment was handed over by the respondents to the appellant at Patna, it does not constitute any part of cause of action. Aggrieved by the said order, the appellant is before us in this appeal.10) The issue before us is, whether the High Court under Section 482, Cr.P.C was justified in quashing the complaint on the ground that no cause of action has arisen in Patna in respect of the alleged offences under the provisions of IPC.

Court's reasoning:
In this case, it is observed, that, the jurisdiction of the courts depended in civil cases on a "cause of action" giving rise to a civil liability, and in criminal cases on the commission of an offence, and on the provisions made in the two Codes of Procedure as to the venue of the trial and other relevantIn view of the above principles, the Court on basis of the averments made in the complaint, if it is prima facie of the opinion that the whole or a part of cause of action has arisen in its jurisdiction, it can certainly take cognizance of the complaint. There is no need to ascertain that the allegations made are true inIn view of the above, in our considered opinion, the High Court has erred by going into merits of the case and deciding doubtful or complicated questions of law and fact while invoking its powers under Section 482 of Cr.P.C. This is not the fit case where the High Court could have exercised its inherent powers under section 482 of the Code.33) The cardinal principles which requires to be kept in view while invoking powers under Section 482 of Cr.P.C. has been stated in the case of State of H.P. v. Pirthi Chand, (1996) 2 SCC 37 , where in this Court has observedthe court exercises its inherent power under Section 482, the prime consideration should only be whether the exercise of the power would advance the cause of justice or it would be an abuse of the process of the court." (Parais thus settled law that the exercise of inherent power of the High Court is an exceptional one. Great care should be taken by the High Court before embarking to scrutinise the FIR/chargesheet/complaint. In deciding whether the case is rarest of rare cases to scuttle the prosecution in its inception, it first has to get into the grip of the matter whether the allegations constitute the offence. It must be remembered that FIR is only an initiation to move the machinery and to investigate into cognizable offence. After the investigation is conducted (sic concluded) and theis laid, the prosecution produces the statements of the witnesses recorded under Section 161 of the Code in support of theAt that stage it is not the function of the court to weigh the pros and cons of the prosecution case or to consider necessity of strict compliance of the provisions which are considered mandatory and its effect ofIt would be done after the trial is concluded. The court has to prima facie consider from the averments in theand the statements of witnesses on the record in support thereof whether court could take cognizance of the offence on that evidence and proceed further with the trial. If it reaches a conclusion that no cognizable offence is made out, no further act could be done except to quash theBut only in exceptional cases, i.e., in rarest of rare cases of mala fide initiation of the proceedings to wreak private vengeance, the court may embark upon the consideration thereof and exercise the power." (Para