Case: Sharad Kumar Sanghi Vs. Sangita Rane

2. Bereft of unnecessary details, the facts which are necessary to be stated are that the appellant is the Managing Director M/s. Sanghi Brothers (Indore) Ltd., Indore which is a registered company duly incorporated and registered under the Companies Act, 1956 and is engaged in the business of automobile sale, finance and shipping etc. having branches at various places including the city of Bhopal. Theobtained a quotation from the Bhopal Branch for purchase of a TATA Diesel vehicle model SFC 709/38 LB in the month of April 1998 and the vehicle was delivered to the respondent on 01.05.1998 on payment of the price deposited at Bhopal vide Bank Draft issued from the State Bank of India, Sarni, Betul. The respondent faced difficulty with the vehicle and eventually he came to know in the month of August 2000 that a different engine number was made in the invoice that was issued to him than the engine that was put in the chasis. On further enquiry, he found that there is a letter issued by Tata Engineering and Locomotive Company (TELCO) on 7.11.2000 that in the course of transit from the company to Bhopal, the said vehicle had met with an accident as a result of which the engine was replaced by another engine. Coming to know of this, the respondent filed a complaint under Section 200 of the Cr.P.C. alleging that M/s Sanghi Brothers (Indore) Ltd., Indore being represented by the Managing Director, Sharad Kumar Sanghi, had suppressed the information and deliberately cheated the respondent.3. The learned Magistrate, after following the procedure as contemplated under Section 202 of the Cr.P.C., took cognizance of the offence to which we shall advert to at a later stage.4. After cognizance was taken and summons were issued, the appellant filed a revision before the learned Sessions Judge, Betul which was dismissed on 27.02.2002.5. Being aggrieved by the aforesaid order, he preferred an application under Section 482 of the Cr.P.C. before the High Court. It was contended before the High Court that the learned Magistrate had no territorial jurisdiction; that there was no deceit by the respondent; that the company was not made an accused in the complaint and, therefore, the complaint was not maintainable; and that there was no mens rea. The High Court, as is manifest from the order impugned, repelled all the submissions and dismissed the application for quashment.

Court's reasoning:
11. In the case at hand as the complainants initial statement would reflect, the allegations are against the company, but the company has not been made arrayed as a party. Therefore, the allegations have to be restricted to the Managing Director. As we have noted earlier, allegations are vague and in fact, principally the allegations are against the company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened on certain statutes. It has been so held by aBench in Aneeta Hada v. Godfather Travels and Tours Private Limited ((2012) 5 SCC 661 ) in the context of Negotiable Instruments Act, 1881.12. At this juncture, it is interesting to note, as we have stated earlier, that the learned Magistrate while passing the order dated 22.10.2001, had opined, thusie from the complaint filed by the complainant, documents, evidence and arguments that accused company has committed cheating with the complaint by delivering old and accidented vehicle to her at the cost of a new truck. Accordingly,sufficient grounds exist for registration of a complaint against the accused U/s. 420 of I.P.C. and is accordingly registered.When the company has not been arraigned as an accused, such an order could not have been passed. We have said so for the sake of comp 4leteness. In the ultimate analysis, we are of the considered opinion that the High Court should have been well advised to quash the criminal proceedings initiated against the appellant and that having not been done, the order is sensitively vulnerable and accordingly we set aside the same and quash the criminal proceedings initiated by the respondent against the appellant.