BIRLA CORPORATION LIMITED versus ADVENTZ INVESTMENTS AND HOLDINGS LIMITED & OTHERS

BIRLA CORPORATION LIMITED

ADVENTZ INVESTMENTS AND HOLDINGS LIMITED &OTHERS

(Criminal Appeal No. 875 of 2019)

MAY 09, 2019

[R. BANUMATHI AND R. SUBHASH REDDY, JJ.]

Penal Code, 1860 – ss. 379, 403, 411 r/w. s. 120B – Theftand misappropriation of the documents – Company petition wasfiled before Company Law Board (CLB) – In the said Companypetition, documents No. 1 to 54 were filed by the respondents –Appellant-company alleged that respondents had stolen/misappropriated documents No. 1 to 54 from the appellant’s premises– It was alleged that documents No. 2 to 28 were photocopied andthen they were kept back in the premises – However, documents No.29 to 54 were not returned and the same were in the possession ofthe respondents – Pursuant thereto, appellant-company filed criminalcomplaint u/ss. 379, 403, 411 r/w. s. 120B IPC – After examiningemployee ‘D’ of the appellant company and complainant ‘S’ (arepresentative of the company), the Trial court found sufficientgrounds for proceeding against all the respondents and also orderedissuance of summons to the respondents for the offences punishableu/ss. 380, 411 and 120B IPC – Aggrieved, respondents filed petitionu/s. 482 Cr.P.C. – High Court held that since original of documentsNo. 1 to 28 were still in the custody of the complainant, thus thecomplaint would not survive in respect of the documents No. 1 to 28– However complaint was allowed by the High Court, insofar asdocuments No. 29 to 54 were concerned and the matter was remittedto the Trial court – On appeal, held: The allegations in the statementof complainant ‘S’ were vague and lacked material particulars asto the commission of theft – Complainant has neither attributed toany facts nor material particulars as to the commission of theft – Inthe complaint, there were no specific averments against respondentsas to how they were responsible in moving the documents out of thepossession of the appellant – Further, the statement of the employee‘D’ was only bare statement that respondents had procureddocuments from the custody of the appellant – In the instant case,

CDEF

Athe satisfaction of the magistrate was on presumptive footing – Neitherthe statement of the complainant nor the statement of ‘D’ containedparticulars as to the commission of offence – There was noapplication of mind by the magistrate in taking cognizance of theoffence against the respondents – Also, issuance of summons wasalso not very well founded and the same cannot be sustained – SoBfar as, the allegations of retention of documents No. 29 to 54 areconcerned, there are no allegation as to when and how the originaldocuments were removed and retained by the respondents – Noprima-facie case is made out against the accused persons – SupremeCourt has the power to quash any judicial proceedings u/Art. 136Cof the Constitution – Thus, criminal complaint qua the documentsNo. 29 to 54 quashed.

Code of Criminal Procedure, 1973 – s. 202 – Scope of enquiry– Held: The scope of enquiry under this section is extremelyrestricted only to finding out the truth or otherwise of the allegationsDmade in the complaint in order to determine whether process shouldbe issued or not u/s. 204 Cr.P.C. or whether the complaint shouldbe dismissed by resorting to s.203 Cr.P.C. on the footing that thereis no sufficient ground for proceeding on the basis of the statementsof the complainant and of his witnesses, if any – At the stage ofenquiry u/s. 202 Cr.P.C., the Magistrate is only concerned with theEallegations made in the complaint or the evidence in support of theaverments in the complaint to satisfy himself that there is sufficientground for proceeding against the accused.Code of Criminal Procedure, 1973 – Issuance of process –Held: To be summoned/to appear before the Criminal Court as anFaccused is serious matter affecting one’s dignity and reputationin the society – In taking recourse to such serious matter insummoning the accused in case filed on complaint otherwisethan on police report, there has to be application of mind as towhether the allegations in the complaint constitute essentialGingredients of the offence and whether there are sufficient groundsfor proceeding against the accused.

Penal Code, 1860 – s. 29 – Document – Held: The “document”as defined in s.29 IPC is “moveable property” within the meaningof s.22 IPC which can be the subject matter of theft – The information

contained thereon in the documents would also fall within thepurview of the “corporeal property” and can be the subject matterof the theft.

Penal Code, 1860 – Theft – Intention of the taker – Held:Intention is the gist of the offence – It is the intention of the takerwhich must determine whether taking or moving of thing is theft –The intention to take “dishonestly” exists when the taker intends tocause wrongful loss to any other which amounts to theft – It is anessential ingredient of the offence of “theft” that the movableproperty should have been “moved” out of the possession of anyperson without his consent.

Words and Phrases – ‘dishonest intention’, ‘wrongful gain’and ‘wrongful loss’ – discussed.

Allowing the appeal arising out of SLP(Crl.) D.Nos.6405 &6122 of 2019 and dismissing the appeal arising out of SLP(Crl.)No.9053 of 2016, the Court

HELD: 1. Company Petition was filed before the CompanyLaw Board under Sections 235, 237, 247, 250, 397, 398, 402 and403 of the Companies Act, 1956 by respondents No.1 to 5 whoare the shareholders of the appellant Company allegingoppression and mismanagement. M/s Birla Education Trust(represented by respondent No.6) is also one of the petitionersin the Company Petition. Along with the Company Petition, thecopy of the documents in question i.e. documents No.1 to 54including document No.1-Internal Audit Report were filed andadvance copy of the Company Petition and copy of the documentswere given to the appellant. Appellant-Company filed complaintalleging that the respondents have gained unauthorized accessand possession of the documents No.1 to 54. ‘S’, complainant (arepresentative of the Company) has only alleged that heapprehends that all the accused persons in connivance with eachother have procured the documents. The allegations in thestatement of the complainant are vague and lack materialparticulars as to the commission of the theft. Complainant hasneither attributed to any facts nor material particulars as to thecommission of theft. [Paras 39, 42 and 47] [69-F-G; 680-G;683-B-C]

A2. Respondent No.10-Birla Buildings Limited is responsiblefor the day to day affairs of the maintenance of the building.Respondent No.11 is the CEO of Respondent No.10-BirlaBuildings Limited. In the complaint, there are no specificaverments against respondents No.10 and 11 as to how they hadaccess to the 3[rd] and 4[th] floors of the building owned by theBappellant Company and as to how they are responsible in movingthe documents out of the possession of the appellant. Likewise,no specific overt act of “dishonest removal” of the documents isattributed to the other respondents. The mere fact thatrespondents No.10 and 11 are responsible for security andCmaintenance of the building cannot lead to an inference thatrespondents No.10 and 11 are responsible for the theft.[Para 48] [683-D-E]3. In the statement of ‘D’, employee of the appellantcompany, there is only bare statement that respondents No.13Dto 15 have filed case before the Company Law Board that thedocuments are highly confidential and that they have procuredthe documents stolen from the custody of the appellant. Thereare no specific allegations against respondents No.13 to 15.Likewise, there are no specific allegations against the otheraccused who are residing outside the jurisdiction of the courtEand how and when they committed theft of the documents thathow they entered into conspiracy. Considering the variouslitigations pending between the parties before issuing summons,the Magistrate ought to have considered the complaint andstatement of witnesses and satisfied himself that there are primaFfacie materials showing the ingredients of the offence of theft(house theft) and receipt of stolen property. [Para 54] [685-D-F]

4. For taking cognizance of the offence, the Magistrate interalia relied upon the statement of the complainant and ‘D’ to arriveat conclusion that prima facie case is made out against theGrespondents. Neither the statement of the complainant nor thestatement of ‘D’ contain the particulars as to the commission ofthe offence to have satisfied the Magistrate that there weresufficient grounds for proceeding against the accused. By perusalof the above order passed by the Magistrate, there is absolutely

nothing to indicate application of mind in taking cognizance ofthe offence against respondents No.1 to 16 including therespondents who are residents beyond the jurisdiction of thecourt. [Para 57] [686-F-H]

5. In the present case, the complaint lacks particulars as totime and the place of theft or the person who has committed theft.There are no averments in the complaint alleging that how thedocuments had gone out of the possession of the complainant.There are only mere statement of the complainant thatrespondents No.12 to 16 have filed civil suits basing on the stolendocuments and that he apprehends that all the accused personsin connivance with each other must have procured the documentsby theft. In the absence of particulars, by mere possession of thedocuments or mere production of the documents in the CompanyPetition or civil suits, it cannot be said that sufficient groundswere made out to proceed against the accused or that thesatisfaction of the Magistrate was well founded justifying issuanceof process. [Para 58] [687-D-F]

6. The object of investigation under Section 202 Cr.P.C. is“for the purpose of deciding whether or not there is sufficient groundfor proceeding”. The enquiry under Section 202 Cr.P.C. is toascertain the fact whether the complaint has any valid foundationcalling for issuance of process to the person complained againstor whether it is baseless one on which no action need be taken.The law imposes serious responsibility on the Magistrate todecide if there is sufficient ground for proceeding against theaccused. The issuance of process should not be mechanical norshould be made as an instrument of harassment to the accused.Issuance of process to the accused calling upon them to appearin the criminal case is serious matter and lack of materialparticulars and non-application of mind as to the materials cannotbe brushed aside on the ground that it is only proceduralirregularity. In the present case, the satisfaction of the Magistratein ordering issuance of process to the respondents is not wellfounded and the order summoning the accused cannot besustained. The impugned order of the High Court holding thatthere was compliance of the procedure under Section 202 Cr.P.C.

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Acannot be sustained and is liable to be set aside. [Para 61][688-E-H]7. Admittedly, documents No.1 to 54 including theDocument No.1-Internal Audit Report of Chanderia unit of theappellant Company has been filed by the respondents in theBcompany petition. These documents are intra-companycorrespondence, internal audit reports, agreements, etc. inrelation to the operations of the appellant Company. Admittedly,these documents have been produced in the company petitionby the shareholders of the appellant-Company to substantiatetheir case of oppression and mismanagement by respondent No.17Cand for vindication of their rights. In the facts and circumstancesof the case in hand, the taking away of the documents temporarilyand using them in the pending litigations between the partieswould not amount to theft. [Para 70] [691-G-H; 692-A]

8. The FIR or the criminal proceedings can be quashed ifDthe allegations do not make out prima-facie case or allegationsare so improbable that no prudent person would ever reach ajust conclusion that there are sufficient grounds for proceedingagainst the accused. So far as, the allegation of retention of thedocuments No. 29 to 54, no allegation as to when and how theEoriginal documents were removed and retained by therespondents. Where on the admitted facts no prima-case case ismade out against the accused for proceeding or when the SupremeCourt is satisfied that the criminal proceedings amount to abuseof process of court, Supreme Court has the power to quash anyjudicial proceedings in exercise of its power under Article 136 ofFthe Constitution of India. The present case is fit case forexercising the power in quashing the criminal complaint qua thedocuments No.29 to 54 also. [Para 88] [699-B-D]

9. Conclusions are summarised as under:-

Ga) By the order of the Magistrate, cognizance was takenagainst respondents No.1 to 16 for commission of the offencesunder Sections 380, 411 and 120B IPC. There are no avermentsin the complaint nor are there allegations in the statement of thecomplainant or the witness ‘D’ as to when and how the theft wascommitted and the order of the Magistrate taking cognizance ofH

the criminal case against respondents No.1 to 16 qua documentsNo.1 to 54 is liable to be set aside.

b) The “document” as defined in Section 29 IPC is a“moveable property” within the meaning of Section 22 IPC whichcan be the subject matter of theft. The information containedthereon in the documents would also fall within the purview ofthe “corporeal property” and can be the subject matter of thetheft. The information contained thereon in the documents wouldalso fall within the purview of the “corporeal property” and canbe the subject matter of the theft. The findings of the High Courtis modified to that extent.

c) In the facts and circumstances of the present case, useof documents No.1 to 28 and documents No.29 to 54 by therespondents in judicial proceedings is to substantiate their casenamely, “oppression and mismanagement” of the administrationof appellant-Company and their plea in other pending proceedingsand such use of the documents in the litigations pending betweenthe parties would not amount to theft. No “dishonest intention”or “wrongful gain” could be attributed to the respondents andthere is no “wrongful loss” to the appellant so as to attract theingredients of Sections 378 and 380 IPC.

d) Considering the facts and circumstances of the presentcase and the number of litigations pending between the parties,continuation of the criminal proceedings would be an abuse ofthe process of the court. The order of the Magistrate takingcognizance of the offences and the issuance of summons torespondents No.1 to 16 and the criminal proceedings thereonare liable to be quashed. [Para 89] [699-E-H; 700-A-D]

National Bank of Oman v. Barakara Abdul Aziz and Another(2013) 2 SCC 488 : [2012] 11 SCR 500 ; Mehmood UlRehman v. Khazir Mohammad Tunda and Others (2015) 12SCC 420 : [2015] 4 SCR 841 ; Bhushan Kumar and Anotherv. State (NCT of Delhi) and Another (2012) 5 SCC 424 : [2012]2 SCR 696 ; Vijay Dhanuka and Others v. Najima Mamtajand Others (2014) 14 SCC 638 : [2014] 4 SCR 171 ; PepsiFoods Ltd. and Another v. Special Judicial Magistrate andOthers (1998) 5 SCC 749 : [1997] 5 Suppl. SCR 12 ; PunjabNational Bank and Others v. Surendra Prasad Sinha 1993

[2019] 7 S.C.R.

ASupp (1) SCC 499 : [1992] 2 SCR 528 ; Jagdish Ram v. Stateof Rajasthan and Another (2004) 4 SCC 432 : [2004] 2SCR 846 ; Smt. Nagawwa v. Veeranna Shivalingappa Konjalgiand Others (1976) 3 SCC 736 : [1976] Suppl. SCR 123 ;State of Haryana and Others v. Bhajan Lal and Others 1992Supp (1) SCC 335 : [1990] 3 Suppl. SCR 259 ; Indian OilBCorpn. v. NEPC India Ltd. and Others (2006) 6 SCC 736 :[2006] 3 Suppl. SCR 704 – relied on.

Sunil Bharti Mittal v. Central Bureau of Investigation (2015)4 SCC 609 : [2015] 1 SCR 377 ; Chandra Deo Singh v.Prokash Chandra Bose alias Chabi Bose and Another AIRC1963 SC 1430 : [1964] SCR 639 ; K.N. Mehra vs. State ofRajasthan AIR 1957 SC 369 : [1957] SCR 623 ; PooranMal v. Director of Inspection (Investigation), New Delhi andOthers (1974) 1 SCC 345 : [1974] 2 SCR 704 ; MadhavraoJiwajirao Scindia and Others v. Sambhajirao ChandrojiraoDAngre and Others (1988) 1 SCC 692 : [1988] 2 SCR 930 ;Abhijit Pawar v. Hemant Madhukar Nimbalkar and Another(2017) 3 SCC 528 : [2016] 9 SCR 475 ; GHCL EmployeesStock Option Trust v. India Infoline Limited (2013) 4 SCC505 : [2013] 5 SCR 276 ; Pyare Lal Bhargava v. State ofRajasthan AIR 1963 SC 1094 : [1963] Suppl. SCR 689 –Ereferred to.

Case Law Reference

BIRLA CORPORATION v. ADVENTZ INVESTMENTS &HOLDINGS LTD.

CRIMINAL APPELLATE JURISDICTION : Criminal AppealNo. 875 of 2019.

From the Judgment and Order dated 15.05.2015 of the High Courtat Calcutta in C.R.R. No. 323 of 2011.

With

Criminal Appeal Nos. 876, 877 of 2019.

C. A. Sundaram, Arvind P. Datar, Mukul Rohatgi, Amit Desai,Kapil Sibal, K. V. Vishwanathan, Sidharth Luthra, Ranjit Kumar, DebolBanarjee, Ms. V. Mohana, Sr. Advs., Senthil Jagadeesan, SiddharthAggarwal, Rohit Bharadwaj, Ms. Rupali Samuel, Ms. Sonakshi Malhan,Ms. Suriti Chowdhary, Ms. Mrinal Kanwar, Ms. Rohini Musa, ArjunSingh, Zafar Inayat, Abhishek Gupta, Geo Joseph, Rohan Jaitley, AjayBhargava, Vikas Mehta, Ms. Trishala Trivedi, Rohan Dakshini,Ms. Namrata Vinod, Gopalakrishna S., Apoorv Khator,. Mithun Shashank,Karan Gupta, Vasanth B., Amit Agarwalla, P. C. Sharma, Ms.VrindaBhandari, Himanshu Gupta, Akshay Sehgal, T.R.B. Sivakumar, KunalChatterjee, Mahesh Agarwal, Ajay Bhargava, Mrs. Shally Bhasin,Vaibhav Niti, Ms. Sayaree Basu Mallik, Ms. Madhavi Agarwal,Ms. Surabhi Limaye, Ms. Trishala Trivedi, Rishi Raj Sharma, Ms. SoumyaJoykaran Singh, Chaitanya Safaya, Soumya Ray Chowdhury,Ms. Sangeeta Mandal, Ms. Swati Sinha, Sanjiv Kumar Trivedi, SavinderSingh, Dhananjaya Sud, Ms. Ankita Sharma (for M/S. Fox Mandal &Co.), Amit Agarwalla, P. C. Sharma, T.R.B. Sivakumar, SayantanTalapatra, Saifudin S., Advs. for the appearing parties.

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[2019] 7 S.C.R.

AThe Judgment of the Court was delivered byR. BANUMATHI, J. 1. Leave granted.

2. These appeals arise out of the judgment dated 15.05.2015 passedby the High Court of Calcutta in C.R.R. No.323 of 2011 in and by whichthe High Court quashed the complaint of the appellant-Company filedBunder Sections 379, 403 and 411 IPC read with Section 120-B IPC quadocuments No.1 to 28 of the Schedule. Insofar as documents No.29 to54 of the Schedule, the High Court remitted the matter to the trial courtto proceed with the matter in accordance with law.

3. Being aggrieved by quashing of the complaint qua documentsCNo.1 to 28, the appellant-complainant has preferred appeal (SLP (Crl.)No.9053 of 2016). Being aggrieved by remitting the matter to the trialcourt qua documents No.29 to 54, the respondents have filed appeal[SLP(Crl.) No.6405 of 2019 and SLP(Crl.) D. No.6122 of 2019].Though the SLPs by the respondents are filed with delay, in the interestDof justice, delay in filing the SLPs are condoned.

4. These appeals arise out of the criminal complaint filed by theappellant-Company which belong to Madhav Prasad Birla (MPB) Group,now under the control of respondent No.17-Harshvardhan Lodha whois the son of Rajendra Singh Lodha. The impugned complaint has aEbackground of multitude of litigations filed by the respondents and others.Brief facts which led to filing of these appeals are that one PriyamvadaDevi Birla (PDB) and her husband Madhav Prasad Birla (MPB) werein control and management of several corporate entities which arecollectively referred to as the M.P. Birla Group of Industries. They didnot have any children. They have created several trusts for undertakingFcharitable activities in particular on the education side. PDB died on03.07.2004 and MPB had predeceased her. There is an ongoing disputeover legality of Will allegedly executed by Priyamvada Devi Birla (PDB)dated 18.04.1999 in favour of Rajendra Singh Lodha and respondentNo.17-son of said Rajendra Singh Lodha. On 19.07.2004, petition wasGfiled by Rajendra Singh Lodha, father of respondent No.17 for grant ofprobate of the purported Will before the High Court at Calcutta. TheProbate Petition has been converted into testamentary suit for grant ofLetters of Administration. Krishna Kumar Birla (KKB), Basant KumarBirla (BKB), Ganga Prasad Birla (GPB) and Yashovardhan Birla (YB)have filed caveats to oppose the grant of probate of the said Will datedH18.04.1999. The High Court held that Ganga Prasad Birla (GPB) has

caveatable interest and therefore, he has right to oppose the grant ofprobate of the said Will. The said testamentary suit is pending.Subsequently, Krishna Kumar Birla (KKB), Kashi Nath Tapuriah (KNT)and Pradip Kumar Khaitan (PKK) filed an application for grant of probateof the 1982 Will of Madhav Prasad Birla (MPB) and Ganga PrasadBirla (GPB); Kashi Nath Tapuriah (KNT) and Pradip Kumar Khaitan(PKK) have filed an application for grant of probate of the 1982 Will ofMadhav Prasad Birla (MPB) before the High Court at Calcutta and thesaid testamentary proceedings are also pending.

5. Respondents No.1 to 5 who are shareholders of the appellantCompany and the trust-Birla Education Trust represented by respondentNo.6, had filed Company petition in CP No.1/2010 under Sections 397and 398 of the Companies Act, 1956 before the Company Law Board(CLB) alleging oppression and mismanagement being perpetrated byrespondent No.17 who is in administration and operation of the saidCompany. The petition before the CLB has been filed through respondentsNo.6 to 9 who are shown as accused Nos.6 to 9 in the complaint.6. On 24.03.2010, respondents No.12 to 16 have filed five civilsuits in the High Court of Calcutta (CS Nos.73-77/2010) under Section92 of the Code of Civil Procedure stating that in the year 1988, MPBand PDB had created five mutual and reciprocal trusts to leave theestate covered by these trusts for charity. These trusts are said to havebeen revoked just three days prior to the alleged Will dated 18.04.1999.In the said suits in CS No.73-77/2010, respondents No.12 to 16 havechallenged the revocation of the five trusts and prayed for recovery ofthe properties of the public charity and for enforcement of the publictrust obligations of the properties vested in the said five trusts.

7. The company petition in CP No.1/2010 was filed before CLB(now pending before NCLT) on 10.03.2010. In the said company petition,documents No.1 to 54 have been filed. The advance copy of the companypetition and the copies of the documents have been served upon theappellant-Company. Document No.1-Internal Audit Report of theappellant Company was filed in the civil suits filed by respondents No.12to 16 challenging the revocation of the five trusts created by MPB andPDB. Alleging theft and misappropriation of all the documents No.1 to54, the appellant Company filed the criminal complaint under Sections379, 403, 411 read with Section 120B IPC against respondents No.1 to16 and in the said complaint, appellant was represented by Shri Samir

AGanguly who is the Vice-President (Legal) of the appellant-company.The gravamen of the allegations in the complaint is that copies of 54documents were used before the Company Law Board (CLB) in C.P.No.1 of 2010 filed by respondents No.1 to 5 and Birla Education Trustrepresented by respondent No.6. Copy of one such document viz., InternalAudit Report of Chanderia Unit of the appellant Company has beenBfiled along with the interlocutory applications filed by respondents No.13to 16 in the civil suits which were filed challenging the revocation oftrusts and for recovery of properties vested in the trust.

8. Let us understand the array of the parties. Each one ofrespondents No.1 to 5 are the shareholders of the appellant-Company.CRespondent No.6-Pradip Kumar Khaitan is reputed lawyer and atrustee of Birla Education Trust. Respondent No.7-Akshay Poddar is aDirector of respondent No.1-Adventz Investments & Holdings Limited.Respondent No.8-Santosh Kumar Poddar is the Director of respondentNo.3-Britex (India) Limited. Respondent No.9-Bal Kishan ToshniwalDis the Director of respondent No.2-Govind Promoters Private Limited.Respondent No.10-Birla Buildings Limited is in-charge of the overallmaintenance and upkeep of Birla Buildings where the appellantCompany is located. Respondent No.11-S. Chakrabarty is the ChiefExecutive Officer of respondent No.10. Respondents No.12 to 16 areones who have filed the suits CS No.73-77/2010 under Section 92 CPCEbefore the High Court at Calcutta challenging the revocation of the trustsand for recovery of the properties of the public charity. RespondentNo.17-Harshvardhan Lodha is the son of late Rajendra Singh Lodhaand now the Director-cum-Chairman of the appellant-Company againstwhom C.P. No.1 of 2010 has been filed.F9. The allegations in the complaint in brief are as under:-

The complaint contains list of fifty-four documents with theirbrief description given in the Schedule of the complaint. Document No.1is an Internal Audit Report of Chanderia unit of the appellant Companyfor the period ending November, 2009. According to the appellant-Gcomplainant, keeping in mind the confidential nature of the report, onlysix copies were made. Out of which, five sets were sent to officers ofthe Company individually named and one was retained by the Auditor.The Internal Audit Report produced by the respondents is the copy ofone of the original five sets which was sent to one Bachh Raj Nahar-Executive Director and Chief Executive Officer of the Company. It isalleged that respondents No.1 to 16 have stolen/misappropriateddocuments No.2 to 28 from the appellant’s premises and that afterphotocopying the documents, they were kept back in the appellant’spremises. It is alleged that documents No.29 to 54 have been stolen/misappropriated from the appellant’s premises and that after photocopyingthe documents, they were not returned in the appellant’s premises andthe originals are still in the possession of the respondents. Before makingthe complaint, the complainant-appellant had conducted an internal enquiryto find out how these documents reached the respondents.

10. These documents have at all times been kept at the registeredoffice of the appellant-Birla Buildings. These documents have restrictedaccess and are meant for the consumption of designated and specifiedindividuals only. These documents include intra-company correspondence,internal audit reports, agreements etc. in relation to operations of theCompany. The appellant-complainant alleges that respondents No.1 to 9and 12 to 16 gained access to the Internal Audit Report and otherdocuments unauthorizedly and illegally with the aid of respondent No.10-Birla Buildings Limited and respondent No.11-S. Chakrabarty, CEO whoare in-charge of upkeep of the building in which the office of the appellant-complainant is situated.

11. The appellant further averred that by letter dated 29.03.2010,the Company through its advocate called upon the advocate ofrespondents No.1 to 6 to disclose as to how they obtained the documentsmentioned in the Schedule of the complaint. The respondents sent replydated 30.03.2010 and evaded giving any response to the said query onthe premise that there was no procedure of the Company Law Board(CLB) for seeking such information. Appellant-Company sent letterdated 17.04.2010 to respondents No.12 to 16 calling upon them to explainas to how they came in possession of the documents; but there was noreply. In the rejoinder filed by respondents No.1 to 6, they again failedand/or refused to state how they procured these documents.

12. Appellant alleged that without the consent of the appellantCompany, the respondents/accused have dishonestly stolen/misappropriated the documents and thus committed theft and conspiracyto commit theft. It is also averred that the respondents/accuseddishonestly received or retained the stolen property knowing and having

Areason to believe the same to be stolen property and as such committedthe offence punishable under Section 411 IPC. It is alleged that therespondents/accused thus dishonestly committed theft of the documentsNo.1 to 54 belonging to the appellant Company and misappropriatedthem by converting the same for their own use and thus committed theoffences punishable under Sections 379, 403 IPC read with Section 120-BB IPC.

13. Complainant Shri Samir Ganguly was examined on 06.10.2010.Since some of the accused persons are residents beyond local jurisdictionof the court, the trial court/the Magistrate fixed the matter for enquiryunder Section 202 Cr.P.C. on 08.10.2010. An employee of the appellantCCompany by name P.B. Dinesh was examined on 08.10.2010.Considering the averments in the complaint and the statement ofComplainant Shri Samir Ganguly and P.B. Dinesh, the learned Magistratevide order dated 08.10.2010 found that there are sufficient grounds forproceeding against all the sixteen respondents and ordered issuance ofDsummons to the respondents for the offences punishable under Sections380, 411 and 120B IPC.14. Aggrieved by the summoning order dated 08.10.2010,respondents filed petition under Section 482 Cr.P.C. before the HighCourt for quashing the criminal proceedings. Insofar as compliance ofEthe procedure in taking cognizance of the offences, the High Court heldthat upon perusal of the averments in the complaint and the statement ofrepresentative of the company Shri Samir Ganguly and P. B. Dinesh, theMagistrate satisfied himself that there were sufficient grounds forproceeding against the accused and ordered to issue process against thesixteen accused and the High Court held that on the procedural aspect,Fthe Magistrate did not commit any error. The High Court held that sinceoriginals of documents No.1 to 28 are still in the custody of thecomplainant, taking away the information contained in such documentscannot be considered to be “movable property” and the temporaryremoval of the documents for taking away the contents thereon by itselfGcannot be the subject of the offence of theft or dishonest misappropriationof property as well as dishonest receiving of the stolen property. Onthose findings, the High Court held that the complaint would not survivein respect of the documents No.1 to 28. Insofar as documents No.29 to54 are concerned, the High Court held that as the originals of thosedocuments are missing, the complaint discloses ingredients of the offenceH

of theft. The High Court held that insofar as documents No.29 to 54 areconcerned, the complainant can proceed against the respondents andaccordingly remitted the matter to the trial court.

15. On behalf of the appellant, Mr. C.A. Sundaram, learned seniorcounsel submitted that the appellant discharged the initial burden placedupon it by adducing pre-summoning evidence by examining two witnessesand based upon the averments in the complaint and the statement ofwitnesses Shri Samir Ganguly and P.B. Dinesh, the Magistrate satisfiedhimself that there are sufficient grounds for proceeding against theaccused and the High Court rightly held that there was no irregularity inthe procedure followed by the Magistrate in issuing process against therespondents. The learned senior counsel submitted that respondentsNo.1 to 9 have produced the documents before the Company Law Boardand respondents No.12 to 16 have filed document No.1-Internal AuditReport which are highly confidential documents and having not disclosedthe source for the accusation/possession of the documents, prima faciecase in dishonest removal of the documents have been made out and theMagistrate rightly found that there are sufficient grounds for proceedingagainst the respondents/accused and took the cognizance of the offencesunder Sections 380, 411 and 120-B IPC.

16. The learned senior counsel for the appellant submitted thatwhen the Magistrate has taken cognizance of the offence, the HighCourt ought not to have substituted its views for the summoning orderpassed by the Magistrate qua documents No.1 to 28. In support of hissubmission, reliance was placed upon Smt. Nagawwa v. VeerannaShivalingappa Konjalgi and Others (1976) 3 SCC 736 and numberof other decisions. It was submitted that the High Court was not right inquashing the criminal complaint qua documents No.1 to 28.

17. In appeal preferred by the respondents, they assailed the orderof issuance of process against the respondents by the Magistratecontending that there were no adequate materials so as to arrive atsatisfaction of the Magistrate that there were sufficient grounds forproceeding against the respondents. It was submitted that the productionof the copies of the documents in the Company Law Petition and in thecivil suits would not amount to theft and the averments in the complaintand the statement of the complainant and witness P.B. Dinesh wouldnot attract the ingredients of theft and there was no application of mind

Aof the learned Magistrate and the Magistrate mechanically issued processagainst the respondents and the High Court ought to have quashed theproceedings in toto.

18. On behalf of respondents No.1 to 5, Mr. Kapil Sibal, learnedsenior counsel submitted that the complaint lacks specification as to theBtime and manner of the commission of the offence and who committedtheft of the documents and when and how the same was detected. Thelearned senior counsel contended that the averments in the complaint donot make out prima facie case of theft and that the materials placedbefore the Magistrate were inadequate and there were no sufficientgrounds for proceeding against the respondents and the High Court oughtCto have quashed the entire proceedings in toto. The learned senior counselfurther submitted that document No.1-Internal Audit Report of theappellant Company and other documents have been filed by therespondents in the company petition before the CLB to substantiate theircase of oppression and mismanagement, which can never amount toDtheft. Learned senior counsel contended that when the documents areproduced in the proceedings before the Company Law Board forvindication of their rights or defence, the criminal complaint filed by theappellant is nothing but “legal thumb screw” and the High Courtrightly quashed the criminal proceedings qua documents No.1 to 28. Itwas submitted that since there was neither application of mind by theEMagistrate nor any reasoned order has been passed disclosing thesatisfaction of the mind, the entire proceedings before the Magistrate isliable to be quashed.

19. Mr. Mukul Rohatgi, learned senior counsel appearing on behalfof respondent No.10 and Mr. Amit Desai, learned senior counselFappearing on behalf of respondent No.11 submitted that respondent No.10has the overall responsibility of the management and maintenance of the“building” in which the office of the appellant is situated and there areno specific allegations in the complaint as to how respondents No.10and 11 had access to these documents which were in the custody ofGdesignated employees of the complainant. It was submitted that in theabsence of allegations in the complaint to prove commission of offenceby respondents No.10 and 11, the mere fact that respondents No.10 and11 are responsible for the maintenance of the building by itself, cannotlead to an inference that respondents No.10 and 11 are responsible forthe theft.H

20. On behalf of respondent No.11, learned senior counselsubmitted that respondent No.11 is the CEO of respondent No.10-Company and is overall administrative in-charge of the company’s affairsin Birla Building and in the absence of specific allegations against him,the mere official position of respondent No.11 will not automatically makehim vulnerable to criminal prosecution. The learned senior counsel furthersubmitted that the doctrine of vicarious liability is based upon legalpresumption and creates fictional liability and since the doctrine ofvicarious liability is not available (as matter of law) in regard to offencesunder the IPC, the complainant cannot rely upon legal presumption ofan act or mensrea to proceed against respondent No.11 in criminalcase.

21. On behalf of respondents No.13 to 16, Mr. Ranjit Kumar andMr. Debal Banerjee, learned senior counsel submitted that the trial courthad not applied its mind to the materials on record and the averments inthe complaint and the statement of the witnesses do not make primafacie case and the Magistrate mechanically issued process againstrespondents No.12 to 16. It was submitted that filing document in thejudicial proceedings can never be termed as an act of “theft” or “dishonestmisappropriation” so as to attract the ingredients of Sections 380 and411 IPC read with Section 120-B IPC.22. Reiterating the contention of other respondents, Mr. K.V.Viswanathan, learned senior counsel appearing on behalf of respondentNo.6 submitted that respondent No.6 is well reputed lawyer and atrustee of the Birla Education Trust which is shareholder of the appellantCompany. The learned senior counsel further submitted that in the absenceof specific allegations against respondent No.6, he cannot be madevicariously liable merely because he is adorning the position of trustee inBirla Education Trust. It was submitted that the complaint filed by theappellant is intended to arm twist the respondents from ventilating thelegitimate rights before the appropriate judicial forum and in the absenceof materials, the proceedings initiated against respondent No.6 is liableto be quashed.

23. On behalf of respondents No.7 to 9, Mr. Sidharth Luthra,learned senior counsel submitted that absolutely there are no avermentsas to how the said documents had gone out of the possession of theappellant-complainant and mere possession of the copy of the documents

Awill not amount to theft nor would amount to conspiracy. It was submittedthat even assuming that the evidence was illegally obtained, the samecannot be shut out and it cannot amount to theft.

24. We have considered the submissions of the learned seniorcounsel appearing on behalf of the appellant and the respondents andBcarefully perused the impugned judgment and materials on record.

25. The following questions arise for consideration in theseappeals:-

(i)Whether the allegations in the complaint and the statementof the complainant and other materials before the MagistrateCwere sufficient to constitute prima facie case to justify thesatisfaction of the Magistrate in issuing process against therespondents?

(ii)Whether the respondents are right in contending that in takingcognizance of the offences under Sections 380, 411 andD120-B IPC and ordering issuance of process against therespondents is vitiated due to non-application of mind?

(iii) Whether the High Court was right in quashing the criminalproceedings qua documents No.1 to 28 on the ground thatmere information contained in the documents cannot beEconsidered as “moveable property” and cannot be the subjectof the offence of theft or receipt of stolen property?

(iv) Whether filing of the documents in question in the petitionbefore the Company Law Board to substantiate their caseof oppression and mismanagement and document No.1 inFthe civil suits challenging revocation of the trust deeds wouldamount to theft justifying taking cognizance of the offences?

(v) Whether there is dishonest moving of documents causingwrongful loss to the appellants and wrongful gain to therespondents?

(vi) Whether filing of documents in the judicial proceedings canbe termed as an act of theft causing wrongful gain to oneselfand wrongful loss to the opponent so as to attract theingredients of Section 378 IPC?

26. Complaint filed under Section 200 Cr.P.C. and enquirycontemplated under Section 202 Cr.P.C. and issuance of process:-Under Section 200 of the Criminal Procedure Code, on presentation ofthe complaint by an individual, the Magistrate is required to examine thecomplainant and the witnesses present, if any. Thereafter, on perusal ofthe allegations made in the complaint, the statement of the complainanton solemn affirmation and the witnesses examined, the Magistrate hasto get himself satisfied that there are sufficient grounds for proceedingagainst the accused and on such satisfaction, the Magistrate may directfor issuance of process as contemplated under Section 204 Cr.P.C. Thepurpose of the enquiry under Section 202 Cr.P.C. is to determine whethera prima facie case is made out and whether there is sufficient groundfor proceeding against the accused.27. The scope of enquiry under this section is extremely restrictedonly to finding out the truth or otherwise of the allegations made in thecomplaint in order to determine whether process should be issued or notunder Section 204 Cr.P.C. or whether the complaint should be dismissedby resorting to Section 203 Cr.P.C. on the footing that there is no sufficientground for proceeding on the basis of the statements of the complainantand of his witnesses, if any. At the stage of enquiry under Section 202Cr.P.C., the Magistrate is only concerned with the allegations made inthe complaint or the evidence in support of the averments in the complaintto satisfy himself that there is sufficient ground for proceeding againstthe accused.

28. In National Bank of Oman v. Barakara Abdul Aziz andAnother (2013) 2 SCC 488, the Supreme Court explained the scope ofenquiry and held as under:-

“9. The duty of Magistrate receiving complaint is set out inSection 202 CrPC and there is an obligation on the Magistrate tofind out if there is any matter which calls for investigation by acriminal court. The scope of enquiry under this section is restrictedonly to find out the truth or otherwise of the allegations made inthe complaint in order to determine whether process has to beissued or not. Investigation under Section 202 CrPC is differentfrom the investigation contemplated in Section 156 as it is only forholding the Magistrate to decide whether or not there is sufficientground for him to proceed further. The scope of enquiry under

ASection 202 CrPC is, therefore, limited to the ascertainment oftruth or falsehood of the allegations made in the complaint:

(i) on the materials placed by the complainant before the court;

(ii) for the limited purpose of finding out whether prima faciecase for issue of process has been made out; and

(iii) for deciding the question purely from the point of view ofthe complainant without at all adverting to any defence thatthe accused may have.”

29. In Mehmood Ul Rehman v. Khazir Mohammad Tunda andCOthers (2015) 12 SCC 420, the scope of enquiry under Section 202Cr.P.C. and the satisfaction of the Magistrate for issuance of processhas been considered and held as under:-

“2. Chapter XV Cr.P.C. deals with the further procedure fordealing with “Complaints to Magistrate”. Under Section 200DCr.P.C, the Magistrate, taking cognizance of an offence on acomplaint, shall examine upon oath the complainant and thewitnesses, if any, present and the substance of such examinationshould be reduced to writing and the same shall be signed by thecomplainant, the witnesses and the Magistrate. Under Section202 Cr.P.C, the Magistrate, if required, is empowered to eitherEinquire into the case himself or direct an investigation to be madeby competent person “for the purpose of deciding whether ornot there is sufficient ground for proceeding”. If, after consideringthe statements recorded under Section 200 Cr.P.C and the resultof the inquiry or investigation under Section 202 Cr.P.C, theMagistrate is of the opinion that there is no sufficient ground forFproceeding, he should dismiss the complaint, after briefly recordingthe reasons for doing so.

3. Chapter XVI Cr.P.C deals with “Commencement ofProceedings before Magistrate”. If, in the opinion of the Magistratetaking cognizance of an offence, there is sufficient ground forGproceeding, the Magistrate has to issue process under Section204(1) Cr.P.C for attendance of the accused.”

30. Reiterating the mandatory requirement of application of mindin the process of taking cognizance, in Bhushan Kumar and Another v.

State (NCT of Delhi) and Another (2012) 5 SCC 424, it was held asunder:-

“11. In Chief Enforcement Officer v. Videocon InternationalLtd. (2008) 2 SCC 492 (SCC p. 499, para 19) the expression“cognizance” was explained by this Court as “it merely means‘become aware of’ and when used with reference to court or aJudge, it connotes ‘to take notice of judicially’. It indicates thepoint when court or Magistrate takes judicial notice of anoffence with view to initiating proceedings in respect of suchoffence said to have been committed by someone.” It is entirely adifferent thing from initiation of proceedings; rather it is thecondition precedent to the initiation of proceedings by theMagistrate or the Judge. Cognizance is taken of cases and not ofpersons. Under Section 190 of the Code, it is the application ofjudicial mind to the averments in the complaint that constitutescognizance. At this stage, the Magistrate has to be satisfied whetherthere is sufficient ground for proceeding and not whether there issufficient ground for conviction. Whether the evidence is adequatefor supporting the conviction can be determined only at the trialand not at the stage of enquiry. If there is sufficient ground forproceeding then the Magistrate is empowered for issuance ofprocess under Section 204 of the Code.”

31. Under the amended sub-section (1) to Section 202 Cr.P.C., itis obligatory upon the Magistrate that before summoning the accusedresiding beyond its jurisdiction, he shall enquire into the case himself ordirect the investigation to be made by police officer or by such otherperson as he thinks fit for finding out whether or not there is sufficientground for proceeding against the accused.

32. By Cr.P.C. (Amendment) Act, 2005, in Section 202 Cr.P.C. ofthe Principal Act with effect from 23.06.2006, in sub-section (1), thewords “…and shall, in case where accused is residing at placebeyond the area in which he exercises jurisdiction…” were insertedby Section 19 of the Criminal Procedure Code (Amendment) Act, 2005.In the opinion of the legislature, such amendment was necessary asfalse complaints are filed against persons residing at far off places inorder to harass them. The object of the amendment is to ensure thatpersons residing at far off places are not harassed by filing false

Acomplaints making it obligatory for the Magistrate to enquire. Notes onClause 19 reads as under:-

“False complaints are filed against persons residing at far offplaces simply to harass them. In order to see that the innocentpersons are not harassed by unscrupulous persons, this clauseBseeks to amend sub-section (1) of Section 202 to make itobligatory upon the Magistrate that before summoning theaccused residing beyond his jurisdiction he shall enquire into thecase himself or direct investigation to be made by police officeror by such other person as he thinks fit, for finding out whetheror not there was sufficient ground for proceeding against theCaccused.”

33. Considering the scope of amendment to Section 202 Cr.P.C.,in Vijay Dhanuka and Others v. Najima Mamtaj and Others (2014)14 SCC 638, it was held as under:-

D“12. ….The use of the expression “shall” prima facie makes theinquiry or the investigation, as the case may be, by the Magistratemandatory. The word “shall” is ordinarily mandatory butsometimes, taking into account the context or the intention, it canbe held to be directory. The use of the word “shall” in allcircumstances is not decisive. Bearing in mind the aforesaidEprinciple, when we look to the intention of the legislature, we findthat it is aimed to prevent innocent persons from harassment byunscrupulous persons from false complaints. Hence, in our opinion,the use of the expression “shall” and the background and thepurpose for which the amendment has been brought, we have noFdoubt in our mind that inquiry or the investigation, as the case maybe, is mandatory before summons are issued against the accusedliving beyond the territorial jurisdiction of the Magistrate.”

Since the amendment is aimed to prevent persons residing outsidethe jurisdiction of the court from being harassed, it was reiterated thatholding of enquiry is mandatory. The purpose or objective behind theamendment was also considered by this Court in Abhijit Pawar v.Hemant Madhukar Nimbalkar and Another (2017) 3 SCC 528 andNational Bank of Oman v. Barakara Abdul Aziz and Another (2013)2 SCC 488.

34. The order of the Magistrate summoning the accused mustreflect that he has applied his mind to the facts of the case and the lawapplicable thereto. The application of mind has to be indicated bydisclosure of mind on the satisfaction. Considering the duties on the partof the Magistrate for issuance of summons to accused in complaintcase and that there must be sufficient indication as to the application ofmind and observing that the Magistrate is not to act as post office intaking cognizance of the complaint, in Mehmood Ul Rehman, this Courtheld as under:-

“22. ….the Code of Criminal Procedure requires speaking orderto be passed under Section 203 Cr.P.C. when the complaint isdismissed and that too the reasons need to be stated only briefly.In other words, the Magistrate is not to act as post office intaking cognizance of each and every complaint filed before himand issue process as matter of course. There must be sufficientindication in the order passed by the Magistrate that he is satisfiedthat the allegations in the complaint constitute an offence andwhen considered along with the statements recorded and the resultof inquiry or report of investigation under Section 202 Cr.P.C., ifany, the accused is answerable before the criminal court, there isground for proceeding against the accused under Section 204Cr.P.C., by issuing process for appearance. The application ofmind is best demonstrated by disclosure of mind on the satisfaction.If there is no such indication in case where the Magistrateproceeds under Sections 190/204 Cr.P.C., the High Court underSection 482 Cr.PC. is bound to invoke its inherent power in orderto prevent abuse of the power of the criminal court. To be calledto appear before the criminal court as an accused is serious matteraffecting one’s dignity, self-respect and image in society. Hence,the process of criminal court shall not be made weapon ofharassment.”

35. In Pepsi Foods Ltd. and Another v. Special JudicialMagistrate and Others (1998) 5 SCC 749, the Supreme Court hasheld that summoning of an accused in criminal case is serious matterand that the order of the Magistrate summoning the accused must reflectthat he has applied his mind to the facts of the case and law governingthe issue. In para (28), it was held as under:-

CDE

A“28. Summoning of an accused in criminal case is seriousmatter. Criminal law cannot be set into motion as matter ofcourse. It is not that the complainant has to bring only twowitnesses to support his allegations in the complaint to have thecriminal law set into motion. The order of the Magistratesummoning the accused must reflect that he has applied his mindBto the facts of the case and the law applicable thereto. He has toexamine the nature of allegations made in the complaint and theevidence both oral and documentary in support thereof and wouldthat be sufficient for the complainant to succeed in bringing chargehome to the accused. It is not that the Magistrate is silentCspectator at the time of recording of preliminary evidence beforesummoning of the accused. The Magistrate has to carefullyscrutinise the evidence brought on record and may even himselfput questions to the complainant and his witnesses to elicit answersto find out the truthfulness of the allegations or otherwise andthen examine if any offence is prima facie committed by all orDany of the accused.”

The principle that summoning an accused in criminal case is aserious matter and that as matter of course, the criminal case againsta person cannot be set into motion was reiterated in GHCL EmployeesStock Option Trust v. India Infoline Limited (2013) 4 SCC 505.

36. To be summoned/to appear before the Criminal Court as anaccused is serious matter affecting one’s dignity and reputation in thesociety. In taking recourse to such serious matter in summoning theaccused in case filed on complaint otherwise than on police report,there has to be application of mind as to whether the allegations in thecomplaint constitute essential ingredients of the offence and whetherthere are sufficient grounds for proceeding against the accused. InPunjab National Bank and Others v. Surendra Prasad Sinha 1993Supp (1) SCC 499, it was held that the issuance of process should notbe mechanical nor should be made an instrument of oppression orneedless harassment.

37. At the stage of issuance of process to the accused, theMagistrate is not required to record detailed orders. But based on theallegations made in the complaint or the evidence led in support of thesame, the Magistrate is to be prima facie satisfied that there are sufficient

grounds for proceeding against the accused. In Jagdish Ram v. Stateof Rajasthan and Another (2004) 4 SCC 432, it was held as under:-

“10. ….The taking of cognizance of the offence is an areaexclusively within the domain of Magistrate. At this stage, theMagistrate has to be satisfied whether there is sufficient groundfor proceeding and not whether there is sufficient ground forconviction. Whether the evidence is adequate for supportingthe conviction, can be determined only at the trial and not at thestage of inquiry. At the stage of issuing the process to the accused,the Magistrate is not required to record reasons.”

38. Extensive reference to the case law would clearly show thatthe allegations in the complaint and complainant’s statement and othermaterials must show that there are sufficient grounds for proceedingagainst the accused. In the light of the above principles, let us considerthe present case whether the allegations in the complaint and the statementof the complainant and other materials before the Magistrate weresufficient enough to constitute prima-facie case to justify the Magistrate’ssatisfaction that there were sufficient grounds for proceeding againstthe respondents-accused and whether there was application of mind bythe learned Magistrate in taking cognizance of the offences and issuingprocess to the respondents.

39. Respondents No.1 to 5 are minority shareholders in theappellant-Company. Respondent No.6 is lawyer and trustee of BirlaEducation Trust. Respondent No.6 had been empowered to file petitionbefore the CLB. Respondents No.7, 8 and 9 are the Directors ofrespondents No.1, 3 and 2 respectively. On 10.03.2010, Company PetitionCP No.1/2010 was filed before the Company Law Board under Sections235, 237, 247, 250, 397, 398, 402 and 403 of the Companies Act, 1956 byrespondents No.1 to 5 who are the shareholders of the appellant Companyalleging oppression and mismanagement. M/s Birla Education Trust(represented by respondent No.6) is also one of the petitioners in theCompany Petition. Along with the Company Petition, the copy of thedocuments in question i.e. documents No.1 to 54 including documentNo.1-Internal Audit Report were filed and advance copy of the CompanyPetition and copy of the documents were given to the appellant.

40. On 24.03.2010, respondents No.12 to 16 have filed five civilsuits under Section 92 of Code of Civil Procedure before the High Court

Aof Calcutta being CS Nos.73-77 of 2010 challenging the revocation offive public charitable trusts created by Madhav Prasad Birla (MPB)and Priyamvada Devi Birla (PDB) in 1988. Respondents No. 12 to 16have averred that the trusts have assets worth thousands of crores ofrupees which are vested with the trusts dedicated for charity. In the saidsuits, respondents No.12 to 16 have challenged the revocation of theBtrusts and sought for recovery of the property that are vested in thepublic charity through the five trusts set up by MPB and PDB and thesaid suits are pending. On 29.03.2010, five interlocutory applicationshave been filed in the aforesaid suits praying for interim reliefs and inthose applications, respondents No.12 to 16 annexed photocopy of theCdocument No.1-Internal Audit Report of the Chanderia unit of BirlaCorporation Limited for the period ending November, 2009. About sevenmonths thereafter on 04.10.2010, criminal complaint was filed by theappellant against respondents No.1 to 16 under Sections 379, 403 and411 read with Section 120-B IPC alleging theft of the documents andreceipt of stolen property and dishonest misappropriation of theDdocuments. Of the sixteen accused, six are corporate entities and restare natural persons. Respondents No.1 to 5 are the shareholders whofiled the Company Petition CP No.1 of 2010. Respondents No.12 to 16are the plaintiffs who have instituted civil suits challenging the revocationof the five trusts and for recovery of the properties that are vested in theEpublic charity.41. Respondents No.3, 6, 12 and some of the other respondentsare the residents beyond the local limits of the trialcourt – 10[th] Metropolitan Magistrate, Calcutta. Since number of accusedare residents beyond the local limits of the trial court, as per amendedFprovision of Section 202 Cr.P.C., it is obligatory upon the Magistrate thatbefore summoning the accused, he shall enquire into the case or directthe investigation to be made by police officer or by such other personas he thinks fit for finding out whether or not there are sufficient groundsfor proceeding against the accused. In the present case, the learnedMagistrate has opted to hold such enquiry himself.G

42. The complaint alleges that the respondents have gainedunauthorized access and possession of the documents No.1 to 54. It isalleged that documents No.1 to 28 have been stolen/misappropriatedfrom the premises of the appellant and that after photocopying thedocuments, they were kept back in the premises. In so far as documentsH

No.29 to 54, it is alleged that they have been stolen/misappropriated andhave not been returned and are still in the possession of the respondents.It is alleged that respondents No.1 to 16 had gained unauthorized accessand exercised to control over the said documents. It is further allegedthat by letter dated 29.03.2010, on being called upon to disclose as tohow the respondents had obtained the documents, the respondents byletter dated 30.03.2010 evaded making response to the query on thepremise that there was no procedure of the CLB for seeking suchinformation.

43. The gist of the allegations in the complaint are:-

(i)Respondent No.10-Company is in-charge of day to daymaintenance of the building which houses office of thecomplainant and others. Respondent No.11 is the CEO Incharge of respondent No.10 and responsible for the day today administration of respondent No.10.

(ii) Respondents No.1 to 9 are in possession of photocopies ofdocuments No.1 to 28 and stated to be in possession oforiginals of documents No.29 to 54;

(iii) Use of photocopies of documents No.1 to 24 by respondentsNo.1 to 9 in the company petition before the CLB and use ofdocument No.1-Internal Audit Report by respondents No.12to 16 in the civil suits filed by them;

(iv) The documents are highly confidential and meant for useconsumption only of designated and specified individuals ofthe appellant Company and the respondents have gainedunauthorized access to the documents and exercise of controlFover the documents; and

(v) Omission to explain the source of copies of documents inspite of issuance of notice dated 29.03.2010 to respondentsNo.1 to 9 and notice dated 01.04.2010 to respondents No.12to 16.

44. With reference to document No.1-Internal Audit Report ofChanderia Unit, it is alleged that one copy of the original of documentNo.1 was marked to Bachh Raj Nagar and it was claimed to be still withthem. With reference to documents No.2 to 28, in para No.(20) of thecomplaint, it is alleged that the documents were kept in the premises on

Athe 3[rd] and 4[th] floor with the concerned individuals or their secretariesand the respondents have gained unauthorised access and had controlover the documents. The allegations against the respondents is thatrespondents No.10 and 11 are under the control and management of theBirla Buildings and has security and the overall responsibility of themanagement and maintenance of the same. It is alleged that theBrespondents in connivance with respondents No.10 and 11 have gainedunauthorised access to the documents and thus the documents havebeen stolen from the premises and then misappropriated. The avermentsin the complaint even if taken at its face value and accepted in its entiretydo not constitute prima facie offence under Section 378 IPC.

C45. After referring to filing of CP No.1/2010 where the xeroxcopies of the documents were annexed, the complaint alleges as under:-

“9. ….The Company submits that the said documents are highlyconfidential internal records and correspondence of Company andits officers. These documents were at all time kept inside theDregistered office of the Company at the said premises. Thesedocuments have restricted access and are meant for the perusaland consumption only of designated and specified individuals.These documents and the information contained therein is theproperty of company over which no unauthorized person has anyEright.”

46. On 06.10.2010, Vice-President (Legal) - Power of Attorneyof the complainant Company, Shri Samir Ganguly was examined as arepresentative of the Company under Section 200 Cr.P.C. Shri SamirGanguly has stated “that the accused persons have filed variousFlitigations before various forums. These accused persons havecommitted serious crime of theft of various documents which Ihave mentioned in my compliant.” Shri Samir Ganguly has furtherstated as under:-

“….Our office situated at Birla Building, 9/1, R.N. Mukherjee at3[rd] & 4[th] Floor. Accused No.10 has full control of maintenanceGand security to each and every floor….”

“.….In normal course, the accused persons could never haveaccess to those documents except by illegal means. The documentsare highly confidential like internal audit report of one of our unitswhich is not supposed to be in their possession. Other accusedH

persons have filed five civil suits basing on those stolen documents,from which I apprehend that all accused persons in connivancewith each other have procured those documents by theft……”

47. Being the Vice-President (Legal) and representative of theCompany, Shri Samir Ganguly may not have personal knowledge of theaverments made in the complaint and he has not attributed any specificovert act to any of the respondents. Shri Samir Ganguly has only allegedthat he apprehends that all the accused persons in connivance with eachother have procured the documents. The allegations in the statement ofthe complainant are vague and lack material particulars as to thecommission of the theft. Complainant Shri Samir Ganguly has neitherattributed to any facts nor material particulars as to the commission oftheft.

48. Respondent No.10-Birla Buildings Limited is responsible forthe day to day affairs of the maintenance of the building. RespondentNo.11-S. Chakrabarty is the CEO of Respondent No.10-Birla BuildingsLimited. In the complaint, there are no specific averments againstrespondents No.10 and 11 as to how they had access to the 3[rd] and 4[th]floors of the building owned by the appellant Company and as to howthey are responsible in moving the documents out of the possession ofthe appellant. Likewise, no specific overt act of “dishonest removal”of the documents is attributed to the other respondents. The mere factthat respondents No.10 and 11 are responsible for security andmaintenance of the building cannot lead to an inference that respondentsNo.10 and 11 are responsible for the theft.

49. So far as respondent No.11 who is the CEO of respondentNo.10-Company is concerned, it is stated that he is responsible for theday to day affairs of respondent No.10-Company and the complainantinvoked the doctrine of vicarious liability. The learned senior counselMr. Desai has submitted that for proceeding against respondent No.11,the complaint must show “active role” of the natural person. Reliancewas placed upon Sunil Bharti Mittal v. Central Bureau of Investigation(2015) 4 SCC 609, wherein it was held as under:-

“43. Thus, an individual who has perpetrated the commission ofan offence on behalf of company can be made an accused,along with the company, if there is sufficient evidence of his activerole coupled with criminal intent…..”

A50. As rightly submitted by learned senior counsel for respondentsNo.10 and 11, it is inconceivable that respondent No.11, CEO of respondentNo.10-Company, if committed the offence of theft, would have beenpermitted to continue in that profession. Be it noted, the complainant-appellant Company is also shareholder in respondent No.10-Companyand had its nominee Mr. S.N. Prasad on the Board of Directors of theBappellant at the relevant time till his death in December, 2012. It ispertinent to note that no complaint has ever been made against respondentNo.11 against alleged theft or any other overt act. In the absence ofparticulars or prima-facie case in the complaint or the statement of ShriSamir Ganguly against respondents No.10 and 11, the satisfaction of theCMagistrate appears to be on the presumptive footing that respondentsNo.10 and 11 are in-charge of maintenance of the building. Likewise,issuance of process to other respondents is only on the presumptivefooting that they have filed copies of the documents in CP No.1/2010and in the civil suits filed challenging revocation of the trusts.

D51. In his order dated 06.10.2010, the Magistrate observed thatsince some of the accused persons are residents beyond the localjurisdiction of the court, the matter further requires to be enquired intounder Section 202 Cr.P.C. and therefore, fixed the matter for furtherenquiry on 08.10.2010. On 08.10.2010, P.B. Dinesh, employee of theappellant Company was examined who have stated that respondentENo.14-Kumar Mangalam Birla is the Chairman of Aditya Birla Grouphaving their office in Mumbai; respondent No.15-Sidharth Birla is also apart of that Company and he resides at Alipore, Calcutta; respondentNo.13-Rajendra Prasad Pansari is resident of Calcutta who has nowjoined Birla Group. Witness P.B. Dinesh has stated that these respondentsFhave procured documents stolen from the appellant’s custody and filedcase before the Company Law Board on the basis of those documents.

52. Based on the allegations in the complaint and the statementsof Shri Samir Ganguly and P.B. Dinesh, the Metropolitan Magistratetook cognizance and directed issuance of summons to respondents No.1Gto 16. As pointed out earlier, as per Notes on Clause 19, the objectbehind the amendment to Section 202 Cr.P.C. is to ensure that innocentpersons who are residing at far off places are not harassed byunscrupulous persons. The amendment therefore, makes it obligatoryupon the Magistrate that before summoning the accused residing beyondthe jurisdiction, the Magistrate has to enquire the case either himself orH

direct investigation to be made by the police officer and is required toapply his mind and record his satisfaction with reasons.

53. As pointed our earlier, P.B. Dinesh had merely stated thatrespondent No.14-Shri Kumar Mangalam Birla is the Chairman of AdityaBirla Group having their office in Mumbai and respondent No.15-ShriSidharth Birla is part of the Company and resides at Alipore. P.B.Dinesh has also stated that respondent No.13-Rajendra Prasad Pansaristays in Calcutta and that he was an ex-employee of Birla Corporationand now he has joined Birla Group. P.B. Dinesh has thus stated aboutresidence of respondent No.14 being at Mumbai and residence ofrespondents No.13 and 15 at Calcutta. There are no specific allegationsagainst respondent No.14 or against any other respondents who areresiding outside the jurisdiction. Likewise, no specific allegation as tohow respondent No.14 or other respondents who are residing outsidethe jurisdiction have gained entry into the building of the appellantCompany and committed theft of the documents nor any specificallegation as to the alleged conspiracy.54. In the statement of P.B. Dinesh, there is only bare statementthat respondents No.13 to 15 have filed case before the Company LawBoard that the documents are highly confidential and that they haveprocured the documents stolen from the custody of the appellant. Thereare no specific allegations against respondents No.13 to 15. Likewise,there are no specific allegations against the other accused who areresiding outside the jurisdiction of the court and how and when theycommitted theft of the documents that how they entered into conspiracy.Considering the various litigations pending between the parties beforeissuing summons, the learned Magistrate ought to have considered thecomplaint and statement of witnesses and satisfied himself that thereare prima facie materials showing the ingredients of the offence oftheft (house theft) and receipt of stolen property.

55. While ordering issuance of process against the accused, theMagistrate must take into consideration the averments in the complaint,statement of the complainant examined on oath and the statement ofwitnesses examined. As held in Mehmood Ul Rehman, since it is aprocess of taking judicial notice of certain facts which constitute anoffence, there has to be application of mind whether the materials broughtbefore the court would constitute the offence and whether there are

Asufficient grounds for proceeding against the accused. It is not amechanical process.

56. As held in Chandra Deo Singh v. Prokash Chandra Bosealias Chabi Bose and Another AIR 1963 SC 1430 and in series ofjudgments of the Supreme Court, the object of an enquiry under SectionB202 Cr.P.C. is for the Magistrate to scrutinize the material produced bythe complainant to satisfy himself that the complaint is not frivolous andthat there is evidence/material which forms sufficient ground for theMagistrate to proceed to issue process under Section 204 Cr.P.C. It isthe duty of the Magistrate to elicit every fact that would establish thebona fides of the complaint and the complainant.C

57. The order of the Magistrate dated 08.10.2010 reads as under:-

“The representative of the complainant Company is present. Thiscourt takes the case record up for enquiry under Section 202Cr.P.C. itself. Witness P.B. Dinesh is examined during the enquiryDand his statement has been recorded. Purpose of the enquiryseems to have been meted out. Perused the affidavit filed forthat purpose on behalf of the complainant company. Perused thedocuments (both original and xerox copies) suppolied and reliedon by the complainant company in support of its case. Consideringall above I find sufficient grounds for proceeding against all theEsixteen accused persons for commission of an offence underSections 380, 411, 120B IPC. Cognizance is taken. Issue summonsaccordingly upon the accused persons fixing 10.12.2010 for S/Rand appearance. Requisites at once.”

For taking cognizance of the offence, the Magistrate thus interFalia relied upon the statement of the complainant and P.B. Dinesh toarrive at conclusion that prima facie case is made out against therespondents. As discussed earlier, neither the statement of thecomplainant nor the statement of P.B. Dinesh contain the particulars asto the commission of the offence to have satisfied the Magistrate thatGthere were sufficient grounds for proceeding against the accused. Byperusal of the above order passed by the Magistrate, we find absolutelynothing to indicate application of mind in taking cognizance of the offenceagainst respondents No.1 to 16 including the respondents who areresidents beyond the jurisdiction of the court. Though speaking orelaborate reasoned orders are not required at this stage, there must be

sufficient indication that there was application of mind by the Magistrateto the facts constituting the commission of offence.

58. There are no averments in the complaint nor allegations in thestatement of the complainant or witness P.B. Dinesh as to when andhow the theft was committed. The complaint has been filed allegingcommission of the offence punishable under Sections 380, 411 and 120BIPC. The Magistrate has taken cognizance under Sections 380, 411 and120B IPC. The offence under Section 380 IPC in the case institutedotherwise than on police report is warrant case triable by theMagistrate under Chapter XIX – Trial of warrant cases byMagistrates, XIX-B – Cases instituted otherwise than on policereport. For the offences triable under Chapter XIX – trial of warrantcases by the Magistrate, the court has to frame the charge. As perSection 212 Cr.P.C., the charge shall contain such particulars as to thetime and place of the alleged offence and the person against whom orthe thing in respect of which, the offence was committed as are reasonablysufficient to give the accused notice of the matter with which he ischarged. In the present case, the complaint lacks particulars as to timeand the place of theft or the person who has committed theft. There areno averments in the complaint alleging that how the documents had goneout of the possession of the complainant. There are only mere statementof the complainant Shri Samir Ganguly that respondents No.12 to 16have filed civil suits basing on the stolen documents and that heapprehends that all the accused persons in connivance with each othermust have procured the documents by theft. In the absence of particulars,by mere possession of the documents or mere production of thedocuments in the Company Petition or civil suits, it cannot be said thatsufficient grounds were made out to proceed against the accused or thatthe satisfaction of the Magistrate was well founded justifying issuanceof process.

59. As held in Pepsi Foods Limited, summoning the accused fora criminal offence is serious matter and the respondents are answerablein the criminal court. The non-application of mind as to the materialscannot be brushed aside as procedural irregularity. There is no indicationin the order of the Magistrate dated 08.10.2010 as to application of themind and as to the satisfaction of the Magistrate as to the sufficientground for proceeding against the respondents under Sections 380, 411and 120-B IPC.

A60. The High Court held that witness P.B. Dinesh has stated aboutalleged involvement of some of the accused and there is no fundamentalerror committed by the Magistrate in following the procedure underChapter XIX of the Criminal Procedure Code. The High Court furtherobserved that the flaw at the worst would be procedural irregularity.The order dated 08.10.2010 taking cognizance of the offence underBSections 380, 411 and 120B IPC against respondents No.1 to 16 areliable to be set aside. The Magistrate who is conducting an investigationunder Section 202 Cr.P.C. has full power in collecting the evidence andexamining the matter. We are conscious that once the Magistrate isexercised his discretion, it is not for the Sessions Court or the HighCCourt to substitute its own discretion for that of the Magistrate to examinethe case on merits. The Magistrate may not embark upon detailed enquiryor discussion of the merits/demerits of the case. But the Magistrate isrequired to consider whether prima case has been made out or notand apply the mind to the materials before satisfying himself that there

are sufficient grounds for proceeding against the accused. In the case inDhand, we do not find that the satisfaction of the Magistrate for issuanceof summons is well founded.

61. The object of investigation under Section 202 Cr.P.C. is “forthe purpose of deciding whether or not there is sufficient groundfor proceeding”. The enquiry under Section 202 Cr.P.C. is to ascertainEthe fact whether the complaint has any valid foundation calling for issuanceof process to the person complained against or whether it is baselessone on which no action need be taken. The law imposes seriousresponsibility on the Magistrate to decide if there is sufficient ground forproceeding against the accused. The issuance of process should not beFmechanical nor should be made as an instrument of harassment to theaccused. As discussed earlier, issuance of process to the accused callingupon them to appear in the criminal case is serious matter and lack ofmaterial particulars and non-application of mind as to the materials cannotbe brushed aside on the ground that it is only procedural irregularity.In the present case, the satisfaction of the Magistrate in ordering issuanceGof process to the respondents is not well founded and the order summoningthe accused cannot be sustained. The impugned order of the High Courtholding that there was compliance of the procedure under Section 202Cr.P.C. cannot be sustained and is liable to be set aside.

Production of copies of documents in the CompanyPetition – whether would amount to theft:

62. So far as documents No.1 to 28 filed in the company petition,the High Court held that since originals of documents No.1 to 28 arestill in the custody of the appellant Company-complainant, temporaryremoval of those documents and the subject of alleged removal was“the information” contained in those documents, the same cannot beconsidered to be “movable property”. The High Court took the viewthat such temporary removal of documents and use of information cannotbe the subject of the offence of theft or dishonest misappropriation ofproperty as well as dishonest receiving of the stolen property.

63. Insofar as documents No.1 to 28 are concerned, the pointfalling for consideration is whether the temporary removal of thedocuments and filing of photocopies and use of the information/contentsof the documents can be the subject matter of theft.

64. Contention of the appellant is that the very act of moving thedocuments out of the possession of the appellant-Company would amountto theft. It was submitted that the loss need not be caused by permanentdeprivation of the property; but loss due to theft may be caused even bytemporary moving of the property. In support of this contention, the learnedsenior counsel for the appellants placed much reliance upon Pyare LalBhargava v. State of Rajasthan AIR 1963 SC 1094. In the said case,wherein the appellant-Pyare Lal Bhargava, superintendent in the ChiefEngineer’s Office, at the instance of one Ram Kumar Ram got filefrom the Secretariat through clerk and took the file to his house, madeit available to said Ram Kumar Ram who replaced the same documentsin the file with other papers and thereafter, returned the file the next day.In the said case, the arguments was advanced contending that appellant/accused Pyare Lal Bhargava was one of the officers working in thedepartment and the facts do not constitute the offence of theft for thereason that there was no intention to take it dishonestly as he had takenit only for the purpose of showing the documents to Ram Kumar Ramand returned it on the next day to the office and therefore, he had nottaken the said file out of the possession of any person. Rejecting the saidcontention, the Supreme Court held that “………To commit theft, oneneed not take movable property permanently out of the possessionof another with the intention not to return it to him. It would satisfy

Athe definition if he took any movable property out of the possessionof another person though he intended to return it later on……..”.In the light of the ratio laid down in Pyare Lal Bhargava, temporaryremoval of original documents for the purpose of replicating theinformation contained in them in some other medium would thus fulfillthe requirement of “moving” of property which is the actus reus of theBoffence of theft as defined under Section 378 IPC.

65. In Pyare Lal Bhargava, yet another contention raised wasthat the accused did not intend to take it dishonestly as he did not receiveany “wrongful gain” or caused any “wrongful loss” to any other person.Rejecting the said contention, in Pyare Lal Bhargava, the SupremeCCourt held as under:-

“8. ………. To commit theft one need not take movable propertypermanently out of the possession of another with the intentionnot to return it to him. It would satisfy the definition if he took anymovable property out of the possession of another person thoughDhe intended to return it later on. We cannot also agree with learnedCounsel that there is no wrongful loss in the present case. Wrongfulloss is loss by unlawful means of property to which the personlosing it is legally entitled. It cannot be disputed that the appellantunauthorizedly took the file from the office and handed it over toERam Kumar Ram. He had, therefore, unlawfully taken the filefrom the department, and for short time he deprived theEngineering Department of the possession of the said file. Theloss need not be caused by permanent deprivation of propertybut may be caused even by temporary dispossession, though theperson taking it intended to restore it sooner or later. temporaryFperiod of deprivation or dispossession of the property of anothercauses loss to the other………...”

66. One of the foremost components of theft is that the subjectmatter of the theft needs to be “moveable property”. “Moveableproperty” is defined in Section 22 IPC which includes corporealGproperty of every description. It is beyond doubt that document is a“moveable property” within the meaning of Section 22 IPC which canbe the subject matter of theft. “document” is “corporeal property”.A thing is “corporeal” if it has body, material and physical presence.As per Section 29 IPC, “Document” denotes “any matter expressedHor described upon any substance by means of letters, figures or

marks or by more than one of those means, intended to be used, orwhich may be used as evidence of that matter”. The first Explanationto Section 29 IPC provides that it is immaterial by what means or uponwhat substance these are formed. This definition would include withinits ambit photocopy of document. As per Explanation No.2 of Section29 IPC, letters, figures or marks shall be deemed to be expressed bysuch letters, figures or marks within the meaning of the Section. Suchletters, figures or marks thus have material and physical presence.Therefore, it can also be inferred that the said information would bedeemed to fall within the purview of “Document” – corporeal property.

67. Information contained in document, if replicated, can be thesubject of theft and can result in wrongful loss, even though the originaldocument was only temporarily removed from its lawful custody for thepurpose of extracting the information contained therein. In the case ofK.N. Mehra vs. State of Rajasthan AIR 1957 SC 369, this Court heldthat gain or loss contemplated need not be total acquisition or totaldeprivation but it is enough if it is temporary retention of property bythe person wrongfully gaining or temporary keeping out of propertyfrom person legally entitled.68. The High Court, in our view, was not right in holding that thereplication of the documents or use of information in the documentsNo.1 to 28 and the contents thereon are not corporeal property andwould not amount to theft qua documents No.1 to 28. The documentsand the replication of the documents and the contents thereon havephysical presence and therefore, are certainly “corporeal property”and the same can be the subject matter of theft.

69. The main question falling for consideration is whether in thefacts and circumstances of the case in hand whether temporary removalof the documents and using them in the litigations pending between theparties would amount to theft warranting lodging of criminal complaint.

70. Admittedly, documents No.1 to 54 including the DocumentNo.1-Internal Audit Report of Chanderia unit of the appellant Companyhas been filed by the respondents in the company petition. Thesedocuments are intra-company correspondence, internal audit reports,agreements, etc. in relation to the operations of the appellant Company.Admittedly, these documents have been produced in the company petitionby the shareholders of the appellant-Company to substantiate their caseof oppression and mismanagement by respondent No.17 and for

Avindication of their rights. As discussed infra in the facts andcircumstances of the case in hand, in our view taking away of thedocuments temporarily and using them in the pending litigations betweenthe parties would not amount to theft.

71. In the criminal complaint, by order dated 08.10.2010, theBMagistrate has taken the cognizance of the offence under Section 380IPC - “Theft in dwelling house, etc.”. In order to constitute theft, thefollowing ingredients are essential:-

i.Dishonest intention to take property;

ii.The property must be moveable;

iii.It should be taken out of the possession of another person;

iv.It should be taken without the consent of that person;

v.There must be some removal of the property in order toaccomplish the taking of it.D

72. Intention is the gist of the offence. It is the intention of thetaker which must determine whether taking or moving of thing is theft.The intention to take “dishonestly” exists when the taker intends tocause wrongful loss to any other which amounts to theft. It is an essentialingredient of the offence of “theft” that the movable property shouldEhave been “moved” out of the possession of any person without hisconsent. “Movable property” is defined in Section 22 of IPC, whichreads as under:-

“Movable property – The words “movable property” areintended to include corporeal property of every description, exceptFland and things attached to the earth or permanently fastened toanything which is attached to the earth.”

“Dishonestly” has been defined in Section 24 IPC, which reads as under:-

“Dishonestly - Whoever does anything with the intention ofcausing wrongful gain to one person or wrongful loss to anotherGperson, is said to do that thing “dishonestly”.

“Wrongful gain” and “Wrongful loss” have been defined in Section 23IPC which read as under:-

“Wrongful gain” - “Wrongful gain” is gain by unlawful meansof property to which the person gaining is not legally entitled.H

“Wrongful loss” - “Wrongful loss” is the loss by unlawful meansof property to which the person losing it is legally entitled.

Gaining wrongfully, losing wrongfully - person is said togain wrongfully when such person retains wrongfully, as well aswhen such person acquires wrongfully. person is said to losewrong-fully when such person is wrongfully kept out of anyproperty, as well as when such person is wrongfully deprived ofproperty.”

73. In the facts and circumstances of the case, it is to be seen inusing the documents in the litigation, whether there is “dishonestintention” on the part of the respondents in causing “wrongful loss” tothe appellant Company and getting “wrongful gain” for themselves.Respondents No.1 to 5 are the shareholders of the appellant-Companyand they have produced the photocopies of the documents No.1 to 54 inthe CLB proceedings which were filed by them on the ground ofoppression and mismanagement. Merely because the respondents haveproduced the copies of the documents in the CLB proceedings, it cannotbe said that the respondents have removed the documents with“dishonest” intention. Copies of documents are produced in support ofthe case of respondents No.1 to 5 and to enable the Court to arrive atthe truth in judicial proceeding involving alleged oppression andmismanagement in the affairs of the appellant Company by respondentNo.17. person can be said to have “dishonest intention” if in takingthe property it is the intention to wrongful gain by unlawful means or tocause wrongful loss by unlawful means. As discussed earlier, thecomplaint does not allege that there was any wrongful gain to therespondents or wrongful loss to the appellant-Company so as to constituteingredients of theft under Section 378 IPC. The complaint only allegesthat the copies of the document were used in the CLB proceedings byrespondents No.1 to 5. There is no allegation of “wrongful gain” to therespondents or “wrongful loss” to the appellant.

74. As pointed out earlier, documents No.1 to 54 are filed in theCompany Petition to substantiate their case of oppression andmismanagement. Filing of documents in the CLB proceedings is only toassert their claim of oppression and mismanagement of the appellantCompany. According to the respondents, there is bona fide dispute ofoppression and mismanagement and the documents No.1 to 54 are filedonly to substantiate their case. When bona fide dispute exists between

Athe parties as to whether there is oppression and mismanagement, thereis no question of “wrongful gain” to the respondents or “wrongfulloss” to the appellant. In using the documents, when there is no dishonestintention to cause “wrongful loss” to the complainant and “wrongfulgain” to the respondents, it cannot be said that the ingredients of theftare made out.B

75. As discussed earlier, respondents No.12 to 16 have filed fivecivil suits challenging the cancellation of the trusts for recovery of theproperty that had vested in public charity through the trust deeds.Respondents No.12 to 16 have filed copy of document No.1-InternalAudit Report of Chanderia Unit of the appellant Company. By the time,Cthe document was filed in the interlocutory applications filed in the civilsuits, the document was already filed in CP No.1/2010. Here again,there is bona fide dispute as to the correctness of cancellation of therevocation of the trusts deed and to substantiate the averments in thecomplaint and in the interlocutory applications. It cannot be said that theDrespondents No.1 to 16 had dishonest intention in using the documentsso as to cause “wrongful loss” to the appellant or “wrongful gain” tothemselves so as to attract the ingredients of theft under Section 378IPC.76. How the respondents had access to the documents may beEone thing. It may perhaps have bearing on the evidentiary value to beattached to the documents. But to say that it amounts to theft and seekingto prosecute the respondents is nothing but an attempt to cow downtheir defence in the litigation or to deprive the respondents of their valuabledefence. In Pooran Mal v. Director of Inspection (Investigation),New Delhi and Others (1974) 1 SCC 345, it has been held by theFConstitution Bench that even in case of illegal search and seizure, thedocuments obtained cannot be shut out from consideration as long asthey are relevant to the matters in issue. In the present case, thedocuments are used in good faith in the legal proceedings i.e. CompanyPetition filed by respondents No.1 to 5 alleging oppression andGmismanagement and the other suits are the civil suits challenging thecancellation of the Trusts. These cases are pending and both the partiesare hotly contesting those cases. Use of the documents in judicialproceeding by the respondents is to substantiate the case of oppressionand mismanagement of the appellant-Company. Absolutely, no “dishonestintention” or “wrongful gain” could be attributed to the respondents.H

Likewise, there is no “wrongful loss” to the appellants so as to attractthe ingredients of Sections 378 and 380 IPC.

77. The intention under Section 24 IPC “dishonestly” must be tocause “wrongful loss” to the other or to have “wrongful gain” foroneself. In determining whether person has acted dishonestly or not, itis the intention which has to be seen. By filing the documents in the legalproceedings, there is no intention on the part of the respondents to cause“wrongful loss” to the appellant nor intention to make “wrongful gain”to themselves. Filing of the documents in the legal proceedings is only tovindicate their stand in the company petition. We find much force in thesubmission of the learned senior counsel, Mr. Sibal, appearing forrespondents No.1 to 5 that the attempt of the appellant in trying toprosecute the respondents appears to arm-twist the respondents in anattempt to shut out the relevant material documents before the CLBproceedings by prosecuting respondents No.1 to 9 and in the civil suits.

78. Whether respondents should have called for thedocuments in accordance with various provisions:- Contention onbehalf of the appellant is that despite there being adequate provisionsunder Section 10-E of Companies Act and Section 91 Cr.P.C. relating tosummoning of documents and of discovery, interrogatories and inspectionof documents under Order XI CPC, the respondents resorted to dubiousmethods to procure the documents and thus, cannot skirt the liability fortheir actions by contending that since the documents were used for alegal proceeding, it cannot be theft.

79. Undoubtedly, adequate provisions have been provided in allthe laws concerned with the instant case to enable party to suit orthe concerned court to require the production of all documents andmaterials considered necessary or desirable for proper adjudication ofthe dispute at hand. If document in possession is not produced afternotice, there is further presumption under Section 114 illus.(g) that theevidence if produced would have been unfavourable to the opposite party.

80. The respondents herein are alleged to have used the documentsof appellant-Corporation without calling upon them to produce thedocuments in accordance with law. Of course, the litigants and theircounsel are expected to comply with the provisions of law and courtdiscovery rules in producing the documents. But merely because therespondents have not called for the documents as per the provisions, it

Acannot be said that they have committed “theft”. It may be that therespondents have not issued notice calling upon the appellant-Corporationto produce the documents or may not have taken steps in accordancewith various provisions of law calling upon them to produce documents.This may probably be the point to be raised in appropriate proceedingsso as to advance arguments as to the evidentiary value to be attached toBthe documents. But it would be far-fetched to say that the respondentshave dishonestly removed the documents and committed the offence oftheft and that they are to face criminal prosecution for theft of thedocuments. It would only be an arm-twisting tactics to deprive therespondents from pursuing their defence with relevant evidence andCmaterials. Since we have held that there are no sufficient ground forproceeding against the respondents and that the order of issuance ofsummons itself is not sustainable, we are not inclined to go further deepon this aspect; nor express our views as to the evidentiary value to beattached to the documents in the relevant proceedings. Lest, it wouldamount to expressing our views in the pending proceedings between theDparties.

81. Whether the criminal prosecution against therespondents be permitted to continue:- As discussed earlier,admittedly the parties are entangled in several litigations. Allegations oftheft and misappropriation are relating to the documents No.1 to 28 andEthe documents No.1 to 54 which are filed in the company petition andfiling of Internal Audit Report in the civil suits. As discussed earlier,there are no specific allegations as to when, where and how therespondents have committed theft; nor are there specific allegationsagainst the respondents accused. Allegations in the complaint, being taken

Fat their face value, do not disclose prima-facie case nor the ingredientsof the offence of house theft or misappropriation are made out.

82. Exercise of power under Section 482 Cr.P.C. envisages threecircumstances in which the inherent jurisdiction may be exercisednamely:- (i) to give effect to an order under the Code; (ii) to preventGabuse of the process of court; and (iii) to otherwise secure the ends ofjustice. Inherent jurisdiction under Section 482 Cr.P.C. though wide hasto be exercised sparingly, carefully and with caution.

83. It is well settled that the inherent jurisdiction under Section482 Cr.P.C. is designed to achieve salutary purpose and that the criminalHproceedings ought not to be permitted to degenerate into weapon of

harassment. When the Court is satisfied that the criminal proceedingsamount to an abuse of process of law or that it amounts to bringingpressure upon the accused, in exercise of the inherent powers, suchproceedings can be quashed. In Smt. Nagawwa v. VeerannaShivalingappa Konjalgi and Others (1976) 3 SCC 736, the SupremeCourt reviewed the earlier decisions and summarised the principles asto when the issue of process can be quashed and held as under:-

“5. ………….. Once the Magistrate has exercised his discretionit is not for the High Court, or even this Court, to substitute itsown discretion for that of the Magistrate or to examine the caseon merits with view to find out whether or not the allegations inthe complaint, if proved, would ultimately end in conviction of theaccused. These considerations, in our opinion, are totally foreignto the scope and ambit of an inquiry under Section 202 of theCode of Criminal Procedure which culminates into an order underSection 204 of the Code. Thus it may be safely held that in thefollowing cases an order of the Magistrate issuing process againstthe accused can be quashed or set aside:

(1) where the allegations made in the complaint or thestatements of the witnesses recorded in support of the sametaken at their face value make out absolutely no case againstthe accused or the complaint does not disclose the essentialingredients of an offence which is alleged against the accused;

(2) where the allegations made in the complaint are patentlyabsurd and inherently improbable so that no prudent personcan ever reach conclusion that there is sufficient ground forproceeding against the accused;

(3) where the discretion exercised by the Magistrate in issuingprocess is capricious and arbitrary having been based eitheron no evidence or on materials which are wholly irrelevant orinadmissible; and

(4) where the complaint suffers from fundamental legaldefects, such as, want of sanction, or absence of complaintby legally competent authority and the like.

The cases mentioned by us are purely illustrative and providesufficient guidelines to indicate contingencies where the High Courtcan quash proceedings.”

A84. In State of Haryana and Others v. Bhajan Lal and Others1992 Supp (1) SCC 335, the Supreme Court considered the scope ofinherent powers of the Court and after referring to earlier decisions, theSupreme Court enumerated categories of cases by way of illustrationwhere the extraordinary jurisdiction under Article 226 of the Constitutionof India can be exercised by the High Court to prevent abuse of processBof Court or otherwise to secure ends of justice. It was held that “wherethe uncontroverted allegations made in the FIR or complaint andthe evidence collected in support of the same do not disclose thecommission of any offence and make out case against theaccused.”C

85. In the present case, it is one thing to say that the documentshave not been secured in accordance with the law and no value could beattached to them. But merely because documents have been producedfrom one source or other, it cannot be said that documents have beendishonestly removed to obtain “wrongful gain” to the respondents andDcause “wrongful loss” to the appellant. Where it appears that the criminalcomplaint has been filed to bring pressure upon the respondents who areshown as accused in the criminal case, the complaint is to be quashed.

86. In Indian Oil Corpn. v. NEPC India Ltd. and Others (2006)6 SCC 736, the Supreme Court after observing that there is growingEtendency in business circles to convert powerful civil disputes in criminalcases held as under:-

“14. While no one with legitimate cause or grievance should beprevented from seeking remedies available in criminal law, acomplainant who initiates or persists with prosecution, beingFfully aware that the criminal proceedings are unwarranted andhis remedy lies only in civil law, should himself be madeaccountable, at the end of such misconceived criminal proceedings,in accordance with law. One positive step that can be taken bythe courts, to curb unnecessary prosecutions and harassment ofinnocent parties, is to exercise their power under Section 250 CrPCGmore frequently, where they discern malice or frivolousness orulterior motives on the part of the complainant. Be that as it may.”

87. In Madhavrao Jiwajirao Scindia and Others v.Sambhajirao Chandrojirao Angre and Others (1988) 1 SCC 692, itwas held that “when prosecution at the initial stage is asked to be

quashed, the test to be applied by the court is as to whether theuncontroverted allegations as made prima-facie establish theoffence.” It was further held that “while considering the matter, thecourt is to take into consideration any special feature which appearin particular case showing whether or not it is expedient in theinterest of justice to permit prosecution to continue.”

88. The FIR or the criminal proceedings can be quashed if theallegations do not make out prima-facie case or allegations are soimprobable that no prudent person would ever reach just conclusionthat there are sufficient grounds for proceeding against the accused. Sofar as, the allegation of retention of the documents No.29 to 54, in ourview, no allegation as to when and how the original documents wereremoved and retained by the respondents. Where on the admitted factsno prima-case case is made out against the accused for proceeding orwhen the Supreme Court is satisfied that the criminal proceedings amountto abuse of process of court, Supreme Court has the power to quash anyjudicial proceedings in exercise of its power under Article 136 of theConstitution of India. In our view, the present case is fit case forexercising the power in quashing the criminal complaint qua the documentsNo.29 to 54 also.

89. We summarise our conclusions as under:-

By the order of the Magistrate dated 08.10.2010, cognizancewas taken against respondents No.1 to 16 for commission ofthe offences under Sections 380, 411 and 120B IPC. Thereare no averments in the complaint nor are there allegations inthe statement of the complainant or the witness P.B. Dineshas to when and how the theft was committed and the order ofthe Magistrate dated 08.10.2010 taking cognizance of thecriminal case against respondents No.1 to 16 qua documentsNo.1 to 54 is liable to be set aside.

It is held that the “document” as defined in Section 29 IPC isa “moveable property” within the meaning of Section 22 IPCwhich can be the subject matter of theft. The informationcontained thereon in the documents would also fall within thepurview of the “corporeal property” and can be the subjectmatter of the theft. The findings of the High Court is modifiedto that extent.

AIn the facts and circumstances of the present case, use ofdocuments No.1 to 28 and documents No.29 to 54 by therespondents in judicial proceedings is to substantiate their casenamely, “oppression and mismanagement” of theadministration of appellant-Company and their plea in otherpending proceedings and such use of the documents in theBlitigations pending between the parties would not amount totheft. No “dishonest intention” or “wrongful gain” couldbe attributed to the respondents and there is no “wrongfulloss” to the appellant so as to attract the ingredients of Sections378 and 380 IPC.

Considering the facts and circumstances of the present caseand the number of litigations pending between the parties, inour considered view, continuation of the criminal proceedingswould be an abuse of the process of the court. The order ofthe Magistrate dated 08.10.2010 taking cognizance of theDoffences and the issuance of summons to respondents No.1 to16 and the criminal proceedings thereon are liable to be quashed.

90. In the result, the impugned judgment of the High Court dated15.05.2015 qua Documents No.29 to 54 is set aside and the appealsarising out of SLP(Crl.) D.Nos.6405 and 6122 of 2019 preferred by theErespondents are allowed. The appeal arising out of SLP(Crl.) No.9053of 2016 preferred by the appellants qua Documents No.1 to 28 isdismissed.

Ankit Gyan

Appeals disposed of.