C482/797/2008 of SUDHIR KUMAR SINGH and OTHERS Vs STATE and ANOTHER

IN THE HIGH COURT OF UTTARAKHAND ATNAINITAL

Criminal Misc. Application No. 797 of 2008(Under Section 482 of Cr.P.C.)

Sudhir Kumar Singh and others

….…… Applicants

versus

State of Uttarkahand and another

……. Respondents

Mr.R.P.Nautiyal, Senior Advocate, assisted by Mr. Prashant Khanna, Advocate, present for the applicants. Mr. P.S.Soun, learned AGA, present for the State/respondent no. 1. Mr. Rajeev Sharma, Advocate, present for the respondent no. 2.

U.C. Dhyani, J. (Oral)

The applicants, by means of the present application under Section 482 Cr.P.C., seek to quash the charge sheet dated 12.08.2008 as well as the proceedings of criminal case no. 4051 of 2008, captioned as State vs. Sudhir Kumar Singh and others, relating to offences punishable under Sections 420 and 406 IPC, pending in the Court of Chief Judicial Magistrate, Dehradun.

first information report was lodged by the respondent no. 2 Bharat Bhushan Gupta against the accused-applicants Sudhir Kumar, Bipin Kumar and Sonu Rawat on 10.04.2008 in PS Kotwali Nagar, Dehradun for the offences punishable under Sections 420 and 406 IPC. The grievance of the respondent no. 2 was that Anand Rathi

Securities Private Limited blocked the limit of account of respondent no. 2 on 21.01.2008, and therefore, he could not proceed online share trading and on account of this, respondent no. 2 could not compensate his loss in share trading on account of falling down of the share market. The contents of the first information report were read over by the learned counsel for the applicants in the court. After the investigation, charge sheet against the accused-applicants in respect of offences punishable under Sections 420 and 406 IPC was submitted. Cognizance on the said charge sheet was taken by the learned Magistrate. Aggrieved against the said order, present application under Section 482 Cr.P.C. was moved.

3.Learned counsel for the applicant submitted that even on bare reading of the first information report, no ingredient of offence punishable under Section 420 or 406 IPC were made out. Learned counsel further submitted that there was no element of ‘entrustment’, ‘dominion of property’ or ‘deception’, even if the contents of the first information report be considered to be true. Learned counsel further pointed out that nothing was entrusted to the applicants. The dispute of respondent no.2 was with Anand Rathi Securities Private Limited, who filed complaint under Section 138 of the Negotiable Instruments Act against respondent no. 2, which is pending adjudication. The police investigated the case only for namesake. Statement of the complainant only was taken by the investigating officer. Only on the basis of the statement under Section 161 Cr.P.C. of the complainant Bharat Bhushan and other

constables, charge sheet was filed against the accused applicants. In fact, no case was made out against them.

4.Learned counsel for the respondent no. 2, on the other hand, submitted that no agreement or contract was filed by the applicants to show that the company was entitled to sell the shares of respondent no. 2, whose shares were sold by the Anand Rathi Securities Private Limited without his (Bharat Bhushan’s) consent. Learned counsel for the respondent no. 2 further submitted that the monetary loss was caused to the complainant/respondent no. 2 by the action of Anand Rathi Securities Private Limited, who violated SEBI guidelines. hand, submitted that no agreement or contract was filed by the applicants to show that the company was entitled to sell the shares of respondent no. 2, whose shares were sold by the Anand Rathi Securities Private Limited without his (Bharat Bhushan’s) consent. Learned counsel for the respondent no. 2 further submitted that the monetary loss was caused to the complainant/respondent no. 2 by the action of Anand Rathi Securities Private Limited, who violated SEBI guidelines.5.A look at the ingredients of the first information report will reveal that the applicants were the employees of Anand Rathi Securities Private Limited. The loss or damage, if any, was caused to the complainant by the Anand Rathi Securities Private Limited as per the allegations. The concept of vicarious liability is foreign to criminal law. reveal that the applicants were the employees of Anand Rathi Securities Private Limited. The loss or damage, if any, was caused to the complainant by the Anand Rathi Securities Private Limited as per the allegations. The concept of vicarious liability is foreign to criminal law.

The whole controversy was set at rest by the Hon’ble Apex Court in M/s GHCL, Employees Stock Option Trust v. M/s India Infoline Limited, Supreme To-Day Part 55-56-2013 (3) 152, which relied upon the ruling of M/s Thermax Ltd. & others v. K.M.Johny & others, 2011 (11) SCALE 128, in which, Hon’ble Apex Court held as under :Court in M/s GHCL, Employees Stock Option Trust v. M/s India Infoline Limited, Supreme To-Day Part 55-56-2013 (3) 152, which relied upon the ruling of M/s Thermax Ltd. & others v. K.M.Johny & others, 2011 (11) SCALE 128, in which, Hon’ble Apex Court held as under :

“20. Though Respondent no. 1 has roped all the appellants in criminal case without their specific role or participation in the alleged offence with the sole purpose of settling his dispute with appellant-Company by initiating the criminal prosecution, it is pointed out that appellants in criminal case without their specific role or participation in the alleged offence with the sole purpose of settling his dispute with appellant-Company by initiating the criminal prosecution, it is pointed out that

appellant Nos. 2 to 8 are the Ex-Chairperson, Ex-Directors and Senior Managerial Personnel of appellant No. 1-Company, who do not have any personal role in the allegations and claims of respondent No. 1. There is also no specific allegation with regard to their role.

21. Apart from the fact that the complaint lacks necessary ingredients of Sections 405, 406, 420 read with Section 34 IPC, it is to be noted that the concept of ‘vicarious liability’ is unknown to criminal law. As observed earlier, there is no specific allegation made against any person but the members of the Board and senior executives are joined as the persons looking after the management and business of the appellant-Company.

22……………………..

23. In the instant case the High Court has correctly noted that issuance of summons against respondent Nos. 2 to 7 is illegal and amounts to abuse of the process of law. The order of the High Court, therefore, needs no interference by this Court.”

7.The facts of this case were almost identical to the facts of the instant case. The issue is therefore, resolved in favour of the applicants, like it was resolved in favour of the appellants by the Hon’ble Apex Court.

8.The issuance of summons to the applicant, therefore, amounts to abuse of process of law. It is under this situation the Court is required to interfere exercising it’s jurisdiction under Section 482 Cr.P.C., as has been provided by Hon’ble Apex Court in Nikhil Merchant vs. C.B.I. and another, 2008 AIR 7501, B.S.Joshi’s case (2003(4) SCC 675), Gian Singh v. State of Punjab and another (2013) 1 SCC (Cri) 160 and Amit Kapoor vs. Ramesh Chander and another, (2013) 1 Supreme Court

Cases (Cri) 986. The application under Section 482 Cr.P.C. therefore, merits success. Accordingly the same is allowed. The charge sheet dated 12.08.2008 as well as the proceedings of criminal case no. 4051 of 2008, captioned as State vs. Sudhir Kumar Singh and others, relating to offences punishable under Sections 420 and 406 IPC, pending in the Court of Chief Judicial Magistrate, Dehradun are hereby quashed.

Dt. 10.06.2013 Kaushal

(U.C. Dhyani, J.)