PETITIONER:
AMAR CHAND AGARWALLA
Vs.
RESPONDENT:
SHANTI BOSE AND ANOTHER ETC.
DATE OF JUDGMENT22/12/1972
BENCH:
VAIDYIALINGAM, C.A.
BENCH:
VAIDYIALINGAM, C.A.
ALAGIRISWAMI, A.
DUA, I.D.
CITATION:
1973 AIR 799 1973 SCR (3) 179
1973 SCC (4) 10
CITATOR INFO :
R 1973 SC1274 (17)
E 1973 SC2145 (8)
E&R 1978 SC 1 (15)
R 1979 SC 663 (9)
R 1986 SC1721 (9)
ACT:
Code of Criminal Procedure (Act 5 of 1898), ss. 439 and
561APower of High Court to quash charges and proceedings-
Scope of.
HEADNOTE:
As a result of a judicial enquiry in relation to a complaint
by the appellant against the four respondents, summons were
issued to the respondents, and before the Magistrate,
evidence, oral and documentary, was adduced by the
complainant (appellant) in the presence of the accused
(respondents). On a consideration of those materials, the
Magistrate framed charges against I all the four accused
under ss. 120 B/409 1. P.C. and under s. 409, against
accused 1 to 3, in September 1968. Thereafter, the trial
proceeded, a large volume of oral and documentary evidence
was let in, and all that remained was the examination of two
prosecution witnesses and a court-witness before closing the
trial. All the prosecution witnesses, examined till then
were also cross-examined by the respondents. At that stage,
in March 1969, the 4th accused moved the High Court for
quashing the proceedings and the other accused followed with
similar petitions.
The High Court, in spite of the complainant representing
that the trial had almost come to a close quashed the
charges and proceedings on the grounds that, the complainant
had suppressed material facts, that the two prosecution
witnesses should not be allowed to be examined ‘in the
circumstances of the case’, that the’ examination of the
court witness was not necessary as it would only prejudice
the accused and under the effect of cross-examination, and
that the evidence on record ruled out any offence of breach
of trust or a conspiracy to commit it.
Allowing the appeal to this Court,
HELD : The High Court was in error
(a) It is not as if the accused had moved the High Court at
the earliest stage when summons was issued to them. Nor had
they ,approached the High Court when charges were framed
against them. If the case of the accused was that the
allegations try the complaint did not constitute the
offences complained of or that the complainant was to be
quashed on any other ground available in law, the accused
should have approached the High Court at least when the
charges were framed. [186DE]
(b) Assuming there was a suppression of material facts by
the complainant that was a matter to be considered by the
trial Court. Similarly, whether the evidence on record
established that an offence of breach of trust or a
conspiracy to commit it, had been committed, Is again a
matter for the trial court to come to a conclusion after, an
appraisal of the entire evidence let in by the prosecution
and the defence. The High Court was not justified, at that
stage, to have embarked upon an appreciation of the
evidence. [187AC]
(c) The accused never challenged the order of the trial
court regarding the examination of prosecution witnesses or
the court-witness, and
180
the High Court was not justified in holding that they should
not be examined, and hence, the order regarding their
examination should stand.
Jamatraj Kewalji Govani v. The State of Maharashtra, [1963]
3 S.C.R. 415, referred to.
(d) If the High Court had passed the order quashing the
charges and proceedings in exercise of its inherent
jurisdiction under s.561A, Cr. P.C. then the exercise of the
power by the High Court was not justified, because, the
present case does not come within the ambit of the
principles laid down by this Court, in R. K. Kapur v. The
State of Punjab, [1960] 3 S.C.R. 388. [188 A-C]
(e) Even assuming that the High Court was exercising
jurisdiction under s. 439, Cr. P.C., the present was not a.
case for interference by the High Court. The jurisdiction
of the High Court is to be exercised nearly, under the
section, only in exceptional cases when there is a glaring
defect in the procedure or there is a manifest error on a
point of law and consequently a flagrant miscarriage of
justice. [188D]
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 101 to
103 of 1970.
Appeals by special leave from the judgment and order dated
October 10, 1969 of the Calcutta High Court in Criminal
Revision Nos. 238, 289 and 290 of 1969.
D. Mukherjee and S. Ghosh for the appellants (in all the
appeals).
A. N. Mulla, J. M. Khanna, Vishnu Bahadur Saharaya and
Yogindra Khushalani for the respondents, (in Cr. A. Nos.
101 & 103/70).
R. A. Gupta for respondent (in Cr. A. No. 102/70).
S. C. Mazumdar for the State (in all the appeals).
The Judgment of the Court was delivered by
VAIDIYALIGAM, J. These three appeals by the complaint, by
special leave, are against the common judgment and order
dated August 10, 1969, of the Calcutta High Court in
Criminal Revisions Nos. 238, 289 and 290 of 1969, setting
aside the charge under section 120B read with section 409
I.P.C. framed against all the four accused and the charge
under section 409 IPC framed against accused Nos 1 to 3. The
High Court by the same judgment, quashed the proceedings
based upon the said charges, which were pending before the
Presidency Magistrate, 7th Court, Calcutta in case No.
C/3443 of 1967.
The appellant in all these three appeals, Amar Chand Agar-
walla, filed a complaint before the Chief Presidency
Magistrate, Calcutta, on November 21, 1967, on the basis of
which the four
181
accused persons, namely, Paramanada Agarwalla, Madan Mohan
Gour, Jhumermal Agarwala and Shanti Bose, were required to
answer charges under section 120B/409 and 409 IPC. These
persons will be referred to as accused Nos. 1, 2, 3 and 4
respectively. The case was later on transferred to the
Presidency Magistrate, 7th Court, Calcuttta, for disposal.
The 7th Presidency Magistrate, after recording the evidence
of ten prosecution witnesses, framed a charge on September
7, 1968, under section 120B/409 against all the four accused
and a charge under section 409 IPC against accused Nos. 1 to
3. The allegations in the complaint were briefly as follows
The complainant was a partner of M/s. Kalinga Bakery Bis-
cuit Confectionery and Mineral Water Company of Rourkela in
Orissa and was granted actual users’ import licence on
November 18, 1966, by the Joint ‘Chief Controller of imports
and Exports, Calcutta, for import of skimmed milk powder and
other commodities upto the value of Rs. 60,000/-. This
commodity was for the purpose of being used in the
licensee’s factory. The complainant appointed M/s. Arun
Importer (P) Ltd., owned, managed and controlled by accused
Nos. 1 to 3, as his agents to import 52.5 bags of milk
powder from New Zealand. The first accused wrote a letter
dated July 25, 1967, informing the complainant that the
goods had already been shipped and that they would be
arriving very shortly. Accused Nos. 1 to 3 also offered to
assist the complainant with a loan of Rs. 25,000/- to enable
him to clear the shipping documents from the Bank. The 4th
accused was introduced by the other accused as a Customs
Clearing Agent and on their suggestion, the, complainant
appointed him as his clearing agent. After clearing the
shipping documents with the assistance of the loan provided
by the accused, the complainant, however, was not informed
about the actual arrival of the ship. The complainant
addressed a letter dated August 19, 1967, to accused No. 4
asking for information about the arrival of the goods. None
of the accused gave any intimation about the arrival of the
goods. However, to his surprise, the complainant read in
the newspaper a report on August 22, 1967, about the police
having recovered from the various parts of Calcutta several
bags of milk powder stated to have been imported on his
account. The complainant rushed to Calcutta and contacted
the accused but was not able to get any information.
Accused No. 4 flatly declined to even recognise the
complainant or talk to him; accused Nos. 1 to 3, however,
professed ignorance about the whole thing and hinted that
accused No. 4 might have diverted the goods to other
persons. On August 26, 1967, an application was filed
before the Chief Presidency Magistrate to direct the police
to make an investigation under section 156(3) of the
Criminal Procedure Code re-
182
garding the missing quantity of milk powder. In the said
application, however, only Shanti Bose (the present accused
No. 4) was cited as an accused, as the complainant did not
have any reason to suspect the other accused. The milk
powder seized by the police was later on directed to be
returned to the complainant by the High Court on his
furnishing security. Accused Nos. 1 to 3, coming to know
about this proceeding, instituted on September 25, 1967, a
suit against the complainant in the High Court (Suit No.
2283 of 1967) praying for a declaration that the plaintiff
was the pledge of 316 bags of milk powder of the defendant
and prayed for a decree in the sum of Rs. 26,744.87. They
also asked for various interim reliefs. The complainant,
during the pendency of the proceedings before the Chief
Presidency Magistrate, came to know that all the accused
persons had taken away on August 19, 1967, the entire
quantity of 525 bags of milk powder, which had been imported
on his account without his knowledge, consent or
instructions and that they had also mis-appropriated about
200 bags before the police could raid their premises. On an
ascertainment of these facts, the complainant withdrew his
original complaint with the permission of the court and
instituted the present complaint against all the accused.
On receipt of the complaints the Chief Presidency Magistrate
ordered a judicial enquiry to be held by the 9th Presidency
Magistrate. In the judicial enquiry held by the latter, the
complainant had brought on record various documents to
substantiate his allegations. As a result of the enquiry,
the Chief Presidency Magistrate on December 26, 1967,
summoned all the four accused persons under sections
120B/409 and 409 an transferred the case for disposal to the
7th Presidency Magistrate, The learned Magistrate, after a
consideration of the materials placed before him by the
complainant, framed on September 7, 1968 charges against all
the accused under sections 120B/409 IPC and a charge under
section 409 IPC against accused Nos. 1 to 3.
None of the accused persons moved the High Court against the
order of the Magistrate issuing process or against the order
dated 7-9-1968 framing charges against them. It is seen
from the records that a large volume of oral and documentary
evidence had already been lot in and the trial itself had
almost come to the closing stage. What remained was only to
examine two more witnesses on the side of the prosecution,
as per order dated 24-21969, and also to examine one Durga
Dutt Chowdhury as a court witness under section 540,
Criminal Procedure Code, as per order dated 7-3-1969. The
witnesses examined so far by the prosecution had also been
cross-examined, by the defence.
183
While matters stood thus, the 4th accused moved the High
Court in Criminal Revision No. 238 of 1969 for quashing the
charges and the entire proceedings that had taken place
before the Magistrate. There was also a prayer in the
alternative for stay of the criminal proceedings till the
disposal of Civil Suit No. 2283 of 1967 Accused No. 2 filed
a similar Revision No. 289 of 1969, followed by accused Nos.
1 and 3, who were the, petitioners in Criminal Revision No.
290 of 1969.
All the three Criminal Revisions were, heard together by the
High Court and have been dealt with in its common judgment.
On behalf of the accused, five contentions were urged before
the High Court for quashing the charges as well as the
entire proceedings pending before the Presidency Magistrate.
The first contention related to the maintainability of the
present proceedings by the complainant, when he himself was
an accused in a case under section 5 of the Imports and
Exports (Control) Act 1947, stated by the Central Bureau of
Investigation, Economic Offences wing, Calcutta, in B. C.
case No. 23/W/67. it was urged before the High Court that
though he had been discharged, he is, nevertheless, an
interested complainant. The High Court rejected this
contention and held that, on that account, the present
proceedings cannot be quashed.
The second contention of the accused related to the effect
of ,the order of withdrawal of the earlier complaint on the
present proceedings. It was pleaded that the dismissal of
the, first complaint operates as a bar to these proceedings.
However, this contention also was rejected by the High Court
on the ground that an order of dismissal under section 203,
Criminal Procedure Code, is no bar to the entertainment of a
second complainant on the similar facts, though such a
complaint can be entertained, only under exceptional
circumstances. The High Court ultimately held that the
present proceedings are not unwarranted of unable in view of
the first order of discharge in the circumstances of the
present case.
The third contention that was taken before the High Court by
the accused was that the factum of entrustment has not been
established by clear and cogent evidence and as such, there
cannot be any breach of trust, for less any dishonest
conversion leading to a conspiracy. The learned Judge held
that it is difficult, at that stage, on the evidence
adduced, to hold that there has not been any entrustment,
especially as the whole case depends upon on appreciation of
the entire evidence for coming to a conclusion one way or
the other. On this reasoning, this contention also was
rejected.
184
It must be noted that the third contention was an invitation
to the High Court to consider the evidence already adduced
before the Magistrate and to come to a conclusion that no
entrustment had been established. The High Court, in our
opinion, ,quite rightly, declined at that stage, to go into
that question of tact and left it to the Magistrate to
assess and appreciate the evidence and come to a conclusion
one way or the other. We are particularly referring to this
aspect because, as will be seen later, ,the High Court
adopted a different criteria when it dealt with the fifth
contention of the accused.
The fourth contention of the accused was that both the first
and the second complaints suppressed material facts,
vitiating the present proceedings. The fifth contention, as
the High Court itself observes, related to the merits,
namely, that the evidence on record does not establish the
offences with which the accused are charged. These two
contentions have found favour with the High Court. It is on
the basis of the acceptance of these contentions that the
entire proceedings have been quashed.
The fourth contention of the accused was that the
complainant had suppressed material facts, which were within
his knowledge, in the first complaint filed on August 26,
1967. Particularly, it was stressed that the complainant
had not even referred to the Civil Suit No. 2283 of 1967
instituted against him. The said complaint also does not
refer to the complainant having taken a loan of Rs. 25,000/-
from the accused. The learned Judge has accepted this
criticism as justified. It is not necessary for us to refer
to, what according to the learned Judge were, certain omis-
sions made by the complainant in his original complaint
filed on August 26, 1967. But it is enough to state that
the view of the learned Judge that even the suit instituted
against the complainant had not been referred to, is not
justified. The complaint was filed on August 26, 1967,
whereas the suit against the complainant was filed on
September 26, 1967. It is also the view of the learned
Judge that the present complaint also. does not refer to
certain matters, which were within the knowledge of the com-
plainant. We do not propose even to advert to these
matters.
According to the High Court, there has been a suppression of
some material facts in the two petitions of complaint and,
therefore, the present proceedings must be held to be bad
and repugnant effecting their maintainability. The High
Court has referred in this case to a decision of the
Calcutta High Court which, in our opinion, has no bearing.
The decision is in Sunder Das Loghani v. Farun Rustom
Iran(1). That was a case of
(1) A.I.R. 1939 Calcutta 320.
185
discharge of the accused under section 253 (2) of the
Criminal Procedure Code, as the Magistrate was of the
opinion that the complainant had deliberately suppressed
several facts and that the complaint was a thoroughly
dishonest one. in the end the High Court has held that the
Present Proceedings are bad and improper and, therefore,
they have to be quashed.
The fifth and the last contention taken on behalf of the
accused relates, as the High Court itself states, to the
merits of the case and is based Upon the evidence on record,
both oral and documentary. After a consideration of certain
items of evidence, the learned Judge has held that the
evidence on record rules out any offence of breach of trust.
or a conspiracy to commit the same, by the accused persons
and, therefore, the present croceedings are not maintainable
and have to be quashed.
A representation appears to have been made on behalf of the
complainant that a large volume of evidence, oral and
documentary, has already been adduced and the trial has gone
on for a long time and that only two more prosecution
witnesses and a court witness remain to be examined. On
this basis it was pressed before the High Court by the
complainant that the High Court should allow the proceedings
to go on and to come to its logical conclusion and that the.
High Court should not interfere at that stage. The learned
Judge, however, considered this representation and held that
the two remaining prosecution witnesses should not be
allowed to be examined ‘in the facts and circumstances of
the case, as they cannot possibly have any material effect
on the merits of the case. The High Court further held that
even the proposed examination of the court witness is not
necessary, as it will only prejudice the accused and undo
the effect of their cross-examination. On this basis, the
representation made on behalf of the complainant was
rejected.
On behalf of the appellant, Mr. D. Mookerjee very
strenuously attacked the reasoning of the High Court for
quashing the charges framed against the accused and the
entire proceedings that head taken place before the
Presidency Magistrate. On the other hand, Mr. A. N. Mulla,
learned counsel on behalf of the accused, urged that the
High Court was justified, in the circumstances, in quashing
the charges well as the entire proceedings so far taken
place before the Presidency Magistrate. The learned counsel
appearing for the State supported the appellant and urged
that the High Court was not justified in interfering with
the proceedings when the trial had gone on for a
considerably long time and was due to close,
We have already referred to the 4th and the 5th contentions
urged on behalf of the accused which have found favour with
186
the High Court. We have already pointed out that the
learned Judge quite rightly declined, when dealing with the
third contention, to consider, on an appreciation of
evidence, whether an entrustment has been proved. This, the
High Court has properly left to be decided by the Magistrate
after the entire evidence is closed. But when dealing with
the fifth contention, which the High Court itself says,
relative to the merits of the case, and has to be decided on
the basis of the evidence on record, both oral and
documentary, the High Court instead of adopting the same
test, as it did when dealing with the third contention,
embarked upon a fairly elaborate appreciation of the
evidence on record and ultimately came to the conclusion
that the evidence on record does not establish any breach of
trust, or a conspiracy to commit the same, by the accused
persons. Regarding the fourth contention, which also has
found acceptance at the hands of the High Court, it relates
to what according to the accused was, suppression of certain
material facts by the complainant in his two complaints.
In our opinion, the High Court was not justified, in the
particular circumstances of this case, in quashing the
charge, as well as the entire proceedings that had taken
place before the Magistrate. it is not as if the accused had
moved the High Court at the earliest stage when the
Presidency Magistrate issued sommons to them. Nor had they
approached the High Court when charges were framed against
them. The accused had ‘been summoned, after a judicial
enquiry by the Chief Presidency Magistrate on December 26,
1967, under sections 120B/409 and 409 IPC. Before the
Magistrate, the evidence. oral and documentary, was adduced
by the complainant in the presence of the accused. On a
consideration of such materials, the Presidency Magistrate
framed charges against all the four accused as early as
September 7, 1968. If the case of the accused was that the
allegations in the complaint do not constitute the offence
complained of or that the complaint has to be quashed for
any ground available in law. they should have approached the
High Court, at any rate. immediately after the charges were
framed. The records disclose that it was the fourth
accused, who moved the High Court to quash the proceeding on
March 17, 1969, earlier than the other accused. Even by
that date, several prosecution witnesses, had been examined
and they had also been cross-examined by the accused.
Several items of documentary evidence had already been let
in during the trial. Only two prosecution witnesses and a
court witness remained to be examined. The proper course at
that stage to be adopted by the High Court was to allow the
proceedings to go on and to come to its logical conclusion,
one way or the other,. and decline to interfere with those
proceedings. The fourth contention related to the
suppressions of certain
187
material in the complaint. We do not propose to express any
opinion on that aspect because, even assuming that there has
been suppression, that is a matter to be considered by the
Trial Magistrate. Similarly, as to whether the evidence on
record establishes that an offence of breach of trust has
been committed, or not, is again a matter for the Trial
Court to come to a conclusion, one way or the other, after
an appraisal of the entire evidence that is let in by the
prosecution and by the defence, if any. The High Court was
not justified at that stage to have embarked upon an
appreciation of the evidence. Here again, we do not express
any opinion, on merits, as the matter is to be, considered
by the Trial Magistrate.
The High Court was also equally not justified in holding
that the two prosecution witnesses should, not be examined
on the ground that their evidence will not have any material
effect on the merits. The further view of the High Court
that the examination of the court witness will prejudice the
accused, is also without any basis. In fact, the High
Courts decision on. the question of these witnesses is
really on a representation made on behalf of the complainant
that the trial is almost coming to a close and that only two
more prosecution witnesses and one court witness remain to
be examined. So far as we could see, the’ accused have not
challenged the order of the Magistrate dated February 24,
1969, allowing the prosecution to examine Satanarayan
Agarwalla and an officer of the Directorate of Industries,
Government of Orissa; nor have they challenged the order
dated March 7, 1969, of the Magistrate allowing the prayer
of the prosecution for examining Durga Dutt Chowdhury as a
court witness under section 540. In holding that the
proposed examination of Durga Dutt Chowdhury, as a court
witness, will pre-judice the accused, the High Court has not
given due consideration to the decision of ;this Court in
Jamatraj Kewalji Govani v.The State of Maharastra(1).
It is not clear whether the High Court passed the order, in
question, under section 561A or under section 439 of the
Code. of Criminal Procedure. This Court has laid down the
principles in R.,P. Kapur v. The State of Punjab(2), which
have to beborne in mind by the High Court when its inherent
jurisdiction under section 561A is invoked for quashing the proce
edings pending before a subordinate court. It has
been ‘emphasised that the inherent jurisdiction could be
exercised to quash proceedings in a proper case, either to
prevent the abuse of the.process of any court or otherwise
to secure the ends of justice. This Court has also
indicated some of the categories of case where-
(1) [1967] 3 S.C.R. 415.
(2) [1960] 3 S.C.R. 388.
188
the inherent jurisdiction could and should be exercised to
quash proceedings. However, the exercise of the power by
the High Court, in the case before us, does not come within
the ambit of the-principles laid down by this Court in the
above decision. For instance, the second contention taken
before the High Court by the accused related to the
maintainability of the second complaint, when the first
complaint had been withdrawn and the accused had been
discharged. If the High Court had accepted the contention
of the accused in that regard, it may be that the High Court
was justified in quashing ;the proceedings, though at a very
late stage. But on that point, the High Court’s decision is
in favour of the complainant. The other points taken into
account by the High Court do not justify the exercise of its
power under section 561A and that too at a very late stage
of the proceedings.
Even assuming that the High Court was exercising
jurisdiction under section 439, in our opinion, the present
was not a case for interference by the High Court. The
jurisdiction of the High Court is to be exercised normally
under section 439, Criminal Procedure Code, only in
exceptional cases, when there is a glaring defect in the
procedure or there is a manifest error of point of law and
consequently there has been a flagrant miscarriage of
justice. The High Court has not found any of these circums-
tances to exist in the case before us for quashing the
charge and the further proceedings.
The judgment and order of the High Court quashing the
,charges framed against the accused as well as the other
proceedings based thereon, pending in case No. C/344 3 of
1967, are set aside. The learned Presidency Magistrate will
proceed with the further trial and give it a very
expeditious disposal. We make it clear that the directions
given by the Chief Presidency Magistrate regarding the
examination of two more prosecution witnesses and the court
witness will stand, subject to any modifications that may be
made by that Court in regard to the directions I already
given by it. In the result, the appeals are allowed.
V.P.S. Appeals
allowed.
189