Appeal filed with dishonest intention and lack of evidence can not stand in SC : Justice Anirudh Bose J.
Title: SACHIN GAG V STATE OF UP
Citation: CRIMINAL APPEAL (Arising out of Petition for Special Leave to Appeal (Criminal) No.4415 OF 2023)
Dated on: 23.1.2024
Corum: HON’BLE JUSTICE ANIRUDDHA BOSE, J.
Facts of the case
In the present case the appellant, Sachin Garg, was the plant manager of Exide Industries Limited (EIL), a corporate entity located in Bawal, Haryana. Saurabh Sharma, respondent no. 2, was the provider of Dissolved Acetylene Gas (DA Gas), which was utilized to manufacture batteries in the factory. The dispute arose from a purchase order issued for the supply of DA Gas, which was changed twice based on representations made by respondent no.23. The respondent no.2 claimed that the appellant owed him Rs.9,36,693.18/- for work completed in December 2019, however the appellant disputed both the rate and the amount. The respondent no.-2 Mr. Sharma filed a criminal complaint against the appellant under Sections 406, 504, and 506 of the Indian Penal Code, 1860 (IPC) for cheating and criminal breach of trust, intentional insult and criminal intimidation. The appellant filed a challenge to the complaint and summoning order in the Allahabad High Court, but received no relief. He then filed an appeal with the Supreme Court of India.
legal issues:
(a) whether the complaint and summoning order revealed an offence under Sections 405, 406, 504 and 506 of the IPC
(b) whether the dispute was a civil dispute arising from a breach of contract rather than a criminal offence
(c) whether the complaint could be maintained without arraigning the principal company (EIL).
Legal analysis
Section 405 of the Indian Penal Code, 1860 (IPC): This section defines the offence of criminal breach of trust, which occurs when a person who is entrusted with property or has dominion over it, dishonestly misappropriate, converts, uses or disposes of it in violation of any direction of law or contract.
Section 406 of the IPC: This section prescribes the punishment for criminal breach of trust, which is imprisonment for up to three years or fine or both.
Section 420 of the IPC: This section defines the offence of cheating, which occurs when a person dishonestly induces another person to deliver any property or to do or omit to do anything, by deceiving or fraudulently using any false representation.
Section 482 of the Code of Criminal Procedure, 1973 (CrPC): This section empowers the High Court to quash any criminal proceeding or order if it is necessary to prevent the abuse of the process of any court or to secure the ends of justice.
Section 202 of the CrPC: This section lays down the procedure for inquiry by a Magistrate before issuing process, which may include examination of witnesses or directing an investigation by a police officer or any other person.
In this case the appellant challenged the complaint case and the summons order issued by the Magistrate under Sections 406, 504 and 506 of the IPC, by filing an application under Section 482 of the CrPC in the High Court, contending that the complaint did not disclose any criminal offence and that it was a commercial dispute, which should be resolved by civil court.
Court analysis and judgement
The Supreme Court granted the appeal, dismissing the complaint and quashing the order. The Court ruled that the allegations made by respondent no.2 did not constitute an offence under Sections 405, 406, 504, and 506 of the IPC because they lacked the essential ingredients of dishonest misappropriation, conversion, use or disposal of property, dishonest intention of inducement, intentional insult, or threat to cause injury. The Court stated that the disagreement was solely business in nature and contained no element of criminality. The Court also remarked that respondent no.2 ascribed the misconduct to the appellant, despite the fact that the work was done for EIL, and that the allegation of criminal intimidation was ambiguous . The Court concluded that the Magistrate had failed to apply his mind in issuing summons, and the High Court had failed to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, to prevent the Criminal Court from abusing its power. As a result, the Court reversed the assailed verdict and dismissed the criminal case.
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Written by- Namitha Ramesh