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Yogesh Mittal vs State Of Haryana & Anr on 2 July, 2018

CRM-M-2606 of 2016 -1-

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA
AT CHANDIGARH

CRM-M-2606 of 2016
Date of Decision: 02.07.2018

Yogesh Mittal
….Petitioner

Versus

State of Haryana and another
….Respondents

CORAM: HON’BLE MR. JUSTICE AMOL RATTAN SINGH

Present:- Mr. Vikas Bahl, Senior Advocate, with
Mr. Manbir Singh Batth, Advocate,
for the petitioner.

Mr. Baljinder Singh Virk, DAG, Haryana.

Mr. Mukesh Rao, Advocate,
for the applicant-respondent no.2.

***
Amol Rattan Singh, J.

By this petition, by which jurisdiction of this Court under Section

482 of the Code of Criminal Procedure is sought to be invoked, the petitioner

seeks the quashing of complaint no.25-1 of 2010/12, instituted by respondent

no.2 herein, Kesar Lal Bansal, before the learned Chief Judicial Magistrate,

Sirsa, alleging therein the commission of offences punishable under Sections

420 and 120-B IPC. (A copy of the complaint is annexed as Annexure P-1

with the petition).

The petitioner further seeks the setting aside of the summoning

order dated 15.09.2012 (copy Annexure P-5), by which he has been

summoned by the learned Judicial Magistrate Ist Class, Sirsa, which order has

been upheld in Criminal Revision no.180 of 2015 by the learned Additional

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Sessions Judge, Sirsa, vide his order dated 16.11.2015 (copy Annexure P-14).

2. The allegation of the complainant is that the petitioner, Yogesh

Mittal, as also his co-accused Mahender Sharma, and 4 other co-accused, who

are shown to be the Directors/CEOs of M/s Katyayani Petroleum Limited,

Pune (hereinafter to be referred to as the ‘M/s Katyayani’), have cheated him.

As per the complaint, the present petitioner and Mahender

Sharma approached the complainant in August 2007 and induced him to

install an LPG Gas Filling Station at Sirsa, with him to obtain a dealership

from M/s Katyayani, the total investment of the complainant being

Rs.25,00,000/-.

3. A perusal of the complaint shows that the offer made to the

complainant essentially was that he would arrange for land measuring 80′ x

80′ and obtain/”manage” No Objection Certificates (NOCs) from the

departments of Food Supply, Electricity and Fire Brigade, with all other

formalities to be completed by the company, i.e. M/s Katyayani, at its

expenses, including setting up of the office and workshop etc.

The sale price of the gas was also stated to have been explained

to him.

In the aforesaid background, in a nutshell the case of the

complainant is that though he had paid a sum of about Rs.29,00,000/- at

various stages, which was also beyond the amount of Rs.25,00,000/- that he

was initially asked to invest, no gas station had been installed and therefore

he had been cheated of the aforesaid amount of Rs.29,00,000/- by all the

accused.

4. Upon the complaint being filed, the learned trial Court (JMIC,

Sirsa), after noticing the essential facts, further noticed that the complainant

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had also taken a plea that he had come to know that the present petitioner

(Yogesh Mittal) was the brother-in-law of a prominent doctor who was also

close to the family of the complainant, with the petitioner running a firm

known as M/s Shri Vishnu Eatables (India) Limited, Kaithal, dealing in the

business of rice on a large scale in several State in the country and abroad.

Accused no.2 Mahender Sharma (not a petitioner in this petition),

was also believed by the complainant, as he was a resident of Sirsa and

therefore (as per the complainant) he had sent his consent to become a dealer

for dispensing gas after installation of a gas pump, with a telephonic call also

stated to have been received by him from the Chairman-cum-Director of M/s

Katyayani, i.e. the 3rd accused before the trial Court.

5. It was also noticed by the trial Court that, as per the petitioner, he

had initially paid a cheque of Rs.1000/-, then Rs.2,65,000/- in favour of the

firm of the present petitioner (M/s Shri Vishnu Eatables), with the

complainants’ signature also having been taken on an application form, and

that the petitioner and Mahender Sharma allegedly had assured the

complainant that the gas pump would be installed early, upon which they

obtained a demand draft for an amount of Rs.1,05,000/-, a press conference

also having been organised and advertisements having been made through

newspapers “for including the innocent people to become victims of their

forgery”.

Various communications having been established between the

complainant and M/s Katyayani, it was also noticed by the trial Court in the

impugned order, that an allotment letter of dealership was sent to the

complainant on 19.12.2008, under the signatures of the 6th accused before that

Court, i.e. S.M. Tuli, Chief Executive Officer of the said company.

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Two cheques of Rs.4,00,000/- each are stated to have been sent

by post to the aforesaid company, with the complainant allegedly having taken

out the money from his existing business on the allurement of “a bright

future”. A piece of land measuring 90′ x 90′ had also been taken by the

complainant on lease for 30 years, with Rs.8100/- per month to be paid for the

lease, he also contending that he had spent money for levelling the plot of

land, installation of a tubewell and for getting an electricity connection.

It is also stated in the impugned order that as per the complainant

he had suffered expenses for getting ‘No Objection Certificates’ from three

departments and that after investing such a huge amount, the complainant

came to know from “his sources of Bombay and Pune”, that the present

petitioner and Mahender Sharma actually had no agreement with M/s

Katyayani and no gas filling pump had earlier been got installed by them.

6. The complainant is stated to have then approached the petitioner

and Mahender Sharma at Kaithal, accusing them of “fraudulent

misrepresentation” with them having allegedly requested him (complainant) to

“keep mum”, with them subsequently having told him that they had now

obtained a distributorship from M/s Katyayani, vide an agreement executed in

May 2008, with them having paid the said company Rs.2,00,00,000/- as

security. A photostat copy of the agreement was also stated to have been given

to the complainant, assuring him of “guarantee and responsibility”.

7. In the month of March 2009, all the accused before the trial

Court are stated to have made a survey of the site at village Moriwali, District

Sirsa, and after approving of the same, the complainant was again assured

with promises by the present petitioner and Mahender Sharma that the gas

filling station would start functioning by 30.09.2009.

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Three cheques of amounts of Rs.2,35,000/-, Rs.7,00,000/- and

Rs.9,50,000/- are stated to have been issued between the months of March and

September, 2009 by the complainant in favour of M/s Katyayani, with the

total amount paid by that time therefore being Rs.26,56,000/-, the ‘extra’

Rs.1,56,000/- alleged to have been taken for the supply of Gas Kits to be

installed in a vehicle (the original amount to have been invested being

Rs.25,00,000/- as per the complainant).

Thereafter, on 13.01.2010, accused Mahender Sharma again is

stated to have obtained Rs.2,50,000/- from the complainant for supply of the

goods, including a gas tank, with the total investment thereby made by the

complainant alleged to be Rs.29,06,000/-.

8. The respondent-complainant, as stated in the impugned order,

examined himself as PW1 and one Bhagwan Dass Mehta as PW2 by way of

preliminary evidence, also tendering about 19 documents, including copies of

cheques, postal receipts and legal notices etc.

9. Upon appraisal of the aforesaid preliminary evidence, the trial

Court noticed as follows:-

“3. I have gone through the preliminary evidence on record
and have duly heard the arguments led by the counsel for the
complainant. On perusal of the facts of the complaint alongwith
the preliminary evidence adduced, it is clearly made out that the
various cheques of the alleged amount were issued by the
complainant in favour of the defendants. He did so while acting
in accordance with the terms of the proposal kept before him by
the accused persons no.1 and 2. Further documentary evidence
exhibited by the complainant, support the averments of the
complainant.

It is appropriate to mention with regard to the present stage
in this case that satisfaction of judicial consciousness is a sine

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qua non before issuing process against the accused in a
complaint case.”

Thus, finding sufficient ground to summon all the accused,

including the present petitioner, the impugned order dated 15.09.2012 was

passed.

10. Aggrieved of the aforesaid order, the petitioner filed a revision

petition that came up for hearing before the learned Additional Sessions

Judge, Sirsa, who again, after noticing the aforementioned facts, came to the

conclusion that the learned trial Court had not erred in summoning the

petitioner and the other accused, especially as, at the stage of issuing process,

the Magistrate “is not to see whether there was any truth in allegations

levelled by the complainant, but only has to see whether on the basis of

allegations, a cognizable offence is to be made out or not”.

To hold as above, reliance was placed by the revisional Court on

a judgment of the Supreme Court in Ram Babu v. State of Madhya Pradesh

and others 2009 (4) RCR (Criminal) SC 204.

11. The revisional Court also duly noticed the arguments raised

before it, especially pertaining to the fact that even in its reports submitted

under Section 202 Cr. P.C., the police had not found any offence made out

against the present petitioner and that, further, as per the petitioner, it was the

complainant himself who was at fault, not having procured NOCs from

various departments, thereby having violated the terms and conditions of the

agreement.

It had also been contended before that Court by the petitioner that

a cancellation deed had been entered into between him (petitioner-accused)

and M/s Katyayani, after which the complainant was contacted by M/s

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Katyayani, without any involvement of the petitioner.

12. Having considered the aforesaid arguments, the revisional Court

held that the Magistrate had the power to reject the report furnished by the

police under Section 202 Cr.P.C. and still issue process and therefore, there

being no legal infirmity in the summoning order, there was no ground to

interfere with it, in exercise of revisional jurisdiction under Section 397

Cr.P.C.

Consequently, the revision petition filed by the present petitioner

was dismissed vide the second order impugned in this petition, dated

16.11.2015 (Annexure P-14).

13. The petitioner having earlier approached this Court by way of

CRM-M-40282 of 2014, which was dismissed as withdrawn on 17.12.2014

with liberty to file a fresh one, the present petition came to be instituted on

20.01.2016, (invoking jurisdiction under Section 482 of the Cr.P.C., as

already stated earlier).

14. Extensive arguments have been addressed on both sides before

this Court, with Mr. Vikas Bahl, learned Senior Counsel appearing for the

petitioner, first submitting that only individuals have been made accused in

the complaint, with neither the company “of the petitioner”, i.e. M/s Shri

Vishnu Eatables (India) Limited, having been impleaded/arraigned as an

accused, nor in fact, even M/s Katyayani so arraigned, with only its MDs,

Directors and CEOs having been impleaded, by individual names.

He therefore submitted that most dealings having been made by

the complainant with the companies, with cheques issued in favour of the said

entities, the complaint itself is not maintainable, as there is no vicarious

liability of the petitioner.

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He pointed to Ex.C13 before the trial Court (Annexure P-6 with

the present petition), which is a copy of the ‘Distributor Agreement’ between

M/s Katyayani and the company of which the petitioner is the Director (M/s

Shri Vishnu Eatables). Vide the said agreement, M/s Shri Vishnu Eatables

was ‘appointed’ the distributor for M/s Katyayani, for the purpose of

developing a retail dealership network of Auto LPG dispensing stations in the

States of Haryana, Punjab, Rajasthan, Himachal Pradesh, Uttrankhand and the

Union Territory of Chandigarh.

Thus Mr. Bahl contended that the ‘petitioners’ company’ not

having been arraigned as an accused in the impugned complaint, the petitioner

personally could not be held liable for the commission of any offence. He

cited the following judgments of the Supreme Court to support his argument:-

(i) R. Kalyani v. Janak C. Mehta (2009) 1 SCC 516;

(ii) S.K. Alagh v. State of U.P. Ors. 2008 (2) RCR
(Criminal) 79.

In Kalyanis’ case, on the question of whether one of the Directors

could be held to be vicariously liable, it was held that:-

“A vicarious liability can be fastened only by reason of a
provision of a statute and not otherwise. For the said purpose, a
legal fiction has to be created. Even under a special statute when
the vicarious criminal liability is fastened on a person on the
premise that he was in charge of the affairs of the company and
responsible to it, all the ingredients laid down under the statute
must be fulfilled. A legal fiction must be confined to the object
and purport for which it has been created.”

It was also further held as follows:-

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“If a person, thus, has to be proceeded with as being vicariously
liable for the acts of the company, the company must be made an
accused. In any event, it would be a fair thing to do so, as legal
fiction is raised both against the Company as well as the person
responsible for the act of the Company.”

In Alaghs’ case, a complaint was filed alleging therein the

commission of an offence punishable under Section 406 IPC, with the

company that the accused was a Managing Director of, not having been

arraigned as an accused.

It was held as follows by the Supreme Court:-

“15. Appellant No.1 is the Managing Director of the Company.
Respondent No.3 was its General Manager. Indisputably, the
company is a juristic person. The demand drafts were issued in
the name of the company. The company was not made an
accused. The dealership agreement was by and between M/s
Akash Traders and the company.

16. Mr. Pramod Swarup, learned counsel appearing on behalf
of respondent no.2, in support of the order passed by the learned
Chief Judicial Magistrate as also the High Court, submitted that
as, prima facie, the appellant was in charge of and was in control
of the business of the company, he would be deemed to be liable
for the offence committed by the company.

17. Indian Penal Code, save and except some provisions
specifically providing therefor, does not contemplate any
vicarious liability on the part of a party who is not charged
directly for commission of an offence.”

Thereafter, upon reproducing Section 406 IPC, the Supreme

Court held as follows:-

“20. As, admittedly, drafts were drawn in the name of the

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company, even if appellant was its Managing Director, he cannot
be said to have committed an offence under Section 406 of the
Indian Penal Code. If and when a statute contemplates creation of
such a legal fiction, it provides specifically therefor. In absence
of any provision laid down under the statute, a Director of a
company or an employee cannot be held to be vicariously liable
for any offence committed by the company itself.{See Sabitha
Ramamurthy and Anr. v. R.B.S. Channabasavaradhya, 2006
(4) RCR (Criminal) 296 : 2006 (3) Apex Criminal 282 : [(2006)
10 SCC 581]}.”

15. The next argument of Mr. Bahl, learned Senior Counsel for the

petitioner, is that despite reports under Section 202 Cr.P.C. having been called

for by the trial Court, on the asking of the complainant, the impugned order

passed by the that Court does not even refer to the said reports and the order is

consequently bad for that reason also.

Mr. Bahl referred to various interim orders passed by the trial

Court (copies of which have been collectively annexed as Annexure P-2 with

the petition), to point out that at first a report under Section 202 Cr.P.C. was

called for by the learned Magistrate on 17.07.2010, received on 31.08.2010,

with that report not having been accepted, as recorded in the order dated

15.11.2010, on the ground that the statements of some persons were not

recorded, and therefore a complete report was sought by the Court, which was

received on 25.01.2011.

Thereafter, after about 11 months, upon the complainant seeking

a fresh report (under Section 202 Cr.P.C.), many dates having gone by prior to

that, the said request was allowed and a 3rd report was received on 18.07.2012,

the Court thereafter recording on 31.08.2012 that the complainant was not

satisfied with the said report and consequently, arguments would be addressed

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on merits on the next date of hearing.

16. Mr. Bahl, in the context of the report under Section 202 Cr.P.C.,

pointed to that part of the report dated 25.01.2011 (Annexure P-3), which

states as follows:-

“As per agreement, No Objection Certificate was to be taken by
complainant and as per statements of Shri S.M. Tuli, CEO,
Katyani Petroleum and Mahender Sharma and as per record, it
has been found that complainant did not obtain NOC and due to
non receipt of NOC, the work of LPG filling station could not be
started. During enquiry, no such proof has come to the light
regarding issuance of threats. Complainant is certainly suffering
financial loss. From the enquiry into complaint, no cognizable
offence has been found. Matter has been found to be civil in
nature.”

He next pointed to the report dated 18.07.2012 referring to the

cancellation report between the petitioners’ company and M/s Katyayani, with

it being further observed as follows:-

“After the cancellation deed dated 06.10.2008, Vishnu Eatables
(India) Ltd., Kaithal had no concern with Katyani Petroleum
Limited, Pune, to whom there was a proposal to allot LPG Pump,
nor any transaction had taken place in this regard. Vishnu
Eatables (India) Ltd. Had transferred the share of deposit of
Kesar Bansal to Katyani Company. So far as the question of
payment of Rs.6,65,000/- of Kesar Lal Bansal is concerned,
which Vishnu Eatables (India) Ltd., Kaithal had got through
Mahender Sharma, same was transferred in Katyani Company,
the proof of which Yogesh Mittal has given along with other
documents and his statements were recorded during enquiry.
Thereafter the payment which Kesar Lal Bansal had transferred
to the company and the material was supplied by the Company to

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Kesar Lal Bansal. After sending of the material, the pump was
not installed due to the reason that Kesar Lal Bansal did not get
NOC from concerned departments.”

17. Thus, learned Senior Counsel submitted that with such detailed

findings coming in the reports sought by the Court, even on the asking of the

complainant, the trial Court still did not actually apply its mind to the contents

of the report before passing the impugned order summoning the petitioner and

his co-accused.

18. On the issue of it being necessary for a report under Section 202

Cr.P.C. to be taken into consideration, he cited the following judgments (two

of co-ordinate Benches of this Court and one of the Supreme Court):-

(i) Madhu Rani v. Prem Kumar and others 2015 (3) RCR
(Criminal) 889;

(ii) Kuldip Raj Mahajan v. Hukam Chand 2008 (1) RCR
(Criminal) 370; and

(iii) M/s Pepsi Foods Ltd. v. Special Judicial Magistrate
1997 (4) RCR (Criminal) 761.

In Madhu Ranis’ case, it was held by this Court that though a

report under Section 202 (1) Cr.P.C. alone cannot be made the basis for

disposal of a complaint, however, the “inquiry/investigation”, conducted is

not of a futile exercise and has to be taken into consideration by the

Magistrate while deciding as to whether process is to be issued or not.

In Mahajans’ case, it was not a report under Section 202 Cr.P.C.

that was under consideration, but a cancellation report filed by the police in

respect of the FIR registered by the complainant, which cancellation report

was stated to have been concealed from the Magistrate hearing the complaint

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subsequently filed, and the summoning order consequently having been

passed without referring to the cancellation report.

In such circumstances, this Court had quashed the complaint

instituted before the Magistrate, holding it to be an abuse of the process of

Court.

19. Learned Senior counsel referred to the aforesaid judgments also

to submit that since the petitioner was at Kaithal, and the other accused at

Pune, a report under Section 202 Cr.P.C. was in any case necessary to have

been obtained by the Magistrate at Sirsa, and consequently, the significance of

the said reports could not have been completely ‘washed away’ by the

Magistrate, without even referring to them.

20. From the case of M/s Pepsi Foods Ltd., learned Senior Counsel

has pointed to the fact that it was held by the Supreme Court that summoning

of an accused in a criminal case is a serious matter and such proceedings

cannot be set into motion “as a matter of course”, with the Magistrate required

to carefully scrutinize the evidence brought on record, even by putting

questions to the complainant and his witnesses, to elicit answers from them to

determine the truth, or otherwise, of the allegations made.

21. Mr. Bahl next submitted on the merits of the complaint instituted

by the respondent herein, to the effect that even as per the complainants’ own

version in the complaint, it was he who was to get the NOC from the

departments of Food Supplies, Electricity and the Fire Brigade, as is stated

in paragraph 1(iii) of the complaint.

Learned Senior Counsel next again pointed to the inquiry reports

(under Section 202 Cr.P.C.) wherein also the same finding was arrived at by

the inquiry officer (the SHO, Police Station City Sirsa).

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Mr. Bahl next, in that context, referred to a letter written by the

CEO of M/s Katyayani, addressed to the complainant (stated to be Ex.C7

before the trial Court; – Annexure P-8 with the present petition). The said

letter while stating that the site drawings and survey report provided by the

complainant to that company, had been approved, further stated that the next

step would be to obtain a No Objection Certificate from the District

Magistrates’ office.

Learned Senior Counsel submitted that the document having

been exhibited by the complainant himself before the trial Court, obviously he

was very well aware of the fact that the NOC was to be obtained from the

office of the District Magistrate, with that letter also having been followed up

vide a letter dated 05.01.2010 (Annexure P-11), stating that the NOC from the

National Highway Authority was also very important, after which the

installation of the plant and instruments would start.

In the context of NOCs, Mr. Bahl submitted that though a

contention may be raised before this Court by learned counsel for the

respondent that in fact NOCs were obtained by the complainant, it could be

seen even from the reply to the present petition (on behalf of the respondent-

complainant), that the three letters annexed collectively therewith as

Annexure R-1, (one from the Superintending Engineering, PWD, BR to the

Engineer-in-chief, the next from the XEN of the Electricity Corporation to the

Deputy Commissioner and the last from the District Town Planner to the

District Magistrate), are not actually ‘No Objection Certificates’ issued but in

fact are either recommendations for issuance of NOC/reports, or to the effect

that no electric lines are passing over the proposed site, or (in the last case), a

recommendation that permission would also be required from the Ministry of

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Road Transport, GOI, New Delhi, as the site falls on a National Highway, and

further, a fire safety certificate would also be required from the “concerned

department”.

Mr.Bahl further submitted that therefore no NOC having been

actually obtained by the respondent-complainant in setting up the gas filling

station, with no response given even after this Court put it to learned counsel

earlier that if NOCs are even now obtained, the response of M/s Katyayani to

setting up of a gas filling station/refund of money could be obtained; very

obviously the complainant is not able to obtain the NOCs, and therefore the

petitioner could not be held responsible for any investments made by the

respondent-complainant, he thereafter not having obtained the NOCs.

22. He further submitted that at best a civil dispute qua non-fulfilling

of a contract (as alleged by the complainant), may be raised by the

complainant, which of course would be defended on merits by the petitioner

and any other person arrayed as a defendant in any such suit.

23. Lastly, Mr. Bahl pointed to paragraphs 3 and 8 of the complaint,

to submit that eventually it is not the petitioner or his company who were to

allot the gas filling station, and in fact it was M/s Katyayani to which the

complainant paid Rs.2,35,000/-, Rs.7,00,000/- and Rs.9,50,000/-, thus

totalling Rs.18,85,000/-, and therefore, the petitioner in any case was only a

person who at best introduced the parties to each other, with his company

having been paid only Rs.2,65,000/- plus Rs.1000/-, in toto.

24. On the aforesaid contentions, learned Senior Counsel for the

petitioner sought that the petition be allowed and the complaint itself, and the

order summoning the petitioner to face trial, be quashed.

25. Refuting the aforesaid arguments, Mr. Mukesh Rao, learned

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counsel for the respondent-complainant, first pointed to the fact that

admittedly Rs.2,65,000/- had been received by cheque by the petitioner in

favour of his company, after which again Rs.4,00,000/- were handed over to

the petitioner and accused Mahender Sharma by way of a cheque.

He submitted that at the time when these cheques were handed

over, i.e. on 13.08.2007 and 28.02.2008/12.04.2008, in fact there was no

agreement between the petitioner and the M/s Katyayani, such agreement

having taken place only on 27.05.2008, a copy of which is annexed with the

petition, it having been cancelled within five months on 06.10.2008, thereby

making it obvious that there was never any intention to actually ensure that a

gas filling station was installed.

Mr. Rao next submitted that in fact M/s Katyayani had first

approached this Court by filing CRM-M no.40720 of 2013, also seeking

quashing of the complaint and the summoning orders, which petition was

dismissed as withdrawn before a co-ordinate Bench of this Court on August

14, 2015 (a copy of the said order being annexed as part of the Annexure R-8

collectively, with the reply of the respondent herein).

A perusal of the said order also shows that at the time that the

said petition was withdrawn, personal appearance of the petitioners therein

before the trial Court was exempted by this Court, subject to the condition that

they would always be represented through counsel, would not delay

proceedings, would not dispute their identity as accused, would have no

objection to recording of prosecution evidence in the presence of their

counsel, and would appear before the trial Court as and when required by that

Court.

Mr. Raos’ contention is that, in fact, the petitioner and Mahender

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Sharma having approached the complainant, their culpability in the

cheating/fraud, was more than that of the Directors of M/s Katyayani and

consequently, this petition in any case deserves to be dismissed.

26. Learned counsel next referred to the order of the trial Court dated

17.03.2015, recording therein that the petitioner, Yogesh Mittal, had even

agreed to compromise the matter with the complainant, which as per learned

counsel, would only be subject to Rs.47,00,000/- being paid to the

complainant.

He submitted that unless the accused were actually guilty of

having defrauded the complainant, they would not have agreed to pay such a

large amount and therefore the compromise not having gone through because

of the payment not having been made, this petition does not deserve to be

allowed.

27. He next argued that as a matter of fact the revision petition

against the impugned order of the trial Court dated 15.09.2012, having been

dismissed in 2015, this petition filed invoking jurisdiction under Section 482

Cr.P.C, in the year 2016, is only by-passing limitation, with even the

revisional Court having observed in its (now impugned) order dated

16.11.2015, that the revision petition (under Section 379 Cr.P.C.), was also

filed beyond limitation.

28. On the issue of the report under Section 202 Cr.P.C. not having

been referred to by the trial Court, Mr.Rao submitted that the said reports lose

meaning once the entire case comes before the Magistrate after preliminary

evidence had been led, and therefore this Court would not set aside the

impugned summoning order on that ground.

In this context, learned counsel referred to the following

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judgments:-

(i) Rahul Gandhi and others v. Dr. Subramanian Swamy
and another 2015 (225) DLT 196;

(ii) Nupur Talwar v. Central Bureau of Investigation and
another (2013) 1 SCC (Cri) 689; and

(iii) Sonu Gupta v. Deepak Gupta and others (2015) 2 SCC
(Cri) 265.

From the judgment in Rahul Gandhis’ case, learned counsel

referred to paragraph 34 (of the Law Finder Edition), wherein a learned Single

Judge of the Delhi High Court held that “hyper technical objections” on the

summoning of the two petitioners in that petition, on the ground that they

resided outside the tutorial jurisdiction of the trial Court, did not carry much

substance.

From Nupur Talwars’ case, Mr. Rao pointed to paragraph 12

thereof, wherein the judgment in Bhushan Kumar and another v. State

(NCT of Delhi) 2012 (2) RCR (Criminal) 794 has been cited, holding therein

that “time and again it has been stated by this Court that the summoning order

under Section 204 of the Code requires no explicit reasons to be stated

because it is imperative that the Magistrate must have taken notice of the

accusations and applied his mind to the allegations made in the police report

and the materials filed therewith”.

Thus, the contention is that though the aforesaid observation is in

the context of a report submitted under Section 173 Cr.P.C., however, even a

report submitted in terms of Section 202 need not be referred to by the trial

Court, if it is otherwise convinced that, prima facie, a case is made out against

those arraigned as accused in a complaint.

From Sonu Guptas’ case, Mr. Rao pointed to paragraphs 7 and 8

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of the judgment, which essentially hold to the same effect.

Learned counsel for the respondent-complainant therefore

submitted that in view of what has been held by the Supreme Court, the

judgment of this Court in Madhu Ranis’ case (supra), cannot be said to be

laying down good law.

29. Next on the same issue, Mr. Rao submitted that in any case the

result of an inquiry report, whether under Section 173 Cr.P.C. or under

Section 202 thereof, naturally cannot be taken as final evidence in any case

and only actual evidence led before the Court, is legally admissible, and

consequently, the contention that the report under Section 202 not having

been referred to by the Magistrate, renders the summoning order to be bad in

law, is a misconceived contention on behalf of the petitioner.

He further submitted that at this stage in any case this Court

would also see whether the case set out by the respondent-complainant in his

complaint before the Magistrate, justifies dismissal of such complaint.

On the aforesaid contention, Mr. Rao cited a judgment of the

Supreme Court in Kaptan Singh v. State of M.P. 1997 (3) RCR (Criminal)

135.

30. Last on the aspect of the report under Section 202 Cr.P.C. not

having been referred to, Mr. Rao referred to Section 465 of the Cr.P.C., to

submit that simply an error or omission, either in a complaint, a summon, a

warrant or a judgment, or other proceedings, during trial, would not lead to

reversal of such summons/judgment etc., unless in the opinion of the Court

reversing such order, a failure of justice is occasioned.

Learned counsel submitted that in fact failure of justice would be

if the complaint were to be quashed, and on the other hand, continuance of the

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complaint in view of the allegations made therein, substantiated by

preliminary evidence led on complainants’ behalf, would not prejudice the

petitioner/other accused in any case, because precharge evidence was still to

be led, after which the trial court would make up its mind as to whether the

accused are to be discharged or the trial is still to proceed further.

31. On the issue of the company of the petitioner not having been

arraigned as an accused in the complaint, learned counsel submitted that the

allegation against the petitioner being that he had approached the complainant

alongwith Mahender Sharma, and had enticed him into believing that a gas

filling station would be set up by M/s Katyayani, and on that ground he had

extracted money from the complainant, whether such money was paid in the

name of the company of the petitioner or in the name of M/s Katyayani, it was

not actually on behalf of the company that the petitioner had approached the

complainant but on his own behalf, his company not having entered into any

agreement at that point of time with M/s Katyayani.

32. Mr. Rao next submitted that the complainant had actually

obtained NOCs and even if it is presumed that the documents referred to

alongwith the reply of the complainant to the present petition are not NOCs,

even in other parts of Haryana where NOCs were obtained by various parties,

no connections were provided by the petitioner or M/s. Katyayani.

He submitted that the petitioner in fact is also facing criminal

proceedings for having duped the Warehousing Corporation (in an unrelated

matter), which ‘showed his character’ and therefore this Court would not set

aside either the summoning order or quash the complaint.

33. In rebuttal to the aforesaid arguments, Mr. Vikas Bahl again

reiterated that there is no NOC whatsoever obtained by the complainant, even

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though the method of obtaining such NOCs was explained in the letter Ex.P7

(Annexure P-8 with the present petition), and consequently, the complainant

is simply taking advantage of his own fault to put pressure on the petitioner

and other co-accused for refund of any money spent by him, with even M/s

Katyayani having spent large sums of money which bore ‘no fruit’, as the

NOCs were not obtained.

34. As regards the compromise shown to be entered into between the

parties, as reflected in the order of the trial Court dated 17.03.2015, learned

Senior Counsel submitted that the petitioner himself was only to pay

Rs.7,50,000/-, his company having been advanced only a sum of Rs.6,60,000/.

He submitted that even that amount (Rs.7,50,000/-), was agreed to be paid by

the petitioner simply to ‘buy peace’, instead of facing a prolonged trial and

criminal proceedings.

Thus, Mr. Bahls’ contention is that simply because the petitioner

decided to compromise the matter to end criminal proceedings, that does not

in any way point to his guilt in actually having duped the complainant, in the

circumstances enumerated in detail hereinabove.

35. Next, learned senior counsel submitted that in fact it was the

company of the petitioner (Ms/ Shri Vishnu Eatables) that had entered into an

agreement with M/s Katyayani, and therefore the company was in fact a

necessary party to the criminal proceedings, if at all they are to be held to be

maintainable.

In this context, he referred to a document dated July 11, 2007

(sought to be placed on record by way of a miscellaneous application filed),

which is actually a letter addressed on behalf of M/s Katyayani to the

company of the petitioner, i.e. M/s Shri Vishnu Eatables.

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36. As regards a report under Section 202 Cr.P.C. being necessary to

be referred to before issuing process, Mr. Bahl relied upon a judgment of the

Supreme Court in Abhijit Pawar v. Hemant Madhukar Nimbalkar Anr.

2017 (1) RCR (Criminal) 405, which in turn referred to an earlier judgment in

Mehmood Ul Rehman v. Khazir Mohammad Tunda 2015 92) RCR

(Criminal) 517, wherein it was held that though undoubtedly no speaking

order is required to be passed at the stage of issuing process, even in terms of

Section 203 Cr.P.C. (with such detailed reasoning to be given only if the

complaint is to be dismissed), however, “there must be sufficient indication in

the order passed by the Magistrate, that he is satisfied that the allegations in

the complaint constitute an offence and when considered along with the

statements recorded and the result of inquiry or report of investigation under

Section 202 Cr.P.C., if any, the accused is answerable before the criminal

court, there is ground for proceeding against the accused under Section 204

Cr.P.C., by issuing process for appearance”.

Distinguishing the judgment referred to by learned counsel for

the respondent, Mr. Bahl submitted that the judgment of the Delhi High Court

in Rahul Gandhi is no longer good law in view of the judgment in Abhihit

Pawars’ case, as also in National Bank of Oman v. Barakara Abdul Aziz

and Anr. (2013) 2 SCC 488.

[It is to be noticed here that actually the said judgment is on the

issue of whether procedure under Section 202 Cr.P.C. should have been

resorted to or not by the Magistrate, after the amendment thereto was made in

2005].

37. On the issue of a company being a necessary party to criminal

proceedings where dealings are with a company whose Directors or

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functionaries are alleged to have duped the complainant, Mr. Bahl referred to

the judgment that in fact was on a previous hearing cited by Mr. Mukesh Rao,

in Sunil Bharti Mittal v. Central Bureau of Investigation 2015 (2) RCR

(Criminal)1, wherein it was held, as already noticed earlier, that there was no

vicarious liability unless the statute specifically provides for it and

consequently, if an individual committed an offence on behalf of a company,

he is to be made an accused only alongwith the company.

Mr.Bahl reiterated that the respondent-complainant had paid

most of the money by cheques to M/s Katyayani directly, and therefore the

petitioner cannot be held liable or culpable for the commission of any criminal

offence, simply because he was the person who introduced the aforesaid

company to the complainant.

38. Thus, the arguments of the parties stood concluded as detailed

hereinabove.

39. Having considered the arguments raised on both sides, as also the

orders impugned before this Court, in my opinion, this petition cannot be

allowed, for the reasons set out hereinafter.

Firstly, as regards the company of the petitioner not having been

arraigned as an accused and therefore the petitioner not being liable on

account of any vicarious liability, at this stage at least (untill substantive

evidence is led by both sides before the learned trial Court), it would appear to

me that the petitioner having approached the complainant alongwith one

Mahender Sharma, offering on behalf of M/s Katyayani, that an Auto LPG

Gas Filling Station can be set up if the complainant provides land and fulfils

other conditions of obtaining NOCs etc., with at that stage the petitioners’

company not having entered into any agreement with M/s.Katyayani, it cannot

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be stated for certain (at this stage) that the petitioner was acting on his own

behalf or on behalf of his company, i.e. M/s Shri Vishnu Eatables. As per the

complaint, the petitioner approached the complainant alongwith Mahender

Sharma, first in the month of August 2007, whereas his agreement with M/s

Katyayani, for distributorship, (copy Annexure P-6 with the petition), is dated

May 27, 2008 (with the year 2002 however written in Annexure P-6, admitted

by learned counsel for the petitioner to be a typographical error), with that

agreement also having, in fact, been cancelled within a period of slightly over

four months, on October 6, 2008, vide the cancellation deed (Annexure P7).

(That aspect, of the cancellation deed, would be looked at a little later).

Thus, even though the payment made by the complainant is

stated to be in favour of the company of the petitioner, i.e. M/s Shri Vishnu

Eatables, there being no written contract between the said company and the

complainant, nor even with M/s Katyayani and the petitioners’ company, I

would not hold at this stage at least, that the said company was a necessary

party and that the petitioner could not have been arraigned as accused in the

complaint, without also arraigning the company so.

40. As regards non-reference to the reports submitted under Section

202 Cr.P.C., as had been called for by the trial Court on three occasions, with

three such reports having been submitted, again in the opinion of this Court,

such reference is not a sine qua non for issuing process in the form of an

order summoning an accused, as long as the order of the trial Court discloses

reasoning and application of mind by that Court, before issuing such process.

The relevant part of the order of the trial Court has already been reproduced

earlier in this judgment, showing that prima facie at least the trial Court

formed an opinion, that an offence, possibly punishable under Sections 420

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and 120-B of the IPC, had been made out, payment having been made through

cheques and bank drafts by the complainant on a promise of ‘deliverance’ of a

gas filling station, but with the promise not fulfilled.

Whether or not eventually the complainant can prove the offence

to have been actually committed or not, would be a matter of evidence to be

led before that Court.

Hence, at this stage to hold that the summoning order is bad

simply on account of non-reference to the reports under Section 202, which

reports hold the petitioner and his co-accused to be not guilty, in the opinion

of this Court will not be justifiable, especially in view of what is to be noticed

immediately hereinafter.

41. Coming therefore to the argument of Mr. Bahl, learned Senior

Counsel, that no offence is even made out against the petitioners, for the

reason that it was the complainant himself who had to obtain the NOCs, which

were never obtained by him, and therefore the petitioner cannot be held liable

for non fulfillment of the complainants’ part of the contract.

Though that argument is very attractive at first blush, however,

what (again at this stage) cannot be overlooked by this Court, is that the

‘Distributor Agreement’ between the petitioner and M/s Katyayani, admittedly

stood cancelled within less than five months of the agreement having been

entered into, i.e. in 2008 itself, which may possibly indicate the intention of

the parties, which issue again needs to be gone into by the trial Court in detail,

on the basis of evidence led before it, including any substantial investments

made by M/s Katyayani/ the petitioner himself, etc.

42. Of course, as regards the contention of learned counsel for the

complainant that the documents annexed with the reply of the complainant

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are No Objection Certificates, that is an argument to be rejected at the outset,

because a bare perusal of the said documents (collectively Annexure R-7 with

the reply), show that they are only internal correspondence between various

departments and the Deputy Commissioner/District Magistrate, with a no

objection certificate actually still to be issued.

43. As regards the argument of Mr. Bahl that even during the

pendency of this present petition, despite a query being made to learned

counsel for the complainant as to whether the complainant could now obtain

the NOCs, and he not having been able to obtain them, Mr. Rao submitted that

no such NOCs are now being given and consequently, it would be impossible

for the petitioner to obtain them at this stage; with in any case the intention of

the petitioner not being honest right from the beginning, which is fortified by

the fact that he even cancelled the agreement with M/s Katyayani.

44. As regards Mr. Bahls’ contention that the petitioner having been

paid Rs.2,66,000/-, with M/s Katyayani having been paid Rs.9,90,000/- by the

complainant, therefore, there was no liability of the petitioner for setting up

the gas filling station, the contention of the complainant still being that there

was never any seriousness on the part of the petitioner or M/s Katyayani that

such gas filling station could actually be set up, that aspect would again be

gone into by the trial Court on the basis of evidence led before it, including

the fact that the distributor agreement was cancelled, also seeing the extent of

investment by M/s Katyayani/the petitioner etc., naturally looking at all

evidence in toto that may be led by either side at any stage, to prove or

disprove the allegation made.

45. Consequently, in view of what has been discussed hereinabove,

in the opinion of this Court, the complaint instituted before the learned

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Magistrate by the respondent herein, cannot be quashed at this stage; and

further, no error is found in the impugned order of the trial Court summoning

the petitioner and his co-accused to answer the complaint instituted against

them.

Therefore, even the order of the revisional Court, dismissing the

revision petition filed against the impugned order of the JMIC dated

15.09.2012, is to be sustained.

Hence, finding no merit in this petition, it is dismissed; but with

it made absolutely clear that this Court has made no observation whatsoever

on the actual culpability of the petitioner, or otherwise, which would be

determined by the trial Court wholly on the basis of evidence led before it by

both sides, all observations made hereinabove or in any other orders passed

earlier in this petition, only being in the context of whether or not the

petitioner was correctly summoned by the trial Court, and whether or not the

complaint needs to be quashed at this preliminary stage itself.

July 2, 2018 (AMOL RATTAN SINGH)
dinesh JUDGE

Whether reasoned/speaking: Yes/no
Whether reportable: Yes/no

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