MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. & ANR.versusDATAR SWITCHGEAR LTD. & ORS.

                  [2010] 12 S.C.R. 551


  MAHARASHTRA STATE ELECTRICITY DISTRIBUTION                        A
               CO. LTD. & ANR.
                               v.
            DATAR SWITCHGEAR LTD. & ORS.
            (Criminal Appeal No. 1979 of 2010)
                                                                    B
                     OCTOBER 08, 2010

             [D.K. JAIN AND H.L. DATTU, JJ.]

     Code of Criminal Procedure, 1973 - s. 482 - Power
under - Exercise of - Contract between Maharashtra State            C
Electricity Board (MSEB) and a company - Dispute between
parties - Termination of contract by company - Reference of
dispute to arbitral tribunal - Final award with observation as
regards fabrication of certain documents tendered in
evidence by MSEB - Criminal complaint by the company                D
and its senior officials against MSEB, its Chairman and
others for commission of offences u/ss. 192 and 199 r/w s. 34
- Issuance of summons to all named in 'the complaint -
Petition u/s. 482 Cr. P. C. - Dismissed by High Court - On
appeal, held: Prima facie case of offences ulss. 192 and 199        E
made out against MSEB - Thus, not a fit case for exercise
of power uls. 482 in favour of MSEB - As regards the
Chairman of MSEB, no specific averment demonstrating his
role in fabricating false evidence before arb.itral tribunal - No
indication of existence of pre-arranged plan - Thus, no prima       F
facie case made out against Chairman in respect of offences
ulss. 192 and 199 rlw s. 34 - Order of magistrate taking
cognizance against Chairman in complaint case quashed -
Penal Code, 1860 - ss. 192 and 199 rlw s. 34 - Liability -
Vicarious liability - Common intention.
                                                                    G
    Appellant No. 1 is the successor-in-interest of
Maharashtra State Electricity Board (MSEB} and
appellant No. 2 is its Chairman. Respondent No. 1 is an

                              551                                   H
    552      SUPREME COURT REPORTS             [2010] 12 S.C.R.


A incorporated company and respondent Nos. 2 and 3 are
  senior officials of respondent No.1. Respondent No. 1
  and MSEB entered into various contracts. Dispute arose
  between the parties and respondent No. 1 terminated the
  contract. The dispute was referred to the arbitral tribunal.
B The arbitral tribunal passed the final award directing
  MSEB to pay certain amount to respondent No. 1 as
  damages. The award also contained certain observations
  that MSEB had fabricated certain documents as
  evidence. On the basis thereof, respondent No. 1 to 3 filed
c a criminal complaint against the appellants alleging
  commission of offences under Sections 192 and 199 read
  with Section 34 IPC. The magistrate took cognizance of
  the complaint and issued summons against all the
  accused named therein. Aggrieved, the appellants filed
   petition u/s . 482 Cr.P.C. for quashing the complaint. The
0
   High Court dismissed the petition. Therefore, the
  appellants filed the inst~nt appeal.

          Partly allowing the· appeal, the Court

E      HELD: 1.1 Wherever by a legal fiction the principle
  of vicarious liability is attracted and a person who is
  otherwise not personally involved in the commission of
  an offence is made liable for the same, it has to be
  specifically provided in the statute concerned. Neither
F Section 192 nor Section 199 IPC, incorporate the principle
  of vicarious liability, and, therefore, it was incumbent on
  the complainant to specifically aver the role of each of the
  accused in the complaint. [Para 29) [570-G-H)

          S.K. Alagh Vs. State of Uttar Pradesh and Ors. (2008) 5
G SCC 662, referred to.

        1.2. A bare perusal of the complaint shows that the
    gravamen of the allegation is that a fabricated document
    containing the offending endorsement was tendered in
H
 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION            553
     CO. LTD. v. DATAR SWITCHGEAR LTD.

evidence before the arbitral tribunal on behalf of MSEB       A
by accused No. 6, who was in-charge of 'S' section. It is
evident from the complaint that the other accused were
named in the complaint because according to the
complainant, MSES-accused No. 1 was acting under their
control and management. The only averment made                B
against appellant No. 2 is that appellant No.1, MSEB was
acting under the control and managementof appellant
No. 2 along with the other, three accused. Appellant No.
2 happened to be the Chairman of MSEB at the relevant
time but one cannot draw a presumption that a Chairman        c
of a company is responsible for all acts committed by or
on behalf of the Company. In the entire body of the
complaint there is no allegation that appellant No. 2 had
personally participated in the arbitration proceedings or
was monitoring them in his capacity as the Chairman of        D
MS.EB and it was at his instance the subject interpolation
wa~ made in the document. [Para 28) [56~-E-H] [570-A]

  · S. M: S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Anr
(2005) 8 sec 89 - referred to.
                                                              E
     1.3 The Board Resolution adduced by the
complainant does not establish that appellant No.2 was
involved in the alleged fabrication of false evidence or
adducing the same in evidence before the arbitral
tribunal. In the absence of any such specific averment        F
demonstrating the r.ole of appellant No.2 in the
commission of the offence, it is difficult to hold that the
complaint, even assuming it to be correct in its entirety,
disclosed the commission of an offence by appellant No.2
under Sections 192 and 199 IPC. [Para 30) [571-C-E]
                                                              G
     1.4 Section 34 IPC does not constitute a substantive
offence, and is merely in the nature of a rule of evidence,
and liability is fastened on a person who may have not
be.en directly involved in the commission of the offence
                                                              H
    554    SUPREME COURT REPORTS             [2010] 12 S.C.R.


A
    on the basis of a pre-arranged plan between that person
    and the persons who actually committed the offence.
    [Para 33] [572-C-D]

       1.5 It is manifest that common intention refers to a:
8 prior concert or meeting of minds, and though, it is not
  necessary that the existence of a distinct previous plan
  must be proved, as such common intention may develop
  at the spur of the moment, yet the meeting of minds must
  be prior to the commission of offence suggesting the
C existence of a pre-arran.ged plan. Therefore, in order to
  attract Section 34 IPC, the complaint must, prima facie,
  reflect a common prior concert or planning amongst all
  the accused. In the instant case, the complaint did not
  indicate the existence of any pre-arranged plan whereby
D appellant No. 2 had, in collusion, with the other accused
  decided to fabricate the document in question and
  adduce it in evidence before the arbitral tribunal. There
  was not even a whisper in the complaint indicating any
  participation of appellant No. 2 in the acts constituting the
E offence, and that being the case, Section 34 IPC is not
  attracted in his case. No prima facie case has been made
  out against appellant No.2 in respect ofoffences under
  Sections 192 and 199 IPC, even with the aid of Section
  34 of the IPC. Therefore, it was a fit case where the High
F Court should have exercised its powers undeT Section
  482 of the Code by quashing the complaint against
  appellant No. 2. [Paras 34, 35] (572-G] [573-A-D]

       Chandrakant Murgyappa Umrani & Ors. v. State of
  Maharashtra 1998 SCC (Cri) 698; Hamlet @ Sasi & Ors. v.
G State of Kera/a (2003) 10 SCC 108; Surendra Chauhan v.
  State of M. P. (2000) 4 SCC 110 - referred to.

        2.1 Regarding the case of appellant No.1 company,
    bearing in mind the fact that the document was submitted
H
 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION               555
     CO. LTD. v. DATAR SWITCHGEAR LTD.

with the intention to support the averments in the written A
statement filed on their behalf, which .could possibly
influence the decision of the arbitral tribunal in relation
to the conduct of the respondent No. 1 while discharging
their obligations under the contract between them and
appellant No. 1, it cannot be held that prima facie a case 8
of offences under Sections 192 and 199 IPC is not made
out against them. It is evident from the observations of
the tribunal that had the tribunal not doubted the veracity
of the said document, it could have made a material .
difference to the result of the arbitral proceedings. [Para C
31] [571-E-G]

     2.2 The submission that the arbitral award on the
basis whereof the said complaint was filed has been set
aside and, therefore, the complaint is liable to be quashed
on this ground is untenable as the offences under D
Sections 192 and 199 IPC, if made out, exist independent
of the final arbitral award. Therefore, it is not a fit case for·
the exercise of power under Section 482 Cr.P.C. in favour
of appellant No. 1. [Para 32] [571-H] [572-A-B]
                                                                  E
     4. The appeal is dismissed qua appellant No.1. It is
allowed in relation to appellant No.2, and consequently
order of the Magistrate taking cognizance against
appellant No. 2 in the complaint is quashed. [Para 36]
[573-E]                                   ..
                                                                 F
    R. P. Kapur Vs. State of Punjab AIR 1960 SC 866; Rupan
Oeo/ Bajaj and Anr. Vs. Kanwar Pal Singh Gill and Anr. (1995)
6 sec 194; - relied on.

    lnder Mohan Goswami and Anr. Vs. State of Uttarancha/        G
and Ors. (2007) 12 sec 1; K. L. E. Society and Ors. vs.
Siddalingesh (2008) 4 SCC 541; Baijnath Jha Vs. Sita Ram
and Anr. (2008) 8 SCC 77; Suneet Gupta Vs. Anil Triloknath
Sharma and Ors. (2008) 11 SCC 670; G. Sagar Suri and Anr.
Vs. State of U. P. and Ors. (2000) 2 SCC 636; Pepsi Foods        H
    556      SUPREME COURT REPORTS              [2010] 12 S.C.R.


A ·Ltd. & Anr. \.(s. Special Judicial Magistrate & Ors. (1998) 5
   SCC 749; Keki Hormusji Gharda and Ors. Vs. Mehervan
   Rustom Irani and Anr. (2009) 6 SCC 475; N.K. Wahi Vs.
   Shekhar Singh and Ors. (2007) 9 SCC 481; Sharon Michael
   & Ors. Vs. State of Tamil Nadu (2009) 3 SCC 375; Maksud
B Saiyed vs. State of Gujarat and Ors. (2008) 5 SCC 668;
   Sunita Jain Vs. Pawan Kumar Jain (2008) 2 SCC 705; Som
   Mittal Vs. Government of Karnataka (2008) 3 SCC 574; Tarun
   K. Shah Vs. C.R. Alimchandani & Ors. (2001) 9 SCC 728;
   K.M. Mathew Vs. K.A. Abraham and Ors. (2002) 6 SCC 670;
C In Re: Suo Moto Proceedings Against R. Karuppan,
   Advocate (2001) 5 SCC 289; Sushi/ Kumar Vs. Rak~sh
   Kumar (2003) 8 SCC 673; Murray and Co. vs. Ashok Kr.
   Newatia and Anr. (2000) 2 SCC 367; Babula/ Vs. State of
   Uttar Pradesh and Ors. AIR 1964 SC 725 - referred to.

D                       Case Law Reference:
          (2007) 12 sec 1        Referred to.         Para 13.
          (2008) 4 sec 541       Referred to.         Para 1"3
          (2008) 8 sec 11        Referred to.         Para 13
E
          (2008) 11 sec 670      Referred to.          Para 13
          (2000) 2 sec 636       Referred to.          Para 13
          (1998) 5 sec 749       Referred to.          Para 14
F
          (2005) 8 sec 89        Referred to.          Para 14
          (2009) 6 sec 475       Referred to.          Para 14
          (2007) 9 sec 481       Referred to.          Para 14
G         (2009) 3 sec 375       Referred to.          Para 14
          (2008) 5 sec 662       Referred to.          Para 14
          (2008) 5 sec 668       Referred to.          Para 14

H
  MAHARASHTRA STATE ELECTRICITY DISTRIBUTION          557
      CO. LTD. v. DATAR SWITCHGEAR LTD.

    (2008) 2 sec 105        Referred to.         Para 15     A

    (2008) 3. sec 57 4      Referred to.         Para 15

    (2001) g sec 728        Referred to.         Para 16

    (2002) 6 sec 670        Referred to.         Para 16     B
    (2001)   s sec 289      Referred to.         Para 17

    (2003) 8 sec 673        Referred to.         Para 17

    (2000) 2 sec 367        Referred to.         Para 17
                                                             c
    AIR 1960 SC 866         Relied on.           Para 19

    (1995) 6 sec 194        Relied on.           Para 19

    AIR 1964 SC 725         Referred to.         Para 26

    (2008) 5 sec 662        Referred to.         Para 29     D

    (2005) 8 sec 89         Referred to.         Para 33

    1998 sec (Cri) 698      Referred to.         Para 33

    (2003) 10 sec 108       Referred to.         Para 33     E
    (2000) 4 sec 11 o       Referred to.         Para 33

    CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 1979 of 2010.
                                                             F
    From the Judgment & Order dated 09.10.2007 of the High
Court of Judicature at Bombay in Criminal Application No.
3715 of 2005.

    Nagendra Rai, Vikas Singh, Ashok Desai, Shekhar
Naphade, Ranjit Kumar, Lakshmi Raman Singh, Ravi Prakash,    G
Varun Agarwal, Chandra Prakash, Amrita Singh, Udita Singh,
Raunak Jain, Abhishek Mitra, Mukul Taly, Swati Deshpande,
Sneha Datar, Jatin Zaveri for the appearing parties.

    The Judgment of the Court was delivered by               H
    558      SUPREME COURT REPORTS              [2010] 12 S.C.R.


A         D.K. JAIN, J. 1. Leave granted.

        2. This appeal, by special leave, is directed against the
  judgment, dated 9th October 2007, delivered by the High Court
  of Bombay in Criminal Application No. 3715 of 2005, in a
B petition filed by the two appellants herein under Section 482
  of the Code of Criminal Procedure, 1973 (in short "the Code").
   By the impugned judgment, the High Court has declined to
  quash a criminal complaint filed by respondents No.1 to 3 in
  this appeal against the appellants and others for offences under
   Sections 192 and 199 read with Section 34 of the Indian Penal
C Code, 1860 (for short "the IPC").

          3. Shorn of unnecessary details, the tacts, material for
    adjudication of the issue arising in this appeal may be stated
    thus:
D
       Appellant No.1, viz. Maharashtra State Electricity
  Distribution Co. Ltd.; constituted in. terms of the provisions of
  the Electricity Act, 2003 is the successor in interest of
  Maharashtra State Electricity Board (for short "MSEB") and
E appellant No. 2 is its Chairman. Respondent No.1 is an ·
  incorporated company, viz. Mis Datar Switchgear Ltd. and
  respondents No.2 and 3, senior officials of respondent No.1,
  are the complainants and respondents No.4 to 7 are the co-
  accused.

F      4. Pursuant to various contracts entered into between
  respondent No. 1 and MSEB in the year 1993-94 for installation
  of "Low Tension Load Management Systems" (for short
  "LTLMS"), MSEB issued a work order on 27th March 1997
  whereby respondent No. 1 was required to install at various
G locations and lease out 47,987 LTLMS to MSEB for a period
  of 10 years at a monthly rent of ' 825/- for the first six years,
  and about · 650/- per month for the remaining four years.

      5. Clause 8.1 of the said contract stipulated that
H respondent No.1 would send intimation to the Section-in-charge
  MAHARASHTRA STATE ELECTRICITY DISTRIBUTION 559
 CO. LTD. v. DATAR SWITCHGEAR LTD. [D.K. JAIN, J.]
of MSEB regarding the installation of the equipment, and                A
thereafter, a commissioning report was to be prepared in that
regard, which was to be signed jointly by the representative of
the complainant and the concerned Section-in-charge of the
MSEB.
                                                                        B
     6. During the validity period of the contract, various
disputes arose between respondent No.1 and MSEB. On 19th
February 1999, respondent No.1 partially terminated the
contract, conveying to MSEB that it would not install any more
LTLMS, and would only maintain the installed items.
                                                                        c
     7. On 21st April 1999, respondent No.1 terminated the
contract in entirety. Nevertheless, they offered to maintain the
installed objects provided MSEB continued to pay rent during
the duration of the work order. As the dispute arose between
respondent No. 1 and MSEB vide order dated 5th May 1999,                o
the High Court of Bombay referred the disputes to Arbitral
Tribunal.

    8. The arbitration proceedings commenced· on 19th
February 1999. The controversy in the instant case pertains to
the amended written statement filed by the MSEB on 7th                  E
February 2000, the relevant extract of which reads as follows:

    "9A. The Respondents submit that the Claimants are not
    entitled to claim any amount from the Respondents as
    claimed or otherwise. In fact, as stated hereinafter, the           F
    Claimants are bound to refund to the Respondents all the
    amounts recovered by them from the Respondents along
    with interest thereon. The Respondents submit that the
    Claimants are guilty of having practiced frau,d upon the
    Respondents. The Claimants have fabricated documents                G
    as also are guilty of misrepresentation of material facts in
    the matter of commissioning objects, installing them, taking
    out print outs therefrom and submitting bills in respect
    thereof ....................................................... .
                                                                        H
    560       SUPREME COURT REPORTS                [2010] 12 S.C.R.


A         (a) COMMISSJONJNGICOMMISSIONING REPORTS

          The provisions of Clause 8.1 of the work order provided
          for installation and commissioning of LTLMS systems in
          presence of Section in Charge of every Section. The
          Claimants not only did not inform the concerned/Section
B         in Charge as required by Clauses (a) and (b) thereof, but
          submitted commissioning reports for the LM systems
          making it appear as if the objects were installed on a given
          date in presence of the representatives of the Section in
          charge as mentioned in the said reports, and thereafter
c         submitted the same for the signature of the Sections in
          charge. With a view that the sub divisions, divisions and
          circles of the Respondents are not able to find out the
          same, the Claimants failed and neglected to send copies
          of the Commissioning reports as provided in Clause
D         8.0(d), thereby making it impossible for the officers
          mentioned in clause (e) thereof to depute representatives
          to inspect the commissioned objects in the. circle. The
          Claimants thus obtained payments from· the dates
           mentioned in the said reports fraudulently by
E          misrepresentation of the facts .... "

      9. The Arbitral Tribunal passed the final award on 18th
  June 2004 whereby it directed MSEB to pay '185,97,86,399/-
  as damages to respondent No.1, and pay interest at the rate
F of 10% p.a. on the sum of '179,15,87,009/-. The award
  contained the following observations suggesting that the MSEB
  had introduced certain fabricated documents as evidence:

          "As regards the Commissioning Reports produced by the
          Respondents at Exhs. C-64 and C-74, the Claimants
G         submitted, and with considerable merit that the
          Respondents had indulged in tampering the
          commissioning reports produced on the record. The
          submission is correct."                               ~
          10. On the basis of the said observations in the arbitral •
H
  MAHARASHTRA STATE ELECTRICITY DISTRIBUTION 561
 CO. LTD. v. DATAR SWITCHGEAR LTD. [D.K. JAIN, J.]

award, on 23rd June 2004 respondent Nos. 1 to 3 filed criminal         A
complaint No. 476 of 2004 before the Judicial Magistrate, First
Class, Nasik for offences under Sections 192 and 199 read
with Section 34 of the IPC. The Judicial Magistrate, First Class,
Nasik took cognizance of the said complaint and issued
summons against all the accused named in the complaint.                B

     11. Being aggrieved by the order of the Magistrate taking
cognizance of the complaint, appellants preferred the afore-
stated petition under Section 482 of the Code before the High
Court of Bombay for quashing of the complaint.
                                                                       c
      12. As stated above, the High Court, vide the impugned
judgment has dismissed the said petition. The High Court has
inter alia observed that a prima facie case has been made out
against .the accused and the complaint clearly establishes the
joint action of the accused to attract vicarious liability under the   D
IPC. Hence, the present appeal by two of the accused.

      13. Mr. Vikas Singh, learned senior counsel appearing on
behalf of the appellants assailed the impugned judgment on the
ground that the dispute between the parties was purely civil in        E
nature, and the criminal justice system has been set in motion
only to pressurize the appellants. In order to buttress the
contention that the High Court would be justified in exercising
its powers under Section 482 of the Code to quash a vexatious
criminal complaint to prevent an abuse of the process of the
Court, learned counsel commended us to the decisions of this
                                                                       F
Court in lnder Mohan Goswami & Anr. Vs. State of Uttaranchal
and Ors. 1, K.L.E. Society & Ors. Vs. Siddalingesh 2 , Baijnath
Jha Vs. Sita Ram & Anr. 3 , Suneet Gupta Vs. Anil Triloknath
Sharma & Ors. 4 and G. Sagar Suri & Anr. Vs. State of U.P. &
o~s                                                                    G
1.   (2007) 12 sec 1.
2.   (2008) 4 sec 541.
3.   (2008) 8 sec 11.
4.   (2008) 11 sec 670.
5.   (2000) 2 sec 636.                                                 H
    562       SUPREME COURT REPORTS              [2010] 12 S.C.R.


A      14. Relying on the decisions in Pepsi Foods Ltd. & Anr.
  Vs. Special Judicial Magistrate & Ors. 6 , S. M. S.
  Pharmaceuticals Ltd. Vs. Neeta Bhalla & Anr7 and Keki
  Hormusji Gharda & Ors. Vs. Mehervan Rustom Irani & Anr. 8 ,
  learned counsel contended that the IPC, save and except in
B some specific cases, does not contemplate vicarious liability
  of a person who is not directly charged for the commission of
  an offence, and a person cannot be made an accused merely
  by reason of his official position. Further, it was contended that
  in order to launch prosecution against the officers of a company,
c the complainant must make specific averments as to the role
  played by each of the officials accused in the complaint. In
  order to buttress the contention, learned counsel placed reliance
  on the decisions of this Court in N.K. Wahi Vs. Shekhar Singh
  & Ors. 9 , Sharon Michael & Ors. Vs. State of.Tamil Nadu 10 ,
  S.K. Alagh Vs. State of Uttar Pradesh & Ors. 11 and Maksud
0
  Saiyed Vs. State of Gujarat & Ors. 12 •

        15. Mr. Ashok Desai," learned senior counsel appearing
  for respondents No.1 & 2, on the other hand, while emphasizing
  that power under Section 482 of the Code is to be exercised
E sparingly and with circumspection, argued that in the instant
  case, in light of the averments in the complaint, a prima facie
  case is made out against the appellants and, therefore, the
  High Court was fully justified in declining to exercise its
  jurisdiction under the said provision. In the written submissions
F filed on behalf of the respondents reliance is placed on the
  decisions of this Court in Sunita Jain Vs. Pawan Kumar Jain 13

    6.   (1998) 5 sec 749.
    7.   c2005) 8 sec 89.
G 8. c2009) 6 sec 475.
    9.   (2007) 9 sec 481.
    10. (2009) 3 sec 375.
    11. (2008) 5 sec 662.
    12. (2008) 5 sec 668.
H   13. (2008) 2 sec 705.
 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION                     563
CO. LTD. v. DATAR SWITCHGEAR LTD. [D.K. JAIN, J.]

and Som Mittal Vs. Government of Kamataka 14 to contend that            A
the present case does not fall in the category of "rarest of rare"
cases, warranting exercise of jurisdiction by the High Court
under Section 482 of the Code. Learned counsel contended
that the offence of fabrication of false evidence cannot be
described as a civil act, and in any event, the existence of a          B
civil remedy does not preclude the maintainability of criminal
complaint.

     16. Relying on the decisions of this Court in Tarun K. Shah
Vs. C.R. A/imchandani & Ors. 15 and K.M. Mathew Vs. K.A.                C
Abraham & Ors. 16 , it was next contended that it was not
necessary to allege an overt act by each of the accused, and
in that regard, the averments in the complaint were sufficient.
Moreover, the use of the expression "whoever causes any
circumstance to exist" in Section 192 of the IPC indicates that
vicarious liability is in-built within the Section, and the complaint   D
contains specific averments to that effect.

  . 17. Learned counsel urged that the. offences under
Sections 192 and 199 IPC were complete when the accused
had adduced the fabricated commissioning reports in                     E
proceedings before the arbitrators, who had adversely
commented on the conduct of the appellants. It was argued that
the said offences would survive irrespective of the sustenance
or otherwise of the arbitral award. Commending us to the
decisions of this Court in In Re: Suo Moto Proceedings
                                                                        F
Against R. Karuppan, Advocate'17 , Sushi/ Kumar Vs. Rakesh
Kumar18 and Murray & Co. Vs. Ashok Kr. Newatia & Anr. 19 ,
learned counsel pleaded that\ the offences of perjury and

14. c2008) 3 sec 574.                                                   G
15. c2001) 9 sec 728.
16. c2002) 6 sec 610.
11. c2001) 5 sec 289.
18. c2003) 8 sec 673.
19. (2000) 2 sec 367.                                                   H
    564       SUPREME COURT REPORTS                [2010] 12 S.C.R.


A   fabrication of false evidence require stern action to be taken
    against persons indulging in such acts.

         18. Before embarking on an evaluation of the rival
    submissions, it would be apposite to briefly examine the nature
    of the power of the High Court under Section 482 of the Code.
8
         19. It is well settled that though the inherent powers of the
   High Court under Section 482 of the Code are very wide in
   amplitude, yet they are not unlimited. However, it is neither
   feasible nor desirable to lay down an absolute rule which would
C govern the exercise of inherent jurisdiction of the Court.
   Nevertheless, it is trite that powers under the said provision
   have to be exercised sparingly and with caution to secure the
   ends of justice and to prevent the abuse of the process of the
   Court. Where the allegations in the first information report or
D the complaint taken at its face value and accepted in their
   entirety do not constitute the offence alleged, the High Court
   would be justified in invoking its powers under Section 482 of
  '.the Code to quash the criminal proceedings. (See: R.P. Kapur
    Vs. State of Punjab 20 and Rupan Deol Bajaj &Anr. Vs. Kanwar
E Pa/ Singh Gill & Anr. 21 .)
         20. In Som Mittal (supra), a three judge bench of this Court,
    while holding that the power under Section 482 of the Code to
    quash criminal proceedings should be used sparingly, and with
    circumspection in the "rarest of rare cases", observed that:
F
          "When the words "rarest of rare cases" are used after the
          words "sparingly and with circumspection" while describing
          the scope of Section 482, those words merely emphasise
          and reiterate what is intended to be conveyed by the words
G         "sparingly and with circumspection". They mean that the
          power under Section 482 to quash proceedings should not
          be used mechanically or routinely, but with care and

    20. AIR 1960 SC 866.
H 21. (1995) 6 sec 194.
  MAHARASHTRA STATE ELECTRICITY DISTRIBUTION 565
 CO. LTD. v. DATAR SWITCHGEAR LTD. [D.K. JAIN, J.]

    caution, only when a clear case for quashing is made out            A
    and failure to interfere would lead to a miscarriage of
    justice. The expression "rarest of rare cases" is not used
    in the sense in which it is used with reference to
    punishment for offences under Section 302 IPC, but to
    emphasise that the power under Section 482 CrPC to                  B
    quash the FIR or criminal proceedings should be used
    sparingly and with circumspection. Judgments are not to
    be construed as statutes. Nor words or phrases in
    judgments to be interpreted like provisions of a statute.
    Some words used in a judgment should be read and                    c
    understood contextually and are not intended to be taken
    literally. Many a time a judge uses a phrase or expression
                                          a
    with the intention of emphasising point or accentuating
    a principle or even by way of a flourish of writing style. Ratio
    decidendi of a judgment is not to be discerned from a stray
                                                                        0
    word or phrase read in isolation."

      21. Thus, the question for consideration is whether or nqt
in light of the allegations in the complaint against the appellants-,
the High Court was correct in law in declining to exercise its
jurisdiction under Section 482 of the Code?                             E

     22. In order to appreciate the rival contentions of the
parties, it would be expedient to refer to the relevant portions
of the complaint:

    "5. In the said Arbitration proceedings it was falsely
                                                                        F
    contended by the Accused at para 9(A)(a) of the Written
    Statement that the Complainant N"o. 1 had submitted false
    and fabricated Commissioning Reports and the equipment
    particularized therein was installed without the presence
    of the MSEBs Section-in-Charge and the Accused relied               G
    upon a copy of the Commissioning Report inter alia
    pertaining to Shirpur Section in Dhule Circle. The said
    Commissioning Report as relied upon by the Accused was
    tendered as Exhibit 'C-64' by the witness examined on
                                                                        H
    566       SUPREME COURT REPORTS                  [2010] 12 S.C.R.


A         behalf of the Accused No. 1. The said Commissioning
          Report contained an endorsement 'not installed in
          presence' to allege that the Commissioning of the
          equipment particularized in the said Commissioning
          Report at Exhibit 'C-64' was not done in the presence of
B         MSEBs Section Officer. The said Commissioning Report
          contained the signature of the representative of the
          Complainant No. 1 and the said endorsement was made
          above the said signature of the Complainant No. 1's
          representative in a mannei to depict as if the Complainant
c         No. 1's representative had accepted the fact alleged in the
          said endorsement.

           6. On the other hand, the Complainant No. 1 brought on
           record their copy of the Commissioning Report pertaining
           to Shirpur Section in Dhule Circle as Exhibit 'C-74' which
D          had no such endorsement as is found on the face of Exhibit
           'C-74'. It is the case of the Complainant No.1 that the
           Accused wifh common criminal intent caused tfie
           impugned endorsement "not installed in presence" to·be
           superscribed on Exhibit 'C-64' after it was duly signed by
E          the representative of the Complainant No. 1 and the
           Section in charge of MSEB so as to convey the
           impression that the Complainant No. 1's representative
           had accepted the fact alleged in the said endorsement.
          .The said falsification and fabrication of the record was
F          brought to the notice of the Ld. Arbitrators in the Arbitration
           proceedings and the Ld. Arbitrators observed in their
           award dated 18.06.2004 as under: ....................... .



G
          The Complainants say and submit that the Ld. Arbitrators
          have thus held that the said endorsement was fabricated
          and was admittedly tendered in evidence by the Accused
          No. 1 acting under the control and management of
          Accused Nos. 2, 3, 4 and 5. The Accused No. 6 was
H
 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION 567
CO. LTD . .v. DATAR SWITCHGEAR LTD. [D.K. JAIN, J.]

    particularly responsible for the conduct of the MSEBs A
    officers in the Shirpur Section which falls under the,'
    Dondaicha Division of Dhule District. The Complainanfs
    say and sublnit that the Accused acted with comm.on
    criminal intent to falsify and fabricate;the said endorsement
    with the intention to support the c;ase of the Accused No. B
    1 that the equipment was installed by the Complainant No.
    1 without the presence of the officers of the MSEB. The
    Complainants say and submit that the said adion was
    therefore clearly intended to pervert the course of justice
    and misled (sic) the Ld. Arbitrator into entertaining in C
    erroneous opinion touching upon the point of material
    determination as to whether the Complainant No. 1 had
    installed the equipment without the presence of the MSEBs
    Section-in-charge. The Complainants say and submit that
    the Accused fabricated false evidence which has been
    tendered by them in the course of judicial proceedings D
    before the Ld. Arbitrators and t~e Accused are guilty of
    offence u/s 192, 199 r/w Sec. 34 of the Indian Penal Code.
    The Complainants say and submit that the Accused acted
    with common criminal intention to play fraud on the Ld.
    Arbitral Tribunal and deny justice to the Complainant No. E
     1."

                                     (Emphasis supplied by us)

     23. It is manifest that the allegation against the appellants
                                                                     F
herein is that appellant No.1 had, acting under the control and
management of all the accused, including appellant No. 2 and
in particular accused No. 6, superscribed an endorsement on
Exhibit C-64 with an intention to support its case and tendered
the same in the course of judicial proceedings before the
Arbitral Tribunal, thereby committing offence of fabricating false   G
evidence in terms of Section 192 and 199 read with Section
34 IPC.
    T\
     24. At this juncture, it would be apposite to refer to the
relevant statutory provisions and examine the legal position.        H
    568       SUPREME COURT REPORTS                   [2010] 12 S.C.R.


A         25. Sections 192 and 199 IPC, read as follows:

          "192. Fabricating false evidence.-Whoever causes any
          circumstance to exist or makes any false entry in any book
          or record, or electronic record or makes any document or
          electronic record containing a false statement, intending
B         that such circumstance, false entry or false statement may
          appear in evidence in a judicial proceeding, or in a
          proceeding taken by law before a public servant as such,
          or before arbitrator, and that sl'-:;h circumstance, false entry
          or false statement, so appearing in evidence, may cause
c         any person who in such proceeding is to form an opinion
          upon the evidence, to entertain an erroneous opinion
          touching any point material to the result of such
          proceeding, is said "to fabricate false evidence"."

D         "199. False statement made in declaration which is by
          law receivable as evidence.- Whoever, in any declaration
          made or subscribed by him, which declaration any Court
          of Justice, or any public servant or other person, is bound
          or authorized by law to receive as evidence of any fact,
E         makes any statement which is false, and which he either
          knows or believes to be false or does not believe to be
          true, touching any point material to the object for which the
          declaration is made or used, shall be punished in the same
          manner as if he gave false evidence."
F       26. It is plain that for constituting an offence under Section
    192 IPC, the following ingredients must be satisfied:
          (i) Causing any circumstance to exist, or making any false
          entry in any book or record or making any document
G         containing a false statement.
          (ii) Doing one of the above acts with the intention that it
          may appear in evidence in a judicial proceeding, or in a
          proceeding taken by law before a public servant or an
          arbitrator.
H
  MAHARASHTRA STATE ELECTRICITY DISTRIBUTION 569
 CO. LTD. v. DATAR SWITCHGEAR LTD. [D.K. JAIN, J.]

    (iii) Doing such act with the intention that it may cause any   A
    person, who in such proceeding, is to form an opinion
    upon the evidence to entertain an erroneous opinion
    touching any point material to the result of such
    proceeding. (See: Babula/ Vs. State of Uttar Pradesh &
    Ors. 22.)                                                       B

     27. Similarly, Section 199 IPC requires the following
ingredients to be established:

    "(i) Making of a declaration which a Court or a public
    servant is bound or authorised by law to receive in             C
    evidence.
                                             I
     (ii) Making of a false statement in such declaration
     knowing or believing it to be false.
                                                                    D
     (iii) Such false statement must be touching any point
     material to the object for which the declaration is made or
     used.''. ·                                          ·

     28. A bare perusal of the complaint shows that the
gravamen of the allegation is that a fabricated document            E
containing the offending endorsement was tendered in
evidence before the Arbitral Tribunal on behalf of MSEB by
accused No. 6, who was in-charge of Shirpur section. It is
evident from the afore-extracted paragraphs of the complaint
that other accused have been named in the complaint because,        F
according to the complainant, MSES-accused No. 1 was acting
under their control and management. It bears repetition that the
only averment made against appellant No. 2 is that appellant
No.1, i.e. MSES was acting under the control and management
of appellant No. 2 along with other three accused. There is no      G
denying the fact that appellant No. 2 happened to be the
Chairman of MSES at the relevant time but it is a settled
proposition of law that one cannot draw a presumption that a
Chairman of a company is responsible for all acts committed
22. AIR 1964 SC 725.                                                H
    570       SUPREME COURT REPORTS                  [2010] 12 S.C.R.


A by or on behalf of the Company. In the entire body of the
  complaint there is no allegation that appellant No. 2 had
  personally participated in the arbitration proceedings or was
  monitoring them in his capacity as the Chairman of MSES and
  it was at his instance the subject interpolation was made in
B Exhibit C-64. At this stage, we may refer to the extract of a
  Board resolution, pressed into service by the respondents in
  support of their plea that appellant No. 2 was responsible for
  the conduct of business of appellant No. 1. The said resolution
  merely authorises the Chief-Engineer to file counter claim
c before the Arbitral Tribunal in proceedings between appellant
  No. 1 and respondent No. 1. It rather demonstrates that it was
  the Chief Engineer who was made responsible for looking after
  the interest of the appellant No. 1 in those proceedings. In this
  regard, it would be useful to advert to the observations made
  by a three judge bench of this Court in S. M. S. Pharmaceuticals
0
    (supra) :-

          "Th~re is no universal rule that a director of a company is
          in charge of its everyday affairs. We have discussed about
          the position of a director in a company in order to illustrate
E         the point that there is no magic as such in a particular word,
          be it director, manager or secretary. It all depends upon
          the respective roles assigned to the officers in a company.
          A company may have managers or secretaries for different
          departments, which means, it may have more than one
F         manager or secretary."

       29. It is trite law that wherever by a legal fiction the principle
  of vicarious liability is attracted and a person who is otherwise
  not personally involved in the commission of an offence is made
G liable for the same, it has to be specifically provided in the
  statute concerned. In our opinion, neither Section 192 IPC nor
  Section 199 IPC, incorporate the principle of vicarious liability,
  and therefore, it was incumbent on the complainant to
  specifically aver the role of each of the accused in the
  complaint. It would be profitable to extract the following
H
  MAHARASHTRA STATE ELECTRICITY DISTRIBUTION 571
 CO. LTD. v. DATAR SWITCHGEAR LTD. [D.K. JAIN, J.]
observations made in S.K. Alagh (supra) :-                              A

     "As, admittedly, drafts were drawn in the name of the
     Company, even if the appellant was its Managing Director,
     he cannot be said to have committed an offence under
   . Section 406 of the Penal Code. If and when a statute
                                                                        B
     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."
                                                                        c
     30. Therefore, we are of the view that even the Board
Resolution, adduced by the complainant, does not establish that
appellant No.2 was involved in the alleged fabrication of false
evidence or adducing the same in evidence before the arbitral
tribunal. In the absence of any such specific averment D
demonstrating the role of appellant No.2 in the commission of
the offence, we find it difficult to hold that the complaint, even
assuming it to be correct in its entirety, discloses the
commission of an offence by appellant No.2 under Sections·.
192 and 199 of IPC.                                                E

        31. However, in so far as the case of appellant No.1
 company is concerned, bearing in mind the fact that Exhibit C-
 64 was submitted with the intention to support the averments
 in the written statement filed on their behalf, which could
 possibly influence the decision of the arbitral tribunal in relation   F
·to the conduct of the respondent No. 1 while discharging their
 obligations u:ider the contract between them and appellant No.
 1, we are unable to hold that prima facie, a case of offences
 under Sections 192 and 199 IPC is not made out against them.
 It is evident from the observations of the Tribunal quoted in para     G
 9 (supra) that had the tribunal not doubted the veracity of the
 said document, it could have made a material difference to the
 result of the arbitral proceedings.

     32. It was faintly argued that the arbitral award on the basis     H
        572       SUPREME COURT REPORTS                [2010] 12 S.C.R.


    A whereof the said complaint has been filed has been set aside
      and therefore, the complaint is liable to be quashed on this
      ground. The submission is untenable as the offences under
      Sections 192 and 199 IPC, if made out, exist independent of
      the final arbitral award. We are, therefore, of the opinion, that
    8 it is not a fit case for the exercise of power under Section 482
1

      of the Code, in favour of appellant No. 1.

           33. We shall now examine whether appellant No.2 could
      be made liable for the afore-mentioned offences by operation
      of Section 34 of IPC. It is trite that Section 34 IPC do.es not
    C constitute a substantive offence, and is merely in the nature of
      a rule of evidence, and liability is fastened on a person who
      may have not been directly involved in the commission of the
      offence on the basis of a pre-arranged plan between that
      person and the persons who actually committed the offence. In
    D order to attract Section 34 IPC, the following ingredients must
      be established:

              "(i) there was common intention in the sense of a pre-
              arranged plan;
    E
              (ii) the person sought to be so held liable had participated
              in some mar;mer in the act constituting the offence." (See:
              Chandrakant Murgyappa Umrani & Ors. Vs. State of
              Maharashtra 23; Hamlet @ Sasi & Ors. Vs. State of
              Kerala 24; Surendra Chauhan Vs. State of M.P. 25)
    F
           34. It is manifest that common intention refers to a prior
      concert or meeting of minds, and though, it is not necessary
      that the existence of a distinct previous plan must be proved,
      as such common intention may develop at the spur of the
    G moment, yet the meeting of minds must be prior to the
      commission of offence suggesting the existence of a pre-

        23. 1998 sec (CRI) Ei98.
        24. (2003) 1o sec 108.
    H 2s. (2000) 4 sec 110.
MD. ALAUDDIN KHAN v. KARAM THAMARJIT SINGH 573
             [V.S. SIRPURKAR, J.]
arranged plan. Therefore, in order to attract Section 34 of the       A
IPC, the complaint must, prima facie, reflect a common prior
concert or planning amongst all the accused. In our opinion, in
the present case, the complaint does not indicate the existence
of any pre-arranged plan whereby appellant No. 2 had, in
collusion, with the other accused decided to fabricate the            B
document in question and adduce it in evidence before the
arbitral tribunal. There is not even a whisper in the complaint
indicating any participation of appellant No. 2 in the acts
constituting the offence, and that being the case we are
convinced that Section 34 IPC is not attracted in his case.           c
     35. In the final analysis, we are of the opinion that no prima
facie case has been made out against appellant No.2 in respect
of offences under Sections 192 and 199 of the IPC, even with
the aid of Section 34 of the IPC. Therefore, it was a fit case
where the High Court should have exercised its powers under           D
Section 482 of the Code by quashing the complaint against
appellant No. 2.                                  ·

    36. For the aforegoing reasons, the appeal is dismissed
qua appellant No. 1; it is allowed in relation to appellant No.2;     E
and consequently order of the Magistrate taking cognizance
against appellant No. 2 in Complaint No.476 of 2004 is
quashed.

N.J.                                      Appeal partly allowed.