Supreme Court of India
RAVINDRA KUMAR MADHANLAL GOENKA & ANR.versusM/S. RUGMINI RAM RAGHAV SPINNERS P. LTD.
- Citation
- 2009 INSC 485
- Decided
- 13 April 2009
- Disposal
- Dismissed
- Bench
- S B SINHA
Holding
A petition under Section 482 CrPC cannot be entertained to quash proceedings where prima facie material exists; the defence must be considered at trial and the case is not an extreme one warranting pre‑emptive dismissal.
Summary
The appellants, commission agents dealing in cotton, were sued by the respondent for criminal breach of trust, cheating, dishonest misappropriation and conspiracy under IPC sections 406, 420, 384 and 120‑B. They filed a petition under Section 482 of the CrPC seeking to quash the criminal proceedings, arguing that the dispute was essentially civil. The High Court dismissed the petition, holding that a prima facie case existed and that any defence could be raised only at trial. On appeal, the Supreme Court affirmed that where prima facie material is present, a petition under Section 482 cannot be entertained; the investigation must be allowed to proceed unless the case falls within extreme circumstances. The Court emphasized that defence evidence cannot be considered at the quash stage and that the present commercial dispute did not merit pre‑emptive dismissal. Consequently, the appeal was dismissed.
Issues considered
- The scope of power under Section 482 CrPC to quash criminal proceedings when the complaint discloses a prima facie case.
- Whether a commercial dispute that is civil in nature can justify quashing of criminal proceedings.
- Whether the defence of the accused can be examined at the stage of a petition under Section 482.
Legislation cited
- Code of Criminal Procedure, 1973s. 482
- Indian Penal Code, 1860s. 120-B, s. 384, s. 406, s. 420
Subjects
Section 482 CrPCquashing criminal proceedingsprima facie casecommercial disputecivil vs criminal jurisdictiondefence at trialinvestigation pre‑emption
Judgment
[2009] 6 S.C.R. 27
RAVINDRA KUMAR MADHANLAL GOENKA & ANR. A
v.
MIS. RUGMINI RAM RAGHAV SPINNERS P. LTD.
(Criminal Appeal No. 706 of 2009)
APRIL 13, 2009
B
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.]
Code of Criminal Procedure, 1973 - s. 482 - Scope of
- Complaint uls. 120-B, 406, 420 and 384 IPC - Petition for
quashing the proceedings - Dismissed by High Court - On C
appeal, held: On facts, criminal proceeding not liable to be
quashed - Defence of the accused can be entertained only
at trial stage - It cannot be looked into in a petition uls. 482 -
Investigation of the case should not be permitted to be pre-
""" empted unless there are extreme cases -Present case is not D
an extreme case - Penal Code, 1860 - ss. 120-8, 406, 420
and 384.
Appellant No. 1 was dealing in cotton as Commission
Agent. Appellant No. 2 was his business partner.
Respondent approached appellant No. 1 and ordered for E
cotton bales. Over a period, dispute arose between them.
Respondent asked the appellant to release the bales
agreed upon and appellant told him that the bales would
be released only on payment of balance amount.
Respondent filed complaints before Magistrate against F
appellant No. 1 u/ss. 406, 420 and 384 IPC and against
appellant No. 2 u/ss. 120-B, 406, 420 and 384 IPC.
Appellant's application u/s. 482 Cr.PC for quashing the
criminal proceedings was dismissed. Hence, the present
~ appeal. · ·G
Dismissing the appeal, the Court
HELD: In the instant case, there il~ no denial of the
27 H
28 SUPREME COURT REPORTS [2009) 6 S.C.R.
A fact that though 900 bales of cotton was already
dispatched, 100 bales of cotton are yet to be dispatched.
The defence raised by the appellant can be urged and
proved only during the course of trial. While entertaining
a petition u/o. 482 CrPC, the materials furnished by tho
a defence cannot be looked Into and the defence materials
can be entertained only at the time of trial. It Is well settled
position of law that when there are prlma facle materlals
available, a petition for quashing the criminal
proceEldings cannot be entertained. The Investigating
c agency should have had the freedom to go into the whole
gamut. of the allegations and to reach a conclusion of its
own. Pre-emption of such investigation would be justified
only in very extreme cases. Considering the facts of the
present case, it is not one of those extreme cases where
criminal prosecution can be quashed by the court at the
0
very threshold. [Paras 14 and 15] [37-E-H; 38-A-B]
Nagawwa v. Veeranna Shivalingappa Konjalgi 1976 (3)
SCC 736; State of Haryana v. Bhajan Lal 1992 Supp. (1)
SCC 335; Indian Oil Corpn. v. NEPC India Ltd. 2006 (6) SCC
E 736 and Uma Shankar Gopalika v. State of Bihar 2005 (10)
sec 336, distinguished.
Rupan Deal Bajaj v. Kanwar Pal Singh Gil/ 1995 (6) SCC
194; Pratibha Rani v. Suraj Kumar 1985 (2) SCC 370,
F referred to.
Case Law Reference:
1976 (3) sec 736 Distinguished. Para 9
1992 Supp. (1) sec 335 Distinguished. Para 10
G
1995 (6) sec 194 Referred to. Para 10 •
1985 (2) sec 370 Referred to. Para 10
2006 (6) sec 736 Distinguished. Para 12
H
•• '?
RAVINDRA KUMAR MADHANLAL GOENKA v. 29
RUGMINI RAM RAGHAV SPIN. P. LTD.
2006 (10) SCC 336 Distinguished. Para 13 A
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 706 of 2009.
From the Judgment & Order dated 30.8.2006 of the High
Court of Judicature at Madras in Criminal Original Petition No. B
4556 of 2006.
~· H.L. Agarwal, Dr. R.N. Upadhya (for P.V. Yogeswaran) for
the Appellants.
M.N. Krishnamani, Mary Mitzy, Deepak Jain, G.S. C
Chauhan and (for Shiv Prakash Pandey) for the Respondents.
The Judgment of the Court was delivered by
DR. MUKUNOAKAM SHARMA, J. 1. Leave granted. D
2. This appeal arises out of the judgment and order dated
30.08.2006 passed by the Madras High Court In Criminal
Original Petition No. 4556 of 2006 whereby the learned Single
Judge of the High Court dismissed the petition filed under E
Section 482 of the Code of Criminal Procedure (in short
'CrPC') by the appellants for quashing criminal complaint filed
against them by the respondents before the Judicial Magistrate,
Coimbatore, Tamil Nadu.
3. Facts in brief, as alleged by the appellants, are as F
follows:
Ravindera Kumar Madhanlal Goenka - Accused No. 1 (
1st appellant herein) is the proprietor of Mis. Ravindera Kumar
Madhanlal having its office at Shri Ganesh Complex, Kothadi G
Bazar, Akola - 444001, Maharashtra and is a General
~ Merchant and Commission Agent for various food items like
sugar, jaggery, oil seeds, oil, grains, pulses and cotton etc. It
was dealing in cotton as commission agent for various persons
belonging to different places in different states including
H
30 SUPREME COURT REPORTS [2009) 6 S.C.R.
A Coimbatore in Tamil Nadu. The proprietorship of the 1st
appe!!ant is registered with the Sales Tax Department of
Maharashtra. Srimathi Ravindra Kumar Madhanlal Goenka -
Accused No. 2 (2nd appellant herein) is stated to be a partner
in the firm. Accused-2 is a broker cum dealer and Accused-3
B his wife, a partner and Accused-4 is his sub-broker/agent. The
present appeal has been filed by Accused-1 (1st appellant) and
Accused-2 (2nd appellant).
4. The respondent through his agents approached the 1st
C appellant by personally visiting Akola and ordered cotton bales
to manufacture yarn. The agents had stayed for about 45 days
at Akola and after examining the quality of cotton and after their
approval the cotton was transported to the respondent for which
the respondent offered 1% commission to the 1st appellant. The
1st appellant by raising bank loan gave the same to the cotton
D manufacturers and dealers and bought from them and
...
thereafter, as requested by the respondent, transported the
same to Coimbatore. It was a practice that entire advance
amount was to be paid at the time of ordering cotton. The
respondent after gaining confidence of the 1st appellant some
E time used to send even lesser amount than the actual value of
the cotton but even then the 1st appellant used to send cotton
bales over and above the advance amount paid by the
resporident. The advance amount used to be sent by the
respondent by telegraph transfer and every transfer was ~
F accounted by both the respondent as well as 1st appellant.
5. During the course of their business transaction the
respondent had developed some problem with their two
commission agents belonging to Coimbatore with regard to the
G payment of compensation and other expenses. The appellant
had sent a fax message on 12.2.2004 to the respondent giving "
statement of accounts by showing that the amount lying with him
is Rs. 4,74,521/- and requested him to send balance money
for sending 100 bales and also requested to send the 'C' Form.
H In response to the above fax, on 15.02.2004, the respondent
RAVINDRA KUMAR MADHANLAL GOENKA v. RUGMINI RAM 31
RAGHAV SPIN. P. LTD. [DR. MUKUNDAKAM SHARMA, J.]
"' sent a fax stating that the closing balance with the 1st appellant A
is Rs. 4,76,521/-. Thereafter, the respondent through his agents
requested the 1st appellant to send totaling 145 bales of cotton
and it was confirmed by the fax messages dated 18.2.2004 of
his agent Mr. Srinivas R. Lele wherein he made specific request
to send the 145 bales after receiving the entire amount and B
also by deducting Yi% commission payable to him. The 1st
appellant, vide his fax message dated 20.2.004 requested the
respondent to send the remaining amount for lifting of 145
bales, which was weighed by his new controller and also
requested him to settle all the amount by sending the statement c
of account along with the fax. However, the respondent by return
fax disputed the 1st appellant's claim and allegedly made
some false statement. Again,, the 1st appellant by another fax
requested the respondent to send the remaining balance
including the late fee in accordance with the terms and
D
conditions. The second condition in the invoice was that 24%
interest would be levied upon accounts remaining unpaid 30
days from the date of dispatched goods. The 1st appellant
claimed late fee interest in accordance with the above terms.
However, the respondent did not make such payment. Some
further dispute arose between the parties. E
~
6. Subsequently, the 1st appellant approached the Akola
Police for filing a complaint. However, the same was not
.I. entertained and registered stating that the transaction was
purely commercial and civil in nature and the business disputes F
cannot be resolved by criminal prosecution. In the meanwhile,
the respondent filed a complaint under Section 200 CrPC
before the Judicial Magistrate No. 1 at Coimbatore for offences
u/s 406, 420 and 384 of the Indian Penal Code (in short 'IPC'.
The court vide order dated 2.8.2004 issued an order directing G
·~
the Thudiyalur Police to register a case under Section 406, 420
and 384 IPC and submit their final report within 3 months. The
case was registered on 21.8.2004 after receipt of the court
order on 9.8.2004. Subsequently, the respondent also filed a
private complaint under Section 190 and 200 Cr. PC for H
32 SUPREME COURT REPORTS [2009) 6 s. c. R.
A offences punishable under Sections 120·8, 406, 420 and 384
IPC by Implicating the 2nd appellant, who la the wife of the 1st
oppellant and one Srlnlvasa Lele who la the agent of the
respondent. The Judicial Magistrate No. 1 at Coimbatore on
the basis of such complaint Issued summons to the appellants
B to appear before the court on 17.2.2006.
7. Aggrieved by the aforesaid order of the learned Judicial
Magistrate No. 1, the appellants approached the High Court
for quashing the criminal proceedings against them by filing ·
Criminal Original Petition No. 4556 of 2006 which was
C dismissed by the High Court. The High Court held that a perusal
of allegations mentioned against the accused show that a
prims facie case Is made out but only the trial court may have
to look Into the defence materials produced by the appellants
and admittedly, there was business transaction wherein 900
D bales of cotton were already dispatched but 100 bales of cotton
were yet to be dispatched. Accordingly, the High Court refused
to quash the proceeding.
8. Aggrieved by the said order of the High Court, the
E present SLP has been preferred. It is the case of the appellant
the no criminal proceeding can be initiated as the matters are
essentially civil in nature and business disputes cannot be
resolved by criminal proser.ution. It is the case of the appellant
that 1st appellant at the request of the respondent procured 145
F bales and kept for long time with the dealers place and as the
respondent failed to make payment waiting for despite long
duration, the 1st appellant had stored the 145 bales of cotton
in the Central Ware House at Akola on 18.03.2004 by paying
regular rent and it was being extended from time to time and
G still the bales procured for him is remain at Central Ware
House, Akola. It was contended that had the respondent paid
the entire amount for the 145 bales, the 1st appellant could have
dispatched the bales to the respondent. It is th.e case of the
appellant that the entire amount had already been invested in
H procuring bales for him by investing additional amount of
RAVI NORA KUMAR MADHANLAL GOENKA v. RUGMINI RAM ""~33
RAGHAV SPIN. P. LTD. [OR. MUKUNDAKAM SHARMA, J.]
~
another Ra. 10 lakha by raising bank loan by the 1st appellant. A
-... Hence, there was no cheating or fraud played by the 1st
appctllant. In vlow of the spme It was contended that It was an
alleged breach of contract that'e also only at the last stage of
the performance of the agreement which was due to dispute
of payment of the entire advance amount. In view of this, the B
High Court ought to have quashed the criminal proceedings
Initiated by the respondents.
9. The scope ,of power under Section 482 CrPC has been
explained In a series of decisions by this Court. In Nagawwa v.
~ Veeranna Sh/vallngappa Konjalg/ [1976 (3) SCC 736], it was
c
held that the Magistrate while Issuing process against the
accused should satisfy himself as to whether the allegations In
the complaint, If proved, would ultimately end In the conviction
of the accused. It was held that the order of Magistrate Issuing
process against the accused could be quashed under the D
~
following circumstances: (SCC p. 741, para 5)
"(1) Where the allegations made In the complaint or the
statements of the witnesses recorded in support of the
same taken at their face value make out absolutely no case E
against the accused or the complaint does not disclose
the essential ingredients of an offence which is alleged
against the accused;
J,
(2) Where the allegations made in the complaint are
F
"-.
patently absurd and inherently improbable so that no
prudent person can ever reach a conclusion that there is
sufficient ground for proceeding against the accused;
(3) Where the discretion exercised by the Magistrate in
issuing process is capricious and arbitrary having been G
.+ based either on no evidence or on materials which are ...
wholly irrelevant or inadmissible; and
(4) Where the complaint suffers from fundamental legal
defects, such as, want of sanction, or absence of a H
34 SUPREME COURT 'REPORTS [2009] 6 S.C.R.
A complaint by legally competent authority and the like."
10. In State of Haryana v. Bhajan La/[1992 Supp. (1) SCC
335], a question came up for consideration as to whether
quashing of the FIR filed against the respondent Bhajan Lal for
8 the offences under Sections 161 and 165 IPC and Section 5(2)
of the Prevention of Corruption Act was proper and legal.
Reversing the order passed by the High Court, this Court
explained the circumstances under which such power could be
exercised. Apart from reiterating the earlier norms laid down
C by this Court, it was further explained that such power could be
exercised where the allegations made in the FIR or complaint
are so absurd and inherently improbable on the basis of which
no prudent person can ever reach a just conclusion that there
is sufficient ground for proceeding against the accused.
However, this Court in Rupan Deo/ Bajaj v. Kanwar Pal Singh
D Gill [1995 (6) SCC 194] held (at SCC p. 209, para 23) that "at
the stage of quashing an FIR or complaint the High Court is not
justified in embarking upon an inquiry as to the probability,
reliability or genuineness of the allegations made therein".
E 11. In Pratibha Rani v. Suraj Kumar [1985 (2) SCC 370],
the question arose that when the civil as well as the criminal
remedy is available to a party, can a criminal prosecution be
completely barred. In this case, the matter related to the stridhan
property. The complainant alleged that her husband, father-in- ~
F law and other relatives misappropriated her jewellery and other
valuable articles entrusted to them by her parents at the time
of marriage. The complainant alleged that these dowry articles
were meant for her exclusive use and that the accused
misbehaved and maltreated her and ultimately he turned her out
G without returning the dowry articles. The accused filed a
criminal miscellaneous petition under Section 482 for quashing
the criminal proceedings and the High Court quashed the same. +
The accused contended that the dispute was of a civil nature
and no criminal prosecution would lie. Under thet circumstance,
H this Court held in para 21 at pp. 382-83 as under:
RAVINDRA KUMAR MADHANLAL GOENKA v. RUGMINI RAM 35
RAGHAV SPIN. P. LTD. [DR. MUKUNDAKAM SHARMA, J.]
"21. There are a large number of cases where criminal law A
and civil law can run side by side. The two remedies are
not mutually exclusive but clearly coextensive and
essentially differ in their content and consequence. The
object of the criminal law is to punish an offender who
commits an offence against a person, property or the State 8
for which the accused, on proof of the offence, is deprived
of his liberty and in some cases even his life. This does
not, however, affect the civil remedies at all for suing the
wrongdoer in cases like arson, accidents, etc. It is an
anathema to suppose that when a civil remedy is avaiiable, C
a criminal prosecution is completely barred. The two types
of actions are quite different in content, scope and import."
12. This Court in the case of Indian Oil Corpn. v. NEPC
India Ltd. [2006 (6) SCC 736], at page 747 has observed as
under: O·
"12. The principles relating to exercise of jurisdiction under
Section 482 of the Code of Criminal Procedure to quash
complaints and criminal proceedings have been stated and
reiterated by this Court in several decisions. To mention a E
few-Madhavrao Jiwajirao Scindia v. Sambhajirao
• Chandrojirao Angre, State of Haryana v. Bhajan Lal,
Rupan Deal Bajaj v. Kanwar Pal Singh Gill, Central
Bureau of Investigation v. Duncans Agro Industries Ltd.,
State of Bihar v. Rajendra Agrawal/a, Rajesh Bajaj v. F
State NCT of Delhi, Medchl Chemicals & Pharma (P) Ltd.
v. Biological E. Ltd., Hridaya Ranjan Prasad Verma v.
State of Bihar, M. Krishnan v. Vijay Singh and Zandu
Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque. The
principles, relevant to our purpose are:
G
(i) A complaint can be quashed where the allegations
made in the complaint, even if they are taken at their face
value and accepted in their entirety, do not prima facie
constitute any offence or make out the case alleged against
the accused. H
36 SUPREME COURT REPORTS [2009] 6 S.C.R.
~
A For this purpose, the complaint has to be exomlnod
ae o whole, but without examining tho merits of the
l!lllogatlons. Neither a detailed Inquiry nor a meticulous
analysis of the material nor an assessment of the reliability
or genuineness of the allegations In the complaint, Is
B warranted while examining prayer for quashing of a
complaint.
(ii) A complaint may also be quashed where It is a clear \
abuse of the process of the court, as when the criminal
c
proceeding Is found to have been initiated with mala
fldes/mallce for wreaking vengeance or to cause harm, or
where the allegations are absurd and Inherently
improbable.
-
(Ill) The power to quash shall not, however, be used to ,,.
D stifle or scuttle a legitimate prosecution. The power should
be used sparingly and with abundant caution. ...
(iv) The complaint is not required to verbatim reproduce
the legal ingredients of the offence alleged. If the necessary
factual foundation is laid in the complaint, merely on the
E ground that a few ingredients have not been stated in
detail, tile proceedings should not be quashed. Quashing
of the complaint is warranted only where the complaint is
so bereft of even the basic facts which are absolutely
necessary for making out the offence.
F
(v) A given set of facts may make out: (a) purely a civil
wrong; or (b) purely a criminal offence; or (c) a civil wrong
as also a criminal offence. A commercial transaction or a
contractual dispute, apart from furnishing a cause of action
G for seeking remedy in civil law, may also involve a criminal
offence. As the nature and scope of a civil proceeding are +
different from a criminal proceeding, the mere fact that the
complaint relates to a commercial transaction or breach
of contract, for which a civil remedy is available or has
H been availed, is not by itself a ground to quash the criminal
RAVINDRA KUMAR MADHANLAL GOEN KA v. RUGMINI RAM 37
,, RAGHAV SPIN. P. LTD. [DR. MUKUNDAKAM SHARMA, J.J
\
proceedings. The test is whether the allegations in the A
complaint disclose a criminal offence or not."
13. The appellant has placed reliance on a decision Qf this
Court in the case of Uma Shankar Gopallka v. State of. Bihar
[2005 (10) SCC 336], at page 338 1 wherein this Court hae B
observed as follows:
11
7, In our view ~atltloti of complalnt does not disclose any
crlrninal offence at all much less any offence either under
Section 420 or Section 120·8 IPC and the present case
Is a case of purely civil dispute between the parties for c
which remedy lies before a civil court by filing a properly
constituted suit. lri our opinion, in view of these facts
allowing the police investigation to continue would amount
to an abuse of the wocess of court and to prevent the
same it was just and expedient for the High Court to quash D
the same by exercising the powers under Section 482
CrPC which it has erroneously refused."
14. In the abovementioned case, this Court has taken the
view that when the complaint does not disclose any criminal E
offence, the proceeding is liable to be quashed under Section
482 CrPC. However, the same is not the situation in the present
case. There is no denial of the fact that though 900 bales of
J.
cotton was already dispatched, but 100 bales of cotton are yet
to be dispatched. The defence raised by the appellant F
hereinabove can be urged and proved only during the course
pf trial. While entertaining a petition under Section 482 CrPC,
the materials furnished by the defence cannot be looked into
and the defence materials can be entertained only at the time
of trial. It is well settled position of law that when there are prima
.... facie materials available, a petition for quashing the criminal
G
proceedings cannot be entertained. The investigating agency
should have had the-freedom to go into the whole gamut of the
allegations and to reach a conclusion of its own. Pre-emption
of such investigation would be justified only in very extreme
H
38 SUPREME COURT REPORTS (2009) 6 S.C.R.
A cases.
15. While considering the facts of the present case, we are
of the considered opinion that the present case is not one of
those extreme c:ases where criminal prosecution can be
quashed by the court at the very threshold. A defence case is
8
pleaded but such defence is required to be considered at a
later stage and not at this stage. The appellants would have
ample opportunity to raise all the issues urged in this appeal.
at an appropriate later stage, where such pleas would be and
C could be properly analysed and scrutinized.
16. In view of the aforesaid position, we decline to interfere
with the criminal proceeding at this stage. The appeal is
consequently dismissed. .·".
D K.K.T. Appeal dismissed.
'1
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