2005 (1) TMI 406 - SC - Companies Law

Offences punishable under sections 406 and 428 of the Indian Penal Code - Held that - Appeal allowed. In the present case the appellant was discharged by the Chief Judicial Magistrate and the revisional Court confirmed that order after elaborately considering the facts and circumstances of the case. It may also be noted no offences were made out under section 406 IPC as it was a matter of civil nature. The respondent-corporation had also initiated steps for arbitration proceedings on the basis of the arbitration clause in the agreement. Thus the High Court was not justified in exercising its inherent power under section 482 of the Criminal Procedure Code in this case. It cannot be either said that there was miscarriage of justice warranting interference by the High Court.

Summary

Issues:
1. Jurisdiction of the High Court to set aside orders passed by lower courts in revision.
2. Exercise of inherent powers under section 482 of the Criminal Procedure Code by the High Court.
3. Scope of interference by the High Court in cases of serious miscarriage of justice or abuse of the court's process.

Analysis:
1. The case involved an appeal against the judgment of the High Court of Punjab & Haryana where the appellant was accused of offences under sections 406 and 428 of the Indian Penal Code. The appellant, a partner in a firm, was discharged by the Chief Judicial Magistrate on the grounds that the complaint was of a civil nature and no criminal case was made out. The corporation, dissatisfied with this decision, filed revisions before the Sessions Judge and subsequently before the High Court, which set aside the lower court's orders. The issue before the Supreme Court was the jurisdiction of the High Court to interfere with the decisions of lower courts in revision.

2. The appellant argued that the High Court erred in entertaining the revision as it was not maintainable under section 397(3) of the Criminal Procedure Code. On the other hand, the respondent-corporation contended that the High Court had inherent jurisdiction under section 482 of the Code to set aside the Sessions Judge's order due to a serious miscarriage of justice. Citing precedents like Krishnan v. Krishnaveni and State v. Navjot Sandhu, the Supreme Court analyzed the scope of the High Court's inherent powers and the circumstances under which such powers could be invoked.

3. The Supreme Court emphasized that the power under section 482 of the Criminal Procedure Code should be exercised sparingly and not as a substitute for a second revision. Referring to previous judgments like Rajathi v. C. Ganesan, the Court reiterated that the High Court's inherent jurisdiction could be invoked in cases of serious miscarriage of justice or abuse of the court's process. In the present case, the appellant had been discharged after due consideration by the Chief Judicial Magistrate and the Sessions Judge. The Court found that the High Court had erred in exercising its inherent power under section 482 as there was no miscarriage of justice. Consequently, the Supreme Court allowed the appeals and affirmed the order of discharge in favor of the appellant, setting aside the High Court's judgment.