2016 (4) TMI 1466 - SC - Indian Laws

Refusal to quash the criminal proceedings - Forgery - mis-appropriation of funds and breach of trust - HELD THAT - As regards the commission of offences under the Information Technology Act, 2000 the allegations are that the Appellant had, with fraudulent and dishonest intention on the website of Devi Consultancy Services i.e. www.devidcs.com that the former is a sister concern of Devi Polymers. Further, that this amounts to creating false electronic record. In view of the finding, no offence is made out Under Section 66 of the I.T. Act, read with Section 43. The Appellant was a Director of Devi Polymers and nothing is brought on record to show that he did not have any authority to access the computer system or the computer network of the company. That apart there is nothing on record to show the commission of offence Under Section 65 of the I.T. Act, since the allegation is not that any computer source code has been concealed, destroyed or altered. The acts of the Appellant did not have any dishonest intention while considering the allegations in respect of the other offences. In the circumstances, no case is made out Under Sections 65 and 66 of the I.T. Act, 2000. The High Court seems to have over looked these circumstances and has merely dismissed the petition Under Section 482 of the Code of Criminal Procedure on the ground that it requires evidence at a trial to come to any conclusion - the criminal proceedings initiated by the Respondent constitute an abuse of process of Court and it is necessary to meet the ends of justice to quash the prosecution against the Appellant. The prosecution is quashed - Appeal allowed.

Summary

Issues Involved:
1. Quashing of criminal proceedings against the appellant.
2. Allegations of forgery and misappropriation under the Indian Penal Code.
3. Alleged offences under the Information Technology Act, 2000.

Issue-wise Detailed Analysis:

1. Quashing of Criminal Proceedings:
The appellant sought to quash the criminal proceedings initiated against him by the respondent. The Supreme Court granted leave to appeal against the Madras High Court's decision, which refused to quash the said proceedings. The appellant was prosecuted under Sections 409, 468, and 471 of the Indian Penal Code (IPC), read with Sections 65 and 66 of the Information Technology Act, 2000, and Section 120(b) of the IPC.

2. Allegations of Forgery and Misappropriation:
The appellant, a director in Devi Polymers Private Limited, was accused of creating a separate entity named Devi Consultancy Services (DCS) and showing it as an independent division on a website. The respondent claimed this constituted forgery and misappropriation of funds. However, the court found that DCS was clearly shown as a part of Devi Polymers Private Limited on the website, with no attempt to project it as an independent entity. The court noted that no funds were received separately by the appellant or Unit C, which he headed, and all payments were made to Devi Polymers Private Limited. The court concluded that the appellant's actions did not meet the criteria for forgery under Section 463 IPC, as there was no intent to cause damage, injury, or commit fraud.

3. Alleged Offences under the Information Technology Act, 2000:
The allegations under the Information Technology Act were based on the claim that the appellant created a false electronic record by showing DCS as a sister concern of Devi Polymers. The court found no evidence that the appellant acted with fraudulent or dishonest intent. Additionally, there was no proof that the appellant lacked authority to access the company's computer system or network. The court determined that no offences under Sections 65 and 66 of the Information Technology Act were made out, as there was no concealment, destruction, or alteration of any computer source code.

Conclusion:
The Supreme Court found that the allegations against the appellant were inherently improbable and lacked sufficient grounds for proceeding. The court emphasized that the criminal proceedings seemed to stem from a private and personal grudge between the parties. Citing precedents, the court reiterated that criminal proceedings should be quashed when the allegations do not constitute any offence, are absurd, or are initiated with mala fide intentions. The court concluded that the High Court should have exercised its power to quash the proceedings under the relevant guidelines. Consequently, the appeal was allowed, and the prosecution against the appellant was quashed.