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2021 (3) TMI 37 - SC - Indian LawsDishonor of Cheque - insufficient funds - validity of FIR by the Accused against the complainant - contractual dispute - the private respondent-complainant has filed an application under Section 156(3) Cr.P.C., which is pending before the learned Magistrate, the impugned FIR is lodged with the same allegations - HELD THAT - As per Section 210 Cr.P.C., when in a case instituted otherwise than on a police report, i.e., in a complaint case, during the course of the inquiry or trial held by the Magistrate, it appears to the Magistrate that an investigation by the police is in progress in relation to the offence which is the subject matter of the inquiry or trial held by him, the Magistrate shall stay the proceedings of such inquiry or trial and call for a report on the matter from the police officer conducting the investigation. It also provides that if a report is made by the investigating police officer under Section 173 Cr.P.C. and on such report cognizance of any offence is taken by the Magistrate against any person who is an accused in the complaint case, the Magistrate shall inquire into or try together the complaint case and the case arising out of the police report as if both the cases were instituted on a police report. It also further provides that if the police report does not relate to any accused in the complaint case or if the Magistrate does not take cognizance of any offence on the police report, he shall proceed with the inquiry or trial, which was stayed by him, in accordance with the provisions of Cr.P.C. - merely because on the same set of facts with the same allegations and averments earlier the complaint is filed, there is no bar to lodge the FIR with the police station with the same allegations and averments - However, at the same time, if it is found that the subsequent FIR is an abuse of process of law and/or the same has been lodged only to harass the accused, the same can be quashed in exercise of powers under Article 226 of the Constitution or in exercise of powers under Section 482 Cr.P.C. In that case, the complaint case will proceed further in accordance with the provisions of the Cr.P.C. As observed and held by this Court in catena of decisions, inherent jurisdiction under Section 482 Cr.P.C. and/or under Article 226 of the Constitution is designed to achieve salutary purpose that criminal proceedings ought not to be permitted to degenerate into weapon of harassment. When the Court is satisfied that criminal proceedings amount to an abuse of process of law or that it amounts to bringing pressure upon accused, in exercise of inherent powers, such proceedings can be quashed - The statute saves the inherent power of the High Court, as a superior court, to make such orders as are necessary (i) to prevent an abuse of the process of any Court; or (ii) otherwise to secure the ends of justice. Same are the powers with the High Court, when it exercises the powers under Article 226 of the Constitution. The impugned FIR is nothing but an abuse of process of law and can be said to be filed with a view to harass the appellants - when the impugned FIR is nothing but an abuse of process of law and to harass the appellants-accused, we are of the opinion that the High Court ought to have exercised the powers under Article 226 of the Constitution of India/482 Cr.P.C. and ought to have quashed the impugned FIR to secure the ends of justice. Appeal allowed.
Issues Involved:
1. Whether the impugned FIR constitutes an abuse of process of law. 2. Whether the FIR should be quashed due to the pendency of a similar application under Section 156(3) Cr.P.C. 3. Whether the allegations in the FIR make out a prima facie case under Sections 406/420 IPC. 4. Whether the absence of the company as an accused in the FIR affects its validity. 5. Whether the delay in filing the FIR impacts its legitimacy. Issue-wise Detailed Analysis: 1. Abuse of Process of Law: The appellants contended that the impugned FIR is an abuse of process of law intended to harass them by converting a civil dispute into a criminal case. They argued that the FIR was registered for recovery of commission and discounts from regular business transactions, making it a purely contractual dispute. The Supreme Court noted that the subsequent FIR, filed after a significant delay and with similar allegations as the pending application under Section 156(3) Cr.P.C., appeared to be an attempt to bring pressure on the accused. The Court held that the impugned FIR was indeed an abuse of process of law and was filed to harass the appellants. 2. Pendency of Section 156(3) Cr.P.C. Application: The appellants argued that the FIR should be quashed due to the pendency of a similar application under Section 156(3) Cr.P.C. before the Magistrate. The Supreme Court referred to Section 210 Cr.P.C., which allows for simultaneous proceedings of a complaint case and police investigation. The Court clarified that there is no bar to lodging an FIR with the police station with the same allegations and averments as an earlier complaint. However, the Court emphasized that if the subsequent FIR is found to be an abuse of process of law, it can be quashed. 3. Prima Facie Case under Sections 406/420 IPC: The appellants contended that the FIR did not make out a prima facie case under Sections 406/420 IPC. They argued that the allegations pertained to a contractual dispute and did not involve any entrustment or cheating. The Supreme Court observed that the essential ingredients of the offences under Sections 406/420 IPC were missing from the FIR. The Court noted that the allegations were primarily against the company, and the appellants were joined as accused in their individual capacities without any specific allegations of entrustment or cheating against them. 4. Absence of the Company as an Accused: The appellants argued that the FIR should be quashed as the company, which was primarily responsible for the alleged dues, was not made an accused. The Supreme Court acknowledged that the main allegations were against the company, and the company had not been made an accused in the FIR. The Court referred to previous decisions, emphasizing that vicarious liability cannot be extended to directors or officers of a company in the absence of specific allegations against them. The Court held that the absence of the company as an accused further supported the quashing of the FIR. 5. Delay in Filing the FIR: The appellants highlighted the unexplained delay of two years in lodging the impugned FIR. The Supreme Court noted that the delay in filing the FIR, coupled with the pendency of the application under Section 156(3) Cr.P.C., indicated that the FIR was filed with an ulterior motive to harass the appellants. The Court held that the delay in filing the FIR, in this case, was significant and further supported the conclusion that the FIR was an abuse of process of law. Conclusion: The Supreme Court allowed the appeal and quashed the impugned FIR registered as Case Crime No. 790 of 2017 under Sections 420/406 IPC, Police Station Loni Border, District Ghaziabad. The Court emphasized that the FIR was an abuse of process of law and was filed to harass the appellants. The Court clarified that it had not expressed any opinion on the merits of the allegations made in the application under Section 156(3) Cr.P.C., which was pending before the Magistrate. The Magistrate was directed to proceed with the application in accordance with the law.
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