Petitioner, a director of a chit fund company charged under IPC Ss 406 and 420, sought quashing of FIR alleging he was not named in the initial complaint. Court held that common intention implicated all accused and observations were limited to Section 482 analysis only.
Petition dismissed without prejudice. Trial not quashed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A.
MONDAY, THE 15TH DAY OF NOVEMBER 2021 / 24TH KARTHIKA, 1943
CRL.MC NO. 5704 OF 2017
AGAINST PROCEEDINGS IN CC 168/2017 OF JUDICIAL FIRST CLASS MAGISTRATE
COURT, PIRAVOM, ERNAKULAM
PETITIONER/ACCUSED NO.4:
P.C.ACHANKUNJU
PULLOLICAL HOUSE,THODUPUZHA,IDUKKI-685584.
BY ADVS.M.GOPIKRISHNAN NAMBIAR K.JOHN MATHAI JOSON MANAVALAN KURYAN THOMAS PAULOSE C. ABRAHAM RAJA KANNAN R.CHETHAN KRISHNA
RESPONDENT/S:
1 THE STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR,HIGH COURT OF KERALA AT ERNAKULAM-682031.
V.T.BOSE,VATHAKKATTIL HOUSE,PAZHOOR KARA,PIRAVOM PO,ERNAKULAM(ADDL R3 IMPLEADED AS PER ORDER DATED 19/02/2019 IN CRL MA 1/2019)
R3 BY ADVS. SRI.JOHN T.PAUL SRI.P.R.RAJESH
OTHER PRESENT:
R1 AND R2 BY PP- SRI.SUDHEER GOPALAKRISHNAN.
THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 15.11.2021, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
Crl.MC No.5704 of 2017 2
O R D E R
The petitioner is the 4th accused in
C.C.No.168/2017 on the file of the Judicial First Class Magistrate Court, Piravom which arises from Crime No.955/2015 by Piravom Police Station.
proceedings in the said Calendar Case.
Accused No.1 is a Company named Eminent Chits Private Limited. The 4th and 5th accused are the Directors of the above Company. Accused Nos.2 and 3 are the Managers of the same. The aforesaid Company was engaged in conducting chit funds and as part of
the same, they used to collect amounts from
Crl.MC No.5704 of 2017 3
subscribers on the basis of various chits conducted by them. Annexure-A1 complaint was submitted by the 3rd respondent specifically naming the 2nd and 3rd accused. In the said complaint, it was mentioned that, the 3rd respondent had subscribed two chits of 5 lakhs and 3 lakhs each and deposited several amounts in installments as per the terms and conditions thereof. Thereafter, on 28.8.2015, when he came to the office of the 1st accused (office of the Company), he came to know that the Company is not functioning. On enquiry, it was revealed that the Company has stopped its operation after collecting huge amounts from subscribers. Later, on 9.12.2015, he noticed certain news items published in newspapers to the effect that the 2nd and 3rd accused were arrested by the police in connection with the incident. It was contended that upon seeing the same, the 3rd respondent realized that the accused persons were cheating the 3rd respondent by collecting amounts with dishonest intention and
Crl.MC No.5704 of 2017 4
thereafter misappropriating the same for causing lawful loss to the 3rd respondent.
Crime No.955/2015 wherein the persons named as
accused were 2nd and 3rd accused herein. After a detailed investigation, the Police has filed Annexure A3 charge sheet implicating 5 accused persons including the petitioner herein alleging offences under Sections 406 and 420 r/w. Section 34 of the IPC.
Crl.MC No.5704 of 2017 5
Gopalakrishnan, the learned Public Prosecutor for respondents 1 and 2 and Sri. John T. Paul, the learned counsel for the 3rd respondent.
Crl.MC No.5704 of 2017 6
Tamil Nadu & Another [(2009)3 SCC 375], V.P. Shrivastava v. Indian Explosives Limited & Others [(2010)10 SCC 361], S.V.L. Murthy v. State represented by CBI, Hyderabad [(2009) 6 SCC 77] and Managing Director, Sonalika International Tractor Limited [(2009)11 SCC 435] .
would seriously oppose the prayers sought by the petitioner. It was pointed out that, Annexure-A3 final report contains the allegation that, the entire actions of cheating and misappropriation was conducted by all the accused persons in furtherance of their common intention and, therefore, Section 34 of IPC is also specifically incorporated. The fact that, the petitioner is one of the Directors of the Company is not disputed and in such circumstances, the role of the petitioner is a question of fact which is to be adjudicated on the basis of evidence to be let in during the course of trial. It is not proper on the part of this Court
Crl.MC No.5704 of 2017 7
to interfere in the proceedings at this juncture by invoking the powers under Section 482 of the Cr.PC.
Crl.MC No.5704 of 2017 8
complaint itself that, he received the details of the 2nd and 3rd accused who are named in the said complaint, from some reports happened to be published in the newspapers regarding the cheating and misappropriation by the Company and also as to the arrest of the aforesaid persons in connection with the same. Annexure-A1 complaint contains only a basic information furnished to the Police upon his realisation that, the aforesaid offences mentioned above were committed. The defacto complainant was not supposed to make a detailed enquiry at that juncture and it was a natural reaction on his part to submit a complaint with
bare minimum information which he had at the relevant time. It is likely that, the 3rd respondent was not having the details of the Directors of the Company while submitting the said complaint. But it is to be noted that, the name of the Company is specifically referred in the complaint. It is discernible from the records that, the 1st accused Company as well as the Directors of the Company
Crl.MC No.5704 of 2017 9
were implicated in the final report, submitted after investigation. Merely because of the reason that, the F.I.S. and the complaint based on which the said F.I.R. was registered do not contain the name of the petitioner, it cannot be concluded that the interference of this Court is warranted in the proceedings, invoking powers under Section 482 of the Cr.PC. The police conducted an investigation, after registering the crime against A2 and A3, and during such investigation, the role of the other accused including the petitioner was revealed. In such circumstances, nothing precludes the investigating officer to include the other
persons, who were not originally arraigned as the accused persons. Therefore I do not find any illegality therein.
allegations contained in Annexure A1 or in Annexure A3 do not contain necessary ingredients for establishing the offences under Sections 417,420
Crl.MC No.5704 of 2017 10
and 406 of IPC. According to the learned counsel, the exact role played by the petitioner in the commission of the crime is not specifically mentioned in Annexure-A3 final report. It is also contended that, there is also no allegation that, the petitioner has made any transactions or interactions with the de facto complainant and thereby persuaded the de facto complainant to enter into any transaction with the Company with a dishonest intention to cheat him.
" �തികൾ�് അ ന�ായ ലാഭ�ം 1-)൦ സാ�് �ം മ�ം അ ന�ായ ന��ം വ�� ണ െമ� � ഉേ�ശേ� ാ�ം ക�തേലാ�ം �ടി 2 ഉം 3 ഉം �തികൾ മാേനജര്മാരാ�ം 4 ഉം 5 ഉം �തികൾ ഡിറക്ടർമാരാ�ം പിറവം �ർ� ിേനാട� െക�ിട� ിെ� 1-)൦ നിലയിൽ �വർ� ി� വ� ി�� എ�ിെന�് ചി�് സ് എ� 1-)൦ �തി � ാപന� ിൽ ചി�ിയിൽ േച�� വർ� ചി�ി കാലാവധി തീർ� � ി� േശഷേമാ ന�െ���് ലഭി�ാൽ ന�െ���് കഴി� ഒ� മാസ� ി� േശഷ�ം േലലദായം കഴി� � �ക െകാ��ാെമ� പറ� വിശ�സി�ി� 1-)൦ സാ� ി ടീ � ാപനം നട� ി വ� ി�� �ം 3 ല� ം �പ സാല���ം 2014 െഫ� വരി മാസം �ട�ി 2015 ഒക്േടാബര് മാസം വെര 20 മാസം െകാ�് അ വസാനി�� �ം……...”
Crl.MC No.5704 of 2017 11
From the above statement, it is evident that, the
common intention of the accused persons in committing the acts of cheating and
misappropriation of amounts are specifically stated therein. Admittedly, the petitioner as well as the 5th accused are the Directors of the Company and the main business of the Company is to conduct chitty transactions. The subject matter of the offence in this case is collection of various amounts from the subscribers including that of the 3rd respondent herein as part of the aforesaid chitty transactions. It is specifically averred that, the 2nd and 3rd accused persons were acting in their capacity as Managers of the 1st respondent Company and the actions of the 4th and 5th accused were in their capacity as the Directors of the Company. The sum and substance of the allegations in the final report is that, all the accused persons have committed the acts in furtherance of a common intention, while carrying out the main business activity of the Company. It is true that, as per
Crl.MC No.5704 of 2017 12
the final report, there no specific allegation as to any interaction conducted by the petitioner with the de facto complainant. However, since the entire acts were allegedly committed in furtherance of a common intention by the accused persons in their respective capacities, even in the absence of specific overt act on the part of the petitioner, the offences alleged against him would get attracted. The learned counsel for the petitioner placed reliance upon the decisions in Sushil Sethi’s case (supra), Maksud Saiyed’s case (supra) and Sharon Michael’s case (supra) to canvass the proposition that, in the absence of any specific allegations against him, it would amount to a case of vicarious liability, which is not applicable in criminal proceedings, unless it is specified in the
statute itself. Since no such concept is contemplated in IPC, no person can be implicated for an offence by applying the principles of vicarious liability.
Crl.MC No.5704 of 2017 13
that 2nd and 3rd accused persons who are the employees of the Company, have committed the offences. But on the other hand, the factual allegations as contained in Annexure A3 would clearly reveal that, all the accused persons including the Managers and Directors of the Company have acted jointly in furtherance of a common intention to cheat the de facto complainant and to misappropriate the amounts collected from him. It might be true that, the transactions which are the subject matter of the offence must have been performed physically by the 2nd and 3rd accused.
However, the same was indisputably carried out by
the said accused persons as part of the main
Crl.MC No.5704 of 2017 14
business of the 1st accused Company to which the petitioner was one of the Directors. It is also discernible that the entire business of the Company has been stopped sometime after collection of funds from the 3rd respondent and other subscribers. In such circumstances, the question whether the
petitioner has played an actual role in the commission of crime cannot be decided in a
proceeding of this nature as it is a question of evidence. On the other hand, the allegations in final report, clearly indicate culpability of the petitioner and it contains offence under Section 34 of the IPC as well. In such circumstances, I do not think the contentions of the learned counsel for the petitioner can be considered at this juncture.
dishonest intention on the part of the accused
persons right from the inception which is one of
the basic ingredients to be established by the
Crl.MC No.5704 of 2017 15
prosecution. In my view that contention is also cannot be considered at this juncture as the same requires appreciation of evidence on this point. The contents of Annexure-A3 final report would clearly indicate that there is specific allegation of existence of a dishonest intention even while accepting the payments at the initial stage itself. It is a well settled principles of law that, while considering an application under Section 482 of Cr.PC, the Court is duty bound to look into the averments in the complaint and final report without making any addition or subtraction of anything contained therein. In this case, as mentioned above, there are sufficient averments indicating the existence of dishonest intention right from the inception. Whether such averments are correct or not is a matter of evidence and the sustainability thereof cannot be adjudicated in a proceedings under Section 482 of Cr.PC. In Rajiv Thappar & Ors.
v. Madan Lal Kapoor [(2013) 3 SCC 330] , it was
observed by the Honourable Supreme Court in the
Crl.MC No.5704 of 2017 16
matter of invocation of powers under Section 482 Cr.P.C by the High Court, in the manner as follows:
“28. The High Court, in exercise of its jurisdiction under Section 482 CrPC, must make a just and rightful choice. This is not a stage of evaluating the truthfulness or otherwise of the allegations levelled by the prosecution/complainant against the accused. Likewise, it is not a stage for determining how weighty the defences raised on behalf of the accused are. Even if the accused is successful in showing some suspicion or doubt in the allegations levelled by the prosecution/complainant, it would be impermissible to discharge the accused before trial. This is so because it would result in giving finality to the accusations levelled by the prosecution/ complainant, without allowing the prosecution or the complainant to adduce evidence to substantiate the same. The converse is, however, not true, because even if trial is proceeded with, the accused is not subjected to any irreparable consequences. The accused would still be in a position to succeed by establishing his defences by producing evidence in accordance with law. There is an endless list of judgments rendered by this Court declaring the legal position that in a case where the prosecution/ complainant has levelled allegations bringing out all ingredients of the charge(s) levelled, and have placed material before the Court, prima facie
Crl.MC No.5704 of 2017 17
evidencing the truthfulness of the allegations levelled, trial must be held. 29. The issue being examined in the instant case is the jurisdiction of the High Court under Section 482 CrPC, if it chooses to quash the initiation of the prosecution against an accused at the stage of issuing process, or at the stage of committal, or even at the stage of framing of charges. These are all stages before the commencement of the actual trial. The same parameters would naturally be available for later stages as well. The power vested in the High Court under Section 482 Cr.PC, at the stages referred to herein above, would have farreaching consequences inasmuch as it would negate the prosecution’s/complainant’s case without allowing the prosecution/complainant to lead evidence. Such a determination must always be rendered with caution, care and circumspection. To invoke its inherent jurisdiction under Section 482 Cr.PC the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/ complainant. It should be sufficient to rule out, reject and discard
Crl.MC No.5704 of 2017 18
the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482 Cr.PC to quash such criminal proceedings, for that would prevent abuse of process of the court, and secure the ends of justice.”
In the light of the aforesaid principles, I do not think that an interference at this juncture is warranted as it would cause serious prejudice to the prosecution and also to the 3rd respondent de facto complainant as they will be deprived of the opportunity to establish the allegations raised against the petitioner herein. On the other hand, the petitioner would still be getting an opportunity to prove his innocence by highlighting the contentions raised herein during the course of
Crl.MC No.5704 of 2017 19
trial, even if this Crl.MC is dismissed. Therefore, it is only just and proper to permit the trial court to continue the trial.
In such circumstances, I do not find any ground to entertain this Crl.M.C and accordingly it is dismissed without prejudice to the rights, contentions and remedies of the petitioner. However, it is made clear that, the observations made in this order, are only intended to examine whether a case is made for invoking powers of this court under section 482 or not, and the trial court shall be at liberty to consider all those contentions of the petitioner, in accordance with law, untrammeled by any of the observations contained herein.
Sd/-
ZIYAD RAHMAN A.A. JUDGE
pkk
Crl.MC No.5704 of 2017 20
APPENDIX OF CRL.MC 5704/2017
PETITIONER ANNEXURE
ANNEXURE A1 TRUE COPY OF THE COMPLAINT IN CRIME NO.955/15 OF THE PIRAVOM POLICE STATION ANNEXURE A2 TRUE COPY OF THE FIR IN CRIME NO.955/15 OF THE PIRAVOM POLICE STATION ANNEXURE A3 TRUE COPY OF THE FINAL REPORT IN CRIME NO.955/15 OF THE PIRAVOM POLICE STATION ANNEXURE A4 TRUE C0PY OF THE FORM NO.DIR-12 FILED BY THE PETITIONER TO THE REGISTRAR OF COMPANIES ANEXURE A5 TRUE COPY OF THE FORM NO.DIR-11 FILED BY THE EMINENT CHITS PRIVATE LIMITED COMPANY TO THE REGISTRAR OF COMPANIES.
3 issues framed by the court
Whether the High Court can quash criminal proceedings against an accused who was not named in the initial complaint but is implicated in the final report based on common intention.
Whether allegations in a final report under a joint venture or common intention attract vicarious liability principles to charge directors without specific mention of their overt acts.
Whether the averments in the final report sufficiently indicate dishonest intention and common intent to justify continuing the trial without quashing the proceedings.
Colour shows how this judgement treated each authority
R.Kalyani v. Janak C. Mehta and OthersReferred¶41
R.Kalyani v. Janak C. Mehta and Others [(2009)1 SCC 516] · Who else cites this
Sushil Sethi & Another v. State of Arunachal PradeshReferred¶4166
Sushil Sethi & Another v. State of Arunachal Pradesh & Others [(2020)3 SCC 240] · Who else cites this
Maksud Saiyed v. State of GujaratReferred¶4166
Maksud Saiyed v. State of Gujarat & Others [(2008)5 SCC 668] · Who else cites this
Sharon Michael and Others v. State of Tamil NaduReferred¶4166
Sharon Michael and Others v. State of Tamil Nadu & Another [(2009)3 SCC 375] · Who else cites this
V.P. Shrivastava v. Indian Explosives LimitedReferred¶41
V.P. Shrivastava v. Indian Explosives Limited & Others [(2010)10 SCC 361] · Who else cites this
S.V.L. Murthy v. State represented by CBI, HyderabadReferred¶41
S.V.L. Murthy v. State represented by CBI, Hyderabad [(2009) 6 SCC 77] · Who else cites this
Managing Director, Sonalika International Tractor LimitedReferred¶41
Managing Director, Sonalika International Tractor Limited [(2009)11 SCC 435] · Who else cites this
Rajiv Thappar & Ors. v. Madan Lal KapoorReferred¶83
Rajiv Thappar & Ors. v. Madan Lal Kapoor [(2013) 3 SCC 330] · Who else cites this
3 provisions across 2 enactments
P.C.ACHANKUNJU
THE STATE OF KERALA
ZIYAD RAHMAN A.A.
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
