There is no bar to lodge the FIR with the police station with the same allegations and averments: SC

Kapil Agrawal & Ors. V/S Sanjay Sharma & Ors.

Criminal Appeal No. 142 of 2021

01 March 2021

Counsel for the Appellants: Learned Senior Advocate Shri K.V. Vishwanathan

Counsel for the Respondents: Learned Advocate Shri M.C. Dhingra

The Hon’ble Supreme Court consisting of Justice Dr Dhananjaya Y. Chandrachud and Justice M.R Shah held in this case that 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. A detail note of the statement is made by the court after hearing the arguments of both the parties.

M/s Varun Beverages Ltd. (for short, ‘VBL’) is a licensed franchisee of PepsiCo India PVT Ltd. with Sanjay Sharma as the Distributor in the area of Loni, District Ghaziabad to sell and distribute the products manufactured by the company. That in the year 2014, the company terminated the contract of distributorship, which according to the appellants was due to non-payment of dues by respondent no.1 herein – original complainant. According to the appellants, thereafter on reconciliation of accounts and as per the statement of accounts maintained by the company, after adjusting of all claims and security deposit, a sum of Rs.9,46,280/- was found to be outstanding upon the complainant, towards the material supplied to him. The complainant issued a cheque dated 15.09.2014 in favour of the company – VBL. The said cheque was presented for encashment on 22.09.2014. The same was dishonoured and returned unpaid by the banker of the complainant due to “insufficient funds”. That thereafter, due to non-payment after the issuance of the statutory legal notices, appellants herein filed a criminal complaint under Section 138 of the Negotiable Instruments Act on 07.11.2014 against R1 and his company Thakur Trading, in the Court of Chief Judicial Magistrate, Ghaziabad being Complaint Case No. 7652/2014. R1 has been summoned to face the trial. The said complaint is presently pending for disposal. R1 filed a complaint against one of the officers 2 of the company-VBL being FIR No. 1565/2014 dated 15.09.2014 alleging misappropriation of Rs.6,00,000/- by one of the officers of the company, namely, Vipul Verma. That after investigation by the police, the investigating officer submitted a negative final report No. 47/2015 dated 20.01.2015

The respondent (R1) also filed one another case on 09.02.2015 for misappropriation of Rs.31,12,375/- by the appellants. Thereafter they filed a complaint/application under Section 156(3) Cr. P.C. in the Court of learned Additional Chief Judicial Magistrate-I, Ghaziabad for issuance of direction to the Police Station Loni to register FIR against the appellants herein and two other officers of the company alleging misappropriation of an amount of Rs.31,12,375/-.

After a period of approximately two years, the respondent (R1) lodged the impugned FIR against the appellants for the offences under Sections 406/420 IPC at Police Station Loni, District Ghaziabad, dated 4.8.2017. The allegations in the said FIR are same/similar to the allegations levelled in the application under Section 156(3) Cr.P.C., which is pending consideration before the learned Magistrate since 2015. At this stage, it is required to be noted that the said FIR is filed against Kapil Agarwal, appellant No.1 – Director, Sharad Garg, appellant No.2 – Multi Unit Manager and Deepak Sharma, appellant No.3 – Sales Head.

Therefore, the appellants approached the High Court under Article 226 of the Constitution of India being Criminal Miscellaneous Writ Petition No. 18308 of 2017 for quashing the aforesaid FIR being Case Crime No. 790 of 2017, under Sections 420/406 IPC, Police Station Loni Border, District Ghaziabad. By the impugned judgment and order, the High Court has refused to quash the FIR observing that the impugned FIR, prima facie, discloses commission of cognizable offence.

Learned Senior Counsel for the Appellants submitted that (i) the police report in respect of Section 156(3) application has gone against him, R1 has left the earlier proceedings lying pending for two years without participating in it and has filed a fresh FIR with the same allegations. (ii) With reference to the case law of G. Sagar Suri v. State of U.P. (2000) 2 SCC 636 and Jetking Info train Ltd. v. State of U.P. (2015) 11 SCC 730, view of the pendency of the complaint under Section 138 of the NI Act and the subsequent FIR is a counter-blast to the same, the present prosecution would be clearly an abuse of process of law and therefore the impugned FIR deserves to be quashed and set aside. (iii) The dispute can be said to be a purely civil dispute, which has been given a criminal colour, the same deserves to be quashed and set aside. (iv) The main allegations are against the company and the company had not been made as an accused in the FIR, the same deserves to be quashed and set aside.

Learned Counsel for Respondent submitted that (i) the FIR discloses commission of cognizable offence, the High Court has rightly refused to quash the FIR, in exercise of powers under Article 226 of the Constitution of India. (ii) as the learned Magistrate did not pass any order on the closure report and kept the application under Section 156(3) under consideration for long, much to the agony of the complainant craving justice, the complainant was constrained to file the impugned FIR, making serious allegations against the company and its officers – appellants herein. (iii) The police arrayed the appellants as an accused for the offences under Sections 420/406 IPC, although the facts therein disclosed commission of offences under Sections 467, 468, 471 IPC for forging complainant’s blank cheque No. 038611, out of five blank cheques lying with the company as security and sought to encash it but could not succeed as the cheque was dishonoured.

After hearing both parties in length, the court, referring to section 210 of the Cr.P.C., claimed that the case is on behalf of the appellants that as on the same allegations, 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 with the same allegations and averments would not be maintainable, and therefore, the FIR lodged with the police station Loni Border, District Ghaziabad deserves to be quashed and set aside.

In above regard court held that merely 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.(Para 5)

However, 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. (Para 6)

As held by this Court in the case of Parbatbhai Aahir v. State of Gujarat (2017) 9 SCC 641, Section 482 Cr.P.C. is prefaced with an overriding provision. 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. (Para 6.2)

Concluding the court held: -

In view of the above and for the reasons stated above, the present appeal is allowed. The impugned criminal proceedings/FIR registered as Case Crime No. 790 of 2017, under Sections 420/406 IPC, with the police station Loni Border, District Ghaziabad are hereby quashed and set aside on the aforesaid grounds. We make it clear that we have not expressed anything on merits on the allegations made by respondent no.1 against the appellants as the proceedings in the form of 156(3) Cr.P.C application are pending before the learned Magistrate. The learned Magistrate shall now proceed further with the said application, in accordance with law and on its own merits. Respondent No.1 may proceed further with the said proceedings, if he so chooses and is advised. (Para 9)

Subsequently, the appeals were allowed.

Aaron Varughese.