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PETITIONER:

AMAR CHAND AGARWALLA

Vs.

RESPONDENT:

SHANTI BOSE AND ANOTHER ETC.

DATE OF JUDGMENT22/12/1972

BENCH:

VAIDYIALINGAM, C.A.

BENCH:

VAIDYIALINGAM, C.A.

ALAGIRISWAMI, A.

DUA, I.D.

CITATION:

1973 AIR 799 1973 SCR (3) 179

1973 SCC (4) 10

CITATOR INFO :

R 1973 SC1274 (17)

E 1973 SC2145 (8)

E&R 1978 SC 1 (15)

R 1979 SC 663 (9)

R 1986 SC1721 (9)

ACT:

Code of Criminal Procedure (Act 5 of 1898), ss. 439 and

561APower of High Court to quash charges and proceedings-

Scope of.

HEADNOTE:

As a result of a judicial enquiry in relation to a complaint

by the appellant against the four respondents, summons were

issued to the respondents, and before the Magistrate,

evidence, oral and documentary, was adduced by the

complainant (appellant) in the presence of the accused

(respondents). On a consideration of those materials, the

Magistrate framed charges against I all the four accused

under ss. 120 B/409 1. P.C. and under s. 409, against

accused 1 to 3, in September 1968. Thereafter, the trial

proceeded, a large volume of oral and documentary evidence

was let in, and all that remained was the examination of two

prosecution witnesses and a court-witness before closing the

trial. All the prosecution witnesses, examined till then

were also cross-examined by the respondents. At that stage,

in March 1969, the 4th accused moved the High Court for

quashing the proceedings and the other accused followed with

similar petitions.

The High Court, in spite of the complainant representing

that the trial had almost come to a close quashed the

charges and proceedings on the grounds that, the complainant

had suppressed material facts, that the two prosecution

witnesses should not be allowed to be examined 'in the

circumstances of the case', that the' examination of the

court witness was not necessary as it would only prejudice

the accused and under the effect of cross-examination, and

that the evidence on record ruled out any offence of breach

of trust or a conspiracy to commit it.

Allowing the appeal to this Court,

HELD : The High Court was in error

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(a) It is not as if the accused had moved the High Court at

the earliest stage when summons was issued to them. Nor had

they ,approached the High Court when charges were framed

against them. If the case of the accused was that the

allegations try the complaint did not constitute the

offences complained of or that the complainant was to be

quashed on any other ground available in law, the accused

should have approached the High Court at least when the

charges were framed. [186DE]

(b) Assuming there was a suppression of material facts by

the complainant that was a matter to be considered by the

trial Court. Similarly, whether the evidence on record

established that an offence of breach of trust or a

conspiracy to commit it, had been committed, Is again a

matter for the trial court to come to a conclusion after, an

appraisal of the entire evidence let in by the prosecution

and the defence. The High Court was not justified, at that

stage, to have embarked upon an appreciation of the

evidence. [187AC]

(c) The accused never challenged the order of the trial

court regarding the examination of prosecution witnesses or

the court-witness, and

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the High Court was not justified in holding that they should

not be examined, and hence, the order regarding their

examination should stand.

Jamatraj Kewalji Govani v. The State of Maharashtra, [1963]

3 S.C.R. 415, referred to.

(d) If the High Court had passed the order quashing the

charges and proceedings in exercise of its inherent

jurisdiction under s.561A, Cr. P.C. then the exercise of the

power by the High Court was not justified, because, the

present case does not come within the ambit of the

principles laid down by this Court, in R. K. Kapur v. The

State of Punjab, [1960] 3 S.C.R. 388. [188 A-C]

(e) Even assuming that the High Court was exercising

jurisdiction under s. 439, Cr. P.C., the present was not a.

case for interference by the High Court. The jurisdiction

of the High Court is to be exercised nearly, under the

section, only in exceptional cases when there is a glaring

defect in the procedure or there is a manifest error on a

point of law and consequently a flagrant miscarriage of

justice. [188D]

JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 101 to

103 of 1970.

Appeals by special leave from the judgment and order dated

October 10, 1969 of the Calcutta High Court in Criminal

Revision Nos. 238, 289 and 290 of 1969.

D. Mukherjee and S. Ghosh for the appellants (in all the

appeals).

A. N. Mulla, J. M. Khanna, Vishnu Bahadur Saharaya and

Yogindra Khushalani for the respondents, (in Cr. A. Nos.

101 & 103/70).

R. A. Gupta for respondent (in Cr. A. No. 102/70).

S. C. Mazumdar for the State (in all the appeals).

The Judgment of the Court was delivered by

VAIDIYALIGAM, J. These three appeals by the complaint, by

special leave, are against the common judgment and order

dated August 10, 1969, of the Calcutta High Court in

Criminal Revisions Nos. 238, 289 and 290 of 1969, setting

aside the charge under section 120B read with section 409

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I.P.C. framed against all the four accused and the charge

under section 409 IPC framed against accused Nos 1 to 3. The

High Court by the same judgment, quashed the proceedings

based upon the said charges, which were pending before the

Presidency Magistrate, 7th Court, Calcutta in case No.

C/3443 of 1967.

The appellant in all these three appeals, Amar Chand Agar-

walla, filed a complaint before the Chief Presidency

Magistrate, Calcutta, on November 21, 1967, on the basis of

which the four

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accused persons, namely, Paramanada Agarwalla, Madan Mohan

Gour, Jhumermal Agarwala and Shanti Bose, were required to

answer charges under section 120B/409 and 409 IPC. These

persons will be referred to as accused Nos. 1, 2, 3 and 4

respectively. The case was later on transferred to the

Presidency Magistrate, 7th Court, Calcuttta, for disposal.

The 7th Presidency Magistrate, after recording the evidence

of ten prosecution witnesses, framed a charge on September

7, 1968, under section 120B/409 against all the four accused

and a charge under section 409 IPC against accused Nos. 1 to

3. The allegations in the complaint were briefly as follows

The complainant was a partner of M/s. Kalinga Bakery Bis-

cuit Confectionery and Mineral Water Company of Rourkela in

Orissa and was granted actual users' import licence on

November 18, 1966, by the Joint 'Chief Controller of imports

and Exports, Calcutta, for import of skimmed milk powder and

other commodities upto the value of Rs. 60,000/-. This

commodity was for the purpose of being used in the

licensee's factory. The complainant appointed M/s. Arun

Importer (P) Ltd., owned, managed and controlled by accused

Nos. 1 to 3, as his agents to import 52.5 bags of milk

powder from New Zealand. The first accused wrote a letter

dated July 25, 1967, informing the complainant that the

goods had already been shipped and that they would be

arriving very shortly. Accused Nos. 1 to 3 also offered to

assist the complainant with a loan of Rs. 25,000/- to enable

him to clear the shipping documents from the Bank. The 4th

accused was introduced by the other accused as a Customs

Clearing Agent and on their suggestion, the, complainant

appointed him as his clearing agent. After clearing the

shipping documents with the assistance of the loan provided

by the accused, the complainant, however, was not informed

about the actual arrival of the ship. The complainant

addressed a letter dated August 19, 1967, to accused No. 4

asking for information about the arrival of the goods. None

of the accused gave any intimation about the arrival of the

goods. However, to his surprise, the complainant read in

the newspaper a report on August 22, 1967, about the police

having recovered from the various parts of Calcutta several

bags of milk powder stated to have been imported on his

account. The complainant rushed to Calcutta and contacted

the accused but was not able to get any information.

Accused No. 4 flatly declined to even recognise the

complainant or talk to him; accused Nos. 1 to 3, however,

professed ignorance about the whole thing and hinted that

accused No. 4 might have diverted the goods to other

persons. On August 26, 1967, an application was filed

before the Chief Presidency Magistrate to direct the police

to make an investigation under section 156(3) of the

Criminal Procedure Code re-

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garding the missing quantity of milk powder. In the said

application, however, only Shanti Bose (the present accused

No. 4) was cited as an accused, as the complainant did not

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have any reason to suspect the other accused. The milk

powder seized by the police was later on directed to be

returned to the complainant by the High Court on his

furnishing security. Accused Nos. 1 to 3, coming to know

about this proceeding, instituted on September 25, 1967, a

suit against the complainant in the High Court (Suit No.

2283 of 1967) praying for a declaration that the plaintiff

was the pledge of 316 bags of milk powder of the defendant

and prayed for a decree in the sum of Rs. 26,744.87. They

also asked for various interim reliefs. The complainant,

during the pendency of the proceedings before the Chief

Presidency Magistrate, came to know that all the accused

persons had taken away on August 19, 1967, the entire

quantity of 525 bags of milk powder, which had been imported

on his account without his knowledge, consent or

instructions and that they had also mis-appropriated about

200 bags before the police could raid their premises. On an

ascertainment of these facts, the complainant withdrew his

original complaint with the permission of the court and

instituted the present complaint against all the accused.

On receipt of the complaints the Chief Presidency Magistrate

ordered a judicial enquiry to be held by the 9th Presidency

Magistrate. In the judicial enquiry held by the latter, the

complainant had brought on record various documents to

substantiate his allegations. As a result of the enquiry,

the Chief Presidency Magistrate on December 26, 1967,

summoned all the four accused persons under sections

120B/409 and 409 an transferred the case for disposal to the

7th Presidency Magistrate, The learned Magistrate, after a

consideration of the materials placed before him by the

complainant, framed on September 7, 1968 charges against all

the accused under sections 120B/409 IPC and a charge under

section 409 IPC against accused Nos. 1 to 3.

None of the accused persons moved the High Court against the

order of the Magistrate issuing process or against the order

dated 7-9-1968 framing charges against them. It is seen

from the records that a large volume of oral and documentary

evidence had already been lot in and the trial itself had

almost come to the closing stage. What remained was only to

examine two more witnesses on the side of the prosecution,

as per order dated 24-21969, and also to examine one Durga

Dutt Chowdhury as a court witness under section 540,

Criminal Procedure Code, as per order dated 7-3-1969. The

witnesses examined so far by the prosecution had also been

cross-examined, by the defence.

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While matters stood thus, the 4th accused moved the High

Court in Criminal Revision No. 238 of 1969 for quashing the

charges and the entire proceedings that had taken place

before the Magistrate. There was also a prayer in the

alternative for stay of the criminal proceedings till the

disposal of Civil Suit No. 2283 of 1967 Accused No. 2 filed

a similar Revision No. 289 of 1969, followed by accused Nos.

1 and 3, who were the, petitioners in Criminal Revision No.

290 of 1969.

All the three Criminal Revisions were, heard together by the

High Court and have been dealt with in its common judgment.

On behalf of the accused, five contentions were urged before

the High Court for quashing the charges as well as the

entire proceedings pending before the Presidency Magistrate.

The first contention related to the maintainability of the

present proceedings by the complainant, when he himself was

an accused in a case under section 5 of the Imports and

Exports (Control) Act 1947, stated by the Central Bureau of

Investigation, Economic Offences wing, Calcutta, in B. C.

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case No. 23/W/67. it was urged before the High Court that

though he had been discharged, he is, nevertheless, an

interested complainant. The High Court rejected this

contention and held that, on that account, the present

proceedings cannot be quashed.

The second contention of the accused related to the effect

of ,the order of withdrawal of the earlier complaint on the

present proceedings. It was pleaded that the dismissal of

the, first complaint operates as a bar to these proceedings.

However, this contention also was rejected by the High Court

on the ground that an order of dismissal under section 203,

Criminal Procedure Code, is no bar to the entertainment of a

second complainant on the similar facts, though such a

complaint can be entertained, only under exceptional

circumstances. The High Court ultimately held that the

present proceedings are not unwarranted of unable in view of

the first order of discharge in the circumstances of the

present case.

The third contention that was taken before the High Court by

the accused was that the factum of entrustment has not been

established by clear and cogent evidence and as such, there

cannot be any breach of trust, for less any dishonest

conversion leading to a conspiracy. The learned Judge held

that it is difficult, at that stage, on the evidence

adduced, to hold that there has not been any entrustment,

especially as the whole case depends upon on appreciation of

the entire evidence for coming to a conclusion one way or

the other. On this reasoning, this contention also was

rejected.

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It must be noted that the third contention was an invitation

to the High Court to consider the evidence already adduced

before the Magistrate and to come to a conclusion that no

entrustment had been established. The High Court, in our

opinion, ,quite rightly, declined at that stage, to go into

that question of tact and left it to the Magistrate to

assess and appreciate the evidence and come to a conclusion

one way or the other. We are particularly referring to this

aspect because, as will be seen later, ,the High Court

adopted a different criteria when it dealt with the fifth

contention of the accused.

The fourth contention of the accused was that both the first

and the second complaints suppressed material facts,

vitiating the present proceedings. The fifth contention, as

the High Court itself observes, related to the merits,

namely, that the evidence on record does not establish the

offences with which the accused are charged. These two

contentions have found favour with the High Court. It is on

the basis of the acceptance of these contentions that the

entire proceedings have been quashed.

The fourth contention of the accused was that the

complainant had suppressed material facts, which were within

his knowledge, in the first complaint filed on August 26,

1967. Particularly, it was stressed that the complainant

had not even referred to the Civil Suit No. 2283 of 1967

instituted against him. The said complaint also does not

refer to the complainant having taken a loan of Rs. 25,000/-

from the accused. The learned Judge has accepted this

criticism as justified. It is not necessary for us to refer

to, what according to the learned Judge were, certain omis-

sions made by the complainant in his original complaint

filed on August 26, 1967. But it is enough to state that

the view of the learned Judge that even the suit instituted

against the complainant had not been referred to, is not

justified. The complaint was filed on August 26, 1967,

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whereas the suit against the complainant was filed on

September 26, 1967. It is also the view of the learned

Judge that the present complaint also. does not refer to

certain matters, which were within the knowledge of the com-

plainant. We do not propose even to advert to these

matters.

According to the High Court, there has been a suppression of

some material facts in the two petitions of complaint and,

therefore, the present proceedings must be held to be bad

and repugnant effecting their maintainability. The High

Court has referred in this case to a decision of the

Calcutta High Court which, in our opinion, has no bearing.

The decision is in Sunder Das Loghani v. Farun Rustom

Iran(1). That was a case of

(1) A.I.R. 1939 Calcutta 320.

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discharge of the accused under section 253 (2) of the

Criminal Procedure Code, as the Magistrate was of the

opinion that the complainant had deliberately suppressed

several facts and that the complaint was a thoroughly

dishonest one. in the end the High Court has held that the

Present Proceedings are bad and improper and, therefore,

they have to be quashed.

The fifth and the last contention taken on behalf of the

accused relates, as the High Court itself states, to the

merits of the case and is based Upon the evidence on record,

both oral and documentary. After a consideration of certain

items of evidence, the learned Judge has held that the

evidence on record rules out any offence of breach of trust.

or a conspiracy to commit the same, by the accused persons

and, therefore, the present croceedings are not maintainable

and have to be quashed.

A representation appears to have been made on behalf of the

complainant that a large volume of evidence, oral and

documentary, has already been adduced and the trial has gone

on for a long time and that only two more prosecution

witnesses and a court witness remain to be examined. On

this basis it was pressed before the High Court by the

complainant that the High Court should allow the proceedings

to go on and to come to its logical conclusion and that the.

High Court should not interfere at that stage. The learned

Judge, however, considered this representation and held that

the two remaining prosecution witnesses should not be

allowed to be examined 'in the facts and circumstances of

the case, as they cannot possibly have any material effect

on the merits of the case. The High Court further held that

even the proposed examination of the court witness is not

necessary, as it will only prejudice the accused and undo

the effect of their cross-examination. On this basis, the

representation made on behalf of the complainant was

rejected.

On behalf of the appellant, Mr. D. Mookerjee very

strenuously attacked the reasoning of the High Court for

quashing the charges framed against the accused and the

entire proceedings that head taken place before the

Presidency Magistrate. On the other hand, Mr. A. N. Mulla,

learned counsel on behalf of the accused, urged that the

High Court was justified, in the circumstances, in quashing

the charges well as the entire proceedings so far taken

place before the Presidency Magistrate. The learned counsel

appearing for the State supported the appellant and urged

that the High Court was not justified in interfering with

the proceedings when the trial had gone on for a

considerably long time and was due to close,

We have already referred to the 4th and the 5th contentions

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urged on behalf of the accused which have found favour with

186

the High Court. We have already pointed out that the

learned Judge quite rightly declined, when dealing with the

third contention, to consider, on an appreciation of

evidence, whether an entrustment has been proved. This, the

High Court has properly left to be decided by the Magistrate

after the entire evidence is closed. But when dealing with

the fifth contention, which the High Court itself says,

relative to the merits of the case, and has to be decided on

the basis of the evidence on record, both oral and

documentary, the High Court instead of adopting the same

test, as it did when dealing with the third contention,

embarked upon a fairly elaborate appreciation of the

evidence on record and ultimately came to the conclusion

that the evidence on record does not establish any breach of

trust, or a conspiracy to commit the same, by the accused

persons. Regarding the fourth contention, which also has

found acceptance at the hands of the High Court, it relates

to what according to the accused was, suppression of certain

material facts by the complainant in his two complaints.

In our opinion, the High Court was not justified, in the

particular circumstances of this case, in quashing the

charge, as well as the entire proceedings that had taken

place before the Magistrate. it is not as if the accused had

moved the High Court at the earliest stage when the

Presidency Magistrate issued sommons to them. Nor had they

approached the High Court when charges were framed against

them. The accused had 'been summoned, after a judicial

enquiry by the Chief Presidency Magistrate on December 26,

1967, under sections 120B/409 and 409 IPC. Before the

Magistrate, the evidence. oral and documentary, was adduced

by the complainant in the presence of the accused. On a

consideration of such materials, the Presidency Magistrate

framed charges against all the four accused as early as

September 7, 1968. If the case of the accused was that the

allegations in the complaint do not constitute the offence

complained of or that the complaint has to be quashed for

any ground available in law. they should have approached the

High Court, at any rate. immediately after the charges were

framed. The records disclose that it was the fourth

accused, who moved the High Court to quash the proceeding on

March 17, 1969, earlier than the other accused. Even by

that date, several prosecution witnesses, had been examined

and they had also been cross-examined by the accused.

Several items of documentary evidence had already been let

in during the trial. Only two prosecution witnesses and a

court witness remained to be examined. The proper course at

that stage to be adopted by the High Court was to allow the

proceedings to go on and to come to its logical conclusion,

one way or the other,. and decline to interfere with those

proceedings. The fourth contention related to the

suppressions of certain

187

material in the complaint. We do not propose to express any

opinion on that aspect because, even assuming that there has

been suppression, that is a matter to be considered by the

Trial Magistrate. Similarly, as to whether the evidence on

record establishes that an offence of breach of trust has

been committed, or not, is again a matter for the Trial

Court to come to a conclusion, one way or the other, after

an appraisal of the entire evidence that is let in by the

prosecution and by the defence, if any. The High Court was

not justified at that stage to have embarked upon an

appreciation of the evidence. Here again, we do not express

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any opinion, on merits, as the matter is to be, considered

by the Trial Magistrate.

The High Court was also equally not justified in holding

that the two prosecution witnesses should, not be examined

on the ground that their evidence will not have any material

effect on the merits. The further view of the High Court

that the examination of the court witness will prejudice the

accused, is also without any basis. In fact, the High

Courts decision on. the question of these witnesses is

really on a representation made on behalf of the complainant

that the trial is almost coming to a close and that only two

more prosecution witnesses and one court witness remain to

be examined. So far as we could see, the' accused have not

challenged the order of the Magistrate dated February 24,

1969, allowing the prosecution to examine Satanarayan

Agarwalla and an officer of the Directorate of Industries,

Government of Orissa; nor have they challenged the order

dated March 7, 1969, of the Magistrate allowing the prayer

of the prosecution for examining Durga Dutt Chowdhury as a

court witness under section 540. In holding that the

proposed examination of Durga Dutt Chowdhury, as a court

witness, will pre-judice the accused, the High Court has not

given due consideration to the decision of ;this Court in

Jamatraj Kewalji Govani v.The State of Maharastra(1).

It is not clear whether the High Court passed the order, in

question, under section 561A or under section 439 of the

Code. of Criminal Procedure. This Court has laid down the

principles in R.,P. Kapur v. The State of Punjab(2), which

have to beborne in mind by the High Court when its inherent

jurisdiction under section 561A is invoked for quashing the proce

edings pending before a subordinate court. It has

been 'emphasised that the inherent jurisdiction could be

exercised to quash proceedings in a proper case, either to

prevent the abuse of the.process of any court or otherwise

to secure the ends of justice. This Court has also

indicated some of the categories of case where-

(1) [1967] 3 S.C.R. 415.

(2) [1960] 3 S.C.R. 388.

188

the inherent jurisdiction could and should be exercised to

quash proceedings. However, the exercise of the power by

the High Court, in the case before us, does not come within

the ambit of the-principles laid down by this Court in the

above decision. For instance, the second contention taken

before the High Court by the accused related to the

maintainability of the second complaint, when the first

complaint had been withdrawn and the accused had been

discharged. If the High Court had accepted the contention

of the accused in that regard, it may be that the High Court

was justified in quashing ;the proceedings, though at a very

late stage. But on that point, the High Court's decision is

in favour of the complainant. The other points taken into

account by the High Court do not justify the exercise of its

power under section 561A and that too at a very late stage

of the proceedings.

Even assuming that the High Court was exercising

jurisdiction under section 439, in our opinion, the present

was not a case for interference by the High Court. The

jurisdiction of the High Court is to be exercised normally

under section 439, Criminal Procedure Code, only in

exceptional cases, when there is a glaring defect in the

procedure or there is a manifest error of point of law and

consequently there has been a flagrant miscarriage of

justice. The High Court has not found any of these circums-

tances to exist in the case before us for quashing the

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charge and the further proceedings.

The judgment and order of the High Court quashing the

,charges framed against the accused as well as the other

proceedings based thereon, pending in case No. C/344 3 of

1967, are set aside. The learned Presidency Magistrate will

proceed with the further trial and give it a very

expeditious disposal. We make it clear that the directions

given by the Chief Presidency Magistrate regarding the

examination of two more prosecution witnesses and the court

witness will stand, subject to any modifications that may be

made by that Court in regard to the directions I already

given by it. In the result, the appeals are allowed.

V.P.S. Appeals

allowed.

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