Amar Chand Agarwalla v. Shanti Bose

**A** **B** # _c_ **D** E **F** G **H** _Code_ _of_ _Criminal Procedure (Act 5_ _of_ 1898), _ss._ 439 _and_ _561A-_ _**Power of**_ _**High**_ _**Court to**_ _**quash**_ _**charges and proceeding!-Scope of.**_ As a result of a judicial enquiry in relation to a complaint by the appellant against the four respondents, summons were issued to tho respondents, aind before the Magistrate, evidence, oral and documentary, was adduce<! by the complainant (appellant) in the presence of the accused (respondents). On a consideration of those materials, the Magistrate framed charges against all the four accused under ss. 120 B/409 I.P.C. and under s. 409, against accused I to 3, ~ September 1968. Thereafter, the trial proceeded, ai large volume of oral and documentary evidence was let in, and all that remailwd was the examination of two prosecution witnesses and a court-witness before closing the trial. All the prosecution wit:nesses examined till then were also cross-examined by the res~dents. At that stage, in March 1969, the 4th accused moved the High Court for quashing the proceedinp 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 bad suppressed material facts, that the two prosecution witnesses should not be aillowed 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-examin3tion,** **and** **that** **the** **evidence** **en** **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 (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 i:I> the complaint did not constitute the offences complained of or that the complainant was to be quashed on any other g\"ound available in law, the accused should have approached the High Court at least when too charges were framed. [186DEJ (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, la 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 em· barked upon an appreciation of the evidence. [187 AC] ( c) The nccused never challenged the order of the trial court regard· **ing** **the** **examination** **of prosecution** **witnesses** **or** **the** **court·witness,** **and** _119_ AMAR CHAND AGARWALLA _v._ SHANTI BOSE AND ANOTHER ETC. _December_ 22, 1972 [A. ALAGIRISWAMI, I, D. DUA AND C, A. VAIDIALINGAM, JJ.] 180 SUPREME COURT REPORTS (1973] 3 S.C.R. the High Court was not justified in holding that they should not be **examined,** **-and** **hence,** **the** **order** **regarding** **their** **examination** **should** stlljll(f. _Jamatraj Kewalji Govani_ v. _The Stat•_ _of_ _Maharashtra,_ [1963] 3 S.C.R. 415, referred to. **A** (d) If the High Court had P"ssed the order quashing the charges **and** **proceedings** **in** **exercise** **of** **its** **inherent jurisdiction under** **s.** **561A,** **B** **Cr. P. C. then** **the** **exercise of** **the** **power** **by** **the** **High** **Court** **was** **not** **justified, because, the** **Jfresent** **case does no[ come within the ambit** **of** **the principles laid** **dowi:,.** **by** **this Court,** **in** _**R.**_ _**K.**_ _**Kapur**_ **v.** _**The Stare**_ _of_ _Punjab,_ [1960] 3 S.C.R. 388. [188 A-C] **(e)** **Even assuming that** **the** **High Court** **\\'as** **.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 C **no:rmally,** **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 mis-carriage of justice. [1880] CRIMINAL APPELLATE JURISDICTION : Criminal Appeal Nos. 101 to 103 of 1970. Appeals by special leave from the judgment and order dated D 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. Mu/la,_ _!._ _M. Khanna, Vishnu Bahadur Saharaya_ and E _Yogindra Khushalani_ for the respond~nts, (in Cr. A. Nos. 101 & 103/70). _R._ _A. Gupta_ for respondent (in Cr. A. No. 102/7()). S. _C._ _Mazumdar_ for the State (in all the appeals). The Judgment of the Court was delivered by VAIDIALINGAM, J. These three appeals by the complainant, by special leave, are against the common judgment and order dated August 10, 1969, of the Calcutta High Court in Criminal Re visions Nos. 238, 289 and 290 of 1969, setting aside the charge under section 120B read with section 409 I.P.C. framed against all the (our accused and the charge under section 409 IPC framed against accused Nos 1 to 3. The High Court by the same judg· ment, quashed the proceedings based upon the said charges, which were pending before the Presidency Magistrate, 7th Court, Calcutta in case No. C/34!13 of 1967. The appellant in all these three appeals, Amar Chand AgarwaUa, filed a complaint before the Chief Presidency Magistrate, Calcutta, on November 21, 1967, on the basis of which the four F **G** **ff** AMAR CHAND _v._ SHANTI BOSE _(Vaidialingam,_ /.) IS I A accused persons, namely, Paramanada Agarwalla, Madan Mohain Gour, Jhumennal Agarwalla and Shanti Bose, were required to answer charges uncier section 120B/ 409 and 409 IPC. These persons will be refQrred to as accused Nos. 1, 2, 3 and 4 respectively. The case was later on transferred to the Presidency Magistrate, 7th Court, Calcutta, for disposal. The 7th Presidency B Magistrate, •after recording the evidence of ten prosecution wit nesses, framed a charge on September 7, 1968, under section 120B/409 against all the tour accused and a charge under section 409 lPC against accused Nos. 1 to 3. The allegations in the ## complaim were briefly as follows :### c The complainant was a partner of M/s. Kalinga Bakery Bis cuit Confectionary and Mineral Water Company of Rourkela in Orissa and was granted actual users' import licence on November 18, _1956,_ 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 licencee's· factory. The comD plainant appointed M/s. Arun Importer (P) Ltd., owned, managed and controlled by accused Nos. _1_ to 3, as his agents to impoN 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 E the complainant with a loan of R~. 25,000/- to enable him to clear the shipping documents from the Bank. The 4th accused was in troduced by the other accused as a Customs Clearing Agent and on their suggestion, tht\ 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, F was not informed about the actual arrival of the ship. The com plainant addressed a letter dated August 19, 1967, to accused No. 4 asking for information about the arrival of the J!;oods. None of the accused gave any irntimation 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 G from the various parts of Calcut~a several bags of milk powder stated to have been imported on his account. The complainant rushed to Calcutta amd 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. ##### ll On August 26, 1967, an application was filed before the Chief Presidency Magistra!te to direct the police to make an investiga _tion_ under section 156(3) of the Criminal Procedure Code re 182 SUPREME COURT REPORTS (1973] 3 s.c.R. garding the missing quantity of milk powder. Iill the said application, however, only Shanti Bose (the present accused No. 4) was cited as an accused, as the complainant,did not have any reason to suspect the other accused. The milk powder seized by the police was laiter 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 A B 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 PresF- C" dency Magistrate, came to know that all the accused persons had taken away on August 19, 1967, the entire quantity pf 525 bags of milk powder, which had been imporited on his account without his knowledge, consent or instructions and that they had also mis-appmpriated about 200 bags before the police could raid their premises. On an ascertainment of these facts, the com D plainant withdrew his original complaint with the pemtlssion of the court and instituted the present complaint aglltnst all the accused. D On receipt of the complaint, 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 com- E. plainant had brought on record various documents _to_ substantiaite 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 and transferred the case for disposal _to_ the 7th Presidency Magistrate. The learned Magistrate, after a consideration of the materials F 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 G dated 7-9-1968 framing charges against them. It is seen from the records that a large volume of oral and Jocumentary evidence had already been let 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 24-2-1969, and also to examine one Durga Dutt Chowdhury as H a court wiUless under section 540, Criminal Procedure Code, as per order dated 7-3-1969. The witnesses examined s9 far by the prosecution had, also . been cross-examined, by the defence. AMAll CHAND _v._ SHANTI BOSE _(Vaidialingam,_ /.) 183 A While matters stood thus, the 4th accused mo~ the High Court in Criminal Revision No. 238 of 1969 for quashin& the charges and the entire proceedings that had taken place before the Magis· trate. 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, B 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 ### c High Court for quashing the charges as well as the entire pro ceedings pending ~ore the Presidcmcy Ml\gistrate. The first contention related to the maintainability of the present proceedings by the complainant, when he himself was an accused in a case Uillder seotion _5_ of the Imports and Exports ( CoDJtrOl) Act 194 7, stated by the Central Bureau of Inves\igation, Economic D Offences wing, Calcutta, in B. C. 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 Courl! 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 E 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 mgh Court on rthe ground that an order of dismissal under section 203, Criminal Procedure! Code, is no bar to the entertainment of a ~ond complainam: F on the similar facts, though such a complaint can be entertaillled only under exceptional circumstances. The High Court ultimately held that the present proceedings are not unwarranted . _ot_ unable in view of the first order of discharge in the circumstances: of the present case. G 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 he any breach of trust, for less any dishonest conversion leading to a conspiracy. The learned Judge held that it is diffi cult, at that stage, on the evidence adduced, to hold that there has not been any entrustment, especially as ·the whole case H 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. #### 184 SUPREME COURT REPORTS [197 3] 3 s.c.R. • 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 iact and left it to the Magistrate to assess and appreciate the evidence and come to a conclusion one wav 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 1he 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 accu;ed 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 lmowledge, 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 leall)ed Judge has ##### accepted this criticism as justified. Jt is not necessary for us to refer to, what according to the learned Judge were, certain omissi<lhs made by the complainant in his original comp!afot 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 complaimnt had not been referred to, is not justified. The complaint was filed on August 26, 1967, 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 cmn_ 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 maiiltainabi!ity. 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 Irani(')._ That was a case of (!) A.LR. 1939 Calcutta 320. A B ### c D E F G H .... A B ### c _D_ E F G .H AMAR CHAND _v._ SHANTI BOSE _(Vaidialingam,_ _J.)_ 1$5 discharge of the accused under section 25 3 ( 2) of the Criminal Procedure Code, as the Magistrate was of the opinion that the complainant had deliberately suppressed several facts and ~hat the complaint was a thoroughly dishonest one. In the end the High Court has held that the present proceedings are 1Yad 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 merit; 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 oot any offence of breach of trust. or a conspiracy to commit the same, by the accused persons wd, 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 wimess remain to be examined. On this basis ir was pressed biefore 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 inte1fere 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 circumSl\ances 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 effe9t 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 agailllst the accused and the entire proceedings that had 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 charge 'as well as the entire proceedings so far taken place before the Presidency Magistrate.· The learned oounsel appearing for the State supported the appellant and urged that !he High Court :was not justified in interfe!ing with the proceedmgs 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 urged on behalf of the accused which have found favour with 186 SUPREME COURT REPORTS [1973] 3 S.C.R. the High. Co~rt. We ~ave already po.i!llted out that the learned ~udge qmte ~ghtly dec!Ined, when dealing with the third contention, to consider, on an appreciation of evidence, whether an entrustment h~s 1*:en proved. This, the High Court has properly left to be decided by the Magistrate after the entire evidence is cl?sed. Bu~ 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 ba~is of the evidence on record, 'both oral and doc~me.ntary, the H~gh C?urt inste?d of adopting the same test, as 1t did when dealing with the third contention embarked _ unon a fairly elaborate appreciation of the evidence ~n record aind ultimately 7ame to the conclusion that the evidenco on record does not establish any breach of trust, or a conspiracy to commit ~e same, by the accused persons. Regarding the fourth contention, w~ich also has found ac~eptance at the hands of the Higl\ Court, 1~ relates .to what accordmg to the accused was, suppression ### of certam matenal facts by the complainant m 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 ~ore the Mag:istraJte. It is not as if the accused had moved t~e 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 biY 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 Magistrale 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 _ol_ or that the complaint has to be 11uashed for any ground available illl law, they should have approached the High Court, at any rate, immediately after the charges were framed. The records disclose <hat it was the fourth accused, who moved the High Court to quash the proceeding on March 17, 1969, earl\er 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 B ### c D F G H A B AMAR CHAND _v._ SHANTI BOSE _(Vaidialingam,_ 1.) _181_ materials 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 oonclusion, 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 ~­ barked upon an appreciation of the evide!llce. Here again, we.· do not express any opinion, on merits, as the matter is to be con·. sidered by the Trial Magistrate. ### c The High Court was also equally not justified in holding that the two prosecution witnesses should not be examined 9!11 the ground that their evidence will not have any material effect on the merits. The further view of the High Court that the exam.ina1ion of the court witness will prejudice the accused, is. also wi1hout any basis. In fact, the High Court's decision 011 the D question of these witnesses is really on a representation made on blehalf of the complainant that the trial is ajmost 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 Satana· E rayan 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 theprosecution for examining Durga Dutt Chowdhury as a court witness under section 540. In holding that the proposed exami: nation of Durga Dutt Chowdhury, as a court wrtness, will pre· F judice the accused, the High Court has not given due consi.. deration to the decision of this Court in _Jamatraj_ _Kewalji_ _Govani_ D _v.The_ _State_ _of_ _Maharafhtra(_ _[1]_ _)._ G H It is not clear whether the High Court passed the order, irr question, under section 561A or under section 439 of the Code of Criminal Procedure. This Court has la.id down the principles in _R._ _P._ _Kapur_ v. _The_ _State_ _of_ _Punjab('),_ which have to be· borne in mind by the High Court when its inherent jurisdiction under section 561A is invoked for ·quashing the proceedings 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· ##### (!) [1967] 3 S.C.R. 415. mo : ~ < P : 1 r. ##### 188 SUPREME COURT REPORTS [1973] 3 s.c. .. 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 ithe second com· plaint, 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 ithe proceedings, though at a very late stage. But on that point, the High Court's decision is in favour of the complainant. Thii other points 'taken int0 account by the High Court do not justify the exercise of its power under section 561A and that itoo at a very late stage of the proceedings. Even assuming that the High Court was exercising jurisdiction under section 439, in oµr opiniort, the present was not a case for interference by the High Court. The jurisdiction o.f the High Court is to be exercised normally under section 439, Criminal Procedure Code, only in exceptional cases, when there is a glar· ing 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 circum~· tances to exist in the case before us for quashing the charge and the further proceedings. The judgment and order of the High Court quashin2 the charges framed against the accused as well as the other proceed· ings based thereon, pendimg in case No. C/3443 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 Magis. Irate regarding the examination of itwo mote prosec;ution wit· J!esses and the court witness will stand, subject to any modifications that may be made by that Court in regard to the directions already given by it. In the result, the appeals are allowed. V.P.S. _Appeals_ _allowed._ **A** D ### c **D** **F** **G**