Birla Corporation Limited vs Adventz Investments and Holdings Limited & Others

29 to 54 were not returned and the same were in the possession of the respondents – Pursuant thereto, appellant-company filed criminal complaint u/ss. 379, 403, 411 r/w. s. 120B IPC – After examining employee ‘D’ of the appellant company and complainant ‘S’ (a representative of the company), the Trial court found sufficient grounds for proceeding against all the respondents and also ordered issuance of summons to the respondents for the offences punishable u/ss. 380, 411 and 120B IPC – Aggrieved, respondents filed petition u/s. 482 Cr.P.C. – High Court held that since original of documents No. 1 to 28 were still in the custody of the complainant, thus the complaint would not survive in respect of the documents No. 1 to 28 – However complaint was allowed by the High Court, insofar as documents No. 29 to 54 were concerned and the matter was remitted to the Trial court – On appeal, held: The allegations in the statement of complainant ‘S’ were vague and lacked material particulars as to the commission of theft – Complainant has neither attributed to any facts nor material particulars as to the commission of theft – In the complaint, there were no specific averments against respondents as to how they were responsible in moving the documents out of the possession of the appellant – Further, the statement of the employee ‘D’ was only a bare statement that respondents had procured documents from the custody of the appellant – In the instant case, the satisfaction of the magistrate was on presumptive footing – Neither the statement of the complainant nor the statement of ‘D’ contained particulars as to the commission of offence – There was no application of mind by the magistrate in taking cognizance of the offence against the respondents – Also, issuance of summons was also not very well founded and the same cannot be sustained – So far as, the allegations of retention of documents No. 29 to 54 are concerned, there are no allegation as to when and how the original documents were removed and retained by the respondents – No prima-facie case is made out against the accused persons – Supreme Court has the power to quash any judicial proceedings u/Art. 136 of the Constitution – Thus, criminal complaint qua the documents No. 29 to 54 quashed.

Code of Criminal Procedure, 1973 – s. 202 – Scope of enquiry – Held: The scope of enquiry under this section is extremely restricted only to finding out the truth or otherwise of the allegations made in the complaint in order to determine whether process should be issued or not u/s. 204 Cr.P.C. or whether the complaint should be dismissed by resorting to s.203 Cr.P.C. on the footing that there is no sufficient ground for proceeding on the basis of the statements of the complainant and of his witnesses, if any – At the stage of enquiry u/s. 202 Cr.P.C., the Magistrate is only concerned with the allegations made in the complaint or the evidence in support of the averments in the complaint to satisfy himself that there is sufficient ground for proceeding against the accused.

Code of Criminal Procedure, 1973 – Issuance of process – Held: To be summoned/to appear before the Criminal Court as an accused is a serious matter affecting one’s dignity and reputation in the society – In taking recourse to such a serious matter in summoning the accused in a case filed on a complaint otherwise than on a police report, there has to be application of mind as to whether the allegations in the complaint constitute essential ingredients of the offence and whether there are sufficient grounds for proceeding against the accused.

Penal Code, 1860 – s. 29 – Document – Held: The “document” as defined in s.29 IPC is a “moveable property” within the meaning of s.22 IPC which can be the subject matter of theft – The information HOLDINGS LTD.

contained thereon in the documents would also fall within the purview of the “corporeal property” and can be the subject matter of the theft.

Penal Code, 1860 – Theft – Intention of the taker – Held: Intention is the gist of the offence – It is the intention of the taker which must determine whether taking or moving of a thing is theft – The intention to take “dishonestly” exists when the taker intends to cause wrongful loss to any other which amounts to theft – It is an essential ingredient of the offence of “theft” that the movable property should have been “moved” out of the possession of any person without his consent.

Words and Phrases – ‘dishonest intention’, ‘wrongful gain’ and ‘wrongful loss’ – discussed.

Allowing the appeal arising out of SLP(Crl.) D.Nos.6405 & 6122 of 2019 and dismissing the appeal arising out of SLP(Crl.) No.9053 of 2016, the Court

HELD: 1. A Company Petition was filed before the Company Law Board under Sections 235, 237, 247, 250, 397, 398, 402 and

403 of the Companies Act, 1956 by respondents No.1 to 5 who are the shareholders of the appellant Company alleging oppression and mismanagement. M/s Birla Education Trust (represented by respondent No.6) is also one of the petitioners in the Company Petition. Along with the Company Petition, the copy of the documents in question i.e. documents No.1 to 54 including document No.1-Internal Audit Report were filed and advance copy of the Company Petition and copy of the documents were given to the appellant. Appellant-Company filed complaint alleging that the respondents have gained unauthorized access and possession of the documents No.1 to 54. ‘S’, complainant (a representative of the Company) has only alleged that he apprehends that all the accused persons in connivance with each other have procured the documents. The allegations in the statement of the complainant are vague and lack material particulars as to the commission of the theft. Complainant has neither attributed to any facts nor material particulars as to the commission of theft. [Paras 39, 42 and 47] [69-F-G; 680-G; 683-B-C]

2. Respondent No.10-Birla Buildings Limited is responsible for the day to day affairs of the maintenance of the building. Respondent No.11 is the CEO of Respondent No.10-Birla Buildings Limited. In the complaint, there are no specific averments against respondents No.10 and 11 as to how they had access to the 3 rd and 4 th floors of the building owned by the appellant Company and as to how they are responsible in moving the documents out of the possession of the appellant. Likewise, no specific overt act of “dishonest removal” of the documents is attributed to the other respondents. The mere fact that respondents No.10 and 11 are responsible for security and maintenance of the building cannot lead to an inference that respondents No.10 and 11 are responsible for the theft. [Para 48] [683-D-E]

3. In the statement of ‘D’, a employee of the appellant company, there is only a bare statement that respondents No.13 to 15 have filed case before the Company Law Board that the documents are highly confidential and that they have procured the documents stolen from the custody of the appellant. There are no specific allegations against respondents No.13 to 15. Likewise, there are no specific allegations against the other accused who are residing outside the jurisdiction of the court and how and when they committed theft of the documents that how they entered into conspiracy. Considering the various litigations pending between the parties before issuing summons, the Magistrate ought to have considered the complaint and statement of witnesses and satisfied himself that there are prima facie materials showing the ingredients of the offence of theft (house theft) and receipt of stolen property. [Para 54] [685-D-F]

4. For taking cognizance of the offence, the Magistrate inter alia relied upon the statement of the complainant and ‘D’ to arrive at a conclusion that a prima facie case is made out against the respondents. Neither the statement of the complainant nor the statement of ‘D’ contain the particulars as to the commission of the offence to have satisfied the Magistrate that there were sufficient grounds for proceeding against the accused. By perusal of the above order passed by the Magistrate, there is absolutely HOLDINGS LTD.

nothing to indicate application of mind in taking cognizance of the offence against respondents No.1 to 16 including the respondents who are residents beyond the jurisdiction of the court. [Para 57] [686-F-H]

5. In the present case, the complaint lacks particulars as to time and the place of theft or the person who has committed theft. There are no averments in the complaint alleging that how the documents had gone out of the possession of the complainant. There are only mere statement of the complainant that respondents No.12 to 16 have filed civil suits basing on the stolen documents and that he apprehends that all the accused persons in connivance with each other must have procured the documents by theft. In the absence of particulars, by mere possession of the documents or mere production of the documents in the Company Petition or civil suits, it cannot be said that sufficient grounds were made out to proceed against the accused or that the satisfaction of the Magistrate was well founded justifying issuance of process. [Para 58] [687-D-F]

6. The object of investigation under Section 202 Cr.P.C. is “for the purpose of deciding whether or not there is sufficient ground for proceeding”. The enquiry under Section 202 Cr.P.C. is to ascertain the fact whether the complaint has any valid foundation calling for issuance of process to the person complained against or whether it is a baseless one on which no action need be taken. The law imposes a serious responsibility on the Magistrate to decide if there is sufficient ground for proceeding against the accused. The issuance of process should not be mechanical nor should be made as an instrument of harassment to the accused. Issuance of process to the accused calling upon them to appear in the criminal case is a serious matter and lack of material particulars and non-application of mind as to the materials cannot be brushed aside on the ground that it is only a procedural irregularity. In the present case, the satisfaction of the Magistrate in ordering issuance of process to the respondents is not well founded and the order summoning the accused cannot be sustained. The impugned order of the High Court holding that there was compliance of the procedure under Section 202 Cr.P.C. cannot be sustained and is liable to be set aside. [Para 61] [688-E-H]

7. Admittedly, documents No.1 to 54 including the Document No.1-Internal Audit Report of Chanderia unit of the appellant Company has been filed by the respondents in the company petition. These documents are intra-company correspondence, internal audit reports, agreements, etc. in relation to the operations of the appellant Company. Admittedly, these documents have been produced in the company petition by the shareholders of the appellant-Company to substantiate their case of oppression and mismanagement by respondent No.17 and for vindication of their rights. In the facts and circumstances of the case in hand, the taking away of the documents temporarily and using them in the pending litigations between the parties would not amount to theft. [Para 70] [691-G-H; 692-A]

8. The FIR or the criminal proceedings can be quashed if the allegations do not make out a prima-facie case or allegations are so improbable that no prudent person would ever reach a just conclusion that there are sufficient grounds for proceeding against the accused. So far as, the allegation of retention of the documents No. 29 to 54, no allegation as to when and how the original documents were removed and retained by the respondents. Where on the admitted facts no prima-case case is made out against the accused for proceeding or when the Supreme Court is satisfied that the criminal proceedings amount to abuse of process of court, Supreme Court has the power to quash any judicial proceedings in exercise of its power under Article 136 of the Constitution of India. The present case is a fit case for exercising the power in quashing the criminal complaint qua the documents No.29 to 54 also. [Para 88] [699-B-D]

9. Conclusions are summarised as under:-

a) By the order of the Magistrate, cognizance was taken against respondents No.1 to 16 for commission of the offences under Sections 380, 411 and 120B IPC. There are no averments in the complaint nor are there allegations in the statement of the complainant or the witness ‘D’ as to when and how the theft was committed and the order of the Magistrate taking cognizance of HOLDINGS LTD.

the criminal case against respondents No.1 to 16 qua documents No.1 to 54 is liable to be set aside.

b) The “document” as defined in Section 29 IPC is a “moveable property” within the meaning of Section 22 IPC which can be the subject matter of theft. The information contained thereon in the documents would also fall within the purview of the “corporeal property” and can be the subject matter of the theft. The information contained thereon in the documents would also fall within the purview of the “corporeal property” and can be the subject matter of the theft. The findings of the High Court is modified to that extent.

c) In the facts and circumstances of the present case, use of documents No.1 to 28 and documents No.29 to 54 by the respondents in judicial proceedings is to substantiate their case namely, “oppression and mismanagement” of the administration of appellant-Company and their plea in other pending proceedings and such use of the documents in the litigations pending between the parties would not amount to theft. No “dishonest intention” or “wrongful gain” could be attributed to the respondents and there is no “wrongful loss” to the appellant so as to attract the ingredients of Sections 378 and 380 IPC.

d) Considering the facts and circumstances of the present case and the number of litigations pending between the parties, continuation of the criminal proceedings would be an abuse of the process of the court. The order of the Magistrate taking cognizance of the offences and the issuance of summons to respondents No.1 to 16 and the criminal proceedings thereon are liable to be quashed. [Para 89] [699-E-H; 700-A-D] National Bank of Oman v. Barakara Abdul Aziz and Another (2013) 2 SCC 488 : [2012] 11 SCR 500 ; Mehmood Ul Rehman v. Khazir Mohammad Tunda and Others (2015) 12 SCC 420 : [2015] 4 SCR 841 ; Bhushan Kumar and Another v. State (NCT of Delhi) and Another (2012) 5 SCC 424 : [2012]

2 SCR 696 ; Vijay Dhanuka and Others v. Najima Mamtaj and Others (2014) 14 SCC 638 : [2014] 4 SCR 171 ; Pepsi Foods Ltd. and Another v. Special Judicial Magistrate and Others (1998) 5 SCC 749 : [1997] 5 Suppl. SCR 12 ; Punjab National Bank and Others v. Surendra Prasad Sinha 1993 Supp (1) SCC 499 : [1992] 2 SCR 528 ; Jagdish Ram v. State of Rajasthan and Another (2004) 4 SCC 432 : [2004] 2 SCR 846 ; Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi and Others (1976) 3 SCC 736 : [1976] Suppl. SCR 123 ; State of Haryana and Others v. Bhajan Lal and Others 1992 Supp (1) SCC 335 : [1990] 3 Suppl. SCR 259 ; Indian Oil Corpn. v. NEPC India Ltd. and Others (2006) 6 SCC 736 : [2006] 3 Suppl. SCR 704 – relied on.

Sunil Bharti Mittal v. Central Bureau of Investigation (2015)

4 SCC 609 : [2015] 1 SCR 377 ; Chandra Deo Singh v. Prokash Chandra Bose alias Chabi Bose and Another AIR 1963 SC 1430 : [1964] SCR 639 ; K.N. Mehra vs. State of Rajasthan AIR 1957 SC 369 : [1957] SCR 623 ; Pooran Mal v. Director of Inspection (Investigation), New Delhi and Others (1974) 1 SCC 345 : [1974] 2 SCR 704 ; Madhavrao Jiwajirao Scindia and Others v. Sambhajirao Chandrojirao Angre and Others (1988) 1 SCC 692 : [1988] 2 SCR 930 ; Abhijit Pawar v. Hemant Madhukar Nimbalkar and Another (2017) 3 SCC 528 : [2016] 9 SCR 475 ; GHCL Employees Stock Option Trust v. India Infoline Limited (2013) 4 SCC

505 : [2013] 5 SCR 276 ; Pyare Lal Bhargava v. State of Rajasthan AIR 1963 SC 1094 : [1963] Suppl. SCR 689 – referred to.