IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 14.03.2014 CORAM: THE HON'BLE Ms.JUSTICE K.B.K.VASUKI Crl.R.C.No.529 of 2010 and M.P.Nos.1 and 2 of 2010 1.The General Manager, Shriram Chits Funds PVT.LTD.Head Office: Greams Road, Chennai-6.
2.The Branch Manager, Shriram Chits Funds PVT.LTD.Branch Office, Commercial Complex, Circle -6, Neyveli.Petitioners versus V.Krishnamurthy S/o.Veerappa Padayachi .Respondent Criminal revision is filed under Sections 397 and 401 of the Code of Criminal Procedure, praying to call for the entire records in CC.No.231/2009 on the file of the District Munsif cum Judicial Magistrate, Neyveli and set aside the order dated 15.3.2010 made in CMP.No.5501/2009 on the file of the District Munsif cum Judicial Magistrate, Neyveli.
For Petitioners : Mr.V.Bhiman For Respondent : Mr.Thanga Vadhanabalakrishnan ORDER
The petitioners herein are arrayed as A1 and A2 in CC.No.231 of 2009 registered for the offences under sections 209, 210, 406 and 420 IPC on the basis of the private complaint given by the respondent herein.
The respondent has filed the private complaint by stating that the respondent has joined 10 chits conducted by the petitioner and bid the chits and taken the amounts between 2002 and 2005.
But the petitioners did not pay the amount and joined the wife of the respondent as an agent and promised to pay some gift.
Later on, neither the gift nor the amounts have been paid to the respondent.
Thereafter, arbitration case was filed before the Deputy Registrar of Chits, Cuddalore, who passed the arbitration award.
In pursuance of the same, Execution Petition was filed by the petitioners against the respondent and the amount due under chit transaction has been deducted from the respondent salary and the entire amount has been realised from the respondent.
Even thereafter, the petitioners did not return back the cheques, pro notes and other papers along with signatures and identity card obtained from the respondent and his wife and son/guarantORS.thereby the petitioners are committed the acts of cheating, criminal breach of trust and misappropriation of the money belonging to the respondent, by obtaining the decree falsely against the respondent.
2.The petitioners have in their petition filed under Section 245 Cr.P.C for discharging them from the charges framed against them, contended that the complaint does not make out any specific case against A1 General Manager and A2 Branch Manager.
The trial court dismissed the discharge petition on the ground that the petitioners/accused have not substantiated their case with sufficient documents and the controveRs.in issue can be determined only after full fledged enquiry and no case is made out for discharging the accused from the charges.
Hence, this criminal revision by A1 and A2 before this court.
3.Heard the rival submissions made on both sides.
4.The petitioners herein are the General Manager and the Branch Manager of Shriram Chit Funds.
The facts that the complainant bid 9 chits in the name of himself, his wife and son and thereafter, arbitration case was filed before the Deputy Registrar of Chits, Cuddalore for default in making payment and award was passed and execution petition was filed by the company against the complainant and the award amount was discharged by way of monthly deduction from the salary of the complainant, are not seriously denied.
The complaint proceeds as if the chit amount was not paid to the complainant and his family members and false case was preferred and decree was obtained and the amount was falsely recovered from the salary of the complainant.
The next part of the complaint proceeds to say that even after payment of the amount, the documents such as cheques, pro note, other papers and identity card were not returned to the complainant.
As rightly pointed out by the learned counsel for the petitioneRs.the very fact that the arbitration case was filed before the Deputy Registrar of Chits, Cuddalore and the award was passed against the complainant and his family membeRs.would prima facie falsify the fiRs.part of the allegations raised in the complaint that the chit amount was not paid to the complainant and his family membeRs.The question of committing default in making payment will arise only when the complainant received the entire amount and failed to repay the same.
Had it been true that the chit amount was not paid to the complainant, the complainant would have approached the appropriate forum for recovery of the amount and the failure of the complainant to initiate any such action, even after initiation of arbitration proceedings before the Deputy Registrar of Chits, Cuddalore, will render the allegations raised in the complaint not believable.
In that event, no ingredients for the offences under section 406 IPC for criminal breach of trust and under section 420 IPC for the act of cheating are made out against the petitioners herein.
5.As far as the charges under sections 209 and 210 IPC are concerned, the same deal with dishonestly making false claim in Court and fraudulently obtaining decree for sum not due.
Here again, the failure on the part of the complainant to challenge the correctness of the award passed by the Deputy Registrar of Chits, Cuddalore in the arbitration proceedings and filing of Execution Petition before the execution court would render the arbitration proceedings and the outcome of the same to be final and binding on the parties.
If that is so, the complainant cannot be now permitted to re-open and re-agitate the same as false claim and false decree for the amount due.
Further, there is absolutely no explanation on the part of the complainant for his failure to initiate proceedings to recover the amount from the chit company and for his failure to question the correctness of the award and execution proceedings.
On his failure to do so, no ingredients for the offences under sections 209 and 210 IPC can be said to be made against the petitioners herein.
6.As far as non return of the documents is concerned, the same are undoubtedly submitted before the Deputy Registrar of Chits, Cuddalore, in support of the claim of the company made before the same and the same are not entrusted to the General Manager or Branch Manager, for proceeding against them for non delivery of the documents to the complainant and his family membeRs.Further, it is nowhere stated in the complaint that non payment was due to any attitude on the part of the General Manager and the Branch Manager and the documents were entrusted to either of them.
Whereas, it refers to only Managing Director.
Further, the bidders of the chit company are not only the complainant but also his wife and son.
But the complaint was filed only by the complainant.
It is nowhere stated that the complaint was given on behalf of the complainant and also on behalf of his wife and son, as such, non-institution of separate proceedings by the complainant and his wife and son will render the complaint not maintainable in respect of the alleged claim of the wife and son.
7.Even otherwise, it is nowhere specifically stated in the complaint that the amounts were paid or not paid by the General Manager and the Branch Manager of the firm on the date of filing of the complaint.
Even according to the complainant, they bid the chits during 2005 and the complaint was lodged in the year 2009.
The accused, having been mentioned by their designation, it is not known as to whether the General Manager and the Branch Manager are one and the same during the period when cause of action arose and during the period of institution of the complaint.
The accused cannot be mentioned by their designation for the simple reason that vicarious liability is unknown to criminal law.
In this context, the learned counsel for the petitioners would cite the following Apex Court decisions: (i)2009 AIR SCW1836(R.Kalyani v.
Janak C.Mehta and otheRs.and (ii)(2009) 3 MLJ (Crl) 102(SC) (Sharon Michael and others v.
State of Tamil Nadu and another).8.In the fiRs.case cited above, the Hon'ble Supreme court observed that in the absence of any allegation about entrustment of property of the complainant, or that accused had dominion over such property or that they have committed any criminal breach of trust, which is one of the main ingredients for constituting the offence of cheating, the same could not arise.
It is further observed therein that a vicarious liability can be fastened only by reason of a provision of a statute and not otherwise.
If a person has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused.
In the absence of any allegation about the interaction between the complainant and the accused person, the question of proceeding against the accused, who are referred to by their designation, does not arise.
9.Similar view is expressed in the second decision cited supra.
It is observed therein that in the absence of any material to show that the accused holding different positions in the company made any representation in their personal capacities, they cannot be made vicariously liable only because they are employees of the company.
10.One more aspect to be looked into is the period of punishment.
Out of 4 charges framed against the petitioneRs.three offences are punished with imprisonment upto 3 years only.
In respect of the offence under section 420 IPC, the punishment is extended to 7 yeaRs.Further when the alleged cause of action for filing the complaint was during 2005 when the complainant and his family members were stated to have bid chits.
The complaint was filed only in 2009 i.e., beyond the period of 3 years and the same exceeds three years limitation period, as such, the complaint is hit by limitation.
11.Another aspect to be considered herein is the nature of the dispute arose between the parties.
The alleged non payment of the chit amount being civil in nature, the complaint ought to have been filed before appropriate civil forum and the same cannot be allowed to become subject matter of the criminal proceedings, which may be resorted to as a short cut for execution of a non-existent decree as observed by the Hon'ble Supreme Court in the decision reported in (2009) 3 SCC78(V.Y.Jose and another v.
State of Gujarat and another).12.As a matter of fact, the Hon'ble Supreme Court in para 28 of the authority reported in (1998) 5 SCC749(Pepsi Foods Ltd and another v.
Special Judicial Magistrate and otheRs.observed that summoning of an accused in a criminal case is a serious matter.
Criminal law cannot be set into motion as a matter of course.
The Magistrate has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused.
It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused.
The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto.
Whereas in the present case the impugned order does not disclose independent application of mind of the magistrate concerned as required by the Hon'ble Apex Court in the judgment as cited above.
13.Viewing from any angle, the criminal prosecution initiated against the petitioners and having been time barred no prima facie having been made out cannot be allowed to go on and the same is liable to be set aside.
14.In the result, the criminal revision is allowed by setting aside the order dated 15.3.2010 made in Crl.MP.No.5501/2009 in CC.No.231/2009 on the file of the District Munsif cum Judicial Magistrate, Neyveli.
The petitioners/A1 and A2 are discharged from the charges framed against them.
Consequently, connected miscellaneous petitions are closed.
rk Index:Yes/No Internet:Yes/No 14.03.2014 To The District Munsif cum Judicial Magistrate, Neyveli.
K.B.K.VASUKI, J.
Crl.R.C.No.529 of 2010 14.3.2014