The High Court
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No.733 of 2024 ------ 1. Anup Praveen, aged about 35 years, son of Shrikrishna Tiwari, resident of Devi Mandap Road, Ratu Road, P.O. Hehel, P.S. Sukhdeonagar, District Ranchi, Jharkhand, office at Talesales – Ranchi, 404, 4th Floor, Modi Heights Phase-II, Opposite Road, Ranchi, 834001, Jharkhand Office Code-700021 2. Ashif Alam, aged about 30 years, son of Md. Mahood Alam, resident of Ward No.10, P.O. & P.S. Shivrajpur, District West Champaran, Bihar. Office at Star Health Insurance, House No.202, 2nd Floor, Shantideep Complex, Opposite Hotel Maharaja, Radium Road, Ranchi 834001 3. Pradeep Kumar, aged about 45 years, son of Late Tapeshwar Thakur, resident of Itki Road, P.O. Hehel, P.S. Sukhdeonagar, District Ranchi, Jharkhand, Office at Star Health Insurance House No.202, 2nd Floor, Shantideep Complex, Opposite Hotel Maharaja, Radium Road, Ranchi 834001 … Petitioners Versus 1. The State of Jharkhand 2. Santosh Kumar Sureka, aged about 68 years, son of Late Devi Prasad Sureka, resident of 450, Balaji Niwas, near Nasta Bread Factory, Sidhatoli, Arra gate, Post Mahilong, P.S. Tatisilway, District Opposite Parties Ranchi. … For the Petitioners For the State For the O.P. No.2 ------
Legal Reasoning
“28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. 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. He 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 Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.” 5. Learned counsel for the petitioners submits that the co-accused Anand Roy filed Cr.M.P. No.3038 of 2023 and vide judgment dated 22nd January, 2024 this Court quashed the entire criminal proceedings qua the co-accused Anand Roy. Learned counsel for the petitioners relies upon the judgment of the Hon’ble Supreme Court of India in the case of S. K. Alagh vs. State of U.P. & Others reported in 2008 2 Supreme 152 paragraphs-19 and 20 of which read as under:- “19. As, admittedly, drafts were drawn in the name of the company, even if appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Indian Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a company or an employee cannot be held to be vicariously liable for any offence committed by the company itself. {See Sabitha Ramamurthy and Anr. v. R.B.S. Channabasavaradhya,1 [(2006) 10 SCC 581]}. 20. We may, in this regard, notice that the provisions of the Instruments Act, Essential Commodities Act, Negotiable Employees’ Provident Fund (Miscellaneous Provision) Act, 1952 3 Cr. M.P. No.733 of 2024 etc. have created such vicarious liability. It is interesting to note that Section 14A of the 1952 Act specifically creates an offence of criminal breach of trust in respect of the amount deducted from the employees by the company. In terms of the explanations appended to Section 405 of the Indian Penal Code, a legal fiction has been created to the effect that the employer shall be deemed to have committed an offence of criminal breach of trust. Whereas a person in charge of the affairs of the company and in control thereof has been made vicariously liable for the offence committed by the company along with the company but even in a case falling under Section 406 of the Indian Penal Code vicarious liability has been held to be not extendable to the Directors or officers of the company. {See Maksud Saiyed v. State of Gujarat and Ors.,2 [2007 (11) SCALE 318]}.” (Emphasis supplied) and submits that therein in the facts of that case, the Hon’ble Supreme Court of India held that the Managing Director cannot be said to have committed any offence punishable under Section 406 of the Indian Penal Code. In the absence of any provision laid down under the statute, the Director of the Company or any employee cannot be held vicariously liable for any offence committed by the company itself. 6. Learned counsel for the petitioners next relies upon the judgment of the Hon’ble Supreme Court of India in the case of Mitesh Kumar J. Sha vs. The State of Karnataka & Others reported in 2021 7 Supreme 283 paragraph-39 of which reads as under:- 39. This Court in the case of Hridaya Ranjan Prasad Verma and Others vs. State of Bihar and Another, (2000) 4 SCC 168 has observed:- “15........that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time 4 Cr. M.P. No.733 of 2024 when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise....”” and submits that this is a case of mere breach of contract and in the absence of any intention of the accused since the beginning of the transaction between the parties, the offence of cheating is not made out. 7. Learned counsel for the petitioners next relies upon the judgment of the Hon’ble Supreme Court of India in the case of Randheer Singh vs. The State of U.P. & Others reported in 2021 0 Supreme (SC) 664 wherein in the facts of that case where no whisper of how or in what manner, the appellant of that case was involved in any criminal offence, was mentioned, the Hon’ble Supreme Court of India in the facts of that case set aside the prima facie case so far as the appellant of that case is concerned. 8. It is next submitted by the learned counsel for the petitioners that the petitioner No.1 is working as Deputy Manager, petitioner No.2 is not working with the company although at the relevant time he was posted as Senior Team Leader and petitioner No.3 is working as Operation Officer in Ranchi Branch of Star Health and Allied Insurance Company Limited. It is then submitted that there is no averment in the complaint petition as to how and in what manner the petitioners were responsible for the conduct of the business of the company or otherwise responsible for the company with regard to its functioning. Hence, the petitioners cannot be held personally vicariously liable for any offence, when Star Health and Allied Insurance Company Limited is indisputably a body corporate and the vicarious liability of the petitioners would arrive 5 Cr. M.P. No.733 of 2024 provided any provision exists in that behalf in the statute. It is next submitted that the instant case is purely a civil dispute and the complainant could have moved before the Grievance Redressal Officer. Hence, it is submitted that the prayer as prayed for in this Cr.M.P. be allowed. 9. Learned Addl.P.P. appearing for the State and the learned counsel for the opposite party No.2 on the other hand vehemently oppose the prayer of the petitioner as prayed for in this Cr.M.P. It is next submitted by the learned Addl.P.P. appearing for the State and the learned counsel for the opposite party No.2 that there is direct and specific allegation against the petitioner Nos.2 and 3 that on 08.02.2022 they came to the office of the complainant and got the insurance policy done after receiving Rs.5,467/- for a period of three years and they advised the complainant to get himself admitted in Modi Sewa Sadan but later on they changed their statement and advised the complainant to get himself admitted in Santevita Hospital and this is sufficient to constitute the offence punishable under Section 420/34 of the Indian Penal Code. Hence, it is submitted that this Cr.M.P., being without any merit, be dismissed. 10. Having heard the rival submissions made at the Bar and after carefully going through the materials available in the record, it is pertinent to mention here that it is the undisputed case of the parties that it is the Star Health and Allied Insurance Company Limited which is the company incorporated under the Companies Act, which is the culprit but the Star Health and Allied Insurance Company Limited has not been arrayed as an accused. There is no allegation against the petitioners that the petitioners have any intention to deceive the complainant since the very beginning. 6 Cr. M.P. No.733 of 2024 11. It is the settled principle of law, as has been held by the Hon’ble Supreme Court of India in the case of Uma Shankar Gopalika vs. State of Bihar & Another reported in (2005) 10 SCC 336 paragraph-6 of which reads as under:- “6. Xxxx xxxx xxxx It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.” (Emphasis supplied) that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. 12. Now, coming to the facts of the case, this Court finds that there is absolutely no allegation against the petitioners of having played any deception since the very inception and in the absence of the same, this Court is of the considered view that even if the entire allegations made against the petitioners are considered to be true in their entirety, still the offence punishable under Section 420/34 of the Indian Penal Code is not made out against the petitioners. Accordingly, the continuation of the entire criminal proceedings against the petitioners will amount to abuse of process of law. 13. Therefore, the entire criminal proceeding initiated against the petitioners in connection with Complaint Case No.10615 of 2022 including the order dated 17.07.2023 passed by the learned Judicial Magistrate-XXIV, Ranchi which is 7 Cr. M.P. No.733 of 2024 now pending in the court of learned Judicial Magistrate-XXIV, Ranchi, is quashed and set aside qua the petitioners named above only. 14.
Arguments
: Mr. Prabhat Singh, Advocate Mr. Arun Kumar, Advocate Ms. Anupama Kumari, Advocate : Ms. Vandana Bharti, Addl.P.P. : Mr. Bhaiya V. Kumar, Advocate ------ P R E S E N T HON’BLE MR. JUSTICE ANIL KUMAR CHOUDHARY 1 Cr. M.P. No.733 of 2024 By the Court:- Heard the parties. 2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with a prayer to quash the entire criminal proceeding initiated against the petitioners in connection with Complaint Case No.10615 of 2022 including the order dated 17.07.2023 passed by the learned Judicial Magistrate-XXIV, Ranchi whereby and where under the cognizance for the offence punishable under Sections 420/34 of the Indian Penal Code has been taken qua the petitioners only; which is now pending in the court of learned Judicial Magistrate-XXIV, Ranchi. 3. The brief facts of the case is that the petitioner Nos.2 and 3 being the representatives of Star Health and Allied Insurance Company Limited made a health insurance of the complainant under the scheme ‘Senior Citizen Red Carpet Health Insurance Policy Cashless’ and collected two installments of the premium of the said insurance policy. The complainant suffered an injury of fracture on his leg and got himself treated in the hospital and incurred an expense of around Rs.50,000/- but the said health insurance company did not pay the hospital bill and expenses of the complainant. 4. Learned counsel appearing for the petitioners submits that the petitioners are admittedly the employees of Star Health and Allied Insurance Company Limited. It is further submitted that there is no allegation against the petitioners of being personally involved in any of the alleged transactions relating to the insurance policy taken by the complainant. In support of his contention, learned counsel appearing for the petitioners relies upon the judgment of the Hon’ble Supreme Court of India in the case of Pepsi Foods 2 Cr. M.P. No.733 of 2024 Ltd. & Another vs. Special Judicial Magistrate & Others reported in (1998) 5 SCC 749 paragraph-28 of which reads as under:-
Decision
In the result, this Cr.M.P. stands allowed. (Anil Kumar Choudhary, J.) High Court of Jharkhand, Ranchi Dated the 29th of July, 2024 AFR/ Animesh 8 Cr. M.P. No.733 of 2024