State v. Mukherjee

Heard Sri Mukul Rakesh, learned Senior Advocate, assisted by Sri R.N.Shukla, learned counsel for the applicant, learned A.G.A. for the State and perused the record. The instant application under section 482 Cr.P.C./528 of the B.N.S.S., 2023 has been filed with the prayer to quash the impugned chargesheet no. 8 of 2018 dated 19-12-2018 and further cognizance and summoning order dated 03-01-2019 passed by the learned Special Judge, PC Act-II, Lucknow as well as it's consequential proceedings/orders in Criminal Case No. 21 of 2019, "State Vs Mukherjee", arising out of Case Crime No. 835 of 2011, under sections 120- B,420,467,468 & 471 of the I.P.C. and subsequent added section 8 of the Prevention of Corruption Act, Police Station-Gomti Nagar, Distict-Lucknow, pending in the court of Special Judge, P.C. Act-II, Lucknow. The prosecution story in brief is that on 21-02- 2002, Dwarka New Delhi, (herein after referred NIPL), a tender was published for construction of three numbers of boys hostels that was awarded to U.P. Rajkiya Nirman Nigam Ltd.,Delhi Zone, Nirman Nigam Colony, Jamia Nagar, Okhala, New Delhi. On 04-03-2002, an agreement was entered into between Netaji Subhash Institute of Technology, Azad Hind Fauz Marg, Sector -3, Dwarka, New Delhi and Fauz Marg, Sector -3, Dwarka, New Delhi and U.P. Rajkiya Nirman Nigam Ltd. through Additional General Manager, Delhi Zone and in the meantime U.P. Rajkiya Nirman Nigam Ltd., decided to allot the work on back-to- back basis to Sub-Contractor and it was published in the News Papers and in pursuance of said publication total eight contractors including Nucon India Pvt. Ltd also applied there and after finalization of the bid, the tender of M/s Nucon India Pvt. Ltd., New Delhi was accepted and thereafter on 04.04.2002, an agreement was executed between M/s Nucon India Pvt. Ltd. (herein after referred NIPL), New Delhi and UPRNNL, office at New Delhi. It is argued by the learned Senior Counsel appearing on behalf of the applicant that infact the applicant being the Managing Director of the Company, has committed no offence and the applicant was dragged in a criminal conspiracy and he is sufferer as is evident from narration of the first information report that the U.P. Rajkiya Nirman Nigam Ltd., which a company, constituted under the Companies Act by the State Government and is also controlled and supervised by the State Government, has sublet the work to a company which is being run by the present applicant and that is due to the ignorance of the law on behalf of the U.P. Rajkiya Nirman Nigam Ltd. and there is no fault on the part of the applicant. He submits that infact there was no criminal intent creeping in the matter, as is alleged in the first information report. He added that infact the whole criminal proceedings vitiates in the eyes of law as the company, which is being run by the present applicant, has not been implicated. He has also drawn attention of this court that the first information report itself, is evident that a request was made with respect to lodging of the first information report against Nucon India Pvt. Ltd. and the chargesheet has been filed and the summons have also been issued against the applicant, who is the Managing Director the said company, which is impermissible under the law. In support of his contentions, he has placed reliance on Judgment of the Hon'ble Apex Court reported in (2020) 3 Supreme Court Cases 240, Sushil Sethi and Another Vs State of Arunachal Pradesh and Others and has referred paragraph nos. 2.2, 7.5, 8.1 and 8.2. of the said Judgment, which are extracted as under :- "2.2 According to the appellants, they were not aware about the filing of the FIR and the charge-sheet against them till the year 2017 and on being aware of d the FIR and the charge-sheet against them, the appellants preferred a petition before the High Court for quashing the aforesaid criminal proceedings under Section 482 CrPC. It was contended on behalf of the appellants that the matter pertains to the contract and therefore purely a civil and contractual dispute has been given the colour of criminality and that too with a mala fide intention as they served a notice upon the respondents to pay the maintenance amount due and payable. It was also submitted on behalf of the appellants that they are the Managing Director/Director of M/s SPML Infra Limited a company and that the company has not been arrayed as an accused. It was submitted that there are no allegations that the appellants were in-charge of the affairs of the company and therefore vicariously liable. Number of other submissions were also made on merits in support of their submission that the offence under Section 420 f IPC has not been made out at all. It was also submitted that as soon as the company/appellants were informed with respect to the defect, despite the defect liability period was over, they changed the turbines in the year 2000. It was also submitted that all throughout the project has run and even still running.

7.5 In Sharad Kumar Sanghi, this Court had an occasion to consider the initiation of criminal proceedings against the Managing Director or any officer of a company where company had not been arrayed as a party to the complaint. In the aforesaid decision, it is observed and held by this Court that in the absence of specific allegation against the Managing Director of vicarious liability, in the absence of company being arrayed as a party, no proceedings can be initiated against such Managing Director or any officer of a company. It is further observed and held that when a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegation to constitute the vicarious liability.

8.1 As observed hereinabove, the charge-sheet has been filed against the appellants for the offences under Section 420 read with Section 120-B IPC. However, it is required to be noted that there are no specific allegations and averments in the FIR and/or even in the charge-sheet that fraudulent e and dishonest intention of the accused was from the very beginning of the transaction. It is also required to be noted that contract between M/s SPML Infra Limited and the Government was for supply and commissioning of the Nurang Hydel Power Project including three power generating units. The appellants purchased the turbines for the project from another manufacturer. The company used the said turbines in the power project. The contract was in the year 1993. Thereafter in the year 1996 the project was commissioned. In the year 1997, the Department of Power issued a certificate certifying satisfaction over the execution of the project. Even the defect liability period ended/expired in January 1998. In the year 2000, there was some defect found with respect to three turbines. Immediately, the turbines were replaced. The power project started functioning right from the very beginning-1996 onwards. If the intention of the company/appellants was to cheat the Government of Arunachal Pradesh, they would not have replaced the turbines which were found to be defective. In In any case, there are no specific allegations and averments in the complaint that the accused had fraudulent or dishonest intention at the time of entering into the contract. Therefore, applying the law laid down by this Court in the aforesaid decisions, it cannot be said that even a prima facie case for the offence under Section 420 out. IPC

8.2. It is also required to be noted that the main allegations can be said to be against the company. The company has not been made a party. The allegations are restricted to the Managing Director and the Director of the company respectively. There are no specific allegations against the Managing Director or even the Director. There are no allegations to constitute the vicarious liability. In Maksud Saiyed v. State of Gujarat 13, it is observed and held by this Court that the Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the company when the accused is the company. It is further observed and held that the vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. It is further observed that the statute indisputably must contain provision fixing such vicarious liabilities. It is further observed that even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions c constituting vicarious liability. In the present case, there are no such specific allegations against the appellants being Managing Director or the Director of the company respectively. Under the circumstances also, the impugned criminal proceedings are required to be quashed and set aside." Referring the aforesaid, he submits that the case of the present applicant is squarely covered with the ratio of Judgment abovesaid as in the present case also, there is no specific allegation levelled against the applicant being the Managing Director of the Company and it was obligatory on the part of the complainant to make a requisite complaint, only then the proceeding could have been run. Therefore, submission is that the criminal proceedings against the applicant may be quashed. Learned A.G.A. appearing for the State has opposed the contentions abovesaid. He prays for time to file Counter Affidavit. In view of the aforesaid, list/put up this matter on 29-08-2025. The Station House Officer, Police Station-Gomti Nagar,Lucknow shall remain present before this court alongwith record on 29-08-2025 at 02.15 P.M. He shall also file his personal affidavit explaining the reason as to why the order dated 08-08-2025 passed by this court has been flouted even after the same was intimated to him. Till the next date of listing, the proceedings arising out of Criminal Case No. 21 of 2019, "State Vs Mukherjee", arising out of Case Crime No. 835 of 2011, under sections 120-B,420,467,468 & 471 of the I.P.C. and subsequent added section 8 of the Prevention of Corruption Act, Police Station-Gomti Nagar, Distict-Lucknow, pending in the court of Special Judge, P.C. Act-II, Lucknow, shall remain stayed so far as the present applicant is concerned. Order Date :- 13.8.2025 AKS

Heard Sri Mukul Rakesh, learned Senior Advocate, assisted by Sri R.N.Shukla, learned counsel for the applicant, learned A.G.A. for the State and perused the record. The instant application under section 482 Cr.P.C./528 of the B.N.S.S., 2023 has been filed with the prayer to quash the impugned chargesheet no. 8 of 2018 dated 19-12-2018 and further cognizance and summoning order dated 03-01-2019 passed by the learned Special Judge, PC Act-II, Lucknow as well as it's consequential proceedings/orders in Criminal Case No. 21 of 2019, "State Vs Mukherjee", arising out of Case Crime No. 835 of 2011, under sections 120- B,420,467,468 & 471 of the I.P.C. and subsequent added section 8 of the Prevention of Corruption Act, Police Station-Gomti Nagar, Distict-Lucknow, pending in the court of Special Judge, P.C. Act-II, Lucknow. The prosecution story in brief is that on 21-02- 2002, Dwarka New Delhi, (herein after referred NIPL), a tender was published for construction of three numbers of boys hostels that was awarded to U.P. Rajkiya Nirman Nigam Ltd.,Delhi Zone, Nirman Nigam Colony, Jamia Nagar, Okhala, New Delhi. On 04-03-2002, an agreement was entered into between Netaji Subhash Institute of Technology, Azad Hind Fauz Marg, Sector -3, Dwarka, New Delhi and Fauz Marg, Sector -3, Dwarka, New Delhi and U.P. Rajkiya Nirman Nigam Ltd. through Additional General Manager, Delhi Zone and in the meantime U.P. Rajkiya Nirman Nigam Ltd., decided to allot the work on back-to- back basis to Sub-Contractor and it was published in the News Papers and in pursuance of said publication total eight contractors including Nucon India Pvt. Ltd also applied there and after finalization of the bid, the tender of M/s Nucon India Pvt. Ltd., New Delhi was accepted and thereafter on 04.04.2002, an agreement was executed between M/s Nucon India Pvt. Ltd. (herein after referred NIPL), New Delhi and UPRNNL, office at New Delhi. It is argued by the learned Senior Counsel appearing on behalf of the applicant that infact the applicant being the Managing Director of the Company, has committed no offence and the applicant was dragged in a criminal conspiracy and he is sufferer as is evident from narration of the first information report that the U.P. Rajkiya Nirman Nigam Ltd., which a company, constituted under the Companies Act by the State Government and is also controlled and supervised by the State Government, has sublet the work to a company which is being run by the present applicant and that is due to the ignorance of the law on behalf of the U.P. Rajkiya Nirman Nigam Ltd. and there is no fault on the part of the applicant. He submits that infact there was no criminal intent creeping in the matter, as is alleged in the first information report. He added that infact the whole criminal proceedings vitiates in the eyes of law as the company, which is being run by the present applicant, has not been implicated. He has also drawn attention of this court that the first information report itself, is evident that a request was made with respect to lodging of the first information report against Nucon India Pvt. Ltd. and the chargesheet has been filed and the summons have also been issued against the applicant, who is the Managing Director the said company, which is impermissible under the law. In support of his contentions, he has placed reliance on Judgment of the Hon'ble Apex Court reported in (2020) 3 Supreme Court Cases 240, Sushil Sethi and Another Vs State of Arunachal Pradesh and Others and has referred paragraph nos. 2.2, 7.5, 8.1 and 8.2. of the said Judgment, which are extracted as under :- "2.2 According to the appellants, they were not aware about the filing of the FIR and the charge-sheet against them till the year 2017 and on being aware of d the FIR and the charge-sheet against them, the appellants preferred a petition before the High Court for quashing the aforesaid criminal proceedings under Section 482 CrPC. It was contended on behalf of the appellants that the matter pertains to the contract and therefore purely a civil and contractual dispute has been given the colour of criminality and that too with a mala fide intention as they served a notice upon the respondents to pay the maintenance amount due and payable. It was also submitted on behalf of the appellants that they are the Managing Director/Director of M/s SPML Infra Limited a company and that the company has not been arrayed as an accused. It was submitted that there are no allegations that the appellants were in-charge of the affairs of the company and therefore vicariously liable. Number of other submissions were also made on merits in support of their submission that the offence under Section 420 f IPC has not been made out at all. It was also submitted that as soon as the company/appellants were informed with respect to the defect, despite the defect liability period was over, they changed the turbines in the year 2000. It was also submitted that all throughout the project has run and even still running.

7.5 In Sharad Kumar Sanghi, this Court had an occasion to consider the initiation of criminal proceedings against the Managing Director or any officer of a company where company had not been arrayed as a party to the complaint. In the aforesaid decision, it is observed and held by this Court that in the absence of specific allegation against the Managing Director of vicarious liability, in the absence of company being arrayed as a party, no proceedings can be initiated against such Managing Director or any officer of a company. It is further observed and held that when a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegation to constitute the vicarious liability.

8.1 As observed hereinabove, the charge-sheet has been filed against the appellants for the offences under Section 420 read with Section 120-B IPC. However, it is required to be noted that there are no specific allegations and averments in the FIR and/or even in the charge-sheet that fraudulent e and dishonest intention of the accused was from the very beginning of the transaction. It is also required to be noted that contract between M/s SPML Infra Limited and the Government was for supply and commissioning of the Nurang Hydel Power Project including three power generating units. The appellants purchased the turbines for the project from another manufacturer. The company used the said turbines in the power project. The contract was in the year 1993. Thereafter in the year 1996 the project was commissioned. In the year 1997, the Department of Power issued a certificate certifying satisfaction over the execution of the project. Even the defect liability period ended/expired in January 1998. In the year 2000, there was some defect found with respect to three turbines. Immediately, the turbines were replaced. The power project started functioning right from the very beginning-1996 onwards. If the intention of the company/appellants was to cheat the Government of Arunachal Pradesh, they would not have replaced the turbines which were found to be defective. In In any case, there are no specific allegations and averments in the complaint that the accused had fraudulent or dishonest intention at the time of entering into the contract. Therefore, applying the law laid down by this Court in the aforesaid decisions, it cannot be said that even a prima facie case for the offence under Section 420 out. IPC

8.2. It is also required to be noted that the main allegations can be said to be against the company. The company has not been made a party. The allegations are restricted to the Managing Director and the Director of the company respectively. There are no specific allegations against the Managing Director or even the Director. There are no allegations to constitute the vicarious liability. In Maksud Saiyed v. State of Gujarat 13, it is observed and held by this Court that the Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the company when the accused is the company. It is further observed and held that the vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. It is further observed that the statute indisputably must contain provision fixing such vicarious liabilities. It is further observed that even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions c constituting vicarious liability. In the present case, there are no such specific allegations against the appellants being Managing Director or the Director of the company respectively. Under the circumstances also, the impugned criminal proceedings are required to be quashed and set aside." Referring the aforesaid, he submits that the case of the present applicant is squarely covered with the ratio of Judgment abovesaid as in the present case also, there is no specific allegation levelled against the applicant being the Managing Director of the Company and it was obligatory on the part of the complainant to make a requisite complaint, only then the proceeding could have been run. Therefore, submission is that the criminal proceedings against the applicant may be quashed. Learned A.G.A. appearing for the State has opposed the contentions abovesaid. He prays for time to file Counter Affidavit. In view of the aforesaid, list/put up this matter on 29-08-2025. The Station House Officer, Police Station-Gomti Nagar,Lucknow shall remain present before this court alongwith record on 29-08-2025 at 02.15 P.M. He shall also file his personal affidavit explaining the reason as to why the order dated 08-08-2025 passed by this court has been flouted even after the same was intimated to him. Till the next date of listing, the proceedings arising out of Criminal Case No. 21 of 2019, "State Vs Mukherjee", arising out of Case Crime No. 835 of 2011, under sections 120-B,420,467,468 & 471 of the I.P.C. and subsequent added section 8 of the Prevention of Corruption Act, Police Station-Gomti Nagar, Distict-Lucknow, pending in the court of Special Judge, P.C. Act-II, Lucknow, shall remain stayed so far as the present applicant is concerned. Order Date :- 13.8.2025 AKS