RAMESH RAJAGOPALversusDEVI POLYMERS PRIVATE LIMITED

                         [2016] 4 S.C.R. 527



                      RAMESH RAJAGOPAL
                                 v.
              D'EVI POLYMERS PRIVATE LIMITED
                  (Criminal Appeal No.133 of2016)
                          APRIL 19, 2016                                B
             [S.A. BOBDE AND AMITAVA ROY, JJ.]
        Code of Criminal Procedure, 1973 - s. · 482 -Quashing of
  criminal proceedings~ Prosecution of appellant-accused uls. 409,
  468 and 471 !PC rlw. ss. 65 and 66 of Information Technology Act,
. 2000 rlw. s. 120-B !PC - Petition u/s. 482, for quashing the
                                                                        c.
  proceedings, dismissed by High Court - _On appeal, held: Jn the
  facts of the case, none of.the circumstances alleged, lead to an
  inference of commission- of an offence alleged either under !PC or
  under Information Technology Act _:_ The criminal proceedings seem
  to be due lo a private and personal grudge and thus is abuse of the   D
  process of the Court- High Court wrongly dismissed the pe_tition
  over-looking the circumstances of th~ case ""' In order tO meet the
  ends of justiCf!, it is necessary to quash the criminal proceedings
  against the appellant - Penal Code, 1860 - ss. 409, 468 and 471 -
· Information .Technology Act, 2()00 _;, ss. 65 and 66. -
                                                                        E
         Allowing the appeal, the Court,
       HELD: 1. It is not possible to attribute any intention of
 cheating which is, a necessary,_ ingredient for the offence under
 Section 468 IPC.. The_ allegations that the appellant is guilty of
 an offence under the aforesaid section are inherently improbable
 and there is no sufficient ground of proceedings against the           F - -
 accused. None of the circumstances alleged can lead to an
 inference of commission of an offence under the IPC at any rate.
 The proceedings have been initiated against the appellant as a
 part of an ongoing dispute between the parties and seem to be
 due to a private and personal grudge. [Paras 9, 14 and 15] [531-       G
 A-B; 532-D-F)
       2. As regards the commission of offences under the
. Information Technology Act, 2000, the allegations are that the
  appellant had, with fraudulent and dishonest intention, on the
  website of 'Devi Consultancy Services' mentioned that the former      H
                               527             .
528           SUPREME COURT REPORTS                      [2016] 4 S.C.R.


A     is a sister concern of 'Devi Polymers' which amounts to creating
      false electronic record. The appellant was a Dfrector of 'Devi
      Polymers' and nothing is brought on record to show that he did
      not have any authority to access the computer system or the
      computer network of the company. That apart, there is nothing
      on record to show the commission of offence under Section 65 of
B
      the l.T. Act, since the allegation is not that any computer source
      code has been concealed, destroyed or altered. The acts of the
      appellant did not have any dishonest intention while considering
      the allegations in respect of the other offences. In the
      circumstances, no case is made out under Sections 65 and 66 of
c     the I.T. Act. !Para 211 1535-D-GI
             3. An accused must be relieved from the prosecution, if
      the allegations are taken at their face value and accepted in their
      entirety do not constitute any offence. The High Court seems to
      have over-looked the circumstances of the case and has merely
D     dismissed the petition under Section 482 of the Criminal
      Procedure Code on the ground that it required evidence at a
      trial to come to any conclusion. The criminal proceedings initiated
      by the respondent, constitute an abuse of process of Court and it
      is necessary, to meet the ends of justice to quash the prosecution
      against the appellant. [Paras 20, 22) [535-C, G-H; 536-A]
 E
            State of Haryana and Ors. v. Bhajan Lal and Ors.1990
            (3) Suppl. scR 259 :1992 Supp (1) sec 335;
            Madhavrao Jiwajirao Scindia and Ors. v. Sambhajirao
            Chandrojirao Angre and Ors. 1988 (2) SCR 930 :
            (1988) 1 sec 692; Janata Dal V. HS. Choll'dhmy and
 F          Ors .. 1992 (1) Suppl. SCR 226 : (1992) 4 SCC 305;
            lnder Mohan Goswami and Anr. v. State of Uttarancha/
            and Ors. 2007 (10) SCR 847 : (2007) 12 SCC 1; R.
            Ka/yani v. Janak C. Melita and Ors. 2008 (14) SCR
            1249 : (2009) 1 SCC 516; Umesh Kumar '" State of
 G          Andhra Pradesh and Am: 2013 (14) SCR 213 : (2013)
            10 sec 591- relied on.
                            Case Law Reference
            1990 (3) Suppl. SCR 259       relied on        Para 16

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 RAMESH RAJAGOPAL v. DEVI POLYMERS PVT. LIMITED                              529


      1988 (2) SCR 930                 relied on          Para 17            A
      1992 (1) Suppl. SCR 226          relied on          Para 18
      2007 (10) SCR 847                relied on          Para 19
      2008 (14) SCR 1249               relied on          Para 19
      2013 (14) SCR 213                relied on          Para 20
                                                                              B
      CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 133 of2016.
     From the Judgment and Order dated 26.11.2010 of the High Com1
of Madras in Cr!. 0. P. 4404 of 20 I0.
      K. V. Vishwanathan, Sr. Adv., V. Kai1hik, R. Anand Padmanabhan,         c
Romil Pathak, Anand Sharma, Shashi Bhushan Kumar, Advs. for the
Appellant.
     R. Balasubramanian, Sr. Adv., B. Karunakaran, (For A.
Radhakrishnan), Advs. for the Respondent.
                                                                              D
      The Judgment of the Com1 was delivered by
       S. A. BOBDE, J. 1. We have heard learned counsel for the
parties.
      2. Leave granted.
       3. The appellant has preferred this appeal against the judgment        E
passed by the Madras High Cou11 in Criminal O:P. No. 4404 of 20 I 0
refusing to quash the criminal proceedings initiated against him.
      4. The appellant was prosecuted by the respondent under Sections
409, 468 and 4 71 of the Indian Penal Code (in short 'the IPC') read with
Sections 65 and 66 of the Information Technology Act, 2000 read with          F
Section I 20(b) of the IPC. The appellant is a Director in Devi Polymers
Private Limited, Chennai which is a leader in Polyester Moulding
Compotind (PMC), Sheet Moulding Compound (SMC) and Dough
Moulding Compound (DMCO) in India.
       It is also manufacturing SMC and DMC moulded components for            G
the electrical, automotive and various other industries. The company is
also supplying SMC and DMC compounds and components to almost all
the leading electrical switch gear industries and automotive industries in
India.
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530            SUPREME COURT REPORTS                          (2016] 4 S.C.R.



A            5. It has three Units -A, 8 and C. Unit 'C' is being headed by
      the appellant. It is not disputed that the Unit 'C' primarily renders
      consultancy services. However, all the three Units are .units of one
      entity i.e. Devi Polymers Private Limited.
           6. In the course of business, the appellant thought of improving
B   the  consultancy  services and apparently contacted a consultant known
  · as Michael T Jackson. He also contacted the regular consultants of the
    Company i.e. Devi Polymers Private Limited. The consultants apparently
    advised the creation of a separate entity known as Devi Consultancy
    Services and accordingly, in the web page that was created by the
    consultant, this name occurred. Since an invoice was raised by the
c consultant Michael T Jackson in the sum of I 0,857.50 US Dollars, the
    said amount was paid from the funds of Devi Polymers Private Limited
    amounting to Rs.5,57,207 /-. The amount of Rs.17,000/-has been paid by
     the Devi Polymers Private Limited to M/s Easy Link. These amounts
     were paid as advised by the appellant. It is significant that no amount
D has been paid or received by Unit C separately, independently of Devi
     Polymers Private Limited. All this, namely the engaging of consultants
     and payments to them was apparently done at the behest of the appellant.
             7. The relationship being strained between the respondent and
      the appellant, who are relatives, several proceedings seem to have been
 E    initiated in the Company Law Board pertaining to oppression and
      mismanagement. As of now, it is said that the appellant's petition for
      mismanagement has been dismissed but an appeal is pending. We are,.
      however, not concerned with those proceedings.
          8. However, in the course of disputes and the pending proceedings,
 F the respondent initiated the instant criminal complaint against the appellant.
   'The main circumstances which are relied upon by the respondent in the
    complaint is that in the website for Devi Consultancy Services that was
    created on the advice of the consultant is shown as a separate division
    independent of Devi Polymers Private Limited. According to the
    complainant, this has resulted in forgery, since there is no such thing as
 G Devi Consultancy Services; though the existence of Unit C of Devi
    Polymers Private Limited, which deal with consultancy is not denied.
    The second circumstance seems to be the payment made by the Devi
   ·Polymers Private Limited to the consultants from their own account.
    The former is said to be forgery and the latter is said to be mis-
 H
 RAMESH RAJAGOPAL v. DEVI POLYMERS PVT. LIMITED                               531
                           rs.
                   A. BOBDE, J.l

appropriation of funds and breach of trust.                                    A
         9. Having given our anxious consideration to the dispute, we find
that none of the aforesaid circumstances can lead to an inference of
commission of an offence under the IPC at any rate none of the offence
alleged. As far as the website is concerned, though undoubtedly, Devi
Consultancy Services (DCS) is mentioned, it is made clear in the website       B
itself that DCS is a part of Devi Polymers Private Limited which is
apparent from a link which shows Devi Polymers Private Limited, in the
website itself, are shown as Devi Polymers Private Limited, the main
Company and Devi Consultancy Servic~s as a sister Company. Similarly,
in the website of Devi Polymers Private Limited, which was moved by
the consult;ant, there is a link which shows that Devi Consultancy Services    c
is a sister concern and it is stated that viewers may visit that site. The
address of Devi Consultancy Services is shown to be the same address
as that of Devi Polymers Private Limited. We are satisfied that there is
no attempt whatsoever to project the Devi Consultancy Services as a
concern or a Company which is independent and separate from Devi               D
Polymers Private Limited, to which both the parties belong. In any case
 it is not possible to view the act as an act of forgery.
       I0. It might have been possible to attribute some criminal intent
to the projection of the Unit C as Devi Consultancy Services in the
website, if as a result of such projection, the appellant had received any     E
amounts separate from the Devi Polymers Private Limited, but a perusal
of the complaint shows that this is not so. Not a single rupee has been
received by the appellant in his own name or even separately in the
name of Unit C, which he is heading. All amounts have been received
by Devi Polymers Private Limited.
                                                                               F
       11. Section 463 of the Indian Penal Code defines forgery which
reads as follows:-
       "463. Forgery.- Whoever makes any false documents or false
       electronic record or part of a document or electronic record,
       with intent to cause damage or injury, to the public or to any          G
       person, or to support any c~aim or title, or to cause any person
       to part with property, or to enter into any express or implied
       contract, or with intent to commit fraud or that fraud may be
       committed, commits forgery, "

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532            SUPREME COURT REPORTS                          [2016] 4 S.C.R.



A            12. It is not possible to view the contents of the website showing
      the Devi Consultancy Services as a concern which is separate from
      Devi Polymers Private Limited in view of the contents of the website
      described above. Moreover, it is not possible to impute any intent to
      cause damage or injury or to enter into any express or implied contract
      or any intent to commit fraud in the making of the said website. The
B
      appellant has not committed any act which fits the above description.
      Admittedly, he has not received a single rupee or nor has he entered into
      any contract in his own name on the basis of the above website.
             13. Section 468 of the !PC reads as follows:-

c           "468. Forgery for purpose of cheating -   Whoever commits
            forgery, intending that the document or electronic record
            forged shall be used for the purpose of cheating, shall be
            punished with imprisonment of either de-scription for a term
            which may extend to seven years, and shall also be liable to
            fine."
D
            14. In the absence of any act in pursuance of the website by
      which he has deceived any person fraudulently or dishonestly, induced
      any one to deliver any property to any person, we find that it is not
      possible to attribute any intention of cheating which is a necessary
      ingredient forthe offence under Section 468.
 E
             15. We find that the allegations that the appellant is guilty of an
      offence under the aforesaid section are inherently improbable and there
      is no sufficient ground of proceedings against the accused. The
      proceedings have been initiated against the appellant as a part of an
      ongoing dispute between the parties and seem to Qe due to a private and
 F    personal_,gruc!ge.
             16. In State of Haryana and Ors. v. Bhajan Lal and Ors.
      reported in 1992 Supp(!) SCC 335, this Court laid down the following
      guidelines where the power under Section 482 should be exercised. They
      are:-
 G
             "I 02. In the backdrop of the interpretation of the various
             relevant provisions of the Code under Chapter XIV and of
             the principles of law enunciated by this Court in a series of
             decisions relating to the exercise of the extraordinary power
             under Article 226 or the inherent powers under Section 482
 H
RAMESH RAJAGOPAL v. DEVI POLYMERS PVT. LIMITED                          533
               [S. A. BOBDE, J.]

   of the Code which we have extracted and reproduced above,            A
   we give the following categories of cases by way of illustration
   wherein such power could be exercised either to prevent
   abuse of the process of any court or otherwise to secure the
   ends ofjustice, though it may not be possible to lay down any
   precise, clearly defined and sufficiently channelised and
                                                                         B
   inflexible guidelines or rigid formulae and to give an
   exhaustive list of myriad kinds of cases wherein such power
   should be exercised.
   (1) Where the allegations made in the first information report
   or the complaint, even if they are taken at their face value
   and accepted in their entirety do not prima facie constitute          c
   any offence or make out a case against the accused.
   (2) Where the allegations in the first information report and
   other materials, if any, accompanying the FIR do not disclose
   a cognizable offence, justifying an investigation by police
   officers under Section 156(1) of the Code except under an            D
   order of a Magistrate within the purview of Section 155 (2) of
   the Code.
   (3) Where the uncontroverted allegations made in the FIR or
   complaint and the evidence collected in support of the same
   do not disclose the commission of any offence and make out            E
   a case al{ainst the accused.
   (4) Where. the allegations in the FIR do not constitute a
   cognizable offence but constitute only a non-cognizable
   offence, no investigation is permitted by a police officer without
   an order of a Magistrate as contemplated under Section                F
   155(2) of the Code.
   (5) Where the allegations made in the FIR or complaint are so
   absurd and inherently improbable on the basis of which no
   prudent person can ever reach a just conclusion that there is
   sufficient ground for proceeding against the accused.                 G
   (6) Where there is an express legal bar engrafted in any of
   the provisions of the Code or the concerned Act (under which
   a criminal proceeding is instituted) to the institution and
   continuance of the proceedings and/or where there is a
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534            SUPREME COURT REPORTS                          [2016) 4 S.C.R.



A           specific provision in the Code or the concerned Act, providing
            efficacious redress for the grievance of the aggrieved party.
            (7) Where a criminal proceeding is manifestly attended with
            ma/a fide and/or where the proceeding is maliciously instituted
            with an ulterior motive for wreaking vengeance on the accused
B           and with a view to spite him due to private and personal
            grudge."
            We find that the High Court ought to have exercised its power
      under Clause ( 1), (3) and (5) of the above said judgment.
           17. In Madhavrao Jill'ajirao Scindia and Ors. v. Sambhajirao
c     Chandrojirao Angre and Ors., reported in (1988) I SCC 692, this
      Court observed as follows:-
            "7. The legal position is well settled that when a prosecution at
            the initial stage is asked to be quashed, the test to be applied by
            the court is as to whether the uncontroverted allegations as made
D           prima facie establish the offence. It is also for the court to take
            into consideration any special features which appear in a particular
            case to consider whether it is expedient and in the interest of
            justice to permit a prosecution to continue. This is so on the basis
            thatthe court cannot be utilised for any oblique purpose and where
E           in the opinion of the court chances of an ultimate conviction are
            bleak and, therefore, no useful purpose is likely to be served by
            allowing a criminal prosecution to continue, the court may while
            taking into consideration the special facts of a case also quash the
            proceeding even though it may be at a preliminary stage."
             18. This Court in Janata Dal v. HS. Chowdhary and Ors.,
 F
      reported in ( 1992) 4 sec 305, observed as follows:-
            " 132. The criminal courts are clothed with inherent power to
            make such orders as_may be necessary for the ends ofjustice.
            Such power though unrestricted and undefined should not
            be capriciously or arbitrarily exercised, but should be
 G
            exercised in appropriate cases, ex debito justitiae to do real
            and substantial justice for the administration of which alone
            the courts exist. The powers possessed by the High Court under
            Section 482 of the Code are very wide and the very plenitude
            of the power requires great caution in its exercise. Courts
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 RAMESH RAJAGOPAL v. DEVI POLYMERS PVT. LIMITED                                535
                [S. A. BOBDE, J.]

      must be careful to see that its decision in exercise of this power       A
      is based on sound principles. "
      We reiterate the same caution having found that this is an
appropriate case for the exercise of such powers.
      19. The entire law on the subjects was reviewed by a three
Judges Bench of this Court in Inder Mohan Goswami and Anr. v.                   B
State of Uttaranchal and Ors., reported in (2007) 12 SCC I vide
paragraphs 23 to 39. Thereafter, the law was reiterated in R Kalyani
v. Janak C. Mehta and Ors. reported in (2009) I SCC 516 vide
paragraphs 15 and 16.
      20. In all the cases the principle that the accused must be relieved      c
from the prosecution, even ifthe allegations are taken at their face value
and accepted in their entirety do not constitute any offence has been
upheld, and thereafter in Umesh Kumar v. State of Andhra Pradesh
andanr., reported in (2013) 10 sec 591.
       21. As regards the commission of offences under the Information          D
Technology Act, 2000 the allegations are that the appellant had, with
fraudulent and dishonest intention on the website of Devi Consultancy
Services i.e. www.devidcs.com that the former is a sister concern of
Devi Polymers. Further, that this amounts to creating false electronic
record. In view of the finding above we find that no offence is made out        E
under Section 66 of the I.T. Act, read with Section 43. The appellant
was a Director of Devi Polymers and nothing is brought on record to
show that he did not have any authority to access the computer system
or the computer network of the company. That apart there is nothing on
record to show the commission of offence under Section 65 of the I. T.
Act, since the allegation is not that any computer source code has been         F
concealed, destroyed or altered. We have already observed that the
acts of the appellant did not have any dishonest intention while considering
the allegations in respect of the other offences. In the circumstances,
no case is made out under Sections 65 and 66 of the I.T. Act, 2000.
        22. The High Court seems to have over looked these                      G
circumstances and has merely dismissed the petition under Section 482
of the Criminal Procedure Code on the ground that it requires evidence
at a trial to come to any conclusion. We, however, find that the criminal
proceedings initiated by the respondent constitute an abuse of process
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536             SUPREME COURT REPORTS                        [2016] 4 S.C.R.



A     of Court and it is necessary to meet the ends of justice to quash the
      prosecution against the appellant.
             23. Accordingly, the appeal succeeds. The prosecution is quashed.
      Kalpana K. Tripathy                                       Appeal allowed.