Holding

At the charge‑framing stage, the court must only ascertain whether the material on record can reasonably connect the accused with the alleged offence (prima facie case) and need not form an opinion on the prospect of conviction.

Summary

Sanghi Brothers (Indore) Pvt Ltd filed a complaint alleging that the directors of Chetak Construction Ltd had taken vehicles on lease and later sold eight of them, constituting cheating and criminal breach of trust under IPC sections 420 and 406 read with section 34. The trial magistrate framed charges, but the Madhya Pradesh High Court quashed them, stating that the evidence did not make the offences unimpeachable and that a conviction was not certain. The Supreme Court held that at the charge‑framing stage the court must only determine whether the material on record can reasonably connect the accused to the alleged offence, i.e., whether a prima facie case exists, and should not form an opinion on the prospect of conviction. Consequently, the High Court’s interference was improper, the order quashing the charges was set aside, and the appeal was allowed, reinstating the framed charges. The Court reiterated the test of a prima facie case under CrPC sections 227, 228, 239, 240 and 245.

Issues considered

Whether the High Court was justified in quashing the charge‑framing order on the ground that the evidence was not unimpeachable.
Whether, at the stage of framing charges, the court must consider only the existence of a prima facie case and not the prospect of conviction.
Interpretation of CrPC sections 227, 228, 239, 240 and 245 in the context of charge framing.

Legislation cited

Code of Criminal Procedure, 1973s. 227, s. 228, s. 239, s. 240, s. 245
Indian Penal Code, 1860s. 34, s. 406, s. 420

Subjects

criminal procedurecharge framingprima facie caseCrPC sections 227 228 239 240 245IPC sections 420 406 34cheatingcriminal breach of trustjurisprudence

Judgment

II

If-
[2008] 14 S.C.R. 206

A SANGH! BROTHERS (INDORE) PVT. LTD.
II.
r
SANJAY CHOUDHARY AND ORS.
(Criminal Appeal No.1578 of 2008)
OCTOBER 3, 2008
B
[PR. ARIJIT PASAYAT AND DR. MUKUNDAKAM
SHARMA, JJ.]
~

Code of Criminal Procedure, 1Q73 - ss. 227, 228, 239, I
~-
c 240 & 245 - Charges of cheating and breach of trust framed
by Trial Court - Quashed by High Court after formulating an
opinion about the prospect of conviction - Propriety of - Held:
Not proper - While considering framing of charges, Court is
required to consider whether material brought on record could
reasonably connect the accused with the trial - Nothing more
D
is required to be inquired into - Test of prima facie case is to
be applied - At that stage, there is no necessity of formulating ))._,-
opinion about the prospect of conviction - Penal Code, 1860
- ss. 420 and 406 rlw s.34.
E The Trial Court, on the complaint of appellant, framed
charges against the Respondents under Sections 420 ~
and 406 IPC read with Section 34 IPC. It was the allega-
tion of appellant that respondents took 45 dumper ve-
hicles and 4 light commercial vehicles on lease from them, ,.'
F and in violation of .the agreement between them, illegally
sold off 8 vehicles to other parties with ulterior motive,
}'--
thus committing the offences of cheating and breach of
·trust. .
Respondents filed a criminal revision petition. The
G High Court upon considering the submission of respon-
dents that no charge under Sections 420 and 406 IPC was ,,
clearly made out against them on the basis of evidence +- (.
on record and it was also not so unimpeachable that if it
was not rebutted then a conviction could be based on it,
H 206
SANGHI BROTHERS (INDORE) PVT. LTD. v. SANJAY 207
CHOUDHARY & ORS.
~
, quashed the criminal charges against them and thus al- A
lowed the criminal revision petition. Hence the appeal.
Allowing the appeal, the Court
HELD:1.1. The Court has to see while considering
the question of framing the charge as to whether the ma- · B
terial brought on record could reasonably connect the
-( accused with the trial. Nothing more is required to be in-
quired into. At the stage at which the Court is required to
consider the question of framing of charge, the test of a
prima facie case is to be applied. [Paras 8, 1O] [212,8-C] c
1.2.The instant case is not one where the High Court
ought to have interfered with the order of framing the
charge. Even if there is a strong suspicion about the com-
mission of offence and the involvement of the accused, it
is sufficient for the Court to frame a charge. At that stage, D
there is no necessity of formulating the opinion about the
prospect of conviction. [Para 11] [212,F-G]
State of Maharashtra and Ors. v. Som Nath Thapa and
Ors. (1996) 4 SCC 659; State of Karnataka v. L. Muniswamy
(1977) 2 SCC 699; Stree Atyachar Virodhi Parishad v. Dilip E
Nathumal Chordia (1989) 1 SCC 715; State of West Bengal
v. Mohd. Khalid (1995) 1 SCC 684 and R.S. Nayak v. A.R.
Antulay (1986) 2 sec 716 - relied on.

j CASE LAW REFERENCE F
(1996) 4 SCC 659 relied on Para 7
(1977) 2 sec 699 relied on Para 8
(1989) 1 sec 715 relied on Para 8
(1995) 1 sec 684 relied on Para 8 G
(1986) 2 sec 716 relied on Para 9
CRIM\NALAPPELLATE JURISDICTION: Criminal Appeal ·
No. 1578 of 2008
H
208 SUPREME COURT REPORTS [2008] 14 S.C.R.

A From 'the final Judgment ·and Order dated 5.10.2006 of r.
the High Court of Madhya Pradesh, Bench at Indore in Criminal
Revision No. 865 of 2006
· . . K.T.S. Tulsi, Buddy A. Ranganadhan and A.V. Rangam for
the Appellant.
B
Dr. Rajeev Dhavan, S.K. Gambhir, S.K. Puri, Priya Puri,
V.M. Chauhan and H.K. Puri for the Respondents. \-
The Judgment ofthe Court was delivered by
c DR. ARIJIT PASAYAT, J. 1. Leave granted.
2. C~'allenge in.this appeal is to the judgment of a learned
Single Judge of the Madhya Pradesh High Court, Indore Bench
allowing the Criminal Revision Petition filed by the respondents.
Challenge in the Criminal Revision Petition was to the order
'D dated 14.8.2006 passed by learned Judicial Magistrate, First
Class, Indore in ~riminal case No.2114 of 2003. By the said
order charges were framed against the respondents. The
·. ' ·learned Judicial Magistrate directed framing of charge_for of-
fence punishable 'under Sections 420, 406 read with Section
··." . E 34 IPC. - - ·'
......
·3. Backgrourid facts as projected by appellant in a nut-.
shell are as·follows:
The appellant-company is a registered company dealing
F with the sale of auto vehicles. at Indore and .respondents are
Directors of the Chetak Construction Ltd. a registered company
having its Head Office at Chetack Chamber, R.N.T. Mark, Indore
and accused No.3 is the Secretary of that company. In the year
1988-89 accused approached the complainant company for
G obtaining lease of Tata dumpers and light commercial vehicles
for a specific period on monthly lease rent basis. Respondents
assured complainant company that as per the agreement they
will pay monthly lease rent without any default and to support
their claim, they will also furnish back guarantee for due perf9r-
mance of the condition of the contract. In view of that proposal,
H
SANGHI BROTHERS (INDORE) PVT. LTD. v. SANJAY 209
CHOUDHARY & ORS. [DR. ARIJff PASAYAT, J.]

,..._~
agreements were executed between the parties on 13.5.1988, A
14.11.1988 and 25.3.1989 for c:telivery of 25 dumpers, 10 dump-
ers, 20 dumpers and 4 light commercial vehicles and accused
persons took the delivery of the aforesaid vehicles from the
complainant and also agreed for payment of the monthly lease
rent for 36 months. For the due performance of agreement, nee- B
essary documents were executed by the accused persons in
favour of the complainant. After some time, complainant came
-~

to know that accused No.4 was unable to pay him lease rent
according to the agreement. Then complainant called accused
No.1 and 2 to execute personal guarantee bonds in favour of c
the complainant and after some persuasion, so called personal
guarantee bonds were executed by the accused Nos. 1 and 2
in favour of the complainant for due performance of the agree-
ment on 6.12.1991. They also gave collateral security in favour
of the complainant of a property belonging to M/s Choudhary
D
Builders Private Ltd. and also produced boa-rd resolution dated
~ 6.2.1990 to the complainant. Complainant was unable to get
'--', any rent in time from the accused persons and also found that
applicants/accused in violation of the condition of the agree-
ment have illegally sold eight vehicles to other parties with ulte-
rior motive, thus committing criminal breach of trust also and E
had cheated the complainant. On these allegations, complain-
ant through its Manager filed a complaint under Sections 420
and 406 IPC against the respondents. Before the trial Court,
learned trial Magistrate after taking the cognizance against the
a~cuse9 recorded before charge evidence and on consider- F
ation of before charge evidence by order dated 14.8.2006 or-
' dered for framinQ of the ch_a~ge as noted above.
·•
The order framing of charge was questioned before the
High Court·in the revision petition. After noticing the stands of
G
the petitioners before it and the respondent who is the present
_..,.-, appellant, the High Court noted as follows:
"All these cases are distinguishable with the facts of the
present case. In the present case, applicants are not
praying quashment of the proceedings under the H
210 SUPREME COURT REPORTS [2008] 14 S.C.R.

provisions of Section 482 of the Criminal Procedure Code. r
r
'
The applicants/accused came up before this Hon'ble
Court against the order of framing of the charge and on
the basis of the prima facie evidence recorded before
charge and is trying to assail the findings of the trial Court
B and submits that no charge under Section 420 and 406
IPC is clearly made out against the applicants on the basis
of evidence on record and it is also not so unimpeachable ).-
that if H is not rebutted then a conviction can be based on I
it."

C The High Court was of the view that framing of c~arge was
not sustainable .
.4. In support of the appeal, learned counsel for the appel-
lant submitted that the conclusions of the High Court are clearly
indefensible. It is not a requirement of law that the offence is not
0
so unimpeachable and if it is not rebutted, conviction can be
based on it.
5. Learned counsel for the respondents on the other hand
submitted that the background facts have been rightly taken note
E of by the High Court to conclude that the framing of charge was
not sustainable. It was pointed out that there was no intention of
committing the alleged fraud as has been rightly held by the
High Court. Part of the amount has been received and sale of
vehicle was permitted and the bank guarantee was also
F encashed. Even if it is conceded that there was breach of con-
tract at some point of time that was remedied because of the
permission to sell vehicles and by encashment of the bank guar-
antee. The whole agreement was retrieved. In order to consti-
tute fraud th.ere must be some mental evil design. There is no
G question of any seminal intent as there was civil dispute and the
same has been taken note of by the High Court, more particu-
larly, with reference to the allegations.
6. By way of reply learned counsel for the appellant sub-
mitted that because of huge dues the appellant had the right of
H repossession which could have been exercised w.e.f. 6.1.1990
SANGH! BROTHERS (INDORE) PVT. LTD. v. SANJAY 211
CHOUDHARY & ORS. (DR. ARIJIT PASAYAT, J.]

-- ~ and on 8.2.1990 four personal bank gl!arantees were given by A
the respondents. Since that was not adequate, additional se-
curity was required and same was furnished by offering prop-
erty security which was not owned by the respondents. This could
be known only after the letter of the bank was received. The
intention was very clear, because it was aimed at preventing 8
the appellant from exercising the right of re-possession. It is not
a case where the High Court conceded that there was no of-
-- {
fence made out. Charges were framed and therefore the High
Court should not have by the impugned order aborted the whole
trial. The High Court is wrong in stating that there was no alle- c
gation of any criminal intention at the initial stage. It is pointed
out that this aspect was explicitly stated in the complaint.
7. In State of Maharashtra and Ors. V Som Nath Thapa
and Ors. (1996 (4) SCC 659) this Court observed as follows:
D
"Let us note the meaning of the word 'presume'. In Black's
Law Dictionary it has been defined to mean "to believe or
~
accept upon probable evidence". (emphasis ours). In
Shorter Oxfprd English Dictionary it has been mentioned
that in law 'presume' means "to take as proved until
evidence to the contrary is forthcoming". Stroud's Legal E
dictionary has quoted in this context a certain judgment
according to which "A presumption is a probable
consequence drawn from facts (either certain, or proved
by direct testimony) as to the truth of a fact alleged".
-) (Emphasis supplied). In Law Lexicon by P Ramanath Aiyar F
the same quotation finds place at p. 1007 of 1987 Edn.
32. The aforesaid shows that if on the basis of materials
on record, a court could come to the conclusion that
commission of the offence is a probable consequence; a
G
case for framing of charge exists. To put it differently, if the
court were to think that the accused might have committed
- .... 1
the offence it can frame the charge, though for conviction
the conclusion is required to be that the accused has
committed the offence. It is apparent that at the stage of
H
212 SUPREME COURT REPORTS [2008] 14 S.C.R.

A framing of a charge, probative value of the materials on
record cannot be gone into; the materials brought on record
by the prosecution has to be accepted as true at that stage."
8. Sections 227, 239 and 245 deal with discharge from
. criminal c~arge. In State of Kamataka v. L. Muniswamy (1977
8 (2) sec 6'99) it was noted that at the stage of tram ing the charge
the court has to apply its mind to the question whether or not
there is any ground for presuming the commission of offence ~
i
by the accused. (Underlined for emphasis). The Court has to
see while considering the question of framing the charge as to
C whether the material brought on record could reasonably con-
nect the accused with the trial. Nothing more is required to be
inquired into. (See Str(!!te Atyachar Virodhi Parishad v. Dilip
Nathumal Chordia (1989 (1) SCC 715) and State of West Ben-
gal v. Mohd. Khalid (1995 (1) SCC 684).
D
9. In R.S. Nayak v. A.R. Antulay (1986 (2) SCC 716) this
Court referred to Sections 227 and 228 so far as they are (elat-
able to trial. Sections 239 and 240 are relatable to trial of war-
rant cases and 245(1) and (2) relatable to summons cases.
E 10. After analyzing the terminology used in the three P?irs
of sections it was held. that despite- the differences there is no
. scope for doubt that at the stage at which the court is required
fo consider the question of framing of charge, the test of a prima
facie case to be applied.
F 11. The present case is not one where the High Court ought
to have interfered with the order of framing the charge. As rightly
submitted by learned counsel for the appellant, even if there is
a strong s.uspicion about the commission of offence and the
involvement of the accused, it is sufficient for the court tc;> frame
G. a charge. At that stage, there is no necessity of formulating the
opinion about the prospect of conviction. That being so, the
impugned order of the High Court cannot be sustained and is
set aside. The appeal is allowed.

H B.B.B. Appeal allowed.