M/S THERMAX LTD. & ORS. versus K.M. JOHNY & ORS.

Citation: [2011] 14 S.C.R. 154 · Decided: 27-09-2011 · Supreme Court of India · Bench: P. SATHASIVAM
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Judgment (excerpt)

A 
B 
[2011] 14 (ADDL.) S.C.R. 154 
M/S THERMAX LTD. & ORS. 
v. 
K.M. JOHNY & ORS. 
(Criminal Appeal No. 1868 of 2011) 
SEPTEMBER 27, 2011 
[P. SATHASIVAM AND DR. B. S. CHAUHAN, JJ.] 
Code of Criminal Procedure, 19,73: s.156(3) -
Investigation in cognizable offence - Complaint before crime 
C branch u/ss.405, 406, 420 rlw s.34, /PC alleging non-payment 
of dues by appellant-company - Cognizance of offence not 
taken by crime branch - Application u/s. 156(3) - Magistrate 
issued direction for investigation - Criminal proceedings 
initiated - High Court refused to interfere - On appeal, held: 
D Three complaints containing similar a/legations were 
investigated previously and all were closed as the alleged 
claim was found to be of civil nature - In those circumstances, 
it did not lie for complainant to have approached the 
Magistrate again with the same subject complaint - Inasmuch 
E as the dispute arose out of a contract and a constituted 
remedy was only before a civil court, the Magistrate ought to 
have appreciated that complainant was attempting to use the 
machinery of the criminal courts for exerting unjust, undue 
and unwarranted pressure on the appellants - Apart from the 
F fact that the complaint lacked necessary ingredients of ss. 405, 
406, 420 rlw ~· 34 /PC, no specific allegation was made 
against any person - Complaint was filed in 2002 when the 
alleged disputes pertained to the period from 1993-1995 -
Courts below ought to have appreciated that complainant was 
G trying to circumvent the jurisdiction of the civil courts which 
estopped him from proceeding on account of the law of 
/imitation - In view of the infirmities and in the light of s.482, 
High Court ought to have quashed those proceedings to 
safeguard the rights of the appellants - Complaint quashed 
H 
154 
THERMAX LTD. & ORS. v. K.M. JOHNY & ORS. 
155 
- Penal Code, 1860 - ss.405, 406, 420 rlw s. 34 - Contract -
A 
De/ayllaches. 
On 26.05.1995, the appellant-company placed a 
purchase order on respondent no.1 for designing and 
manufacturing stationary storage tanks. It also placed 
8 
two purchase orders for the supply of consumables and 
other accessories to said tanks. On 20.6.1995, 
respondent no.1 informed the appellant-company about 
their inability to procure the requisite material and 
requested it to supply the same and to deduct the 
material cost from the final bill. Respondent no.1 was 
C 
provided the material by the appellant-company. 
However, respondent no.1 failed to carry out the work as 
per the schedule. The appellant-company cancelled the 
order placed w.e.f. from 26.5.1995 i.e. from the date when 
the order was placed. 
D 
Respondent no.1 filed three complaints with crime 
branch, one in 2000 and two in 2001 alleging that they 
had carried out several fabrication job works for the 
appellant-company and huge amount was ou~tanding till 
E 
date despite several requests. The Crime Branch did not 
take any cognizance. Respondent no.1 made a complaint 
before the Magistrate. By order dated 30.5.2002, the 
Magistrate issued a direction under Section 156(3), 
Cr.P.C. and referred the same to Crime Branch 
(respondent no.2) for investigation. Pursuant to the same, 
respondent no.2 registered an offence and initiated 
proceedings thereunder against the appellant-company. 
The appellant-company moved the High Court for 
quashing and setting aside the order dated 30.5.2002. 
G 
The High Court remitted the matter to Magistrate for 
reconsideration of entire prayer and to decide the case 
afresh. Pursuant to the same, the appellant~company filed 
F 
an application under Section 91, Cr.P.C. praying for 
direction to the Assistant Commissioner of Police, Crime 
H 
156 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. 
A Branch to produce all the records and proceedings of the 
complaint. The Magistrate called for a report under 
Section 156(2) from respondent no.2. Aggrieved 
appellant-company filed writ petition before the High 
Court which was dismissed. 
B 
The question which arose for consideration in the 
instant appeal was whether the ingredients of Sections 
405, 420 read with Section 34 were made out from the 
complaint; whether the Magistrate was justified in calling 
for a report under Section 156(3), Cr.P.C. from the Crime 
C Branch; and whether the High Court was justified in 
confirming the action of the Magistrate and thereby failed 
. to exercise its power and jurisdiction under Section 482, 
Cr.P.C. 
o 
Allowing the
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