S.W. PALANITKAR AND ORS. versus STATE OF BIHAR AND ANR.

Citation: [2001] SUPP. 4 S.C.R. 397 · Decided: 18-10-2001 · Supreme Court of India · Bench: D.P. MOHAPATRA · Disposal: Case Partly allowed

Judgment (excerpt)

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S.W. PALANITKAR AND ORS. 
v . 
. STATE OF BIHAR AND ANR. 
OCTOBER 18, 2001 
[D.P. MOHAPATRA AND SHIVARAJ V. PATIL, JJ.] 
Code of Criminal Procedure, 1973: 
. . 
. 
Ss. 200 to 203 and 482. 
Summons issued on a Criminal complaint-Petitionfiletl for quashing of 
Criminal proceeding-Dismissetl by High Court-On appeal, held, be.fore 
issuing a process, Magistrate has to consider the provisions of Sel'tions 200 to 
203 of the Act and the position of law and to pass on order judiciously and not 
mechanically or in a routine manner-When the acts alleged against did not 
constitute qffence satisfying 'ingredients, even prima.facie, summons should not 
have been issu·ed. 
·Inherent power qf High Court-Section 482-While exercising inherent 
power, High Court has to look at the object and purpose .for which such power 
is conferred-btherentpower is available to give effect to any order under Code 
of Criminal Procedure or to prevent abuse of the process qf any Court or 
otherwise to secure the ends of justice-if no offence is made out there should 
be no hesitation in exercising power under Sec. 482 Cr. P.C.-Breach qf Trust, 
Sections 405 and 415, /PC. 
Pursuant to an agreement between appellant No. 1 (the company) 
and respondent.No. 2, he was appointed as a ·consignment stockist of the 
company subject to certain terms and conditions. Subsequently, respond· 
ent no. 2 (complainant) served a notice on the appellant company for 
payment of certain amount or in the alternative refer the disputes and 
differences to arbitration as per clause 29 of the Agreement. Thereafter 
A 
B 
c 
D 
E 
F 
the company made certain offer which was rejected by the respondent and 
G 
he· filed a complaint alleging offences u/s. 406 and 420 read with Section 
120B IPC inter alia stating that the accused persons in collusion and 
connivance with a wrongful object and motive to squeeze moneys from 
him, cheated him and thus committed criminal breach of trust; and that 
they had cheated him by using his office and godown premises on the basis 
H 
397 
A 
B 
c 
D 
398 
SUPREME COURT REPORTS 
[2001] SUPP. 4 S.C.R. 
of false assurances without making any farthing. 
Judicial Magistrate issued summons against the appellants and they 
approached the High Court by filing a petition u/s. 482 Cr.P.C. for quash· 
ing the order of the Magistrate. High Court dismissed the petition. Hence 
this appeal. 
It was contended for the appellants that High Court failed to exer· 
cise its power u/s. 482 Cr.P.C. in order to prevent abuse of process of the 
Court and/or to secure the ends of justice; that the disputes between 'the 
appellants and respondents were of purely civil in nature; ~hat.no cause 
was made out to proceed against the appellants on criminal side; and that 
the essential ingredients of the offences as alleged were not made out and 
the Magistrate committed a serious error in issuing process and the High 
Court failed to correct the same. 
Partly allowing the appeal, the Court 
HELD : 1.1. An act of breach of trust involves a civil wrong in 
respect of which the person wronged may seek his redress for damages in 
civil court but a breach of trust with mens rea gives rise to a criminal 
prosecution as well. A wrongful act such as criminal breach of trust, 
· E 
cheating or defamation may give rise to action both on civil and criminal 
side when it is clear from the complaint and sworn statement that neces· 
sary ingredients of constituting an offence are made out. In order to 
constitute an offence of cheating the intention to deceive should be in 
existence when the inducement was made. It is necessary to show that a 
F 
perso~ had fraudulent·or dishonest intention at the time of making the 
promises. A mere failure to keep up promise subsequently canno~ be 
presumed as an act leading to cheating. [402-C; 407-B; 407-G-H; 408-A] 
G 
Hrideya Ranjan Prasad Venna & Ors. v. State of Bihar & Am:, [2000] 4 
SCC 168 and G. V. Rao v. L.H. V. Prasad & Ors., [2000] 3 SCC 693, relied on. 
1.2. Many a time, complaints are filed u/s. 200 Cr.P.C. by the parties 
with an oblique motive or for collateral purpose to harass, to wreck venge· 
ance, to pressurise the accused to bring them to their own terms or to 
enforce the obligations arising out of breach of contract touching commer-
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.cial transactions instead of approaching civil courts, with a view to realise 
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S.W. PALANITKAR v. STATE 
399 
moneys at the earliest. Before issuing a process, a Magistrate has t

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