SRI NARENDRA KUMAR A. BALDOTA versus THE STATE OF KARNATAKA

Citation: [2022] 2 S.C.R. 969 · Decided: 14-03-2022 · Supreme Court of India · Bench: INDIRA BANERJEE · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[2022] 2 S.C.R. 969
969
SRI NARENDRA KUMAR A. BALDOTA
v.
THE STATE OF KARNATAKA
(Criminal Appeal No. 429 of 2022)
MARCH 14, 2022
[INDIRA BANERJEE AND J. K. MAHESHWARI, JJ.]
Code of Criminal Procedure, 1973: s. 482 – Quashing of
proceedings – M Company of which appellant is the Chairman and
Managing Director, imported a car for which customs duty and
road tax was paid – Thereafter, differential motor vehicle tax was
demanded in respect of the said vehicle and the same was paid, and
no Dues Certificate was also issued – FIR filed against appellant
that he conspired with Regional Transport Officer to evade payment
of road tax– Petition seeking quashing of proceedings– Dismissed
by the High Court – On appeal, held: Criminal law cannot be set
into motion as a matter of course – Summoning of an accused in a
criminal case is a serious matter - Before summoning, the Magistrate
has to record his satisfaction of a prima facie case against the
Chairman, Managing Director or officer of a company in his/her
own capacity – On facts, there is no whisper of how and in what
manner the appellant abetted the commission of any offence – No
document submitted in connection with the vehicle imported by M
Company being fake or fabricated – Allegations in the FIR read
with the chargesheet filed by the Lokayuktha Police only discloses
short payment of road tax – There is only a vague, bald allegation
of collusion and conspiracy to defraud the State of revenue, which
is devoid of any material particulars – Thus, proceedings against
the appellant are misconceived, harassive, in abuse of process of
law and have been initiated without proper application of mind –
Prevention of Corruption Act, 1988:ss. 13(1)(c), 13(1)(d), 13(2) –
Penal Code – ss. 120B and 420.
Allowing the appeal , the Court
HELD: 1.1 The appellant is Chairman and Managing
Director of the corporate entity, which purchased the vehicle in
question. There is not a whisper in the chargesheet of the specific
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SUPREME COURT REPORTS
[2022] 2 S.C.R.
role played by the appellant or how he committed the offence of
cheating. [Para 24][980-E-F]
1.2. Criminal law cannot be set into motion as a matter of
course. Summoning of an accused in a criminal case is a serious
matter. To set Criminal law into motion, the order of the
Magistrate summoning the accused, must reflect that he has
applied his mind to the facts of the case. Before the Magistrate
issues summons to a Chairman, Managing Director, Director or
any other official of the company, the Magistrate has to record
his satisfaction of a prima facie case against him/her in his/her
own capacity is sine qua non for initiation of criminal proceedings
against a Chairman, Managing Director or officer of a company.
It is well settled that no official of a company can be dragged into
criminal proceedings only in his/her capacity as official of the
company, without any specific role attributed to him/her in relation
to the offence alleged against the company. [Para 25][980-F-H;
981-A]
1.3. Short payment of tax per se is not a criminal offence.
The High Court ordinarily would exercise its jurisdiction under
Section 482 Cr.P.C., if the allegations made in the FIR taken to
be correct in entirety, do not make out any offence. When the
allegations made in the FIR or evidence collected during
investigation do not satisfy the ingredients of an offence, the
superior Courts would not encourage harassment of a person in
a Criminal Court. [Para 29][984-B-C]
Devendra v. State of U.P. (2009) 7 SCC 495 : [2009]
(7) SCR 872 – referred to.
1.4. In the instant case, the allegations in the FIR read
with the chargesheet filed by the Lokayuktha Police only discloses
short payment of road tax. There is only a vague, bald allegation
of collusion and conspiracy to defraud the State of revenue, which
is devoid of any material particulars. [Para 32][985-D-E]
1.5. The Appellant has not questioned initiation of criminal
proceedings against any of the other accused persons. He has no
intention of stalling proceedings against any person involved in
smuggling cars or forging or fabricating documents or committing
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any other illegal activities. He has questioned the legality of
initiation of proceedings against him for alleged short payment of
road tax in respect of a vehicle owned by the company of which
he is Chairman and Managing Director even though, the alleged
deficit road tax had been paid by the company within one 

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