The Supreme Court said that the order issuing process has drastic consequences and such orders require application of mind which cannot be passed casually.

The Court quashed a complaint against the accused in a cheating case on the ground that very general allegations were made in the complaint.

The accused had filed an appeal seeking quashing of complaint alleging the commission of offences under Sections 420, 406, 467, 468, and 472 read with Section 120-B of the Indian Penal Code (IPC) and Section 13 of the Essential Commodities Act, 1955.

The two-Judge Bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan observed, “It is not the case of the 1st respondent-complainant that when the learned Magistrate passed the order dated 16th July 2013, there was some additional material on record. At least, the order of the learned Magistrate does not say so. The order does not even consider the earlier order dated 15th December 2011 calling for the report under sub¬section (1) of Section 202 of the Cr.PC. The order issuing process has drastic consequences. Such orders require the application of mind. Such orders cannot be passed casually. Therefore, in our view, the learned Magistrate was not justified in passing the order to issue a summons.”

Senior Advocate Siddharth Luthra represented the appellant while Advocate Nikhil Jain represented the respondents.

In this case, the appellant was the accused no.2 in a complaint filed by the first respondent i.e., the complainant under Section 200 of the Criminal Procedure Code (CrPC). The other accused persons had filed a petition under Section 482 of CrPC before the High Court for quashing the complaint and summoning order against them. However, the High Court dismissed the said petition.

The dispute arose with regard to a Liquified Petroleum Gas (LPG) Distributorship Agreement. A demand draft of Rs. 74,900/- was issued in favour of the company by the complainant and a letter was addressed by the company alleging serious lapses in customer services rendered, which allegedly caused a big dent in the reputation of the company.

The Supreme Court in the above regard noted, “Very general allegations are made in the complaint by referring to the “accused” without explicitly referring to any particular accused. But, the claim is that the money was taken by the accused company and the agreement was executed in favour of the 1st respondent– complainant by the accused company, which was signed by the 2nd respondent, who was neither an Officer nor a Director of the accused–company. It is not the case in the complaint that the 2nd respondent was authorised by the Board Resolution of the accused company to sign the POS agreement with the 1st respondent–complainant.”

The Court further said that the complaint is nearly twenty years old and even the summoning order was passed eleven years ago. It also noted that the High Court has not recorded cogent reasons for not entertaining the prayer for quashing the complaint and that the only reason given by the High Court is that there were disputed questions of fact, and therefore, the controversy can be decided only after evidence is recorded.

“The deposit of the demand draft in the account of the accused company will, at the most, give rise to civil liability. Even the empty cylinders were provided to the 1st respondent complainant by the 2nd respondent against the deposit. The accused company had no role in this. There is no contractual relationship between the accused company and the 1st respondent-complainant”, it added.

The Court observed that the entire dispute is of a civil nature arising out of a commercial transaction.

Accordingly, the Apex Court partly allowed the appeal and quashed the complaint as against the accused-appellant.

Cause Title- Shiv Jatia v. Gian Chand Malick & Ors. (Neutral Citation: 2024 INSC 142)


Appellant: Senior Advocate Siddharth Luthra, AOR B. Sunita Rao, Advocates Gunmaya S Mann, Gautam Khazanchi, Subham Jain, Kushagra Raghuvanshi, and Rahul Khare.

Respondents: AORs Nikhil Jain, Preeti Singh, Gurmeet Singh Makker, Shubham Bhalla, Advocates Varun Chugh, Bhuvan Kapoor, Krishna Kant Dubey, and AOR Mukesh Kumar Maroria.

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