1. Heard Sri Dilip Kumar and Sri Manish Tiwary, learned Senior Advocates assisted by Sri Syed Imran Ibrahim and Ms. Katyaynini, Advocates, learned counsel for applicants, Sri V.P. Srivastava and Sri Anil Bhushan, learned Senior Advocates assisted by Sri Alok Kumar Yadav and Sri Vikash Chandra Srivastava, learned counsel for Opposite Party No. 2, learned AGA and perused the record.

2. Present applicants have invoked the inherent jurisdiction of this Court under Section 482 CrPC assailing the cognizance order dated 18.7.2018 and chargesheet No. 17 of 2018 dated 10.7.2018 as well as entire criminal proceeding under section 420, 406, 467, 468, 120B/471 IPC arising out of Case Crime No. 0408 of 2018, Police Station Phaze III, District Gautam Buddha Nagar pending in court of Chief Judicial Magistrate, Gautam Buddha Nagar.

3. It emanates from the record that M/s Brys International Private Ltd. (opposite party No. 2) has lodged an FIR being Case Crime No. 0408 dated 14.3.2018 levelling allegation of criminal breach of trust, cheating, dishonestly inducing delivery of property, forgery and criminal conspiracy against the M/s Dignify Builtech Private Ltd. (accused company) and its directors namely Rishi Aggarwal (applicant No. 1), Smt. Sheron Aggarwal (applicant No. 2) and Sri Rajinder Aggarwal (applicant No. 3) with an averment that:-

(i). First informant (opposite party No. 2) is a registered company under the Companies Act, 1956 engaged in the business of construction of residential and commercial buildings, flats, apartments, farm houses, multi story buildings and shades for the factories.

(ii). Accused Company namely M/s Dignify Builtech Pvt. Ltd. is a registered company as well. Present applicants are directors of the said company and are responsible for day to day working of accused company. They take decisions on it’s behalf.

(iii). In the month of May, 2014, accused No. 2 (applicant No. 1 herein), having knowledge that first informant is looking for land to develop housing project, owing to working in same field, has approached first informant with proposal to acquire land near NOIDA Express Way under the NOIDA Authority for group housing project and stated that in this area there is possibility of huge investment in real estate. After few meetings with accused No. 2 to 4 (applicants herein), in the office of first informant with it’s directors and having considered the relevant documents shown by them, first informant has shown it’s willingness to get the proposed land purchased/acquired near the NOIDA Express Way.

(iv). Having been satisfied with the place and documents shown by the accused, first informant has accorded it’s consent to purchase said land and, intending to purchase the land, it has transferred money amounting to Rs. 8,80,000,000/- (Eight Crores and Eighty Lakhs) through RTGS from Bank of Baroda, Sector 63, NOIDA in favour of the accused company.

(v). As per understanding between the parties, land should have been acquired till last 2014. However, till date, said land, as promised, has not been acquired and the money received had fraudulently been utilized by the accused company and their directors, without consent of the first informant, to purchase the shop within the premises of NOIDA Commercial Complex, Plot No. A-2, Sector 38A, NOIDA and remaining amount has been utilized in some other work.

(vi). While the first informant came to know qua misuse of money, it sent legal notice to the accused to return money. In reply to the aforesaid notice, the accused have informed that money received from the first informant has been transferred in the account of M/s Shubhkamna Builtech Private Ltd.

(vii). While the first informant approached to M/s Shubhkamna Builtech Private Ltd. and enquired in this regard, its’ director Mr. Piyush Tiwari has furnished an affidavit that he has not received any such money from the accused company namely M/s Dignify Builtech Private Ltd. for or on behalf of the first informant.

4. Learned counsel for the applicants, while assailing the chargesheet and cognizance order, submits that:-

(i). That Investigating Officer has conducted the investigation in a very unfair and rough manner. He has simply reiterated the allegations levelled against the present applicants as mentioned in the F.I.R. Documents adduced by the present applicant in support of their defence have not been considered by the Investigating Officer. Moreover, opposite party No. 2 has not filed any documentary evidence to strengthen its allegations as mentioned in the FIR. The Investigating Officer failed to appreciate that there was a tripartite agreement between M/s Dignify Builtech Private Ltd. (accused company) and M/s Shubhkamna Builtech Private Ltd., wherein parties agreed upon that M/s Shubhkamna Builtech Private Ltd. shall transfer the amount through informant company and M/s Dignify Builtech Private Ltd. shall pay the amount directly to M/s Shubhkamna Builtech Private Ltd. The same has been acknowledge by M/s Shubhkamna Builtech Private Ltd. in letter dated 10.8.2014 (Annexure11) wherein it is stated that the amount paid by the said company to the informant shall be given by M/s Dignify Builtech Private Ltd. directly to M/s Shubhkamna Builtech Private Ltd. The bank statement evinces the transfer of amount in question by the accused company in favour of M/s Shubhkamna Builtech Private Ltd. Transaction record, however, evinces that amount being transferred by accused company was through opposite party No. 2.

(ii). Affidavit furnished by Mr. Piyush Tiwari, Director of M/s Shubhkamna Builtech Private Ltd. has illegally been relied upon by the Investigating Officer, which is contrary to the bank statement of accused company and ledger book as submitted by M/s Shubhkamna Builtech Private Ltd. It is also contrary to letter dated 10.8.2014 which bears signature of Piyush Tiwari indicating that amount shall be paid to M/s Shubhkamna Builtech Private Ltd. which was received from opposite party No. 2.

(iii). The impugned charge sheet and the summoning order are result of abuse of the process of law and the same are liable to be quashed in the light of the ratio decided by Hon’ble Supreme Court in case of State of Haryana and others Vs. Bhajan Lal and others, [1992 SCC (Cri) 426] [LQ/SC/1990/744] and the case of Ramesh Rajagopal Vs/ Devi Polymers Private Ltd. decided on 19.4.2016.

(iv). Hon’ble Delhi High Court in Company Petition No. 359 of 2016, Ultra Tech Cement Private Ltd. Vs. Brys International Private Ltd. has appointed provisional liquidator of the first informant company (opposite party No. 2) vide its order dated 20.9.2017 directing him to take over all the assets, book of accounts and record of the company. The provisional liquidator, subsequently, stepped into shoes of the official liquidator. Appointment of provisional liquidator was brought to the knowledge of NCLT, New Delhi, who has passed order dated 15.1.2018 dismissing the insolvency resolution process. NCLT has observed that the issued raised by the petitioner has to be examined by the trial court, therefore, no case is made out for insolvency resolution process.

(v). Once the provisional liquidator has been appointed by the court competent, director of opposite party No. 2 has no locus to file any criminal proceeding or any other case before the court competent. All power are vested with the provisional liquidator to sue or to be sued. In this respect, learned counsel for the applicants has referred to the relevant Sections 450, 456 and 457 of Companies Act, 1956.

(vi). Having been unsuccessful in proceeding before the NCLT, opposite party No. 2 has deliberately inculpated the present applicants in the criminal proceeding and got them arraigned for the alleged crime of cheating, fraud etc.

(vii). Civil litigation has illegally been dragged into criminal proceeding. Simple financial transaction matter has been brought under the criminal law, which is not justifiable.

(viii). In the FIR or the charge sheet, no overt act has been attributed to the applicants No. 2 and 3, who have illegally been arraigned in the charge sheet owing to their being directors of the company. The concept of vicarious liability is absent in the criminal law, therefore, for the criminal act/conduct of the company, if any, present applicants cannot be punished. The company has its separate legal entity in the eye of law. The company, being an accused, has not been arraigned in the charge shet, thus, present cognizance order cannot be passed against the present applicants without summoning the accused company. In support of his case, the learned counsel for the applicant has relied upon the case of Ravindranatha Bajpe Vs. Manglore Special Economic Zone Limited and others Etc., Criminal Appeal Nos. 1047-1048 of 2021 decided on 27.10.2021, Sunil Bharti Mittal Vs. Central Bureau of Investigation [AIR 2015 SC 923 [LQ/SC/2015/34] ], GHCL Employees Stock Option Trust Vs. India Infoline Ltd. [2013 4 Supreme Court Cases 505] [LQ/SC/2013/332] .

(ix). No case of cheating and dishonestly inducing delivery of property is made out in the instant matter against the present applicants. Ingredients as required under Section 420 and 415 IPC are not attracted in the present case as held by Hon’ble Supreme Court in the case of Ramjas Vs. State of UP (1970) 2 SCC 740) [LQ/SC/1970/357] and Amar Nath Bhattacharjee Vs. Prasenjit Kumar Bose, 2006 SCC Online Cal 178. Nothing has emerged during the investigation to prove the crime of forgery allegedly authored by the present applicants. Merely mentioning name in the FIR, is not sufficient to arraign the present applicants in the charge sheet. In support of his submission, learned counsel for the applicants has cited the case of Mohammed Ibrahim and others Vs. State of Bihar, (2009) 8 SCC 751 [LQ/SC/2009/1792] . Thus, no case is made out under Section 467, 468 and 471 IPC. It is further submitted that one cannot be arraigned for cheating, misappropriation, and criminal breach of trust simultaneously under Sections 406 and 420 IPC as decided by Hon’ble Supreme Court in the matter of Vimla Dhiman Vs. State, 2013 [4] JCC 2528. Learned counsel for the applicant has further relied upon the case of Ravindra Pal Singh Vs. Punjab Tractor, 1987 (1) RCR 680, Jalpa Prashad Vs. State of Haryana, 1987(2) RCR 427, Sohan Singh Vs. State of Punjab 1983 (2) RCR 544, Vimla Dhiman Vs. State, 2013(4) JCC 2528 and Wolfgang Reim and others Vs. State and others 2012 (3) JCC 2042.

(x). It is further submitted that this Court has got jurisdiction to consider the documents filed by the applicants at this juncture as well in the present application under Section 482 Cr.P.C., as held by Hon’ble Supreme Court in the matter of Prashant Bharti Vs. State of MCT and Delhi, AIR 2013 Supreme Court 2753 and Ramesh Thakur Vs. State (NCT of Delhi), 2013 [2] JCC 1411.

(xi). Lastly it is submitted that crime of criminal conspiracy as averred in the FIR can not be made out merely on the basis of speculation or suspicion. Prima facie evidence is required in this respect. In support of this submission, learned counsel has relied upon the case of Hira Lal Jain Vs. Delhi Administration, 1973 SCC (Cri) 309 [LQ/SC/1972/418] .

5. Per contra, learned counsel for the opposite party No. 2 has vehemently opposed the submissions advanced by counsel for the applicants and contended that:-

(i) Despite the promise made by the present applicants they have deliberately cheated the respondent No. 2 and committed forgery by digesting the money amounting to Rs. 8,80,00,000/- (Rs. Eight Crores and Eighty Lakhs) which has been transferred by opposite party No. 2 for the purpose of securing the land deal.

(ii) Money transaction intending to purchase the land near NOIDA Express Way was a bipartite transaction between the applicants and the opposite party No. 2 and, therefore, third party, namely, M/s. Shubhkamna Builtech Private Ltd. has got no concern with it, whose involvement in the transaction has illegally been shown by the present applicants just to usurp transfered money. Mr. Piyush Tiwari has made it clear in his affidavit that his company, namely, M/s. Shubhkamna Builtech Private Ltd. has not received any money from the accused company namely M/s Dignify Builtech Private Ltd. for or on behalf of respondent No. 2, therefore, transaction, if any, made between the accused company and M/s. Shubhkamna Builtech Private Ltd. is their individual transaction and opposite party No. 2 has no concern with it.

(iii) Present applicants alongwith their company have induced opposite party No. 2 to pay huge money amounting Rs. 8,80,00,000/- (Rs. Eight Crores and Eighty Lakhs) and usurped the same. Therefore, opposite party No. 2 has no option but to lodge an FIR inculpating the present applicants for their overt act.

(iv) Investigating Officer, after due investigation, has rightly filed the charge sheet arraigning the present applicants for the offence of fraud, cheating etc.

(v) Director of the M/s Shubhkamna Builtech Private Ltd., namely, Sri Piyush Tiwari has clearly denied receiving of money from the accused company for or on behalf of opposite party No. 2 and clearly stated that business transaction between the M/s Shubhkamna Builtech Private Ltd. and M/s Dignify Builtech Private Ltd. have nothing to do with the opposite party No. 2.

(vi) By order dated 20.9.2017 passed in company petition filed by UltraTech Cement Ltd. against opposite party No. 2, Hon’ble Delhi High Court has appointed provisional liquidator. However, at later stage, said company petition was dismissed vide order dated 27.8.2018. Thus, for a short period since 20.9.2017 to 27.8.2018 provisional liquidator was appointed, that too, only for the purpose to preserve the asset of the opposite party No. 2.

(vii) It is further submitted that, even during the appointment of provisional liquidator, Managing Director of the company would be entitled to institute criminal proceedings against the accused under the provisions of CrPC read with IPC. There is no bar in the Companies Act, 1956 and, subsequently, in new Act, 2013 or under the Insolvency and Bankruptcy Code, 2016.

(viii) Section 554(1)(a) of Companies Act, 1956 is pari materia to Section 290 (f) of the Companies Act, 2013 as well as Section 35 (k) of Insolvency and Bankruptcy Code 2016, which defines the power of official liquidator, who is appointed when the Company Judge/Tribunal passed the winding up order. However, in the given circumstances, no winding up order has been passed. In support of his case, learned counsel for the opposite party No. 2 has relied upon the case of Jaswantrai Manilal Akhaney Vs. State of Bombay reported in AIR 1956 SC 575.

(ix) It is next contended that Section 450(3) of Companies Act, 1956 is pari materia to Section 275 (3) of Companies Act, 2013 which provides that company court/tribunal can limit the power of provisional liquidator. In this case as well Delhi High Court, vide its order dated 20.9.2017, appointed the provisional liquidator only to preserve the assets of opposite party No. 2.

(x) There is no bar to initiate the criminal proceedings against the accused while the civil litigation is going on before the competent court. In support of this submission, learned counsel for the respondent has relied upon Indian Oil Corporation Vs. NEPC Indian Ltd. and others, (2006) 6 SCC 736 [LQ/SC/2006/634] and case of Mohd Allauddin Khan Vs. State of Bihar and others (2019) 6 SCC 107 [LQ/SC/2019/705] .

(xi) Appreciation of evidence is not permissible in exercise of power under Section 482 Cr.P.C. In support of his submission learned counsel for the opposite party has relied upon Mohd. Akaram Siddiquee Vs. State of Bihar (2019) 13 SCC 350 [LQ/SC/2018/1284] .

(xii) It is lastly contended that company can also be held responsible for the offence under Sections 420 and 406 IPC. Opposite party No. 2 has lodged FIR against the company, namely, M/s Dignify Builtech Private Ltd. However, charge sheet was filed only against the present applicants. This does not absolve the present applicants inasmuch as company can be summoned as well by trial court in exercise of power under Section 190 Cr.P.C. In support of his submission he has relied upon the case of Sunil Bharti Mittal Vs. CBI (2015) 4 SCC 609 [LQ/SC/2015/34] .

6. Having considered the rival submissions advanced by the learned counsel for the parties and careful scrutiny of the documents on board, it is manifested that the criminal contents are emanated from the alleged financial transaction took place between the present applicants along with their company namely M/s Dignify Builtech Private Ltd. and opposite party No. 2. Although financial transaction between them is admitted, however, route of money transaction has been disputed by both the parties. Opposite party No. 2 came with the case that there was bipartite financial transaction/agreement between the opposite party No. 2 and the accused company. Thus, opposite party No. 2 has directly transferred the amount in the account of accused company, having considered the negotiation took place between them. However, present applicants came with the case that it was a tripartite agreement between the parties involving one more company namely M/s Shubhkamna Builtech Private Ltd. Thus, it appears that there was circuitous route in transferring the money through another corporate being M/s Shubhkamna Builtech Private Ltd. Bare perusal of the FIR lodged by opposite party No. 2 indicates that:-

(i) Opposite party No. 2 is in the business of civil construction work and was looking for enormous chunk of land to develop housing project. Likewise accused company namely M/s Dignify Builtech Private Ltd. is working in real estate business as well.

(ii) Accused No. 2 (applicant No. 1 herein) approached opposite party No. 2 with a proposal to acquire the land near NOIDA Express Way for the purposes of developing group housing projects and stated that in this area there is possibility of huge investment in real estate.

(iii) Accused No. 2 to 4 (applicants No. 1 to 3 herein) have negotiated with the directors of the first informant and convened several meetings in the office of first informant, who have shown their willingness to purchase the proposed land near NOIDA Express Way. Having been satisfied with the land shown to the director of the opposite party No. 2 and its documents, they have consented to purchase the land and, accordingly, transferred money to the tune Rs. 8,80,00,000/- (Rs. Eight Crores and Eighty Lakhs) in account of accused No. 1 (accused company).

(iv) After receiving money, the accused have misappropriated the aforesaid fund and illegally utilized the same in purchasing the shop in the premises of Greater NOIDA Corporation Complex instead of acquiring the land for opposite party No. 2.

(v) While paid money was demanded by first informant, accused have refused to return money on the pretext that they already returned said money to M/s Shubhkamna Builtech Private Ltd.

7. In this backdrop of the facts, opposite party No. 2 (first informant) has made clear-cut allegation of cheating, fraud etc. against the present applicants, who were directly involved in negotiations with the director of opposite party No. 2. They participated in the meetings convened in the office of opposite party No. 2 and negotiated the terms and conditions to acquire the land for opposite party No. 2 for the purpose of developing group housing projects.

8. Learned counsel for the applicant has precisely made three fold submissions; first, regarding the maintainability of the criminal proceeding against the present applicants, who are the directors of M/s Dignify Builtech Private Ltd. on the ground that in the criminal law, there is no concept of vicarious liability, therefore, present applicant being directors of the company cannot be implicated in the criminal case for any wrong, in case, done by the company. Second ground taken is that cognizance order was passed only against the directors not against the company, therefore, cognizance order is bad in law and same is unsustainable against the directors. Third ground is taken that criminal proceeding is not permissible for financial transaction which is civil in nature. Second submission is raised qua the locus of opposite party No. 2 to initiate criminal proceedings against the present applicants inasmuch as provisional liquidator was already appointed for the company, therefore, legal action cannot be initiated without consent of the court competent. Third submission has been raised questioning the method of financial transaction took place between the parties and it has been tried to establish that entire money was returned/transferred to opposite party No. 2 through third party namely M/s Shubhkamna Builtech Private Ltd. Lastly, it has been submitted that on the face of FIR, no criminal case is made out against the present applicants for the offence under which they have been inculpated.

9. So far as the first submission qua maintainability of the criminal proceeding against the directors of accused company (M/S Dignify Buildtech Pvt. Ltd.) is concerned, learned counsel for the applicants submits that the directors of the company cannot be held directly responsible for any wrong done on behalf of the company. Cognizance order has been passed only against the present applicants (directors of the company) in a very cursory manner without proper application of mind. The criminal case cannot be set into motion as a matter of course. In criminal law, there is no concept of vicarious liability, therefore, same cannot be cast upon the directors of the company for alleged offence committed by the company. In support of his submission, learned counsel for the applicant has placed reliance upon the case of GHCL Employees Stock Option Trust (supra) and SK Alagh Vs. Uttar Pradesh and others, (2008) 5 SCC 662 [LQ/SC/2008/380] . In both the aforesaid cited case, Hon’ble Supreme Court, having considered the allegation mentioned in complaint, came to the conclusion that general and bald allegations have been levelled against the Managing Director, and other officials of the company and, even, Magistrate who issued summons has not recorded his satisfaction about prima facie case against those officials (respondents) and role played by them in capacity of Managing Director or Directors or Company Secretary, thus, held that issuance of summons against the said officials of the company was illegal and amounts to abuse of process of law. In the case of SK Alagh (supra), Hon’ble Supreme Court, in paragraph 16 of the judgment, has observed that in penal code, save and except some provisions specifically provided therefor, does not contemplate any vicarious liability on the part of a party who is not charged directly for commission of an offence. In the cited case, admittedly, drafts were drawn in the name of the Company, thus, Hon’ble Apex Court has observed that even if the appellant was its Managing Director he cannot be said to have committed an offence under section 406 IPC. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or any employee cannot be held to be vicariously liable for any offence committed by company itself. Expounding the Corporate Criminal liability in the matter of Sunil Bharti Mittal (supra), Hon’ble Supreme Court has discussed the principle of “alter ego” and held that person or group of persons, who control the affairs of the company commit an offence with a criminal intent, their criminality can be imputed to the company as well as they are ‘alter ego’ of the company.

10. Applying the ratio decided by Hon’ble Supreme Court, as discussed above, in the given circumstances of the present case, it is evident that as per FIR version, present applicants (accused No. 2 to 4) are instrumental at the behest of the accused company in negotiating with the directors of opposite party No. 2 and induced them to purchase the property near NOIDA Express Way. Relying upon the promise made by the present applicants, who were actively participated in negotiation with opposite party No. 2 in several meetings, opposite party No. 2 has transferred the money directly to the company accused. Therefore, in my considered opinion, the conduct of the present applicants, who controls the day-today affairs of the company, is questionable. Direct allegation has been made against them in the FIR, wherein applicant No. 1 has approached to opposite party No. 2 with its proposal to acquire the land and, thereafter, the applicant No. 1, 2 and 3 all participated in the meeting to convince the directors of opposite party No. 2 in order to receive money on the pretext of purchasing/acquiring land near NOIDA Express Way. It is apposite to mention that transaction of money has not been denied, however, only the route of transferring the money has been questioned, which is a matter of fact.

11. Learned Senior Counsel for applicants, while questioning the maintainability of the criminal proceeding, has also raised the legality of the charge sheet and cognizance order. It has been submitted that company accused has not been arraigned in the charge sheet, therefore, without inculpating the company in the crime, there directors cannot be summoned. In support of his submission, learned Senior Counsel for the applicants has relied upon the case of GHCL Employees Stock Option Trust (supra) and the case of R. Kalyani Vs. Janak C. Mehta & Ors in criminal appeal No. 1694 of 2008 decided on 24.10.2008, 2009 (1) SCC (Cri) 567, Ravindranatha Bajpe (supra) and Sunil Bharti Mittal (supra). Perusal of record reveals that opposite party No. 2 has lodged FIR against accused company namely M/s Dignify Builtech Private Ltd., being accused No. 1 and its directors (applicants herein) as accused No. 2 to 4. Thus, FIR was instituted accusing the company as well, however, after due investigation, the company has not been arraigned in the charge sheet. The Investigating Officer has found the present applicants guilty for the offence under several sections of IPC. Separate summoning order has not been brought on the record except the endorsement of cognizance made by the learned Magistrate on the shargesheet for taking the cognizance and register the criminal case. Therefore, it would not be befitting to make any comment on the summoning order, however, technicality, if any, is not sufficient to drop the entire criminal proceeding initiated at the behest of opposite party No. 2. In this eventuality, it is always open to the present applicant to raise this objection before the court concerned, who is not bound with the police report submitted under Section 173 CrPC and the court can issue summons, having considered the facts and circumstances of the case and the material available on record, against the other person as well, who has not been arraigned in the charge sheet. He would be at liberty to take action under Section 319 CrPC. Sections 190 and 204 of the CrPC does not restrict the jurisdiction of the court concerned in issuing process against any accused, if warranted.

12. The applicants have also assailed the criminal proceeding on the ground that financial transaction took place between the parties is civil in nature, therefore, same cannot be dragged into the criminal proceeding. In support of his submission, learned Senior Counsel for the applicants has placed reliance on several documents i.e. ledger account etc. to prove the tripartite financial transaction between the parties and contended that financial transaction is in the nature of civil dispute which can be tried only by the court competent except criminal court. Having considered the contents of FIR in its entirety, prima facie, it appears that there is a criminal element in usurping the money transferred by the opposite party No. 2 for the purpose of acquiring the land for it, however, said money has been misappropriated and misused in purchasing a shop and for personal gain of the present applicants. I am of the view that there may be a financial transaction but from the facts and circumstances of the present case criminal offence is primafacie made out under the several sections of the IPC. In the matter of Indian Oil Corporation (supra) Hon’ble Supreme Court summarised the principles to interfere in these matters in exercise of jurisdiction under sec.482 CrPC. For ready reference, paragraph 12 of the aforesaid judgment is quoted hereinbelow:-

“12. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few - Madhavrao Jiwaji Rao Scindia v. Sambhajirao Chandrojirao Angre [1988 (1) SCC 692] [LQ/SC/1988/100] , State of Haryana vs. Bhajanlal [1992 Supp (1) SCC 335], Rupan Deol Bajaj vs. Kanwar Pal Singh Gill [1995 (6) SCC 194] [LQ/SC/1995/992] , Central Bureau of Investigation v. Duncans Agro Industries Ltd., [1996 (5) SCC 591] [LQ/SC/1996/1261] , State of Bihar vs. Rajendra Agrawalla [1996 (8) SCC 164] [LQ/SC/1996/156] , Rajesh Bajaj v. State NCT of Delhi, [1999 (3) SCC 259] [LQ/SC/1999/252] , Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. [2000 (3) SCC 269] [LQ/SC/2000/407] , Hridaya Ranjan Prasad Verma v. State of Bihar [2000 (4) SCC 168] [LQ/SC/2000/615] , M. Krishnan vs Vijay Kumar [2001 (8) SCC 645] [LQ/SC/2001/2336] , and Zandu Phamaceutical Works Ltd. v. Mohd. Sharaful Haque [2005 (1) SCC 122] [LQ/SC/2004/1250] . The principles, relevant to our purpose are:

(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused.

For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.

(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with malafides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.

(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.

(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.

(v) A given set of facts may make out : (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.”

13. In paragraph 12(v) of the aforesaid judgement, it is unequivocally observed that a criminal prosecution or contractual dispute apart from the financial cause of action for seeking remedy in civil law may also involve a criminal offence. Applying the ration decided by Supreme Court in the given circumstances of the present case, in my considered opinion, prima facie, the present applicants, working as a directors of the company, have received money from opposite party No. 2 intending to purchase the land for opposite party No. 2 so that it could develop housing project over there, however, they misused the said fund for their personal gain by purchasing shop at different places and the fraudulently shown the return of money to the third party namely M/s Shubhkamna Builtech Private Ltd.

14. In support of his second submission, learned Senior Counsel for the applicant pressed the order dated 20.9.2017 passed by Hon’ble Delhi High Court in company petition No. 359 of 2016 whereby provisional liquidator has been appointed for opposite party No. 2 namely M/s Brys International Private Ltd. On the premise of appointment of provisional liquidator, it has been submitted that no proceeding can be instituted before any court on behalf of opposite party No. 2 without sanction of the court competent. He has drawn attention of the court towards the provisions enunciated under Sections 446 and 457 (1)(a) of Companies Act, 1956. He has also relied upon the judgment dated 15.1.2018 (Annexure No. 9) passed by NCLT in the case filed on behalf of opposite party No. 2 against the accused company under Section 9 of Insolvency and Bankruptcy Code, 2016 beseeching initiate Corporate Insolvency Resolution Process. In the said case, accused company namely M/s Dignify Builtech Private Ltd. has been shown as a corporate debtor and opposite party No. 2 has been presented itself as a operational creditor. NCLT has dismissed the aforesaid petition with an observation that transfer of money, which is disputed owing to tripartite transaction, can only be ascertained through trial. So far as company petition No. 359 of 2016 filed on behalf of UltraTech Cement is concerned, same was ultimately dismissed vide order dated 27.8.2018. In the light of the fact that provisional liquidator was appointed for limited purpose by order dated 20.9.2017 to look after the property of opposite party No. 2, it would not be befitting to discuss the entire provisions as enunciated under Section 446 to 457 of the Companies Act, 1956. The relevant paragraph No. 8 of the order dated 15.1.2018 appointing the provisional liquidator is quoted hereinbelow:-

“The Official liquidator attached to this Court is appointed as a provisional liquidator. He is directed to take over all the assets, books of account and record of the respondent company forthwith.”

15. It is admitted to the parties that no final winding up order has been passed under the Companies Act and, while appointing provisional liquidator, company court/tribunal can impose certain conditions/limitations upon the provisional liquidator. Thus, it is evident from the relevant portion of order dated 20.9.1997 passed by Hon’ble Delhi High Court that provisional liquidator had been appointed with limited power to take all the assets, books of account and the record of the company. Exhaustive power has been given to the liquidator under the provisions of the Companies Act which, in fact, is applicable after the conclusion of winding up proceedings, therefore, I do not find any force in the submission that criminal proceedings should not have been initiated without sanction of the court competent. Even otherwise, at later stage, company petitioner wherein provisional liquidator has been appointed was dismissed. This Court is not oblivious to the fact that FIR was lodged on 14.3.2018 during pendency of the company proceeding which was ultimately dismissed on 27.8.2018. Even otherwise, there is no restriction under law to set the criminal proceeding into motion by any person. However, in my considered opinion, criminal proceedings are dealt with under the Code of Criminal Procedure. Even assuming that there is requirement of prior sanction of the court competent to institute a case o behalf of company under liquidation, no limitation has been imposed on the power of the court concerned to entertain the criminal prosecution launched in the ordinary course under the provisions of the code of criminal procedure. Provision relating to the prior sanction before filing litigation on behalf of the company is required only to ascertain the financial liabilities of the company and to secure its funds. In the matter of Jaswantrai Manilal Akhaney (supra), Hon’ble Supreme Court has expounded that where a prosecution is to be lodged in the name of, or on behalf of, the company, it naturally becomes the concern of the judge to see whether or not it was worthwhile to incur expenses on behalf of the company and therefore, section requires the sanction of the judge before the liquidator can undertake the prosecution or defence in the name of and on behalf of the company. It is apposite to mention that criminal law does not create any distinction between persons who can report for the offence or who cannot. Any person can resort to the criminal law for commission of any offence which comes within the purview of IPC. Hon’ble Supreme Court in the matter of A.R. Antulay Vs. Ramdas Sriniwas Nayak & ANR (1984 ) 2 SCC 500 [LQ/SC/1989/92] expounded that there is no bar under the criminal law to give information qua any crime. Relevant paragraphs No. 6 and 7 of the aforesaid judgment are quoted hereinbelow:-

“6. It is a well recognised principle of criminal jurisprudence that any- one can set or one put the criminal law into motion except where the statute enacting or creating an offence indicates to the contrary. The scheme of the Code of Criminal Procedure envisages two parallel and independent agencies for taking criminal offences to court. Even for the most serious offence of murder, it was not disputed that a private complaint can, not only be filed but can be entertained and proceeded with according to law. Locus standi of the complainant is a concept foreign to criminal jurisprudence save and except that where the statute creating an offence provides for the eligibility of the complainant, by necessary implication the general principle gets excluded by such statutory provision. Numerous statutory provisions, can be referred to in support of this legal position such as (i) Section 187-A of Sea Customs Act, 1878 (ii) Section 97 of Gold Control Act, 1968 (iii) Section 6 of Import and Export Control Act, 1947 (iv) Section 271 and Section 279 of the Income Tax Act, 1961 (v) Section 61 of the Foreign Exchange Regulation Act, 1973, (vi) Section 621 of the Companies Act, 1956 and (vii) Section 77 of the Electricity Supply Act. This list is only illustrative and not exhaustive. While Section 190 of the Code of Criminal Procedure permits anyone to approach the Magistrate with a complaint, it does not prescribe any qualification the complainant is required to fulfil to be eligible to file a complaint. But where an eligibility criterion for a complainant is contemplated specific provisions have been made such as to be found in Sections 195 to 199 of the CrPC. These specific provisions clearly indicate that in the absence of any such statutory provision, a locus standi of a complainant is a concept foreign to criminal jurisprudence. In other words, the principle that anyone can set or put the criminal law in motion remains intact unless contra-indicated by a statutory provision. This general principle of nearly universal application is founded on a policy that an offence i.e. an act or omission marde punishable by any law for the time being in force [See Section 2(n), CrPC] is not merely an offence committed in relation to the person who suffers harm but is also an offence against society. The society for its orderly and peaceful development is interested in the punishment of the offender. Therefore, prosecution for serious offences is undertaken in the name of the State representing the people which would exclude any element of private vendetta or vengeance. If such is the public policy underlying penal statutes, who brings an act or omission made punishable by law to the notice of the authority competent to deal with it, is immaterial and irrelevant unless the statute indicates to the contrary. Punishment of the offender in the interest of the society being one of the objects behind penal statutes enacted for larger good of the society, right to initiate proceedings cannot be whittled down, circumscribed or fettered by putting it into a straitjacket formula of locus standi unknown to criminal jurisprudence, save and except specific statutory exception. To hold that such an exception exists that a private complaint for offences of corruption committed by public servant is not maintainable, the court would require an unambiguous statutory provision and a tangled web of argument for drawing a far fetched implication, cannot be a substitute for an express statutory provision. In the matter of initiation of proceeding before a Special Judge under Section 8(1), the Legislature while conferring power to take cognizance had three opportunities to unambiguously state its mind whether the cognizance can be taken on a private complaint or not. The first one was an opportunity to provide in Section 8(1) itself by merely stating that the Special Judge may take cognizance of an offence on a police report submitted to it by an investigating officer conducting investigation as con- templated by Section 5-A.” While providing for investigation by designated police officers of superior rank, the Legislature did not fetter the power of Special Judge to take cognizance in a manner otherwise than on police report. The second opportunity was when by Section 8(3) a status of a deemed public prosecutor was conferred on a private complainant if he chooses to conduct the prosecution. The Legislature being aware of a provision like the one contained in Section 225 of the CrPC, could have as well provided that in every trial before a Special Judge the prosecution shall be conducted by a Public Prosecutor, though that itself would not have been decisive of the matter. And the third opportunity was when the Legislature while prescribing the procedure prescribed for warrant cases to be followed by Special Judge did not exclude by a specific provision that the only proce- dure which the Special Judge can follow is the one prescribed for trial of warrant cases on a police report. The disinclination of the Legislature to so provide points to the contrary and no canon of construction permits the court to go in search of a hidden or implied limitation on the power of the Special Judge to take cognizance unfettered by such requirement of its being done on a police report alone. In our opinion, it is no answer to this fairly well-established legal position that for the last 32 years no case has come to the notice of the court in which cognizance was taken by a Special Judge on a private complaint for offences punishable under the 1947 Act. If some-thing that did not happen in the past is to be the sole reliable guide so as to deny any such thing happening in the future, law would be rendered static and slowly wither away 7. The scheme underlying Code of Criminal Procedure clearly reveals that anyone who wants to give information of an offence may either approach the Magistrate or the officer in charge of a police station. If the offence complained of is a noncognizable one, the police officer can either direct the complainant to approach the Magistrate or he may obtain permission of the Magistrate and investigate the offence. Similarly anyone can approach the Magistrate with a complaint and even if the offence disclosed is a serious one, the Magistrate is competent to take cognizance of the offence and initiate proceedings. It is open to the Magistrate but not obligatory upon him to direct investigation by police. Thus two agencies have been set up for taking offences to court. One would therefore, require a cogent and explicit provision to hold that Section 5-A displaces this scheme."

16. Thus, it is clear, as discussed above, that opposite party No. 2 has not committed any illegality in instituting a criminal proceeding against the present applicants, who have been arraigned in the FIR for the offence under several sections of the IPC.

17. Third submission raised by the learned Senior Counsel for the applicants with respect to the financial transaction is of no avail as well, inasmuch as these are disputed questions of fact as to whether financial transaction between the parties was bipartite or tripartite transaction. The applicants have relied upon letter/communication dated 10.8.2014 which was sent by the accused company to M/s Shubhkamna Builtech Private Ltd. showing it as a creditor and produced itself as a debtor. The applicants have also relied upon the copy of the ledger book of M/s Shubhkamna Builtech Private Ltd. and tried to establish that transfer was tripartite and money was paid through M/s Shubhkamna Builtech Private Ltd. to M/s Dignify Builtech Private Ltd. Conversely, opposite party No. 2 has vehemently opposed any tripartite transaction between the parties and involvement of M/s Shubhkamna Builtech Private Ltd. in financial transaction which was, in fact, bipartite between the accused company and opposite party No. 2. Learned counsel for opposite party No. 2 has relied upon the affidavit sworn by Mr. Piyush Chandra Tiwari, Director of M/s Shubhkamna Builtech Private Ltd., who has clearly stated that M/s Shubhkamna Builtech Private Ltd. has not received any amount from M/s Dignify Builtech Private Ltd. on behalf of M/s Brys International Private Ltd. This Court is not expected to examine the factual aspect of the matter qua nature of transaction and involvement of parties in such transaction. Question of disputed transaction can more appropriately be scrutinized by the court competent while committing trial after appraising the evidence adduced by the parties.

18. In this conspectus, as above, I am of the considered view that criminal proceeding initiated on behalf of respondent No. 2 against the present applicant is maintainable and learned Magistrate has rightly taken cognizance on the police report submitted under Section 173 CrPC. On the facts as mentioned in the FIR prima facie commission of offence is made out against the present applicants, who are the directors of the accused company and were throughout instrumental in inducing the present applicant to purchase the land situated near NOIDA Express Way and dishonestly misused the money for other work which they had received from opposite party No. 2 in lieu of transferring the land which was agreed upon between the parties to be purchased for opposite party No. 2. Disputed question of fact has been raised by the learned counsel for the applicants in order to prove the innocence of the present applicants which can more appropriately be scrutinized by the trial court. In the facts and circumstances of the present case, I neither found any abuse of the process of Court nor any justifiable ground to pass an order so as to secure the ends of justice. No ground is made out warranting indulgence of this Court in exercise of inherent jurisdiction under Section 482 CrPC to quash the criminal proceeding as prayed for.

19. Resultantly, instant application under Section 482 CrPC, being misconceived and devoid of merits, is dismissed with no order as to the costs.