Allahabad High Court Quashes Criminal Cases Against CFO, CEO & MD, And Senior Executive Vice President Of Larsen And Toubro Limited

Recently, the Allahabad High Court has quashed criminal cases filed against the CFO, CEO & MD, and Senior Executive Vice President of Larsen and Toubro Limited.

Relying on the decisions of the Supreme Court in Pepsi Foods Ltd. and another v. Special Judicial Magistrate and others, Vijay Dhanuka and others v. Najima Mamtaj and others, Abhijit Pawar v. Hemant Madhukar Nimbalkar and another, the Court held that though the High Court has extraordinary powers to quash criminal proceedings under Section 482 CrPC, the High Court must not go into disputed question of fact under Section 482.

“However, the Court may examine and take note of the facts and the allegations in order to find out whether the impugned proceedings are in abuse of the process of the court and law and their continuance would result in miscarriage of justice or not,” held Justice Rajesh Singh Chauhan.

Case Background

Applicant submitted that three cheques were given to L&T on three different dates, amounting to Rs.58,00,000 and later one blank cheque was given to L&T by the complainant, which, as alleged by him, was taken on the pretext of “confidential responsibilities. Applicant submitted that the cheques were kickbacks/ losses to the company which were compensated by the complainant. Complaint filed a complaint against the officer alleging that he had been beaten up by two unknown persons who took names of the accused to had sent the assailants.

Applicant submitted that the stories and statements made by the complainant were fake, fabricated, and inconsistent and contradictory with the versions submitted by him at various stages of criminal proceedings instituted by him. It was argued that the Magistrate had failed to apply his mind to the “glaring discrepancies and contradictions” before summoning the petitioners for offences under Sections 323, 504, 506, 406, 420 IPC. It was argued that since the ingredients of Section 202 CrPC were not met, the summons were void ab intio.

High Court Observations

The Apex Court in Pepsi Foods Ltd. and another v. Special Judicial Magistrate and others held that summoning of accused in criminal case is a serious matter and such summoning order must reflect application of mind by the Magistrate. It was held that considering the evidence, both oral and documentary, the Magistrate must examine the truthfulness of the allegations made first and then see if the offence alleged has been prima facie committed by any or all accused.

Justice Chauhan held that the substantial compliance of Section 202 CrPC was not made by the Magistrate in the case. The Court held that when Section 202 CrPC was amended in 2005, the words “and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction” were added. The Court held that the purpose of amending the Section was “to avoid false complaints against such persons residing at a far-off place in order to save them from unnecessary harassment.”

The Court held that “the amended provision casts an obligation on the Magistrate to conduct enquiry or direct investigation before issuing the process, so that false complaints are filtered and rejected. The aforesaid purpose is specifically mentioned in the note appended to the Bill proposing the said amendment.”

The Court relied on Vijay Dhanuka and others v. Najima Mamtaj and others where the Supreme Court held that Section 202 was mandatory in nature and thus the procedure laid down in the Section must be complied with.

While quashing the criminal cases and the summons, the Court held that Magistrate had failed to conduct a preliminary inquiry regarding the roles and duties of the applicants before mechanically issuing summoning orders against the persons who were arrayed as parties by the complainant.

Case Title: Mr. R. Shankar Raman Whole Time Director And Chief Financial Officer vs. State of U.P. and Another 2024 LiveLaw (AB) 277

Case citation: 2024 LiveLaw (AB) 277

Appearances: Dileep Kumar, Senior Advocate assisted by Raghuvansh Mishra, Subhash Gulati & Rajendra Kumar Dwivedi assisted by Ms. Sagun Chandra Rastogi, counsel for Petitioners and Aditya Vikram Singh holding brief of Manish Kumar Tripathi, counsel for private opposite party as well as Ms. Nusrat Jahan, Additional Government Advocate for the State.

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