Supreme Court allows second complaint on same facts: V. Ravi Kumar vs. State of Tamil Nadu (2018)

Date of the Judgment: 14 December 2018
Citation: (2018) INSC 1088
Judges: R. Banumathi, J. and Indira Banerjee, J.

Can a person file a second criminal complaint if the first one was withdrawn? The Supreme Court addressed this crucial question in a case involving allegations of fraud and breach of trust. The Court clarified the circumstances under which a second complaint can be entertained, even if it involves the same facts as a previous complaint. This judgment provides clarity on the issue of filing subsequent complaints in criminal cases, especially when the first complaint was not decided on merit.

Case Background

The case involves V. Ravi Kumar, who runs a cotton business under the name “Saravana Yarn Traders,” and Sri. Rajendran Mills Ltd. (referred to as “the Mill”). The appellant, V. Ravi Kumar, had business dealings with the Mill. The Managing Director of the Mill is the respondent No.2/accused No.2, Sri Chokalingam, and the Chairman is the respondent No.3/accused No.3, Sri Sundaram. Sri Sundar, son of the Managing Director, is the respondent No.4/accused No.4 and is in charge of the Mill’s affairs. Respondents Nos. 5 to 13 are also involved in the administration of the Mill.

In December 2001, the Mill asked the appellant to supply cotton lint for conversion into yarn. Transactions took place in 2001, and a Memorandum of Understanding (MOU) was signed in January 2002. The appellant claims to have supplied 1,03,920 kgs of cotton lint to the Mill for conversion into yarn. According to the appellant, the Mill purchased 47,164 kgs of lint worth Rs. 26,93,289 on credit, and the remaining lint worth Rs. 35,26,561.69 was given for conversion into yarn. The appellant alleges that the Mill did not convert the lint into yarn and instead, all the accused conspired to sell the cotton lint worth Rs. 62,19,850.50 and kept the money.

On 20 May 2004, the appellant filed a complaint at the Edapadi Police Station, Salem, against the respondents for offences under Section 420 (cheating) and Section 409 (criminal breach of trust) read with Section 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code (IPC). When the police did not register a case, the appellant sought orders from the Judicial Magistrate II, Sankagiri, under Section 156(3) of the Code of Criminal Procedure (Cr.P.C.) for registration of the complaint. Even after the Magistrate’s order, the police did not register a complaint. Subsequently, the appellant filed a petition in the High Court of Madras, seeking directions to the police to register a case.

Timeline

Course of Proceedings

The police transferred the investigation to the District Crime Branch, and a case was registered as Crime No. 54/2005 under Sections 420, 409, and 34 of the Indian Penal Code (IPC) on 22 June 2005. The appellant, dissatisfied with the police investigation, filed a petition in the High Court of Madras, seeking directions to the Investigation Officer to arrest the accused and complete the investigation. The High Court directed the police to file a final report within three months. The police sought an extension of time, which was granted by the High Court.

Meanwhile, the respondents filed a petition under Section 482 of the Code of Criminal Procedure (Cr.P.C.) in the High Court to quash the FIR, arguing that the allegations did not constitute the offences charged. The State filed a counter-affidavit stating that the investigation revealed forgery of documents by the accused. The appellant, as the complainant, also filed an application to intervene in the proceedings. The High Court initially granted the police six months to complete the investigation. The High Court then referred the matter to the Conciliation and Mediation Centre, which was opposed by the appellant. The case was sent back to the High Court for a decision on merits.

Legal Framework

The case primarily revolves around the interpretation of Section 482 of the Code of Criminal Procedure (Cr.P.C.), which deals with the inherent powers of the High Court to prevent the abuse of the process of law. The case also involves Sections 420 (cheating), 409 (criminal breach of trust), and 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code (IPC).

Section 482 of the Cr.P.C. states:

“Saving of inherent power of High Court. – Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.”

The Court also considered the legal position regarding the maintainability of a second complaint on the same facts, when the first complaint was withdrawn or dismissed.

Arguments

The respondents argued before the High Court that:

• The complainant had withdrawn the first complaint without any reason.
• The dispute was commercial in nature and did not warrant criminal proceedings.
• The complainant should pursue a civil remedy for recovering dues.

The State contended that:

• Investigation revealed that the accused had forged documents using blank letterheads, papers, and cheque leaves of the appellant.
• The ingredients of Sections 468 (forgery for purpose of cheating), 471 (using as genuine a forged document), 420, 409, and 120(b) (criminal conspiracy) of the IPC were present.
• One of the accused had admitted to preparing forged letters on the instructions of other accused.

The appellant argued that:

• The first complaint was withdrawn due to police inaction, and a second complaint was necessary.
• The allegations constituted criminal offences, including fraud and breach of trust.
• The High Court should not have quashed the criminal proceedings at the initial stage.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue:

1. Whether the High Court should have quashed the criminal proceedings on the grounds that the appellant had withdrawn an earlier complaint without assigning reasons; the transactions being commercial in nature, the ingredients of an offence under the Sections referred to above were absent; and that the remedy of the appellant lay in filing a civil suit.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

• Shiv Shankar Singh v. State of Bihar and Anr. [(2012) 1 SCC 130] – The Supreme Court held that a second complaint is maintainable even on the same facts if the earlier complaint was decided on insufficient material, without understanding the nature of the complaint, or if new facts came to light.
• Jatinder Singh and Others v. Ranjit Kaur [2001 (2) SCC 570] – The Supreme Court held that a second complaint is not maintainable on the same facts only when the first complaint was dismissed on merits after an inquiry.
• Pramatha Nath Talukdar and Anr. v. Saroj Ranjan Sarkar [AIR 1962 SC 876] – The Supreme Court held that a second complaint is maintainable on the same facts in exceptional circumstances, such as when the previous order was passed on an incomplete record, a misunderstanding of the nature of the complaint, or new facts came to light.
• Poonam Chand Jain and Anr. v. Fazru [(2010) 2 SCC 631] – The Supreme Court reiterated the principles in Pramatha Nath, stating that a second complaint is maintainable in exceptional circumstances.
• M/s Jayant Vitamins Ltd. v. Chaitanyakumar and Another [(1992) 4 SCC 151] – The Supreme Court held that it is not permissible for the Court to stop investigation by quashing an FIR in the absence of compelling and justifiable reasons.
• Zandu Pharmaceutical Works Limited and Ors v. Mohd. Sharaful Haque and Another [2005 (1) SCC 122] – The Supreme Court referred to State of Haryana and Ors. v. Bhajan Lal and Ors. and summarized the categories of cases in which the High Court can exercise its power under Section 482 of the Cr.P.C.
• Mridaya Ranjan Prasad Verma and Ors. v. State of Bihar and Anr. [(2000) 4 SCC 168] – The Supreme Court distinguished between a mere breach of contract and cheating, emphasizing that fraudulent or dishonest intention is the basis of the offence of cheating.
• State of Punjab v. Subhash Kumar and Ors. [(2004) 13 SCC 437] – The Supreme Court held that the High Court cannot enter into the factual arena to adjudge the correctness of allegations when quashing an FIR.
• Janata Dal v. H.S. Chowdhary and Ors. [(1992) 4 SCC 305] – The Supreme Court held that the High Court cannot enter into the factual arena to adjudge the correctness of allegations when quashing an FIR.
• Vesa Holdings (P) Ltd. and Anr. v. State of Kerala and Ors. [(2015) 8 SCC 293] – The Supreme Court held that a breach of contract would amount to cheating only if there was deception at the very inception.

Judgment

How each authority was viewed by the Court?

• The Court relied on Shiv Shankar Singh v. State of Bihar and Anr. [(2012) 1 SCC 130]* to support the principle that a second complaint is maintainable if the earlier complaint was decided on insufficient material or without understanding the nature of the complaint.
• The Court relied on Jatinder Singh and Others v. Ranjit Kaur [2001 (2) SCC 570]* to support the principle that a second complaint is not maintainable on the same facts only when the first complaint was dismissed on merits after an inquiry.
• The Court relied on Pramatha Nath Talukdar and Anr. v. Saroj Ranjan Sarkar [AIR 1962 SC 876]* to support the principle that a second complaint is maintainable on the same facts in exceptional circumstances.
• The Court relied on Poonam Chand Jain and Anr. v. Fazru [(2010) 2 SCC 631]* to reiterate the principles in Pramatha Nath, stating that a second complaint is maintainable in exceptional circumstances.
• The Court relied on M/s Jayant Vitamins Ltd. v. Chaitanyakumar and Another [(1992) 4 SCC 151]* to support the principle that it is not permissible for the Court to stop investigation by quashing an FIR in the absence of compelling and justifiable reasons.
• The Court referred to Zandu Pharmaceutical Works Limited and Ors v. Mohd. Sharaful Haque and Another [2005 (1) SCC 122]* to understand the circumstances where the High Court can exercise its inherent powers under Section 482 Cr.P.C.
• The Court referred to Mridaya Ranjan Prasad Verma and Ors. v. State of Bihar and Anr. [(2000) 4 SCC 168]* to distinguish between a mere breach of contract and cheating.
• The Court referred to State of Punjab v. Subhash Kumar and Ors. [(2004) 13 SCC 437]* and Janata Dal v. H.S. Chowdhary and Ors. [(1992) 4 SCC 305]* to highlight that the High Court cannot evaluate the factual correctness of the allegations when quashing an FIR.
• The Court distinguished Vesa Holdings (P) Ltd. and Anr. v. State of Kerala and Ors. [(2015) 8 SCC 293]*, clarifying that the principle of deception at the inception should be understood in the context of the facts.

What weighed in the mind of the Court?

The Supreme Court emphasized that the High Court should not have quashed the criminal proceedings at the initial stage, especially when there were allegations of forgery and criminal breach of trust. The Court highlighted that a second complaint is maintainable if the first complaint was not decided on merits. The Court also clarified that the availability of a civil remedy does not bar criminal proceedings if the allegations disclose a criminal offence. The Court’s reasoning was driven by the need to ensure that criminal proceedings are not prematurely terminated, especially when there are allegations of serious offences.

Logical Reasoning

The Supreme Court considered the alternative interpretation that the dispute was purely commercial and a civil suit should be pursued. However, the Court rejected this interpretation because the allegations included forgery and criminal breach of trust, which are criminal offences. The Court emphasized that a civil remedy does not bar criminal proceedings if the allegations disclose a criminal offence.

The Court’s decision was based on the principle that a second complaint is maintainable if the first complaint was not decided on merits. The Court also emphasized that the High Court should not have entered into the factual arena to adjudge the correctness of the allegations at the initial stage. The Court’s decision was aimed at ensuring that criminal proceedings are not prematurely terminated, especially when there are allegations of serious offences.

The Supreme Court held that the High Court erred in quashing the criminal proceedings. The Court set aside the High Court’s order and directed the police to proceed with further investigation. The Court observed that the allegations in the complaint, if true, could constitute offences under Sections 420, 409 and 34 of the Indian Penal Code (IPC).

The Court quoted the following from the judgment:

• “…the law does not prohibit filing or entertaining of the second complaint even on the same facts provided the earlier complaint has been decided on the basis of insufficient material or the order has been passed without understanding the nature of the complaint or the complete facts could not be placed before the court…”
• “…it is only when a complaint is dismissed on merits after an inquiry, that a second complaint cannot be made on the same facts.”
• “…a mere breach of contract is not in itself a criminal offence, and gives rise to the civil liability of damages…fraudulent or dishonest intention is the basis of the offence of cheating.”

There was no dissenting opinion in this case. The judgment was delivered by a bench of two judges, R. Banumathi, J. and Indira Banerjee, J., with the opinion authored by Indira Banerjee, J.

The judgment clarifies that a second complaint is maintainable even if the first complaint was withdrawn, especially if the first complaint was not decided on merits. The judgment also clarifies that the availability of a civil remedy does not bar criminal proceedings if the allegations disclose a criminal offence. This judgment has implications for future cases involving similar issues.

The Court did not introduce any new doctrines or legal principles, but it clarified the existing legal position regarding the maintainability of a second complaint. The Court’s decision was based on the interpretation of Section 482 of the Cr.P.C. and the principles laid down in previous judgments.

Key Takeaways

• A second criminal complaint can be filed even if a previous complaint on the same facts was withdrawn, especially if the first complaint was not decided on merits.
• The availability of a civil remedy does not bar criminal proceedings if the allegations disclose a criminal offence.
• High Courts should not quash criminal proceedings at the initial stage if the allegations disclose a criminal offence.
• Allegations of forgery and criminal breach of trust are serious and go beyond a simple commercial dispute.

Directions

The Supreme Court directed the first respondent to proceed with further investigation in accordance with the law.

Development of Law

The ratio decidendi of this case is that a second complaint is maintainable on the same facts if the first complaint was not decided on merits. This clarifies the legal position on the maintainability of a second complaint and reinforces the principle that criminal proceedings should not be prematurely terminated if there are allegations of serious offences.

Conclusion

In conclusion, the Supreme Court allowed the appeal, setting aside the High Court’s order that had quashed the criminal proceedings. The Court clarified that a second complaint is maintainable if the first complaint was not decided on merits and that allegations of forgery and criminal breach of trust warrant criminal proceedings. This judgment reinforces the importance of allowing criminal investigations to proceed when there are sufficient allegations of criminal conduct.