# BIRLA CORPORATION LIMITED v. ADVENTZ INVESTMENTS AND HOLDINGS LIMITED & OTHERS

- **Citation:** [2019] 7 S.C.R. 655
- **Court:** Supreme Court of India
- **Decided:** 2019-05-09
- **Case number:** Criminal Appeal No. 875 of 2019
- **Bench:** R. Banumathi, R. Subhash Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/birla-corporation-limited-v-adventz-investments-and-holdings-limited-others-34028
- **Pages:** 46

## Headnote

Penal Code, 1860 - ss. 379, 403, 411 r/w. s. 120B - Theft
and misappropriation of the documents - A Company petition was
filed before Company Law Board (CLB) - In the said Company
petition, documents No. 1 to 54 were filed by the respondents -
Appellant-company alleged that respondents had stolen/
misappropriated documents No. 1 to 54 from the appellant's premises
- It was alleged that documents No. 2 to 28 were photocopied and
then they were kept back in the premises - However, documents No.
29 to 54 were not returned and the same were in the possession of
the respondents - Pursuant thereto, appellant-company filed criminal
complaint u/ss. 379, 403, 411 r/w. s. 120B IPC - After examining
employee 'D' of the appellant company and complainant 'S' (a
representative of the company), the Trial court found sufficient
grounds for proceeding against all the respondents and also ordered
issuance of summons to the respondents for the offences punishable
u/ss. 380, 411 and 120B IPC - Aggrieved, respondents filed petition
u/s. 482 Cr.P.C. - High Court held that since original of documents
No. 1 to 28 were still in the custody of the complainant, thus the
complaint would not survive in respect of the documents No. 1 to 28
- However complaint was allowed by the High Court, insofar as
documents No. 29 to 54 were concerned and the matter was remitted
to the Trial court - On appeal, held: The allegations in the statement
of complainant 'S' were vague and lacked material particulars as
to the commission of theft - Complainant has neither attributed to
any facts nor material particulars as to the commission of theft - In
the complaint, there were no specific averments against respondents
as to how they were responsible in moving the documents out of the
possession of the appellant - Further, the statement of the employee
'D' was only a bare statement that respondents had procured
documents from the custody of the appellant - In the instant case,
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the satisfaction of the magistrate was on presumptive footing - Neither
the statement of the complainant nor the statement of 'D' contained
particulars as to the commission of offence - There was no
application of mind by the magistrate in taking cognizance of the
offence against the respondents - Also, issuance of summons was
also not very well founded and the same cannot be sustained - So
far as, the allegations of retention of documents No. 29 to 54 are
concerned, there are no allegation as to when and how the original
documents were removed and retained by the respondents - No
prima-facie case is made out against the accused persons - Supreme
Court has the power to quash any judicial proceedings u/Art. 136
of the Constitution - Thus, criminal complaint qua the documents
No. 29 to 54 quashed.
Code of Criminal Procedure, 1973 - s. 202 - Scope of enquiry
- Held: The scope of enquiry under this section is extremely
restricted only to finding out the truth or otherwise of the allegations
made in the complaint in order to determine whether process should
be issued or not u/s. 204 Cr.P.C. or whether the complaint should
be dismissed by resorting to s.203 Cr.P.C. on the footing that there
is no sufficient ground for proceeding on the basis of the statements
of the complainant and of his witnesses, if any - At the stage of
enquiry u/s. 202 Cr.P.C., the Magistrate is only concerned with the
allegations made in the complaint or the evidence in support of the
averments in the complaint to satisfy himself that there is sufficient
ground for proceeding against the accused.
Code of Criminal Procedure, 1973 - Issuance of process -
Held: To be summoned/to appear before the Criminal Court as an
accused is a serious matter affecting one's dignity and reputation
in the society - In taking recourse to such a serious matter in
summoning the accused in a case filed on a complaint otherwise
than on a police report, there has to be applic

## Text

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BIRLA CORPORATION LIMITED
v.
ADVENTZ INVESTMENTS AND HOLDINGS LIMITED &
OTHERS
(Criminal Appeal No. 875 of 2019)
MAY 09, 2019
[R. BANUMATHI AND R. SUBHASH REDDY, JJ.]
Penal Code, 1860 - ss. 379, 403, 411 r/w. s. 120B - Theft
and misappropriation of the documents - A Company petition was
filed before Company Law Board (CLB) - In the said Company
petition, documents No. 1 to 54 were filed by the respondents -
Appellant-company alleged that respondents had stolen/
misappropriated documents No. 1 to 54 from the appellant's premises
- It was alleged that documents No. 2 to 28 were photocopied and
then they were kept back in the premises - However, documents No.
29 to 54 were not returned and the same were in the possession of
the respondents - Pursuant thereto, appellant-company filed criminal
complaint u/ss. 379, 403, 411 r/w. s. 120B IPC - After examining
employee 'D' of the appellant company and complainant 'S' (a
representative of the company), the Trial court found sufficient
grounds for proceeding against all the respondents and also ordered
issuance of summons to the respondents for the offences punishable
u/ss. 380, 411 and 120B IPC - Aggrieved, respondents filed petition
u/s. 482 Cr.P.C. - High Court held that since original of documents
No. 1 to 28 were still in the custody of the complainant, thus the
complaint would not survive in respect of the documents No. 1 to 28
- However complaint was allowed by the High Court, insofar as
documents No. 29 to 54 were concerned and the matter was remitted
to the Trial court - On appeal, held: The allegations in the statement
of complainant 'S' were vague and lacked material particulars as
to the commission of theft - Complainant has neither attributed to
any facts nor material particulars as to the commission of theft - In
the complaint, there were no specific averments against respondents
as to how they were responsible in moving the documents out of the
possession of the appellant - Further, the statement of the employee
'D' was only a bare statement that respondents had procured
documents from the custody of the appellant - In the instant case,
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the satisfaction of the magistrate was on presumptive footing - Neither
the statement of the complainant nor the statement of 'D' contained
particulars as to the commission of offence - There was no
application of mind by the magistrate in taking cognizance of the
offence against the respondents - Also, issuance of summons was
also not very well founded and the same cannot be sustained - So
far as, the allegations of retention of documents No. 29 to 54 are
concerned, there are no allegation as to when and how the original
documents were removed and retained by the respondents - No
prima-facie case is made out against the accused persons - Supreme
Court has the power to quash any judicial proceedings u/Art. 136
of the Constitution - Thus, criminal complaint qua the documents
No. 29 to 54 quashed.
Code of Criminal Procedure, 1973 - s. 202 - Scope of enquiry
- Held: The scope of enquiry under this section is extremely
restricted only to finding out the truth or otherwise of the allegations
made in the complaint in order to determine whether process should
be issued or not u/s. 204 Cr.P.C. or whether the complaint should
be dismissed by resorting to s.203 Cr.P.C. on the footing that there
is no sufficient ground for proceeding on the basis of the statements
of the complainant and of his witnesses, if any - At the stage of
enquiry u/s. 202 Cr.P.C., the Magistrate is only concerned with the
allegations made in the complaint or the evidence in support of the
averments in the complaint to satisfy himself that there is sufficient
ground for proceeding against the accused.
Code of Criminal Procedure, 1973 - Issuance of process -
Held: To be summoned/to appear before the Criminal Court as an
accused is a serious matter affecting one's dignity and reputation
in the society - In taking recourse to such a serious matter in
summoning the accused in a case filed on a complaint otherwise
than on a police report, there has to be application of mind as to
whether the allegations in the complaint constitute essential
ingredients of the offence and whether there are sufficient grounds
for proceeding against the accused.
Penal Code, 1860 - s. 29 - Document - Held: The "document"
as defined in s.29 IPC is a "moveable property" within the meaning
of s.22 IPC which can be the subject matter of theft - The information
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contained thereon in the documents would also fall within the
purview of the "corporeal property" and can be the subject matter
of the theft.
Penal Code, 1860 - Theft - Intention of the taker - Held:
Intention is the gist of the offence - It is the intention of the taker
which must determine whether taking or moving of a thing is theft -
The intention to take "dishonestly" exists when the taker intends to
cause wrongful loss to any other which amounts to theft - It is an
essential ingredient of the offence of "theft" that the movable
property should have been "moved" out of the possession of any
person without his consent.
Words and Phrases - 'dishonest intention', 'wrongful gain'
and 'wrongful loss' - discussed.
Allowing the appeal arising out of SLP(Crl.) D.Nos.6405 &
6122 of 2019 and dismissing the appeal arising out of SLP(Crl.)
No.9053 of 2016, the Court
HELD: 1. A Company Petition was filed before the Company
Law Board under Sections 235, 237, 247, 250, 397, 398, 402 and
403 of the Companies Act, 1956 by respondents No.1 to 5 who
are the shareholders of the appellant Company alleging
oppression and mismanagement. M/s Birla Education Trust
(represented by respondent No.6) is also one of the petitioners
in the Company Petition. Along with the Company Petition, the
copy of the documents in question i.e. documents No.1 to 54
including document No.1-Internal Audit Report were filed and
advance copy of the Company Petition and copy of the documents
were given to the appellant. Appellant-Company filed complaint
alleging that the respondents have gained unauthorized access
and possession of the documents No.1 to 54. 'S', complainant (a
representative of the Company) has only alleged that he
apprehends that all the accused persons in connivance with each
other have procured the documents. The allegations in the
statement of the complainant are vague and lack material
particulars as to the commission of the theft. Complainant has
neither attributed to any facts nor material particulars as to the
commission of theft. [Paras 39, 42 and 47] [69-F-G; 680-G;
683-B-C]
BIRLA CORPORATION v. ADVENTZ INVESTMENTS &
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2. Respondent No.10-Birla Buildings Limited is responsible
for the day to day affairs of the maintenance of the building.
Respondent No.11 is the CEO of Respondent No.10-Birla
Buildings Limited. In the complaint, there are no specific
averments against respondents No.10 and 11 as to how they had
access to the 3rd and 4th floors of the building owned by the
appellant Company and as to how they are responsible in moving
the documents out of the possession of the appellant. Likewise,
no specific overt act of "dishonest removal" of the documents is
attributed to the other respondents. The mere fact that
respondents No.10 and 11 are responsible for security and
maintenance of the building cannot lead to an inference that
respondents No.10 and 11 are responsible for the theft.
[Para 48] [683-D-E]
3. In the statement of 'D', a employee of the appellant
company, there is only a bare statement that respondents No.13
to 15 have filed case before the Company Law Board that the
documents are highly confidential and that they have procured
the documents stolen from the custody of the appellant. There
are no specific allegations against respondents No.13 to 15.
Likewise, there are no specific allegations against the other
accused who are residing outside the jurisdiction of the court
and how and when they committed theft of the documents that
how they entered into conspiracy. Considering the various
litigations pending between the parties before issuing summons,
the Magistrate ought to have considered the complaint and
statement of witnesses and satisfied himself that there are prima
facie materials showing the ingredients of the offence of theft
(house theft) and receipt of stolen property. [Para 54] [685-D-F]
4. For taking cognizance of the offence, the Magistrate inter
alia relied upon the statement of the complainant and 'D' to arrive
at a conclusion that a prima facie case is made out against the
respondents. Neither the statement of the complainant nor the
statement of 'D' contain the particulars as to the commission of
the offence to have satisfied the Magistrate that there were
sufficient grounds for proceeding against the accused. By perusal
of the above order passed by the Magistrate, there is absolutely
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nothing to indicate application of mind in taking cognizance of
the offence against respondents No.1 to 16 including the
respondents who are residents beyond the jurisdiction of the
court. [Para 57] [686-F-H]
5. In the present case, the complaint lacks particulars as to
time and the place of theft or the person who has committed theft.
There are no averments in the complaint alleging that how the
documents had gone out of the possession of the complainant.
There are only mere statement of the complainant that
respondents No.12 to 16 have filed civil suits basing on the stolen
documents and that he apprehends that all the accused persons
in connivance with each other must have procured the documents
by theft. In the absence of particulars, by mere possession of the
documents or mere production of the documents in the Company
Petition or civil suits, it cannot be said that sufficient grounds
were made out to proceed against the accused or that the
satisfaction of the Magistrate was well founded justifying issuance
of process. [Para 58] [687-D-F]
6. The object of investigation under Section 202 Cr.P.C. is
"for the purpose of deciding whether or not there is sufficient ground
for proceeding". The enquiry under Section 202 Cr.P.C. is to
ascertain the fact whether the complaint has any valid foundation
calling for issuance of process to the person complained against
or whether it is a baseless one on which no action need be taken.
The law imposes a serious responsibility on the Magistrate to
decide if there is sufficient ground for proceeding against the
accused. The issuance of process should not be mechanical nor
should be made as an instrument of harassment to the accused.
Issuance of process to the accused calling upon them to appear
in the criminal case is a serious matter and lack of material
particulars and non-application of mind as to the materials cannot
be brushed aside on the ground that it is only a procedural
irregularity. In the present case, the satisfaction of the Magistrate
in ordering issuance of process to the respondents is not well
founded and the order summoning the accused cannot be
sustained. The impugned order of the High Court holding that
there was compliance of the procedure under Section 202 Cr.P.C.
BIRLA CORPORATION v. ADVENTZ INVESTMENTS &
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cannot be sustained and is liable to be set aside. [Para 61]
[688-E-H]
7. Admittedly, documents No.1 to 54 including the
Document No.1-Internal Audit Report of Chanderia unit of the
appellant Company has been filed by the respondents in the
company petition. These documents are intra-company
correspondence, internal audit reports, agreements, etc. in
relation to the operations of the appellant Company. Admittedly,
these documents have been produced in the company petition
by the shareholders of the appellant-Company to substantiate
their case of oppression and mismanagement by respondent No.17
and for vindication of their rights. In the facts and circumstances
of the case in hand, the taking away of the documents temporarily
and using them in the pending litigations between the parties
would not amount to theft. [Para 70] [691-G-H; 692-A]
8. The FIR or the criminal proceedings can be quashed if
the allegations do not make out a prima-facie case or allegations
are so improbable that no prudent person would ever reach a
just conclusion that there are sufficient grounds for proceeding
against the accused. So far as, the allegation of retention of the
documents No. 29 to 54, no allegation as to when and how the
original documents were removed and retained by the
respondents. Where on the admitted facts no prima-case case is
made out against the accused for proceeding or when the Supreme
Court is satisfied that the criminal proceedings amount to abuse
of process of court, Supreme Court has the power to quash any
judicial proceedings in exercise of its power under Article 136 of
the Constitution of India. The present case is a fit case for
exercising the power in quashing the criminal complaint qua the
documents No.29 to 54 also. [Para 88] [699-B-D]
9. Conclusions are summarised as under:-
a) By the order of the Magistrate, cognizance was taken
against respondents No.1 to 16 for commission of the offences
under Sections 380, 411 and 120B IPC. There are no averments
in the complaint nor are there allegations in the statement of the
complainant or the witness 'D' as to when and how the theft was
committed and the order of the Magistrate taking cognizance of
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the criminal case against respondents No.1 to 16 qua documents
No.1 to 54 is liable to be set aside.
b) The "document" as defined in Section 29 IPC is a
"moveable property" within the meaning of Section 22 IPC which
can be the subject matter of theft. The information contained
thereon in the documents would also fall within the purview of
the "corporeal property" and can be the subject matter of the
theft. The information contained thereon in the documents would
also fall within the purview of the "corporeal property" and can
be the subject matter of the theft. The findings of the High Court
is modified to that extent.
c) In the facts and circumstances of the present case, use
of documents No.1 to 28 and documents No.29 to 54 by the
respondents in judicial proceedings is to substantiate their case
namely, "oppression and mismanagement" of the administration
of appellant-Company and their plea in other pending proceedings
and such use of the documents in the litigations pending between
the parties would not amount to theft. No "dishonest intention"
or "wrongful gain" could be attributed to the respondents and
there is no "wrongful loss" to the appellant so as to attract the
ingredients of Sections 378 and 380 IPC.
d) Considering the facts and circumstances of the present
case and the number of litigations pending between the parties,
continuation of the criminal proceedings would be an abuse of
the process of the court. The order of the Magistrate taking
cognizance of the offences and the issuance of summons to
respondents No.1 to 16 and the criminal proceedings thereon
are liable to be quashed. [Para 89] [699-E-H; 700-A-D]
National Bank of Oman v. Barakara Abdul Aziz and Another
(2013) 2 SCC 488 : [2012] 11 SCR 500 ; Mehmood Ul
Rehman v. Khazir Mohammad Tunda and Others (2015) 12
SCC 420 : [2015] 4 SCR 841 ; Bhushan Kumar and Another
v. State (NCT of Delhi) and Another (2012) 5 SCC 424 : [2012]
2 SCR 696 ; Vijay Dhanuka and Others v. Najima Mamtaj
and Others (2014) 14 SCC 638 : [2014] 4 SCR 171 ; Pepsi
Foods Ltd. and Another v. Special Judicial Magistrate and
Others (1998) 5 SCC 749 : [1997] 5 Suppl. SCR 12 ; Punjab
National Bank and Others v. Surendra Prasad Sinha 1993
BIRLA CORPORATION v. ADVENTZ INVESTMENTS &
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Supp (1) SCC 499 : [1992] 2 SCR 528 ; Jagdish Ram v. State
of Rajasthan and Another (2004) 4 SCC 432 : [2004] 2
SCR 846 ; Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi
and Others (1976) 3 SCC 736 : [1976] Suppl. SCR 123 ;
State of Haryana and Others v. Bhajan Lal and Others 1992
Supp (1) SCC 335 : [1990] 3 Suppl. SCR 259 ; Indian Oil
Corpn. v. NEPC India Ltd. and Others (2006) 6 SCC 736 :
[2006] 3 Suppl. SCR 704 - relied on.
Sunil Bharti Mittal v. Central Bureau of Investigation (2015)
4 SCC 609 : [2015] 1 SCR 377 ; Chandra Deo Singh v.
Prokash Chandra Bose alias Chabi Bose and Another AIR
1963 SC 1430 : [1964] SCR 639 ; K.N. Mehra vs. State of
Rajasthan AIR 1957 SC 369 : [1957] SCR 623 ; Pooran
Mal v. Director of Inspection (Investigation), New Delhi and
Others (1974) 1 SCC 345 : [1974] 2 SCR 704 ; Madhavrao
Jiwajirao Scindia and Others v. Sambhajirao Chandrojirao
Angre and Others (1988) 1 SCC 692 : [1988] 2 SCR 930 ;
Abhijit Pawar v. Hemant Madhukar Nimbalkar and Another
(2017) 3 SCC 528 : [2016] 9 SCR 475 ; GHCL Employees
Stock Option Trust v. India Infoline Limited (2013) 4 SCC
505 : [2013] 5 SCR 276 ; Pyare Lal Bhargava v. State of
Rajasthan AIR 1963 SC 1094 : [1963] Suppl. SCR 689 -
referred to.
Case Law Reference
[2012] 11 SCR 500
relied on
Para 28
[2015] 4 SCR 841
relied on
Para 29
[2012] 2 SCR 696
relied on
Para 30
[2014] 4 SCR 171
relied on
Para 33
[2016] 9 SCR 475
referred to
Para 33
[1997] 5 Suppl. SCR 12
relied on
Para 35
[2013] 5 SCR 276
referred to
Para 35
[1992] 2 SCR 528
relied on
Para 36
[2004] 2 SCR 846
relied on
Para 37
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[2015] 1 SCR 377
referred to
Para 49
[1964] SCR 639
referred to
Para 56
[1963] Suppl. SCR 689
referred to
Para 64
[1957] SCR 623
referred to
Para 67
[1974] 2 SCR 704
referred to
Para 76
[1976] Suppl. SCR 123
relied on
Para 83
[1990] 3 Suppl. SCR 259
relied on
Para 84
[2006] 3 Suppl. SCR 704
relied on
Para 86
[1988] 2 SCR 930
referred to
Para 87
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 875 of 2019.
From the Judgment and Order dated 15.05.2015 of the High Court
at Calcutta in C.R.R. No. 323 of 2011.
With
Criminal Appeal Nos. 876, 877 of 2019.
C. A. Sundaram, Arvind P. Datar, Mukul Rohatgi, Amit Desai,
Kapil Sibal, K. V. Vishwanathan, Sidharth Luthra, Ranjit Kumar, Debol
Banarjee, Ms. V. Mohana, Sr. Advs., Senthil Jagadeesan, Siddharth
Aggarwal, Rohit Bharadwaj, Ms. Rupali Samuel, Ms. Sonakshi Malhan,
Ms. Suriti Chowdhary, Ms. Mrinal Kanwar, Ms. Rohini Musa, Arjun
Singh, Zafar Inayat, Abhishek Gupta, Geo Joseph, Rohan Jaitley, Ajay
Bhargava, Vikas Mehta, Ms. Trishala Trivedi, Rohan Dakshini,
Ms. Namrata Vinod, Gopalakrishna S., Apoorv Khator,. Mithun Shashank,
Karan Gupta, Vasanth B., Amit Agarwalla, P. C. Sharma, Ms.Vrinda
Bhandari, Himanshu Gupta, Akshay Sehgal, T.R.B. Sivakumar, Kunal
Chatterjee, Mahesh Agarwal, Ajay Bhargava, Mrs. Shally Bhasin,
Vaibhav Niti, Ms. Sayaree Basu Mallik, Ms. Madhavi Agarwal,
Ms. Surabhi Limaye, Ms. Trishala Trivedi, Rishi Raj Sharma, Ms. Soumya
Joykaran Singh, Chaitanya Safaya, Soumya Ray Chowdhury,
Ms. Sangeeta Mandal, Ms. Swati Sinha, Sanjiv Kumar Trivedi, Savinder
Singh, Dhananjaya Sud, Ms. Ankita Sharma (for M/S. Fox Mandal &
Co.), Amit Agarwalla, P. C. Sharma, T.R.B. Sivakumar, Sayantan
Talapatra, Saifudin S., Advs. for the appearing parties.
BIRLA CORPORATION v. ADVENTZ INVESTMENTS &
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The Judgment of the Court was delivered by
R. BANUMATHI, J. 1. Leave granted.
2. These appeals arise out of the judgment dated 15.05.2015 passed
by the High Court of Calcutta in C.R.R. No.323 of 2011 in and by which
the High Court quashed the complaint of the appellant-Company filed
under Sections 379, 403 and 411 IPC read with Section 120-B IPC qua
documents No.1 to 28 of the Schedule. Insofar as documents No.29 to
54 of the Schedule, the High Court remitted the matter to the trial court
to proceed with the matter in accordance with law.
3. Being aggrieved by quashing of the complaint qua documents
No.1 to 28, the appellant-complainant has preferred appeal (SLP (Crl.)
No.9053 of 2016). Being aggrieved by remitting the matter to the trial
court qua documents No.29 to 54, the respondents have filed appeal
[SLP(Crl.) D No.6405 of 2019 and SLP(Crl.) D. No.6122 of 2019].
Though the SLPs by the respondents are filed with delay, in the interest
of justice, delay in filing the SLPs are condoned.
4. These appeals arise out of the criminal complaint filed by the
appellant-Company which belong to Madhav Prasad Birla (MPB) Group,
now under the control of respondent No.17-Harshvardhan Lodha who
is the son of Rajendra Singh Lodha. The impugned complaint has a
background of multitude of litigations filed by the respondents and others.
Brief facts which led to filing of these appeals are that one Priyamvada
Devi Birla (PDB) and her husband Madhav Prasad Birla (MPB) were
in control and management of several corporate entities which are
collectively referred to as the M.P. Birla Group of Industries. They did
not have any children. They have created several trusts for undertaking
charitable activities in particular on the education side. PDB died on
03.07.2004 and MPB had predeceased her. There is an ongoing dispute
over legality of a Will allegedly executed by Priyamvada Devi Birla (PDB)
dated 18.04.1999 in favour of Rajendra Singh Lodha and respondent
No.17-son of said Rajendra Singh Lodha. On 19.07.2004, a petition was
filed by Rajendra Singh Lodha, father of respondent No.17 for grant of
probate of the purported Will before the High Court at Calcutta. The
Probate Petition has been converted into a testamentary suit for grant of
Letters of Administration. Krishna Kumar Birla (KKB), Basant Kumar
Birla (BKB), Ganga Prasad Birla (GPB) and Yashovardhan Birla (YB)
have filed caveats to oppose the grant of probate of the said Will dated
18.04.1999. The High Court held that Ganga Prasad Birla (GPB) has a
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caveatable interest and therefore, he has a right to oppose the grant of
probate of the said Will. The said testamentary suit is pending.
Subsequently, Krishna Kumar Birla (KKB), Kashi Nath Tapuriah (KNT)
and Pradip Kumar Khaitan (PKK) filed an application for grant of probate
of the 1982 Will of Madhav Prasad Birla (MPB) and Ganga Prasad
Birla (GPB); Kashi Nath Tapuriah (KNT) and Pradip Kumar Khaitan
(PKK) have filed an application for grant of probate of the 1982 Will of
Madhav Prasad Birla (MPB) before the High Court at Calcutta and the
said testamentary proceedings are also pending.
5. Respondents No.1 to 5 who are shareholders of the appellant
Company and the trust-Birla Education Trust represented by respondent
No.6, had filed a Company petition in CP No.1/2010 under Sections 397
and 398 of the Companies Act, 1956 before the Company Law Board
(CLB) alleging oppression and mismanagement being perpetrated by
respondent No.17 who is in administration and operation of the said
Company. The petition before the CLB has been filed through respondents
No.6 to 9 who are shown as accused Nos.6 to 9 in the complaint.
6. On 24.03.2010, respondents No.12 to 16 have filed five civil
suits in the High Court of Calcutta (CS Nos.73-77/2010) under Section
92 of the Code of Civil Procedure stating that in the year 1988, MPB
and PDB had created five mutual and reciprocal trusts to leave the
estate covered by these trusts for charity. These trusts are said to have
been revoked just three days prior to the alleged Will dated 18.04.1999.
In the said suits in CS No.73-77/2010, respondents No.12 to 16 have
challenged the revocation of the five trusts and prayed for recovery of
the properties of the public charity and for enforcement of the public
trust obligations of the properties vested in the said five trusts.
7. The company petition in CP No.1/2010 was filed before CLB
(now pending before NCLT) on 10.03.2010. In the said company petition,
documents No.1 to 54 have been filed. The advance copy of the company
petition and the copies of the documents have been served upon the
appellant-Company. Document No.1-Internal Audit Report of the
appellant Company was filed in the civil suits filed by respondents No.12
to 16 challenging the revocation of the five trusts created by MPB and
PDB. Alleging theft and misappropriation of all the documents No.1 to
54, the appellant Company filed the criminal complaint under Sections
379, 403, 411 read with Section 120B IPC against respondents No.1 to
16 and in the said complaint, appellant was represented by Shri Samir
BIRLA CORPORATION v. ADVENTZ INVESTMENTS &
HOLDINGS LTD. [R. BANUMATHI, J.]
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Ganguly who is the Vice-President (Legal) of the appellant-company.
The gravamen of the allegations in the complaint is that copies of 54
documents were used before the Company Law Board (CLB) in C.P.
No.1 of 2010 filed by respondents No.1 to 5 and Birla Education Trust
represented by respondent No.6. Copy of one such document viz., Internal
Audit Report of Chanderia Unit of the appellant Company has been
filed along with the interlocutory applications filed by respondents No.13
to 16 in the civil suits which were filed challenging the revocation of
trusts and for recovery of properties vested in the trust.
8. Let us understand the array of the parties. Each one of
respondents No.1 to 5 are the shareholders of the appellant-Company.
Respondent No.6-Pradip Kumar Khaitan is a reputed lawyer and a
trustee of Birla Education Trust. Respondent No.7-Akshay Poddar is a
Director of respondent No.1-Adventz Investments & Holdings Limited.
Respondent No.8-Santosh Kumar Poddar is the Director of respondent
No.3-Britex (India) Limited. Respondent No.9-Bal Kishan Toshniwal
is the Director of respondent No.2-Govind Promoters Private Limited.
Respondent No.10-Birla Buildings Limited is in-charge of the overall
maintenance and upkeep of Birla Buildings where the appellant
Company is located. Respondent No.11-S. Chakrabarty is the Chief
Executive Officer of respondent No.10. Respondents No.12 to 16 are
ones who have filed the suits CS No.73-77/2010 under Section 92 CPC
before the High Court at Calcutta challenging the revocation of the trusts
and for recovery of the properties of the public charity. Respondent
No.17-Harshvardhan Lodha is the son of late Rajendra Singh Lodha
and now the Director-cum-Chairman of the appellant-Company against
whom C.P. No.1 of 2010 has been filed.
9. The allegations in the complaint in brief are as under:-
The complaint contains a list of fifty-four documents with their
brief description given in the Schedule of the complaint. Document No.1
is an Internal Audit Report of Chanderia unit of the appellant Company
for the period ending November, 2009. According to the appellantcomplainant, keeping in mind the confidential nature of the report, only
six copies were made. Out of which, five sets were sent to officers of
the Company individually named and one was retained by the Auditor.
The Internal Audit Report produced by the respondents is the copy of
one of the original five sets which was sent to one Bachh Raj Nahar-
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Executive Director and Chief Executive Officer of the Company. It is
alleged that respondents No.1 to 16 have stolen/misappropriated
documents No.2 to 28 from the appellant's premises and that after
photocopying the documents, they were kept back in the appellant's
premises. It is alleged that documents No.29 to 54 have been stolen/
misappropriated from the appellant's premises and that after photocopying
the documents, they were not returned in the appellant's premises and
the originals are still in the possession of the respondents. Before making
the complaint, the complainant-appellant had conducted an internal enquiry
to find out how these documents reached the respondents.
10. These documents have at all times been kept at the registered
office of the appellant-Birla Buildings. These documents have restricted
access and are meant for the consumption of designated and specified
individuals only. These documents include intra-company correspondence,
internal audit reports, agreements etc. in relation to operations of the
Company. The appellant-complainant alleges that respondents No.1 to 9
and 12 to 16 gained access to the Internal Audit Report and other
documents unauthorizedly and illegally with the aid of respondent No.10Birla Buildings Limited and respondent No.11-S. Chakrabarty, CEO who
are in-charge of upkeep of the building in which the office of the appellantcomplainant is situated.
11. The appellant further averred that by letter dated 29.03.2010,
the Company through its advocate called upon the advocate of
respondents No.1 to 6 to disclose as to how they obtained the documents
mentioned in the Schedule of the complaint. The respondents sent reply
dated 30.03.2010 and evaded giving any response to the said query on
the premise that there was no procedure of the Company Law Board
(CLB) for seeking such information. Appellant-Company sent a letter
dated 17.04.2010 to respondents No.12 to 16 calling upon them to explain
as to how they came in possession of the documents; but there was no
reply. In the rejoinder filed by respondents No.1 to 6, they again failed
and/or refused to state how they procured these documents.
12. Appellant alleged that without the consent of the appellant
Company, the respondents/accused have dishonestly stolen/
misappropriated the documents and thus committed theft and conspiracy
to commit theft. It is also averred that the respondents/accused
dishonestly received or retained the stolen property knowing and having
BIRLA CORPORATION v. ADVENTZ INVESTMENTS &
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reason to believe the same to be stolen property and as such committed
the offence punishable under Section 411 IPC. It is alleged that the
respondents/accused thus dishonestly committed theft of the documents
No.1 to 54 belonging to the appellant Company and misappropriated
them by converting the same for their own use and thus committed the
offences punishable under Sections 379, 403 IPC read with Section 120B IPC.
13. Complainant Shri Samir Ganguly was examined on 06.10.2010.
Since some of the accused persons are residents beyond local jurisdiction
of the court, the trial court/the Magistrate fixed the matter for enquiry
under Section 202 Cr.P.C. on 08.10.2010. An employee of the appellant
Company by name P.B. Dinesh was examined on 08.10.2010.
Considering the averments in the complaint and the statement of
Complainant Shri Samir Ganguly and P.B. Dinesh, the learned Magistrate
vide order dated 08.10.2010 found that there are sufficient grounds for
proceeding against all the sixteen respondents and ordered issuance of
summons to the respondents for the offences punishable under Sections
380, 411 and 120B IPC.
14. Aggrieved by the summoning order dated 08.10.2010,
respondents filed petition under Section 482 Cr.P.C. before the High
Court for quashing the criminal proceedings. Insofar as compliance of
the procedure in taking cognizance of the offences, the High Court held
that upon perusal of the averments in the complaint and the statement of
representative of the company Shri Samir Ganguly and P. B. Dinesh, the
Magistrate satisfied himself that there were sufficient grounds for
proceeding against the accused and ordered to issue process against the
sixteen accused and the High Court held that on the procedural aspect,
the Magistrate did not commit any error. The High Court held that since
originals of documents No.1 to 28 are still in the custody of the
complainant, taking away the information contained in such documents
cannot be considered to be "movable property" and the temporary
removal of the documents for taking away the contents thereon by itself
cannot be the subject of the offence of theft or dishonest misappropriation
of property as well as dishonest receiving of the stolen property. On
those findings, the High Court held that the complaint would not survive
in respect of the documents No.1 to 28. Insofar as documents No.29 to
54 are concerned, the High Court held that as the originals of those
documents are missing, the complaint discloses ingredients of the offence
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of theft. The High Court held that insofar as documents No.29 to 54 are
concerned, the complainant can proceed against the respondents and
accordingly remitted the matter to the trial court.
15. On behalf of the appellant, Mr. C.A. Sundaram, learned senior
counsel submitted that the appellant discharged the initial burden placed
upon it by adducing pre-summoning evidence by examining two witnesses
and based upon the averments in the complaint and the statement of
witnesses Shri Samir Ganguly and P.B. Dinesh, the Magistrate satisfied
himself that there are sufficient grounds for proceeding against the
accused and the High Court rightly held that there was no irregularity in
the procedure followed by the Magistrate in issuing process against the
respondents. The learned senior counsel submitted that respondents
No.1 to 9 have produced the documents before the Company Law Board
and respondents No.12 to 16 have filed document No.1-Internal Audit
Report which are highly confidential documents and having not disclosed
the source for the accusation/possession of the documents, prima facie
case in dishonest removal of the documents have been made out and the
Magistrate rightly found that there are sufficient grounds for proceeding
against the respondents/accused and took the cognizance of the offences
under Sections 380, 411 and 120-B IPC.
16. The learned senior counsel for the appellant submitted that
when the Magistrate has taken cognizance of the offence, the High
Court ought not to have substituted its views for the summoning order
passed by the Magistrate qua documents No.1 to 28. In support of his
submission, reliance was placed upon Smt. Nagawwa v. Veeranna
Shivalingappa Konjalgi and Others (1976) 3 SCC 736 and number
of other decisions. It was submitted that the High Court was not right in
quashing the criminal complaint qua documents No.1 to 28.
17. In appeal preferred by the respondents, they assailed the order
of issuance of process against the respondents by the Magistrate
contending that there were no adequate materials so as to arrive at
satisfaction of the Magistrate that there were sufficient grounds for
proceeding against the respondents. It was submitted that the production
of the copies of the documents in the Company Law Petition and in the
civil suits would not amount to theft and the averments in the complaint
and the statement of the complainant and witness P.B. Dinesh would
not attract the ingredients of theft and there was no application of mind
BIRLA CORPORATION v. ADVENTZ INVESTMENTS &
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of the learned Magistrate and the Magistrate mechanically issued process
against the respondents and the High Court ought to have quashed the
proceedings in toto.
18. On behalf of respondents No.1 to 5, Mr. Kapil Sibal, learned
senior counsel submitted that the complaint lacks specification as to the
time and manner of the commission of the offence and who committed
theft of the documents and when and how the same was detected. The
learned senior counsel contended that the averments in the complaint do
not make out a prima facie case of theft and that the materials placed
before the Magistrate were inadequate and there were no sufficient
grounds for proceeding against the respondents and the High Court ought
to have quashed the entire proceedings in toto. The learned senior counsel
further submitted that document No.1-Internal Audit Report of the
appellant Company and other documents have been filed by the
respondents in the company petition before the CLB to substantiate their
case of oppression and mismanagement, which can never amount to
theft. Learned senior counsel contended that when the documents are
produced in the proceedings before the Company Law Board for
vindication of their rights or defence, the criminal complaint filed by the
appellant is nothing but a "legal thumb screw" and the High Court
rightly quashed the criminal proceedings qua documents No.1 to 28. It
was submitted that since there was neither application of mind by the
Magistrate nor any reasoned order has been passed disclosing the
satisfaction of the mind, the entire proceedings before the Magistrate is
liable to be quashed.
19. Mr. Mukul Rohatgi, learned senior counsel appearing on behalf
of respondent No.10 and Mr. Amit Desai, learned senior counsel
appearing on behalf of respondent No.11 submitted that respondent No.10
has the overall responsibility of the management and maintenance of the
"building" in which the office of the appellant is situated and there are
no specific allegations in the complaint as to how respondents No.10
and 11 had access to these documents which were in the custody of
designated employees of the complainant. It was submitted that in the
absence of allegations in the complaint to prove commission of offence
by respondents No.10 and 11, the mere fact that respondents No.10 and
11 are responsible for the maintenance of the building by itself, cannot
lead to an inference that respondents No.10 and 11 are responsible for
the theft.
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20. On behalf of respondent No.11, learned senior counsel
submitted that respondent No.11 is the CEO of respondent No.10Company and is overall administrative in-charge of the company's affairs
in Birla Building and in the absence of specific allegations against him,
the mere official position of respondent No.11 will not automatically make
him vulnerable to criminal prosecution. The learned senior counsel further
submitted that the doctrine of vicarious liability is based upon a legal
presumption and creates fictional liability and since the doctrine of
vicarious liability is not available (as a matter of law) in regard to offences
under the IPC, the complainant cannot rely upon a legal presumption of
an act or mensrea to proceed against respondent No.11 in a criminal
case.
21. On behalf of respondents No.13 to 16, Mr. Ranjit Kumar and
Mr. Debal Banerjee, learned senior counsel submitted that the trial court
had not applied its mind to the materials on record and the averments in
the complaint and the statement of the witnesses do not make a prima
facie case and the Magistrate mechanically issued process against
respondents No.12 to 16. It was submitted that filing a document in the
judicial proceedings can never be termed as an act of "theft" or "dishonest
misappropriation" so as to attract the ingredients of Sections 380 and
411 IPC read with Section 120-B IPC.
22. Reiterating the contention of other respondents, Mr. K.V.
Viswanathan, learned senior counsel appearing on behalf of respondent
No.6 submitted that respondent No.6 is a well reputed lawyer and a
trustee of the Birla Education Trust which is a shareholder of the appellant
Company. The learned senior counsel further submitted that in the absence
of specific allegations against respondent No.6, he cannot be made
vicariously liable merely because he is adorning the position of trustee in
Birla Education Trust. It was submitted that the complaint filed by the
appellant is intended to arm twist the respondents from ventilating the
legitimate rights before the appropriate judicial forum and in the absence
of materials, the proceedings initiated against respondent No.6 is liable
to be quashed.
23. On behalf of respondents No.7 to 9, Mr. Sidharth Luthra,
learned senior counsel submitted that absolutely there are no averments
as to how the said documents had gone out of the possession of the
appellant-complainant and mere possession of the copy of the documents
BIRLA CORPORATION v.