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civil case and criminal case both maintainable basing on the set of facts of the case=in offences of the nature contemplated under the summoning order, there can be civil liability coupled with criminal culpability. What a party has been deprived of by an act of cheating, can be claimed through a civil action. The same deprivation based on denial by way of deception, emerging from an act of cheating, would also attract criminal liability. In the course of criminal prosecution, a complainant cannot seek a reciprocal relief, for the actions of the accused. As in the instant case, the monetary consideration under the bill of exchange dated 1.2.2001, cannot be claimed in the criminal proceedings, for that relief the remedy would be only through a civil suit. It is therefore not possible for us to accept, that since a civil claim has been raised by the complainant-JCE Consultancy, based on the alleged breach of the agreement dated

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“REPORTABLE”
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 304 OF 2012

(Arising out of SLP (Criminal) No.9168 of 2009)
Lee Kun Hee & Ors. …. Appellants
Versus
State of U.P. & Ors. …. Respondents

 
J U D G M E N T
JAGDISH SINGH KHEHAR, J.
1. Leave granted.
2. Sky Impex Limited (as buyer) entered into an agreement with JCE
Consultancy (as seller) on 1.12.2001. The sale consideration for the
products to be supplied by JCE Consultancy was determined at
US$13,70,000 (approximately Rs.9 crores). The product was to be
delivered no later than 30.1.2002. The buyer was to confirm receipt and
certify quality and quantity. As per the agreement, the product was to be
further transferred by the buyer (Sky Impex Limited) to Samsung Gulf
Electronics, Dubai (hereafter referred to as “Samsung, Dubai”), a wholly
owned subsidiary of Samsung Corporation, South Korea (hereinafter
referred to as “Samsung, South Korea). Consequent upon supply of the
product under the contract/agreement dated 1.12.2001, Samsung Dubai
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was to issue a bill of exchange valued at US$14,32,000, in favour of the
buyer Sky Impex Limited. Sky Impex Limited was to further endorse the
bill of exchange in favour of the seller (JCE Consultancy). Within 72 hours
wherefrom the seller was required to transfer to Sky Impex Limited
US$62,000 as commission. Alternatively, the buyer (Sky Impex Limited)
could transfer, upon delivery, a sum of US$13,70,000, as sale
consideration for the product. It was also provided in the agreement, that
after endorsement of bill of exchange, the liability of the buyer towards the
seller would stand exhausted. Thereupon, the seller would hold the bill of
exchange, in due course, and get vested with the authority under the
Negotiable Instrument Act, to claim value, directly from Samsung, Dubai.
Importantly, the agreement dated 1.12.2001 provided that the contract
would be governed by the laws of India. The agreement dated 1.12.2001
being of substantial relevance in the present controversy, is being
extracted hereinunder:-
“Sky Impex Limited BVI

Agreement No.SA/100/019

This agreement is made this day December the 1st 2001 between

M/s. Sky Impex Ltd., having its registered office at Omer Hodge

Bldg., 2nd Floor, Wickham’s Cay1, P.O. Box-985, Road Town,

Tortola, British Virgin Islands, herein referred to as the `the Buyer

and M/s. J.C.E. Consultancy a proprietorship Company having its

office at 108, Rohini Complex, WA-121, Shakarpur, Delhi-110092,

India, herein referred to as `the Seller‘.
The Agreement between the two parties constitute the following:
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1. The buyer has agreed to purchase Coke Calcination packages

from the Seller to the value of USD 1,370,000 as per order sheet

dated November, 25th, 2001 and duly acknowledge by the Seller.
2. The above packages will be delivered by the Seller to the

Buyer, no later than January, 30th 2002. The packages shall be

handed over by the Seller to the Buyer’s representative as per

communication in writing to be sent by the Buyer to the Seller.
3. The Buyer should provide a Performance Certificate to the

Seller, confirming that the above packages are in accordance with

the order placed and thereafter the Buyer shall not have any claims

against the Seller in respect to the quality of the packages and

quantity ordered.
4. it is understood by the Seller that the said packages are to be

further transferred by the Buyer to M/s. Samsung Gulf Electronics,

Dubai, a company registered under the laws of Dubai, UAE and

which is a wholly owned subsidiary of Samsung Corporation, South

Korea.
5. The Buyer shall receive from Samsung Gulf Electronics, Dubai

a Bill of Exchange for the value of approx. USD 1,432,000 due for

payment of July, 2002 and shall endorse the same to the seller as

consideration for the sale of the packages to the Buyer. Within 72

hours of receiving settlement of the said Bill of Exchange the Seller

shall transfer to the Buyer the amount of USD 62,000 to the

nominated account of the Buyer as his commission. Alternatively

the Buyer shall transfer to the Seller the sum of USD 1,370,000

against delivery of goods to a Bank account that shall be nominated

by the Seller.
6. After endorsement of the said Bill of Exchange, the liability of

the Buyer towards the Seller ceases and the Seller shall become

holder in due course of the Bill of Exchange with all the rights as per

the Negotiable Instrument Act to claim value directly from the

Samsung Gulf Electronics, Dubai.
7. The Buyer, however, in good faith shall follow up with

Samsung Gulf Electronics, for payment of the said Bill of Exchange

at maturity expected in July, 2002 and shall in good faith keep the

Seller informed of any development in respect of settlement of the

Bill.
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8. This contract is governed by the Laws of India.”
3. Through a delivery receipt dated 28.1.2002, Sky Impex Limited
confirmed having received the product valued at US$13,70,000 under the
contract/agreement dated 1.12.2001. The buyer neither complained about
quality nor quantity. There was also no protest that the goods/product was
not received in time. The aforesaid receipt of goods implies the delivery of
the product by JCE Consultancy to Sky Impex Limited. On 1.2.2002,
Samsung, Dubai executed a bill of exchange valued at US$14,32,745 in
favour of the buyer Sky Impex Limited. This implies further delivery of
goods/product from Sky Impex Limited to Samsung, Dubai. The said bill of
exchange was then endorsed in favour of the seller JCE Consultancy, in
terms of agreement dated 1.12.2001.
4. Allegedly, on account of Samsung, Dubai not honouring its
commitment under the bill of exchange dated 1.2.2002, a legal notice
dated 20.12.2004 was issued by JCE Consultancy (the seller) through
counsel, on instructions from M.A. Packir (Shaikh Allauddin Paker Maiddin
– sole proprietor of JCE Consultancy) to Samsung, Dubai. Through the
aforesaid notice Samsung, Dubai, was called upon to make payment of
US$14,32,000 to JCE Consultancy within 48 hours, either by way of bank
draft or other smart investment. Samsung, Dubai, was warned, that in
case of non-receipt of payment, JCE Consultancy would be constrained to
take recourse to legal remedies, both civil and criminal. The legal notice
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issued by JCE Consultancy dated 20.12.2004 was responded to by
Samsung, Dubai, through counsel on 21.12.2004. In response, it was inter
alia asserted:
“…that a Credit Note was already been issued by the

beneficiary for the Bill of Exchange, Sky Impex Limited on 22

June 2002 and before the due date of payment. Therefore,

our client has no commitment or responsibility to pay your

client any amount in relating to the above mentioned Bill of

Exchange and your client can simply demand the amount of

the Bill of Exchange from Sky Impex Limited, who mislead

your client…”
It is therefore apparent, that in its response Samsung, Dubai,
acknowledged execution of a bill of exchange valued at US$14,32,000, in
favour of Sky Impex Limited, and thereby, its liability under the contract
dated 1.12.2001. Inspite thereof Samsung, Dubai, as a matter of defence,
in order to avoid liability, took up the position, that the bill of exchange
executed by it in favour of Sky Impex Limited had been satisfied, and the
beneficiary (Sky Impex Limited) had already issued a credit note in its
(Samsung, Dubai) favour on 22.6.2002.
5. JCE Consultancy filed a criminal complaint (complaint no.30 of
2005) under Sections 403, 405, 415, 418, 420 and 423 read with Sections
120B and 34 of the Indian Penal Code before the VIIth Additional Chief
Judicial Magistrate, Ghaziabad. In the complaint filed by Shaikh Allauddin
Pakir Maiddin – the sole proprietor of JCE Consultancy, Samsung, Dubai,
was impleaded as accused no.1 (appellant no. 5, herein); Byung Woo Lee,
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Managing Director of Samsung, Dubai, was impleaded as accused no.2
(appellant no.3, herein); Lee Kun Hee, President, Samsung Corporation,
was impleaded as accused no.3 (appellant no.1, herein); Yon Jung Yung,
Vice President and Chief Executive Officer, Samsung Corporation, was
impleaded as accused no.4 (appellant no. 2, herein); Dong Kwon Byon,
Ex. Managing Director, Samsung, Dubai, was impleaded as accused no.5
(appellant No. 4, herein); S.C. Baek, ex. Financial Advisor, Samsung,
Dubai, was impleaded as accused no.6; Sky Impex Limited, was
impleaded as accused no.7; and the Chairman of Sky Impex Limited, was
impleaded as accused no.8. Since the contents of the complaint are of
substantial relevance to the present controversy, the same are being
extracted hereunder:
“1. That the complainant company is dealing in consultancy

in the Engineering Field and Sh.Sheikh Allauddin Pakir

Maddin is its sole Prop. Who has been authorized on behalf of

the company to sign, verify and present the complaint and is

empowered to do all the acts.

2. That the accused no.1 is a Multi National Company who

have business in Foreign Countries and is reputed. Accused

No.2 is the Managing Director of accused No.1, Accused No.3

the President, Accused No.4 the Vice President and Chief

Executive Officer, Accused No.5 the Ex. Managing Director,

Accused No.6 the Ex-Financial Controller, who are being

officers of the company and are responsible each and every

done by the company.

3. That on dated 25.11.2011, the Accused no.7 placed

order for supply of Coke Calcination package with complainant

company and was told to make supply of the said items to

accused no.1 which paper is Annexure K-1. In this regard an

agreement (contract) between Accused No.7 and the

complainant company was executed vide L.A./100/019
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dt.1.12.01 which was signed by the Accused No.7 and the

authorized signatory of the complainant company which paper

is Annexure K-2.

4. That in compliance of the order dt.25.11.01 complainant

company supplied the ordered goods to Accused No.7 the

acknowledgement receipt was given by Accused No.7 vide

letter dt.28.1.02 which paper is Annexure K-3.

5. That the Accused No.7 handed over the supplied goods

by the complainant company to Accused No.1 and the handig

over – taking over receipt was acknowledged by the Accused

No.1 vide letter dt.1.2.02 in favour of the Accused no.7 which

paper is Annexure K-4.

6. That as per the clause No.5 of the agreement executed

between the complainant company and the Accused no.7 the

due payment of the received goods was to be made by the

Accused No.1 in the form of Bill of Exchange through Accused

No.7. The accused No.7 was to endorse the bill of Exchange

in favour of the complainant company so received by the

Accused No.7.

7. That the Accused No.1 in its Board Meeting of the

company passed a resolution on 15.8.01 by virtue of which

Accused No.6 in addition to other works was also authorized

to sign Bill of Exchange. The said resolution has been signed

by Accused No.5 in the capacity of Director and Secretary, the

same is Annexure K-5.

8. That in accordance with aforesaid resolution, Accused

No.1 intimated their Bank Manager vide their letter dt.26.1.02

informing that Accused No.6 is authorized to issue Bill of

Exchange on behalf of Accused No.1 and the signatures of

the Accused No.6 were also attested vide the abovesaid letter.

The signature of Accused no.6 have been attested by the

Bank Officer of Accused No.1 which is Annexure K-6.

9. That Accused no.6 for and on behalf of Accused No.1

issued Bill of Exchange No.S.M.I.C. dt:1.2.02 for

Rs.14,32,745/- American Dollars under his signature in favour

of Accused No.7 after having received the ordered goods and

on being satisfied of its quality, the same was endorsed by the

Accused No.7 in favour of the complainant company in view of

the agreement executed between him and the complainant

company which is Annexure K-7.

10. That the complainant company made demand of

payment from the Accused No.1 against the Bill of Exchange

issued in favour of the Accused No.7 and endorsement
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thereon which the Accused No.1 did not pay despite repeated

demands from time to time. The complainant company sent a

legal demand notice dt: 20.12.04 through their Advocate to

Accused No.1 on not receiving the due payment which is

Annexure K-8, and a reply to the same was sent by Accused

No.1 on 21.12.04 through their Advocate stating therein that

the payment of the alleged Bill of Exchange has already been

made in favour of Accused No.7 on 22.6.02, they, therefore,

have no liability to discharge with regard to payment. The

reply to notice is Annexure K-9.

11. That the aforesaid statement of Accused No.1 is illegal

and contrary to law. The complainant company is the real

holder of the Bill of Exchange. Till the demand for payment

against the Bill of Exchange is made there is no question of

payment of the same. Only the holder is entitled to receive

the payment, therefore, the Accused No.1 along with Accused

No.7 do not want to make the payment to the complainant

company and they want to misappropriate the same.

12. That the complainant company is entitled to receive the

payment against the supplied goods which amounts to

14,32,745/- American Dollars from the Accused no.1

personally and jointly and the accused persons have

deliberately not paid the same.

13. That the accused persons have committed the above

offence punishable under Sec.403, 405, 415, 418, 420, 423,

120B, 34 Indian Penal Code.

It is therefore prayed that this Hon’ble Court may be

pleased to summon the accused persons and on proof they be

punished.”
Shaikh Allauddin Pakir Maiddin – the sole proprietor of JCE Consultancy,
examined himself under Section 200 of the Code of Criminal Procedure
before the VIIth Additional Chief Judicial Magistrate on 7.1.2005. In his
testimony he, inter alia, asserted that accused nos.2 to 6 were individually
and jointly liable/responsible for the activities of accused no.1 (Samsung,
Dubai). He deposed that on 25.11.2001 accused no.7 Sky Impex Limited
had placed an order with the complainant, whereupon an agreement dated
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1.12.2001 was executed between Sky Impex Limited (as buyer) and the
complainant – JCE Consultancy (as seller). He maintained, that the
complainant delivered the contracted goods to accused no.7 (Sky Impex
Limited), who further delivered the contracted goods to accused no.1
(Samsung, Dubai). He affirmed, that a receipt of the goods was also
issued by accused no.7 (Sky Impex Limited) vide a letter dated 1.2.2002.
It was maintained, in the statement of Shaikh Allauddin Pakir Maiddin, that
accused no.1, in a Board meeting, approved the proposal to authorize
accused no.6 (S.C. Baek, ex.-Financial Advisor, Samsung, Dubai) to sign
and issue bills of exchange, for and on behalf of Samsung, Dubai. He also
asserted, that a bill of exchange for US$14,32,745 was signed and issued
by accused no.6 on behalf of Samsung, Dubai, to accused no.7 (Sky
Implex Limited). He also deposed, that the said bill of exchange was
endorsed in favour of the complainant – JCE Consultancy, by accused no.7
(Sky Impex Limited). Shaikh Allauddin Pakir Maiddin averred, in his
statement, that despite repeated demands made to accused no.1, to
honour the bill of exchange dated 1.2.2002, no payment came to be made
by accused no. 1 to the complainant. Resultantly, on 20.12.2004 the
complainant sent a legal notice, through counsel, to accused no.1. In its
response dated 21.12.2004, through counsel, it was stated on behalf of the
accused (Samsung, Dubai), that the amount of the said bill of exchange
had already been made over to accused no.7 on 22.6.2002. He also
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asserted, that in reply to the notice, the accused adopted the position of no
liability towards the complainant under the bill of exchange dated 1.2.2002.
Shaikh Allauddin Pakir Maiddin, in his statement under Section 200 of the
Code of Criminal Procedure, contested the stance adopted by the accused
in response to the legal notice, by testifying that the complainant company
was the holder of the bill of exchange, consequent upon an endorsement
made thereupon by Sky Impex Limited. As such, the complainant – JCE
Consultancy maintained, that it was entitled to payment under the bill of
exchange. He also averred, that accused no.1 (Samsung, Dubai), in
collusion with accused no.7 (Sky Impex Limited), in order to deny payment
to the complainant, had adopted the aforesaid position. He asserted, that
the complainant – JCE Consultancy was entitled to recover payment under
the bill of exchange, individually and jointly from the accused. Besides
recording his statement under Section 200 of the Code of Criminal
Procedure, Shaikh Allauddin Pakir Maiddin also tendered copies of the
order sheet dated 2.11.2001, the agreement dated 1.12.2001, the delivery
receipt dated 28.1.2002, the performance certificate dated 1.2.2002,
proceedings of the Board meeting of accused no.1 approving the proposal
to authorize accused no.6, the letter dated 26.1.2002 (issued by accused
no.1 to its banker, informing its banker that accused no.6 was its
authorized signatory), the bill of exchange dated 1.2.2002 in the sum of
US$14,32,745 (issued in favour of Sky Impex Limited, duly endorsed to
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JCE Consultancy), the legal notice dated 20.12.2004 and its reply dated
21.12.2004.
6. Based on the aforesaid criminal complaint, the statement of Shaikh
Allauddin Pakir Maiddin under Section 200 of the Code of Criminal
Procedure, as also, the supporting documents, the VIIth Additional Chief
Judicial Magistrate, Ghaziabad passed an order dated 12.1.2005
summoning the accused under Sections 403, 405, 420 and 423 read with
Sections 120B and 24 of the Indian Penal Code for 3.2.2005. The order
passed by the VIIth Additional Chief Judicial Magistrate, Ghaziabad was
first assailed by the five appellants herein before the High Court of
Judicature at Allahabad by filing Criminal Miscellaneous Application No.
11404 of 2006. The aforesaid Criminal Miscellaneous Application was
disposed of on 13.11.2009. Through the instant appeal the appellants
have assailed the order passed by the High Court on 13.11.2009.
7. The primary contention advanced at the hands of the learned
counsel representing the five appellants before this Court was based on an
admitted sequence of facts. It was submitted, that none of the appellants
is an Indian citizen. It was also submitted, that none of the appellants have
resided in India, either before, or after the execution of the agreement
dated 1.12.2001, nor during its implementation. It was submitted, that
neither the criminal complaint nor the pre-summoning evidence recorded
under Section 200 of the Code of Criminal Procedure, attributes any act of
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omission/commission, within the territorial jurisdiction of India, to any of the
five appellants herein. As such, according to learned counsel, the
provisions of the Indian Penal Code cannot be relied upon to determine the
culpability of the appellants. In order to substantiate the instant contention,
our attention was invited by the learned counsel for the appellants, to
Section 2 of the Indian Penal Code, which reads as under:
“2. Punishment of offences committed within India – Every

person shall be liable to punishment under this Code and not

otherwise for every act or omission contrary to the provisions

thereof, of which he shall be guilty within India.
Based on the Section 2 of the Indian Penal Code, it was sought to be
emphasized, that culpability of an accused under Section 2 of the Indian
Penal Code can only be relatable to an act “…of which he shall be guilty
within India”. Based on aforesaid legal and factual position, it was sought
to be emphasized, that the appellants having not committed any act within
the territorial jurisdiction of India, cannot be blamed of being guilty of an act
“within India”, and as such, cannot be proceeded against in a Court in India
for facing prosecution under the provisions of the Indian Penal Code.
8. In order to support the aforesaid primary contention, it was also
emphasized, that appellant nos. 1 to 4 are all foreign citizens, whereas,
appellant no. 5 is a foreign company incorporated in Dubai. Appellant no.
1, we are told, was Chairman and Director of Samsung, South Korea. It is
contended, that he has had nothing to do with Samsung, Dubai. We are
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informed, that he lives in South Korea. Appellant no. 2, we are informed,
was a former Vice Chairman and CEO of Samsung, South Korea. He also
has had nothing to do with Samsung, Dubai. He too lives in South Korea.
Learned counsel for the appellant contends, that on the date of the
execution of the agreement dated 1.12.2001, appellant no. 3 was the
Managing Director, of Samsung, Dubai. He is no longer so. He too now
resides in South Korea. Likewise, according to learned counsel, appellant
no. 4, on the date of execution of the agreement dated 1.12.2001, was ex-
Managing Director of Samsung, Dubai. He also resides in South Korea.
Appellant no. 5, we were told, is a foreign company incorporated in Dubai
(in the United Arab Emirates). It has its registered office at Dubai. It is
also asserted, that the five appellants herein, have no concern with the
other accused, in the criminal complaint filed by JCE Consultancy.
9. Additionally, it was submitted, that respondent no. 2-JCE
Consultancy, is a proprietary concern under the sole ownership of Shaikh
Allauddin Pakir Maiddin. The aforesaid concern according to the
appellants carries on its business activities either in Delhi or at Ghaziabad,
in India. It was contended on behalf of the appellants, that as per the
averments made in the complaint, it was Sky Impex Limited which had
placed an order with JCE Consultancy under the agreement dated
1.12.2001. Sky Impex Limited, according to the learned counsel for the
appellants, is a foreign company registered in the British Virgin Islands. It
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was submitted, that the complainant has not disclosed where and how the
agreement was executed. It was submitted, that there is no averment at
the hands of the complainant, that the agreement dated 1.12.2001 was
executed in India. It was asserted, that even according to the averments
made in the complaint, the goods were supplied to Sky Impex Limited, and
not to any one or more of the appellants herein. It was pointed out, that
the complaint does not even narrate how or from where the goods were
exported from India. Or how, and from where, delivery was taken by Sky
Impex Limited. It was contended, that the complainant has merely
asserted, that the goods were delivered by Sky Impex Limited to Samsung,
Dubai. It is pointed out, that the complaint does not disclose how and
where, the delivery of goods was made by Sky Impex Limited to Samsung,
Dubai.
10. We shall now endeavour to deal with the primary contention
advanced on behalf of the appellant. The instant contention has a
jurisdictional flavour. We shall deal with the matter, firstly on the basis of
an analysis of some of the provisions of the Code of Criminal Procedure.
For the instant purpose reference may first of all be made to Section 4 of
the Code of Criminal Procedure which is reproduced hereunder :
4. Trial of offense under the Indian Penal Code and

other laws-
1. All offences under the Indian Penal Code (45

of 2860) shall be investigated, inquired into, tried, and otherwise
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dealt with according to the provisions hereinafter contained.

 
2. All offences under any other law shall be

investigated, inquired into, tried, and otherwise dealt with

according to the same provisions, but subject to any enactment

for the time being in force regulating the manner or place of

investigating, inquiring into, trying or otherwise dealing with such

offences.”
It is apparent, from a perusal of Section 4, that inquiry and trial of offences
contemplated under the Indian Penal Code, are to be conducted in the
manner stipulated under the Code of Criminal Procedure. The offences in
this case, as noticed above, have been framed under sections 403
(dishonest misappropriation), 405 (criminal breach of trust), 420 (cheating)
and 423 (dishonest/fraudulent execution of an instrument containing a
false statement relating to consideration) of the Indian Penal Code. The
denial of liability by the accused under the agreement dated 1.12.2001 is
allegedly the basis of the criminal complaint lodged by JCE Consultancy.
The place where the agreement was executed, as well as, the places
where different constituents of the agreement were carried out, are
material factors to determine the relevant court(s) which would/could have
jurisdiction in the matter. The place where the consequence of the criminal
action (alleged in the complaint) ensues, may also be relevant for the said
purpose. And finally, place(s) of receipt and dispatch of communications
exchanged by the rival parties, revealing deception as an ingredient of
cheating alleged by the complainant, can also be relevant to identify the
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court(s) having jurisdiction in the matter. The aforesaid relevance
becomes apparent from Sections 179, 181 and 182 of the Code of
Criminal Procedure, which we shall presently examine.
11. The aforesaid examination has to be based on certain salient facts,
which we may first recapitulate. The complaint alleges the execution of a
contract dated 1.12.2001, wherein consideration in the form of
goods/product produced in India, by the seller (JCE Consultancy) stationed
in India, were to be supplied to the buyer (Sky Impex Ltd.), in Dubai. The
reciprocal consideration in the agreement was in the form of a monetary
payback, by the eventual recipient of goods (Samsung, Dubai), to the
seller in India (JCE Consultancy). The complaint narrates a circuitous
passage of the goods from the seller (JCE Consultancy) to the eventual
buyer (Samsung, Dubai), as also, the return consideration from the said
buyer (Samsung, Dubai) to the seller. Both the aforesaid transactions,
according to the complainant, passed through an intermediary – Sky Impex
Limited. The agreement, according to the complainant, also contemplates
commission for the intermediary (Sky Impex Ltd.). There is definiteness in
the complainant’s allegations of the transfer of goods from India, as also,
the receipt of monetary consideration in India. The complainant has
supported his allegations on the basis of documents, wherein each
document connects the passing of goods from the seller, and of the
reciprocal monetary consideration from the eventual buyer (Samsung,
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Dubai) to the seller (JCE Consultancy) through a fine unbroken chain of
events. The foundation of the complaint has been laid on the basis of the
agreement dated 1.12.2001, whereby the complainant wishes to establish
the corresponding obligations of the rival parties. Through the delivery
receipt dated 28.1.2002, the complainant desires to demonstrate
communication of the goods by the seller, as also, their receipt by the
buyer. Based on the execution of the bill of exchange on 1.2.2002 by, the
authorized signatory of Samsung, Dubai, and the endorsement of the bill of
exchange on 1.2.2002 itself by Sky Impex Limited, in favour of the
complainant JCE Consultancy as reciprocal consideration; exactly in the
manner contemplated under the agreement dated 1.12.2001; the
complainant desires to establish the liability of Samsung, Dubai, under the
agreement dated 1.12.2001.
12. On the question of jurisdiction, based on the factual position
indicated above, reference may first be made to Section 179 of the
Criminal Procedure Code which is being reproduced hereunder:-
“179. Offence triable where act is done or consequence ensues:

When an act is an offence by reasons of anything which has been

done and of a consequence which has ensued, the offence may be

inquired into or tried by a Court within whose local jurisdiction such

thing has been done or such consequence has ensued.”
In Section 179 aforesaid, two phrases need to be noticed. Firstly,
“anything which has been done”, with reference to the offence. And
secondly, “consequence which has ensued”, also with reference to the
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offence. Both the aforesaid phrases substantially enlarge and magnify the
scope of jurisdiction contemplated under Section 179 aforesaid, so as to
extend the same over areas contemplated by the two phrases. In so far as
the present controversy is concerned, the offence(s) alleged in the
complaint emerge from the fact, that even though the complainant faithfully
performed its obligations under the agreement/contract dated 1.12.2001,
the accused dishonestly/fraudulently/falsely denied/avoided the reciprocal
obligation(s) which they were obliged to perform thereunder. In our view,
the words “anything which has been done”, for the present controversy,
would extend to anything which has been done in furtherance of the
execution of the agreement dated 1.12.2001. The facts constituting the
performance of obligations by the complainant, actually constitute the
foundational basis for the criminal accusation levelled against the accused
(in refusing to honour the corresponding obligation). The instant
foundational basis for establishing the commission of the offence, in our
view, would fall within the ambit of the words “anything which has been
done” used in the aforesaid provision. In the absence of the instant
affirmation of the factual position, in the present controversy, the culpability
of the accused cannot be established. In the complaint it is asserted, that
the contracted goods/product were/was supplied by JCE Consultancy from
Ghaziabad in India. The factum of having supplied the goods/product to
Samsung, Dubai through Sky Impex Limited, is sought to be established
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not only through a delivery receipt dated 28.1.2002 (issued by the
intermediary buyer – Sky Impex Limited), but also, on the basis of the bill of
exchange executed on 1.2.2002 by Samsung, Dubai (the ultimate
beneficiary), constituting the payment for the goods/product purchased.
The factum of supply of goods from Ghaziabad (in India) to Dubai (in the
United Arab Emirates), as an essential component of the offence(s)
allegedly committed by the accused, in our view, is relatable to the words
“anything which has been done” used in Section 179 aforesaid. This
factual position, in our view, is sufficient to vest jurisdiction under Section
179 of the Code of Criminal Procedure, with a competent Court at
Ghaziabad.
13. Besides the aforesaid, under Section 179 of the Code of Criminal
Procedure, even the place(s) wherein the consequence (of the criminal
act) “ensues”, would be relevant to determine the court of competent
jurisdiction. Therefore, even the courts within whose local jurisdiction, the
repercussion/effect of the criminal act occurs, would have jurisdiction in the
matter. The reciprocal consideration, flowing out of the agreement dated
1.12.2001, is comprised of a monetary payback. The aforesaid monetary
payback was allegedly transmitted by the recipient of goods (Samsung,
Dubai) to the intermediary buyer (Sky Impex Limited), by way of a bill of
exchange valued at US$ 14,32,745, on 1.2.2002. The aforesaid bill of
exchange was then endorsed by Sky Impex Limited, to the complainant-
2

 

JCE Consultancy. JCE Consultancy maintains, that it holds the said bill of
exchange at Ghaziabad in India. The execution of the bill of exchange (by
Samsung, Dubai) and its endorsement (by Sky Impex Limited) is in
consonance with the terms and conditions of the agreement dated
1.12.2001. Upon alleged denial of payment to JCE Consultancy (under
the bill of exchange dated 1.2.2002), a legal notice dated 20.12.2004 came
to be issued demanding payment. In its response dated 21.12.2004,
Samsung, Dubai, allegedly dishonestly/fraudulently/falsely denied
liability/responsibility. Since the complainant is allegedly holding the bill of
exchange dated 1.2.2001 at Ghaziabad in India, the consequence
emerging out of the said denial of encashment of the bill of exchange, in
our view, would be deemed to “ensue” at Ghaziabad in India. In the
instant view of the matter, the competent Court at Ghaziabad in India, in
our view, would have jurisdiction in the matter under Section 179 of the
Code of Criminal Procedure.
14. Insofar as Section 181 of the Code of Criminal Procedure is
concerned, while inviting our attention to the same, learned counsel for the
complainant-JCE Consultancy, in order to emphasize the issue of
jurisdiction, brought to our notice sub-section (4) thereof. Section 181(4) of
the Code of Criminal Procedure is being extracted hereunder:-
181. Place of trial in case of certain offences –

(1) ………………..

(2) ………………..
2

 

(3) ………………..

(4) Any offence of criminal misappropriation or of criminal breach

of trust may be inquired into or tried by a Court within whose local

jurisdiction the offence was committed or any part of the property

which is the subject of the offence was received or retained, or was

required to be returned or accounted for, by the accused person.
A perusal of the aforesaid provision leaves no room for any doubt, that in
offences of the nature as are subject matter of consideration in the present
controversy, the court within whose local jurisdiction, the whole or a part of
the consideration “…were required to be returned or accounted for…”
would have jurisdiction in the matter. In the present case, a bill of
exchange dated 1.2.2002 was issued on behalf of Samsung, Dubai, to Sky
Impex Limited; Sky Impex Limited, in terms of the agreement dated
1.12.2001, endorsed the aforesaid bill of exchange in favour of the
complainant-JCE Consultancy; JCE Consultancy claims to be holding the
aforesaid bill of exchange at Ghaziabad in India. Being holder of the bill of
exchange dated 1.2.2002, JCE Consultancy demanded the right of
payment thereunder, which is being denied by the accused. Since the bill
of exchange issued by Samsung, Dubai, dated 1.2.2002 for US$14,32,745
was received, and is allegedly being held by JCE Consultancy at
Ghaizabad in India; the aforesaid bill of exchange, according to the
complainant, has to be honoured/realized at the place where it is held (i.e.
at Ghaziabad, in India). In the instant alleged factual background of the
matter, we are of the view, that the competent court at Ghaziabad in India,
2

 

would have jurisdiction to hold the trial of the complaint under Section
181(4) of the Code of Criminal Procedure.
15. Lastly, reference may be made to section 182 of the Criminal
Procedure Code which is being reproduced hereunder:-
182. Offences committed by letters, etc. –

(1) Any offence which includes cheating may, if the deception is

practiced by means of letters or telecommunication messages, be

inquired into or tried by any Court within whose local jurisdiction

such letters or messages were sent or were received; and any

offence of cheating and dishonestly inducing delivery of property

may be inquired into or tried by a Court within whose local

jurisdiction the property was delivered by the person deceived or

was received by the accused person.
(2) Any offence punishable under section 494 or section 495 of

the Indian Penal Code (45 of 1860) may be inquired into or tried by a

Court within whose local jurisdiction the offence was committed or

the offender last resided with his or her spouse by the first marriage,

or the wife by first marriage has taken up permanent residence after

the commission of offence.”
A perusal of section 182 (extracted above) reveals that the said provision
can be invoked to determine jurisdiction in respect of a number of offences
which include cheating as a component. When acts of
fraud/dishonesty/deception, relatable to the offence(s), contemplated
under Section 182 aforementioned, emerge from
communications/messages/letters etc., the place(s) from where the
communications/messages/letters etc. were sent, as also, the places at
which the same were received, would be relevant to determine the court of
competent jurisdiction. The allegations contained in the complaint reveal,
2

 

that the complainant-JCE Consultancy, addressed a legal notice dated
20.12.2004 to Samsung, Dubai, calling upon Samsung, Dubai, to honour
its reciprocal commitment of the monetary payback contemplated under
the agreement dated 1.12.2001. In its response dated 21.12.2004,
Samsung, Dubai, denied liability, by asserting that Samsung, Dubai, had
no commitment/responsibility towards JCE Consultancy, under the bill of
exchange dated 1.2.2002. The aforesaid denial according to the
complainant, constitutes the basis of the criminal complaint filed against
the accused. The place at which the said response on behalf of Samsung,
Dubai, was received, in our view, would be relevant to determine the Court
of competent jurisdiction, under Section 182 of the Criminal Procedure
Code. Even if the response was received by the counsel for JCE
Consultancy in a place other than Ghaziabad (though in India), still the
competent court at Ghaziabad in India, in our view, would be vested with
jurisdiction, as under Section 178 (d) of the Code of Criminal Procedure, in
cases where an offence consists of several acts carried out under different
jurisdictions, a court having jurisdiction where any one of such acts was
committed, will be competent to try the same.
16. In view of the aforesaid deliberations, it is not legitimate for the
appellants to contend, that the actions attributed by JCE Consultancy to
the accused, have no connectivity to territorial jurisdiction in India. Section
179 of the Code of Criminal Procedure vests jurisdiction for inquiry and trial
2

 

in a Court, within whose jurisdiction anything has been done with reference
to an alleged crime, and also, where the consequence of the criminal
action ensues. Section 181(4) of the Code of Criminal Procedure leaves
no room for any doubt, that culpability is relatable even to the place at
which consideration is required to be returned or accounted for. Finally,
Section 182 of the Code of Criminal Procedure postulates that for offences
of which cheating is a component, if the alleged act of deception is shown
to have been committed, through communications/letters/messages, the
court within whose jurisdiction the said communications/letters/messages
were sent (were received), would be competent to inquire into and try the
same. Thus viewed, it is not justified for the appellants to contend, that the
allegations levelled by the complainant against the accused, specially in
respect of the five appellants herein, are not relatable to territorial
jurisdiction in India, under the provisions of the Code of Criminal
Procedure.
17. Our deliberations in the preceding paragraphs are based on the
facts of the present case, as also, the offences which have been
incorporated in the impugned summoning order. We would have had to
examine the scope of Section 2 of the Indian Penal Code, which
constitutes the plank on which submissions advanced on behalf of the
appellants rest. But that may not really be necessary, as our research lead
us to the decision rendered by this Court in Mobarik Ali Ahmed vs. The
2

 

State of Bombay (1958) SCR 328. This Court in the aforesaid judgment
held as under:-
“(24) It would be desirable at this stage to notice certain well-

recognised concepts of International Law bearing on such a

situation. Wheaton in his book on Elements of International Law

(Fourth Edition) at page 183, dealing with criminal jurisdiction states

as follows:

“By the Common Law of England, which has been adopted, in

this respect, in the United States, criminal offences are considered

as altogether local, and are justiciable only by the courts of that

country where the offence is committed.”

At page 182 thereof it is stated as follows :

“The judicial power of every independent State, extends (with

the qualifications mentioned earlier) to the punishment of all

offences against the municipal laws of the State, by whomsoever

committed, within the territory.”

In Hackworth’s Digest of International Law (1941 Edition), Vol.II, at

page 188 there is reference to opinions of certain eminent American

Judges. It is enough to quote the following dictum of Holmes J.

noticed therein :

“Acts done outside a jurisdiction, but intended to produce and

producing detrimental effects within it, justify a State in punishing the

cause of the harm as if he had been present at the effect, if the State

should succeed in getting him within its power.”

In Hyde’s International Law (Second Edition), Vol.I, at page 798, the

following quotation from the judgment of the permanent Court of

International Justice dated September 7, 1927, in the case relating

to S.S. Lotus (Publications, Permanent Court of International

Justice, Series A, Nos.10, 23) is very instructive :

“It is certain; that the courts of many countries, even of

countries which have given their criminal legislation a strictly

territorial character, interpret criminal law in the sense that offences,

the authors of which at the moment of commission are in the territory

of another State, are nevertheless to be regarded as having been

committed in the national territory, if one of the constituent elements

of the offence, and more especially its effects, have taken place

there.”

This quotation is also noticed in Openheim’s International Law

(Eighth Ed.), Vol.I at page 332 in the footnote. In noticing the

provisions of International Law in this context we are conscious that

what we have to deal with in the present case is a question merely
2

 

of municipal law and not of any International Law. But as is seen

above, the principles recognized in International Law in this behalf

are virtually based on the recognition of those principles in the

municipal law of various countries and is really part of the general

jurisprudence relating to criminal responsibility under municipal law.

No doubt some of the above dicta have reference to offences

actually committed outside the State by foreigners and treated as

offences committed within the State by specific legislation. But the

principle emerging therefrom is clear that once it is treated as

committed within the State, the fact that he is a foreigner corporeally

present outside at the time of such commission is no objection to the

exercise of municipal jurisdiction under the Municipal law. This

emphasizes the principle that exercise of criminal jurisdiction

depends on the locality of the offence and not on the nationality of

the alleged offender (except in a few specified cases such as

Ambassadors, Princes etc.).

25. Learned counsel for the appellant has relied on various

passages in the judgment of Cockburn, C. J., in the well-known case

The Queen v. Keyn (Franconia’s case) [(1876) 2 Ex D 63]. Fourteen

learned Judges participated in that case and the case appears to

have been argued twice. Eight of them including Cockburn, C. J.,

formed the majority. Undoubtedly there are various passages in the

judgment of Cockburn, C. J., which prima facie seem capable of

being urged in favour of the appellant’s contention. In particular the

following passage at p. 235 may be noticed:

“The question is not whether the death of the deceased, which

no doubt took place in a British ship, was the act of the defendant in

such ship, but whether the defendant, at the time the act was done,

was himself within British jurisdiction.”

The learned Chief Justice, however, recognized at p. 237 that there

were certain American decisions to the contrary. Now the main

debate in that case was whether the sea upto three mile limit from

the shore is part of British territory or whether in respect of such

three mile limit only limited and defined extraterritorial British

jurisdiction extended which did not include the particular criminal

jurisdiction under consideration. In respect of this question, as a

result of the judgment, the Parliament had to enact the Territorial

Waters Jurisdiction Act, 1878 (41 & 42 Vict., c. 73) which in

substance overruled the view of the majority and of the learned

Chief Justice on this point. The main principle of criminal jurisdiction,

however, relevant for our purpose was enunciated in the minority

judgment of Amphlett, J. A., at p. 118, that “it is the locality of the
2

 

offence that determines the jurisdiction” implying by contrast that it is

not the nationality of the offender.

26. The question, however, that still remains for consideration is

whether there is anything in the language of the sections of the

Indian Penal Code relating to the general scheme of the Code which

compels the construction that the various sections of the Penal Code

are not intended to apply to a foreigner who has committed an

offence in India while not being corporeally present therein at the

time. For this purpose we are not concerned with such of the

sections of the Penal Code, if any, which indicate the actual

presence of the culprit as a necessary ingredient of the offence. Of

course, for such offences a foreigner ex hypothesi not present at the

time in India cannot be guilty. The only general sections of the Indian

Penal Code which indicate its scheme in this behalf are Sections 2,

3, and 4 and as they stand at present, they are as follows:

“2. Every person shall be liable to punishment under this Code

and not otherwise for every act or omission contrary to the

provisions thereof, of which he shall be guilty within India.

3. Any person liable, by any Indian Law, to be tried for an

offence committed beyond India shall be dealt with according to the

provisions of this Code for any act committed beyond India in the

same manner as if such act had been committed within India.

4. The provisions of this Code apply also to any offence

committed by-

(1) any citizen of India in any place without and beyond

India;

(2) any person on any ship or aircraft registered in India

wherever it may be.

Explanation:– In this section the word `offence’ includes every

act committed outside India which, if committed in India, would be

punishable under this Code.”

Sections 3 and 4 deal with offences committed beyond the territorial

limits of India and Section 2 obviously and by contrast refers to

offences committed within India. It appears clear that it is Section 2

that has to be looked to determine the liability and punishment of

persons who have committed offences within India. The section

asserts categorically that every person shall be liable to punishment

under the Code for every act or omission contrary to the provisions

of the Code and of which he shall be guilty within India. This

recognises the general principle of criminal jurisdiction over persons

with reference to the locality of the offence committed by them,

being within India. The use of the phrase “every person” in Section 2

as contrasted with the use of the phrase “any person” in Section 3
2

 

as well as Section 4 (2) of the Code is indicative of the idea that to

the extent that the guilt for an offence committed within India can be

attributed to a person, every such person without exception is liable

for punishment under the Code. Learned counsel for the appellant

suggests that the phrase “within India” towards the end of Section 2

must be read with the phrase “every person” at the commencement

thereof. But this is far-fetched and untenable. The plain meaning of

the phrase “every person” is that it comprehends all persons without

limitation and irrespective of nationality, allegiance, rank, status,

caste, colour or creed. This section must be understood as

comprehending every person without exception barring such as may

be specially exempt from criminal proceedings or punishment

thereunder by virtue of the Constitution (See Article 361(2) of the

Constitution) or any statutory provisions or some well-recognised

principle of international law, such as foreign sovereigns,

ambassadors, diplomatic agents and so forth, accepted in the

municipal law.

27. Learned counsel drew our attention to a number of sections in

the Penal Code, viz., Sections 108-A, 177, 203, 212, 216, 216-A and

236. The argument based on reference to these sections is that

wherever the legislature in framing the Penal Code wanted to

legislate about anything that has reference to something done

outside India it has specifically said so and that therefore it may be

expected that if it was intended that the Penal Code would refer to a

person actually present outside India at the time of the commission

of the offence, it would have specifically said so. We are unable to

accept this argument. These sections have reference to particular

difficulties which arose with reference to what may be called, a

related offence being committed in India in the context of the

principal offence itself having been committed outside India — that is

for instance, abetment, giving false information and harbouring

within India in respect of offences outside India. Questions arose in

such cases as to whether any criminal liability would arise with

reference to the related offence, the principal offence itself not being

punishable in India and these sections were intended to rectify the

lacunae. On the other hand, a reference to Section 3 of the Code

clearly indicates that it is implicit therein that a foreigner who

commits an offence within India is guilty and can be punished as

such without any limitation as to his corporeal presence in India at

the time. For if it were not so, the legal fiction implicit in the phrase

“as if such act had been committed within India” in Section 3 would

not have been limited to the supposition that such act had been
2

 

committed within India, but would have extended also to a fiction as

to his physical presence at the time in India.

28. In the argument before us, there has been some debate as to

what exactly is the implication of the clause “of which he shall be

guilty within India” in Section 2 of the Code. It is unnecessary to

come to any definite conclusion in respect thereto. But it is clear that

it does not support the contention of the appellant’s counsel. We

have, therefore, no doubt that on a plain reading of Section 2 of the

Penal Code, the Code does apply to a foreigner who has committed

an offence within India notwithstanding that he was corporeally

present outside.

… … …

32. After giving our careful consideration to the questions raised

before us, we are clearly of the opinion that even on the assumption

that the appellant has ceased to be an Indian citizen and was a

Pakistani national at the time of the commission of the offence, he

must be held guilty and punished under the Indian Penal Code

notwithstanding his not being corporeally present in India at the

time.” (emphasis is ours)
We are in respectful agreement with the conclusion drawn in Mobarik Ali
Ahmed’s case (supra). It is unnecessary for us to again repeat the same.
In view of the above, we are satisfied that all components of the
submissions advanced on behalf of the appellants, more particularly their
foreign nationality, their residence outside India, and the fact that they
were not present in India when the offence(s) was/were allegedly
committed, are of no consequence, in view of the aforesaid decision
rendered by this Court. We, therefore, find no merit in the first contention
advanced on behalf of the appellants in the instant case, that the Court of
the VIIth Additional Chief Judicial Magistrate could not have entertained
the complaint filed by JCE Consultancy against the appellants.
3

 

18. Another allied submission (the second submission), advanced on
the same lines as the first contention was, that consequent upon the
passing of goods/product to Samsung, Dubai, S.C. Baek (accused no. 7) is
said to have paid the consideration amount through a bill of exchange. It
was submitted, that even as per the averments made by the complainant-
JCE Consultancy, the aforesaid bill of exchange was executed by S.C.
Baek in Dubai. And as such, that liability under the aforesaid bill of
exchange would ensue only at Dubai. It was also contended, that the
aforesaid bill of exchange was allegedly drawn on behalf of Samsung,
Dubai, which is a company registered at Dubai (in the United Arab
Emirates). According to the learned counsel representing the appellants
herein, even the consideration, as per the averments made in the
complaint, was liable to pass from Samsung, Dubai, to Sky Impex Limited
at Dubai (in the United Arab Emirates). It is submitted, that thereafter the
said bill of exchange came to be settled between the executor thereof
(Samsung, Dubai) and the beneficiary thereunder (Sky Impex Limited),
inasmuch as, Sky Impex Limited, consequent upon the settlement of the
said bill of exchange, allegedly executed a credit note in favour of
Samsung, Dubai on 22.6.2002. This credit note was also allegedly
executed at Dubai. It is further submitted, that the aforesaid bill of
exchange was stated to have been endorsed in favour of the complainant
by Sky Impex Limited. This endorsement, according to the learned
3

 

counsel for the appellants, was also made at Dubai (in the United Arab
Emirates). As such, it was contended by the learned counsel for the
appellants, that even the passing of consideration in furtherance of the
alleged contract dated 1.12.2001, took place beyond the territorial barriers
of India. It was, therefore, asserted on behalf of the appellants, that Courts
in India, by no stretch of imagination, can have jurisdiction over the matter.
19. It is not necessary for us to re-examine the issue projected at the
hands of the learned counsel for the appellants, in terms of the factual
position noticed in the foregoing paragraph, because the instant
submission, is in sum and substance, exactly akin to the one raised on
behalf of the appellants as their primary submission. Having threadbare
examined the primary contention, we are satisfied in rejecting the instant
contention of the appellants, for exactly the same reasons which had
weighed with us while dealing with the primary contention raised on behalf
of the appellants.
20. The third submission advanced at the hands of the learned counsel
for the appellants was, that the complaint lodged by JCE Consultancy was
based on an agreement dated 1.12.2001. The aforesaid agreement was
between JCE Consultancy and Sky Impex Limited. It was submitted, that
the appellants herein are not privy to the aforesaid contract/agreement.
Accordingly, it was contended, that the grievance of the complainant, if
any, could have been raised only as against Sky Impex Limited. It was
3

 

asserted, that the appellants are independent of the persons who are privy
to the agreement dated 1.12.2001. It is asserted, that only such persons
who are privy to the contract/agreement dated 1.12.2001, can be
proceeded against for breach of the same. Stated differently, it is
contended , that even if the parties to the contract/agreement dated
1.12.2001 had breached the same, the appellants could not be held liable
therefor. Accordingly, it is asserted, that the appellants herein having no
role to play under the contract/agreement dated 1.12.2001, have been
wrongfully involved in the controversy by the complainant-JCE
Consultancy.
21. Having perused the pleadings filed before this Court, and having
heard the learned counsel for the complainant-JCE Consultancy, as also,
Sky Impex Limited, it becomes necessary for us to record their respective
stances in respect of the involvement of the five appellants, with the
allegations made by JCE Consultancy. First and foremost, it is necessary
to mention, that in the complaint filed by JCE Consultancy, it was expressly
averred in paragraph 1, that all the appellants herein were involved in
“each and every act done by the company” (Samsung, Dubai). In the
statement recorded under Section 200 of the Code of Criminal Procedure,
Shaikh Allauddin Paker Maiddin on 7.1.2005 deposed, that the appellants
herein were individually and jointly liable for the commission of offences
emerging from the complaint. How they were liable (if at all), is a question
3

 

of evidence, which would emerge only after evidence is recorded by the
trial court. But what is interesting is, that Sky Impex Limited, though an
accused in the complaint filed by JCE Consultancy, has totally supported
the accusation(s) levelled by the complainant against the appellants. In a
detailed response to the culpability of the appellants herein, Sky Impex
Limited has adopted a firm stance, wherein it has averred as under:-
“10. It is submitted that the applicant, through other group

companies Sky Impex Isle of Man, had been conducting business

with petitioner/accused since the year 1999. Various other bills of

exchange had been drawn by the applicant and accepted by S.C.

Baek-accused with complete authority vested in him via Board

resolutions issued by petitioner/accused and substantiated by

petitioner/accused through Board resolution of their parent company

in South Korea.

11. It is further pertinent to mention here that the applicant also

had been involved in a bonafide discounting of bill numbers SM 4B

for USD 2,550,432 (Rs.11 crores approx.) and SM 3B for USD

2,448,340 (Rs.11 crores approx.) maturing July 20th, 2002 with

Bankhaus Wolbern in Germany and HSBC Bank (Hong Kong and

Shangai Bank) in London/Dubai, which bills had been duly accepted

by petitioner/accused with full knowledge of petitioner/accused,

based at the head office in South Korea. It is submitted that in one

of the cases, on July 24, 2002 Bankhaus Wolbern a bank in

Germany, to whom the bills were endorsed by the applicant in 2002

made a demand for payment of bill numbers SM 4B and SM 3B to

the office of petitioner/accused in South Korea as petitioner/accused

was trying to renegade on their bonafide obligation to discharge the

bills in their capacity as the acceptor. The bank after making their

investigations concluded that operational control of these

transactions were vested with the offices of the petitioner/accused in

Seoul, South Korea and accordingly issued threat for legal action to

the petitioner/accused at their Head Office in Seoul, to black list the

Samsung Group. A true copy of the said letter dated July 24th, 2002

is being filed as Annexure A-8. It is submitted that within a short

time span of receiving the said letters from Bankhaus Wolbern, USD

3.6 million (Rs.16.2 crores) the bills were paid by accused No. 1

through Emirates International Bank transfer signed jointly by
3

 

accused no. 5 and to Bankhaus Wolbern on Aug. 14, 2002. A true

copy of said transaction is being filed as Annexure A-9…….

12. It is submitted that in Nov. 2003 HSBC Bank Dubai was paid

USD 4.85 million (approx. 21.8 crores) by accused no. 1 through

bank transfer from Emirates Bank International instructions to

discharge bill numbers SM 2A for USD 2,440,925 (approx. 11

crores) – drawn July 8th, 2002, No. SM 17 for USD 1,038,725

(approx. 4.6 crores) drawn July 14th, 2002 and No. SM 18 for USD

1,095,070 (approx. 5 crores) drawn July 14, 2002. It is submitted

that these bills of exchange were from the same series as the bill of

exchange drawn by the applicant and accepted by Mr. S.C. Baek

(accused no. 6) that is now the subject of the criminal case filed at

Ghaziabad by the complainant/respondent. These bills were

endorsed to HSBC Bank in London and were duly and legally paid

by accused number 1 under instructions from the office of the

petitioner/accused under whose orders other set of bills amounting

to USD 3.6 million (16.2 crores) had been paid by accused no. 1 as

indicated in para 11 above. The transfer instructions were duly

signed jointly by accused no. 5, the Managing Director of accused

no. 1 alongside accused Mr. S.C. Baek. The documents including

the bills of exchange, and the instructions to remit are money are

collectively filed and marked as Annexure A-10…………………

It is quiet apparent that had the bills really been part of a criminal

enterprise, as alleged, no corporation big or small would voluntarily

pay out without protest or demur, these sums to the tune of

approximately 18 crores to Bankhaus Wolbern in Germany and 21.8

crores to HSBC in Dubai. It would be pertinent to mention here that

the bills to Bankhaus Wolbern were paid in August 2002 almost 18

months before the police complaint was filed in Dubai on January 7th,

2004 against the applicant and accused no. 6, Mr. S.C. Baek who

continued in his job as Financial Controller with accused no. 1 right

until Dec. 2003 i.e. sixteen (16) months after the bills were paid to

Bankhaus Wolbern by accused no. 5 the Managing Director of

accused no. 1.” (the term applicant in the extract, is a reference to

Sky Impex Limited; and the term petitioner/accused, is a reference to

the appellants).
Even though it was wholly unnecessary for us to examine, at the present
juncture, the involvement or the culpability of the appellants herein, in the
background of the accusations levelled by JCE Consultancy, and the
3

 

supporting stance of Sky Impex Limited, we are of the view, that even the
pleadings before us, prima facie demonstrate the connectivity of the
appellants, with the foundational basis expressed in the complaint. We
are, therefore, satisfied, at the present juncture, that it is undesirable to
exculpate the appellants from the proceedings initiated by JCE
Consultancy before the VIIth Additional Chief Judicial Magistrate,
Ghaziabad. Needless to mention, that the issue under reference may be
reagitated, after evidence has been produced by the rival parties before
the trial court.
22. The fourth contention advanced at the hands of the learned counsel
for the appellants was aimed at demonstrating; firstly, that the charges, as
have been depicted in the summoning order, were not made out; secondly,
that the appellants herein were functionaries of a company, and therefore,
per se could not be made vicariously liable for offences emerging out of
actions allegedly taken in furtherance of the discharge of their
responsibilities towards the company; and thirdly, that none of the
appellants had any concern whatsoever (even as functionaries of the
concerned company), with the allegations levelled by the complainant. To
the credit of the learned counsel representing the appellants, we must
place on record, that reliance was placed on legal precedent, to
substantiate the aforesaid submissions. We are however of the view, that
it is not necessary for us at the present juncture to deal with any of the
3

 

aforesaid submissions, in view of the legal position expressed by this Court
in its recent judgment in Iridium India Telecom Limited vs. Motorola
Incorporated and others, (2011) 1 SCC 74, wherein while examining a
matter similar to the one in hand, this Court examined at great length, not
only the scope of interference under Section 482 of the Code of Criminal
Procedure (including that under Articles 226 and 227 of the Constitution of
India), but also, the culpability of a body corporate/company, including its
functionaries, in respect of criminal charges. The only difference between
the present controversy, and the one adjudicated upon by this Court in
Iridium India Telecom Limited’s case (supra) is, that while in the present
controversy the accused have approached this Court, consequent upon
the denial of reliefs sought from the High Court; in Iridium India Telecom
Limited’s case (supra) the claim raised by the accused had been accepted
by the High Court, whereupon, the complainant had approached this
Court. The submissions which came to be dealt with by this Court in
Iridium India Telecom Limited’s case (supra), at the behest of the
complainant party, are summarized in paragraph 23, which is being
reproduced hereunder:-
“23. The submissions made by Mr Jethmalani although very

elaborate, may be summed up as follows:

(i) The power to quash a criminal complaint that too at the

stage of cognizance, is an extreme power, which must be exercised

very sparingly and with abundant caution; that too in the rarest of

rare cases.
3

 

(ii) In exercise of its power under Section 482, the High Court

has to consider the complaint as a whole, without examining the

merits of the allegations i.e. genuineness of the allegations is not to

be examined at this stage.

(iii) The complaint is not required to verbatim reproduce the

legal ingredients of the offence. If the necessary factual foundation is

laid in the complaint, proceedings should not be quashed.

(iv) Quashing of a complaint is warranted only where the

complaint is so bereft of even basic facts which are absolutely

necessary for making out an offence; that it would be a miscarriage

of justice to permit the proceedings to continue.

(v) In support of the aforesaid submissions, Mr Jethmalani has

relied on the following judgments of this Court: Nagawwa v.

Veeranna Shivalingappa Konjalgi (1976) 3 SCC 736, MCD v. Ram

Kishan Rohtagi (1983) 1 SCC 1, Dhanalakshmi v. R. Prasanna

Kumar 1990 Supp. SCC 686 and State of Haryana v. Bhajan Lal

1992 Supp.(1) SCC 335.”
In paragraphs 24 to 30, this Court in Iridium India Telecom Limited’s case
(supra) noticed the facts pertaining to the controversy, and the emerging
legal technicalities canvassed at the hands of the appellants. In paragraph
31 to 37, this Court recorded the response thereto, at the behest of the
accused. Thereupon, this Court in Iridium India Telecom Limited’s case
(supra) made the following observations in paragraph 38 :-
“38. We have considered the submissions made by the learned

Senior Counsel. A bare perusal of the submissions would be

sufficient to amply demonstrate that this cannot be said to be an

“open and shut” case for either of the parties. There is much to be

said on both sides. The entire scenario painted by both the sides is

circumscribed by “ifs” and “buts”. A mere reading of the 1992 PPM

would not be sufficient to conclude that the entire information has

been given to the prospective investors. Similarly, merely because

there may have been some gaps in the information provided in the

PPM would not be sufficient to conclude that the respondents have

made deliberate misrepresentations. In such circumstances, we

have to examine whether it was appropriate for the High Court to

exercise its jurisdiction under Section 482 CrPC to quash the
3

 

proceedings at the stage when the Magistrate had merely issued

process against the respondents.”

 

In paragraphs 39 to 51, this Court examined the parameters, of the scope
of exercise of jurisdiction in proceedings initiated to quash criminal
charges/proceedings, under Section 482 of the Code of Criminal
Procedure (and/or under Articles 226 or 227 of the Constitution of India).
In this behalf, reliance was placed on past precedent including the decision
rendered by this Court in State of Haryana vs. Bhajan Lal 1992 Supp.(1)
SCC 335, wherein this Court inter alia held as under:-

 

“102. In the backdrop of the interpretation of the various relevant

provisions of the Code under Chapter XIV and of the principles of

law enunciated by this Court in a series of decisions relating to the

exercise of the extraordinary power under Article 226 or the inherent

powers under Section 482 of the Code which we have extracted and

reproduced above, we give the following categories of cases by way

of illustration wherein such power could be exercised either to

prevent abuse of the process of any court or otherwise to secure the

ends of justice, though it may not be possible to lay down any

precise, clearly defined and sufficiently channelised and inflexible

guidelines or rigid formulae and to give an exhaustive list of myriad

kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or

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 a case against the accused.

(2) Where the allegations in the first information report and other

materials, if any, accompanying the FIR do not disclose a cognizable

offence, justifying an investigation by police officers under Section

156(1) of the Code except under an order of a Magistrate within the

purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or

complaint and the evidence collected in support of the same do not

disclose the commission of any offence and make out a case

against the accused.
3

 

(4) Where, the allegations in the FIR do not constitute a

cognizable offence but constitute only a non-cognizable offence, no

investigation is permitted by a police officer without an order of a

Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so

absurd and inherently improbable on the basis of which no prudent

person can ever reach a just conclusion that there is sufficient

ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the

provisions of the Code or the Act concerned (under which a criminal

proceeding is instituted) to the institution and continuance of the

proceedings and/or where there is a specific provision in the Code or

the Act concerned, providing efficacious redress for the grievance of

the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala

fide and/or where the proceeding is maliciously instituted with an

ulterior motive for wreaking vengeance on the accused and with a

view to spite him due to private and personal grudge.

103. We also give a note of caution to the effect that the power of

quashing a criminal proceeding should be exercised very sparingly

and with circumspection and that too in the rarest of rare cases; that

the Court will not be justified in embarking upon an enquiry as to the

reliability or genuineness or otherwise of the allegations made in the

FIR or the complaint and that the extraordinary or inherent powers

do not confer an arbitrary jurisdiction on the Court to act according to

its whim or caprice.”
While dealing with the various judgments rendered by this Court on the
subject, reference was also made to the decision in M.N. Ojha vs. Alok
Kumar Srivastav, (2009) 9 SCC 682. In M.N. Ojha’s case (supra) similar
views as in Bhajan Lal’s case (supra) came to be recorded in the following
words :
“25. Had the learned SDJM applied his mind to the facts and

circumstances and sequence of events and as well as the

documents filed by the complainant himself along with the complaint,

surely he would have dismissed the complaint. He would have

realised that the complaint was only a counterblast to the FIR lodged
4

 

by the Bank against the complainant and others with regard to the

same transaction.

* * *

27. The case on hand is a classic illustration of non-application of

mind by the learned Magistrate. The learned Magistrate did not

scrutinise even the contents of the complaint, leave aside the

material documents available on record. The learned Magistrate

truly was a silent spectator at the time of recording of preliminary

evidence before summoning the appellants.

28. The High Court committed a manifest error in disposing of the

petition filed by the appellants under Section 482 of the Code

without even adverting to the basic facts which were placed before it

for its consideration.

29. It is true that the Court in exercise of its jurisdiction under

Section 482 of the Code of Criminal Procedure cannot go into the

truth or otherwise of the allegations and appreciate the evidence if

any available on record. Normally, the High Court would not

intervene in the criminal proceedings at the preliminary stage/when

the investigation/enquiry is pending.

30. Interference by the High Court in exercise of its jurisdiction

under Section 482 of the Code of Criminal Procedure can only be

where a clear case for such interference is made out. Frequent and

uncalled for interference even at the preliminary stage by the High

Court may result in causing obstruction in the progress of the inquiry

in a criminal case which may not be in the public interest. But at the

same time the High Court cannot refuse to exercise its jurisdiction if

the interest of justice so required where the allegations made in the

FIR or complaint are so absurd and inherently improbable on the

basis of which no fair-minded and informed observer can ever reach

a just and proper conclusion as to the existence of sufficient grounds

for proceeding. In such cases refusal to exercise the jurisdiction may

equally result in injustice more particularly in cases where the

complainant sets the criminal law in motion with a view to exert

pressure and harass the persons arrayed as accused in the

complaint.”
In dealing with the issue under reference, this Court in Iridium India
Telecom Limited’s case (supra) also examined the scope of a body
corporate/company being proceeded against in criminal cases, on the
4

 

canvassed premise, that no mens rea could be attributed to them, and as
such, criminal action could not be taken against them. For the said
purpose reference was made to the legal position on the subject prevailing
in the United Kingdom, the United States of America and Canada, and
thereupon, this Court dealt with the declaration of the legal position on the
subject, at the hands of this Court. Whereupon, its conclusion was
recorded in paragraph 66 as under :
“66. These observations leave no manner of doubt that a

company/corporation cannot escape liability for a criminal offence

merely because the punishment prescribed is that of imprisonment

and fine. We are of the considered opinion that in view of the

aforesaid judgment of this Court, the conclusion reached by the High

Court that the respondent could not have the necessary mens rea is

clearly erroneous.”

 

In sum and substance, all the pleas canvassed on behalf of the
complainant (already extracted above) were upheld by this Court in Iridium
India Telecom Limited’s case (supra).

 

23. Through the complaint, as also, in the statement of Shaikh Allauddin
Paker Maiddin recorded under Section 200 of the Code of Criminal
Procedure, JCE Consultancy has categorically asserted, that the
appellants herein were jointly or severally liable to honour the bill of
exchange dated 1.2.2002, which had been endorsed in its (JCE
Consultancy’s) favour. In order to demonstrate the appellant’s liability, a
series of documents were also placed before the Trial Court. The VIIth
4

 

Additional Chief Judicial Magistrate, having considered the said material,
issued the summoning order. The culpability of the appellants herein would
obviously depend upon the evidence produced before the jurisdictional
Court. It can definitely be stated from the pleadings before this Court, that
one of the accused, namely, Sky Impex Limited, has totally supported the
cause of the complainant-JCE Consultancy, through its written reply.
Relevant extracts of the said reply have already been reproduced
hereinabove (during our deliberations on the third contention). The
situation which emerges, in the case in hand, is similar to the one
encountered by this Court in Iridium India Telecom Limited’s case (supra),
wherein, this Court on being confronted with the factual and legal position
was constrained to record, that the scenario painted by both the sides is
circumscribed by “ifs” and “buts”. Herein also, factual details emerging
from the evidence to be produced by the rival parties, would be necessary
to project a clear picture. It is only thereafter, that a rightful decision on
this issue canvassed will be possible. As of now we are satisfied, that the
factual foundation/background of the acts of omission and commission
presented by the complainant is specific and categoric. We are also
satisfied that the allegations levelled by the complainant, fully incorporate
all the basic facts which are necessary to make out the offences
whereunder the impugned summoning order dated 12.1.2005 has been
passed. The instant controversy does not suffer from any of the
4

 

impairments referred in Iridium India Telecom Limited’s case (supra).
Accordingly, we leave it open to the appellants to canvass the legal
issues, as were canvassed before us, before the trial court. After the rival
parties have led their evidence, the trial court will return its finding thereon,
in accordance with law, without being influenced by any observations
made on the merits of the controversy hereinabove, or hereafter.

 

24. The last contention advanced at the hands of the learned counsel for
the appellants, was based on the assertion, that the complainant – JCE
Consultancy had filed a civil suit bearing Commercial Action No.482 of
2005 before the Court of First Instance, Dubai, praying for the recovery of
the amount depicted in the bill of exchange dated 1.2.2002. It was
submitted, that in the pleadings of the aforesaid civil suit, there was no
allegation against the appellants herein, depicting their criminal
involvement. It was the contention of the learned counsel for the
appellants, based on the averments made in ground D (of the petition for
special leave to appeal) filed before this Court, that JCE Consultancy had
lead evidence in the aforesaid civil suit, whereupon, the said civil suit was
dismissed on 24.9.2008. It is further asserted, that the Court of First
Instance, Dubai, while dismissing the civil suit had held, that the bill of
exchange dated 1.2.2002 had nothing to do with the alleged supply of
goods, by the complainant-JCE Consultancy to Sky Impex Limited. It was
also sought to be asserted, that the said bill of exchange was merely an
4

 

accommodation bill, to enable the complainant-JCE Consultancy “to raise
money, and to use the bill of exchange as a collateral”. It was further
submitted, on behalf of the appellants, that the liability emerging out of the
bill of exchange dated 1.2.2002, can either have civil consequences or
criminal liability. The fact that the aforesaid civil suit came to be filed at the
behest of JCE Consultancy, according to learned counsel, is an
acknowledgement at the hands of the complainant (JCE Consultancy), that
the liability emerging out of the bill of exchange dated 1.2.2002 was civil in
nature. As such, it was asserted at the hands of the learned counsel for
the appellants, that the very initiation of criminal proceedings by the
complainant, against the appellants herein, was misconceived. It is also
contended, that the filing of the criminal complaint by JCE Consultancy,
must be deemed to be an act emerging out of extraneous considerations,
so as to browbeat the appellants herein, and thereby, compel them to
succumb to the illegal demands of the complainant-JCE Consultancy.
Additionally, it was submitted by the learned counsel for the appellants,
that in the civil claim raised by JCE Consultancy before the Court of First
Instance, Dubai, from amongst the appellants, only Samsung, Dubai, was
impleaded as a defendant, whereas, no action was initiated even for the
recovery of the dues under the bill of exchange dated 1.2.2002, against the
other four appellants herein. Based on the aforesaid factual and legal
submissions, it was the contention of the learned counsel for the
4

 

appellants, that criminal prosecution initiated by the complainant-JCE
Consultancy against the appellants herein, is liable to be quashed.

 

25. In response to the aforesaid averments made on behalf of the
appellants, it was the contention of the learned counsel for the
respondents that the civil proceeding initiated by JCE Consultancy in the
Court of First Instance, Dubai, is still pending in appeal. In this behalf, it
was pointed out, that the Dubai Appeals Court passed an order dated
21.7.2010 directing the reattachment of assets of the defendants in the
aforesaid civil suit, in the sum of Dhs.30 million (approximately Rs.45
crores). A copy of the aforesaid order dated 21.7.2010 has been
appended to the reply filed by Sky Impex Limited (to the averments made
in the petition for special leave to appeal) as Annexure A-11. It was
submitted, that consequent upon the passing of the order dated 21.7.2010,
the Dubai Judicial Administration executed the attachment of Dhs.30
million. In order to substantiate the aforesaid factual position, Sky Impex
Limited has appended to its reply Annexure A-12, a bank guarantee dated
22.9.2010, issued by Emirates Bank International, on behalf of Samsung
Dubai, in favour of JCE Consultancy. It is also pointed out by the learned
counsel for the respondents, that an act of omission or commission at the
hands of a party, may lead to civil, as well as, criminal consequences. In
this behalf, learned counsel for the respondents also invited our attention
to the order passed by the Dubai Appeals Court dated 21.7.2010, wherein,
4

 

it was pointed out, that there was no connection between the criminal
action brought out by JCE Consultancy (in the proceedings initiated by it,
before the VIIth Additional Chief Judicial Magistrate, Ghaziabad) and the
civil suit filed by JCE Consultancy (before the Court of First Instance,
Dubai). It was also the contention of the learned counsel for the
respondents, that the civil liability, in the instant case, was raised as
against the eventual purchaser of the goods/product (Samsung, Dubai), in
lieu of the goods/product supplied by the complainant-JCE Consultancy,
which had passed onto the purchasers under the agreement dated
1.12.2001. Accordingly, the civil liability was only raised as against
Samsung, Dubai. However, insofar as the criminal liability is concerned,
Samsung Dubai being one of the subsidiary companies of Samsung,
South Korea, it was allegedly under the overall control exercised by
Samsung, South Korea. Samsung, South Korea, according to the
complainant, was instrumental in the eventual decision taken by Samsung,
Dubai, to deny the passing of the reciprocal monetary consideration, for
the goods supplied under the agreement dated 1.12.2001. This, according
to the respondents, has been the categorical stance of JCE Consultancy in
the criminal complaint, as also, in the pre-summoning evidence recorded
before the VIIth Additional Chief Judicial Magistrate, Ghaziabad under
Section 200 of the Code of Criminal Procedure. These allegations made
by JCE Consultancy, are supported by documents furnished to the
4

 

summoning court. The aforesaid factual position has also been endorsed
by Sky Impex Limited, before this Court. According to the learned counsel
for the respondents, the culpability of the appellants before this Court, in a
series of similar actions, clearly emerges even from documents placed on
record of the instant case, by Sky Impex Limited. As such, it is submitted,
that the respondents have per se repudiated all the submissions advanced
on behalf of the appellant, obviously subject to the evidence which rival
parties will be at liberty to adduce before the trial court.

 

26. We have given our thoughtful consideration to the last contention
advanced at the hands of the learned counsel for the appellants. We are
of the considered view, that in offences of the nature contemplated under
the summoning order, there can be civil liability coupled with criminal
culpability. What a party has been deprived of by an act of cheating, can
be claimed through a civil action. The same deprivation based on denial
by way of deception, emerging from an act of cheating, would also attract
criminal liability. In the course of criminal prosecution, a complainant
cannot seek a reciprocal relief, for the actions of the accused. As in the
instant case, the monetary consideration under the bill of exchange dated
1.2.2001, cannot be claimed in the criminal proceedings, for that relief the
remedy would be only through a civil suit. It is therefore not possible for us
to accept, that since a civil claim has been raised by the complainant-JCE
Consultancy, based on the alleged breach of the agreement dated
4

 

1.12.2001, it can be prevented from initiating proceedings for penal
consequences for the alleged offences committed by the accused under
the Indian Penal Code. It would not be appropriate for us, to delve into the
culpability of the appellants at the present juncture, on the basis of the
factual position projected by the rival parties before us. The culpability (if
at all) would emerge only after evidence is adduced by the rival parties
before the trial court. The only conclusion that needs to be drawn, at the
present juncture is, that even on the basis of the last submission
canvassed on behalf of the appellants, it is not possible to quash the
summoning order at this stage. In the aforesaid view of the matter, it is left
open to the appellants to raise their objections, if they are so advised,
before the trial court. The trial court shall, as it ought to, adjudicate upon
the same in consonance with law, after allowing the rival parties to lead
evidence to substantiate their respective positions.

 

27. For the reasons recorded hereinabove, we find no merit in the
instant appeal. The same is accordingly dismissed.

 
…………………………….J.

(Asok Kumar Ganguly)

 
…………………………….J.

(Jagdish Singh Khehar)

New Delhi;

February 1, 2012.
4

 

 

Digital Performa

 

 

Case No. : CRIMINAL APPEAL NO._______ OF 2012

(Arising out of SLP (Crl.) No.9168 of

2009)
Date of Decision : 01.02.2012 at 1.45 p.m.

 
C.A.V. on : 15.11.2011
Cause Title : Lee Kun Hee & Ors.
Versus
State of U.P. & Anr.

 
Coram : Hon’ble Mr. Justice Asok Kumar Ganguly

Hon’ble Mr. Justice Jagdish Singh Khehar
Judgment delivered by : Hon’ble Mr. Justice Jagdish Singh Khehar
Nature of Judgment : Reportable

 

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