SUSHIL SETHI AND ANOTHER versus THE STATE OF ARUNACHAL PRADESH AND OTHERS

SUSHIL SETHI AND ANOTHER versus THE STATE OF ARUNACHAL PRADESH AND OTHERS

The Supreme Court allowed the appeal and quashed the FIR and chargesheet insofar as they related to the appellants because the pleadings did not disclose any specific allegations of fraudulent or dishonest intention at the inception required for an offence under Section 420 IPC read with Section 120B IPC, the principal allegations were against the company which was not made a party and no vicarious liability was pleaded, and undue delay (appellants were served summons about 13 years after the chargesheet) amounted to harassment, therefore exercise of Section 482 Cr.P.C. to quash was justified.

Parties
Appellant; Original Accused No.1; Managing Director, M/s SPML Infra Limited: Sushil Sethi; Respondent: State of Arunachal Pradesh
Jurisdiction
India
Judgment Date
31 January 2020
Procedural Posture
Criminal Appeal / Appeal Against Gauhati High Court Order Dated 07.09.2018 Refusing to Quash Criminal Proceedings Under Section 482 Cr.p.c.
Outcome
Appeal allowed
Legal Topics
Quashing of FIR and Chargesheet, Section 482 Cr.p.c., Section 420 IPC, Section 120 B IPC, Vicarious Liability of Company Directors, Criminal Conspiracy, Abuse of Process
Criminal Law Procedural Law Company Law Quashing of FIR and Chargesheet Section 482 Cr.p.c. Section 420 IPC Section 120 B IPC Vicarious Liability of Company Directors +2 more

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Parties

Sushil Sethi

Appellant; Original Accused No.1; Managing Director, M/s SPML Infra Limited

State of Arunachal Pradesh

Respondent

Procedural Posture

Criminal Appeal / Appeal Against Gauhati High Court Order Dated 07.09.2018 Refusing to Quash Criminal Proceedings Under Section 482 Cr.p.c.

Legal Issues

  1. 1 Whether the FIR/chargesheet discloses a prima facie offence under Section 420 read with Section 120B IPC
  2. 2 Whether fraudulent or dishonest intention existed at the inception of the contract
  3. 3 Whether directors can be prosecuted when the company is not made an accused and no specific allegations of vicarious liability are made

Ratio Decidendi

The Supreme Court allowed the appeal and quashed the FIR and chargesheet insofar as they related to the appellants because the pleadings did not disclose any specific allegations of fraudulent or dishonest intention at the inception required for an offence under Section 420 IPC read with Section 120B IPC, the principal allegations were against the company which was not made a party and no vicarious liability was pleaded, and undue delay (appellants were served summons about 13 years after the chargesheet) amounted to harassment, therefore exercise of Section 482 Cr.P.C. to quash was justified.

Court Disposition

Appeal allowed

Orders

  • Impugned judgment and order of Gauhati High Court dated 07.09.2018 set aside
  • FIR and chargesheet filed against the appellants for the offence under Section 420 IPC read with Section 120B IPC are quashed insofar as they relate to the appellants