Introduction:

In a significant ruling reinforcing the limits of criminal liability and the principle that prosecution cannot rest on suspicion or vicarious attribution, the Punjab and Haryana High Court quashed a nearly two-decade-old criminal complaint alleging cheating, criminal breach of trust, and conspiracy in connection with a purported MBBS admission. The petition was filed by D.Y. Patil Vidyapeeth (Deemed University) and its office bearers, including senior functionaries, who were arrayed as accused along with one Sachin Shah, the principal alleged wrongdoer. The criminal complaint had been instituted by the complainant, who claimed that he was induced to pay ₹7.75 lakh for securing an MBBS seat for his niece under the management quota. The inducement, according to the complainant, was made by Sachin Shah, who projected himself as an authorised representative of the University and relied upon letters of allotment and confirmation purportedly issued by the institution. When the admission did not materialise and the money was not refunded, the complainant initiated criminal proceedings under Sections 406, 420, and 120-B of the Indian Penal Code not only against Sachin Shah but also against the University and its office bearers. The matter eventually reached the High Court through a petition under Section 482 of the Code of Criminal Procedure challenging the summoning order passed by the Judicial Magistrate First Class, Batala. Justice Vinod S. Bhardwaj, while allowing the petition, undertook a detailed examination of the factual background, the earlier civil proceedings between the parties, and the settled legal principles governing criminal prosecution, particularly in cases where allegations arise from unilateral acts of deception by a third party.

Arguments:

On behalf of the petitioners, it was contended that the entire criminal complaint was an abuse of the process of law, as there was not even a whisper of material to suggest that the University or its office bearers had any role whatsoever in inducing the complainant to part with money. The petitioners argued that the complainant’s own case was that he dealt exclusively with Sachin Shah, who falsely claimed to be an authorised representative of the University. It was emphasised that no communication, assurance, representation, or inducement ever emanated from the petitioners, nor was there any privity of contract, agency relationship, or nexus between the petitioners and Sachin Shah. The petitioners placed heavy reliance on the outcome of the civil suit instituted by the complainant for recovery of the same amount, wherein, after a full-fledged trial, the Civil Court had categorically held that there was no principal–agent relationship between the University and Sachin Shah. The Civil Court had further found that the alleged allotment and confirmation letters were forged documents not issued by the University, and that the bank account in which the money was deposited had been opened on forged documents misusing the University’s name. The decree, which was passed only against Sachin Shah and another accused, was dismissed against the present petitioners and had attained finality up to the appellate stage in 2017. It was argued that once a competent civil court, on identical facts and evidence, had conclusively held that the petitioners had no role in the transaction, continuation of criminal proceedings would amount to harassment and misuse of criminal law. The petitioners further submitted that the essential ingredients of offences under Sections 406 and 420 IPC were completely absent, as there was no entrustment of property to the petitioners, no dishonest inducement attributable to them, and no meeting of minds to attract Section 120-B IPC. It was also urged that the Magistrate had mechanically issued summons without applying judicial mind to the binding civil court findings, and that the High Court’s inherent powers under Section 482 CrPC were squarely attracted to prevent abuse of process and secure the ends of justice.

On the other hand, the State of Punjab and the complainant opposed the petition, contending that the complainant had suffered a substantial financial loss by paying money in the name of the University and that the demand drafts were drawn in favour of the institution, which were allegedly encashed. It was argued that these circumstances raised sufficient suspicion to justify a criminal trial and that the truth or otherwise of the allegations could only be determined after evidence was led. The complainant maintained that he acted on the belief fostered by Sachin Shah on the strength of documents relating to the University and that the misuse of the University’s name and documents could not absolve the institution and its office bearers at the threshold. An objection was also raised regarding the maintainability of the petition under Section 482 CrPC on the ground that an alternative remedy of revision was available before the Sessions Court against the summoning order. According to the respondents, the inherent jurisdiction of the High Court ought not to be invoked where such alternative remedies existed, and the petitioners should have been relegated to the revisional forum.

Court’s Judgment:

After hearing the parties at length, Justice Vinod S. Bhardwaj allowed the petition and quashed the criminal complaint and all consequential proceedings against the petitioners. The Court held that criminal law cannot be set into motion merely because a complainant has suffered a financial loss, unless there is material establishing the direct involvement of the accused in the commission of the alleged offence. The Court observed that the complainant was indeed cheated of money, but such cheating was prima facie attributable to Sachin Shah, who misrepresented himself as an authorised representative of the University. The misrepresentation, the Court noted, was fostered on the strength of forged documents pertaining to the University, but there was no material to suggest that these documents were issued by, or with the knowledge or consent of, the petitioners. The Court categorically held that “the mere payment of money, unaccompanied by any material establishing the petitioners’ involvement in or attribution to the alleged acts of inducement or deception, cannot be treated as sufficient to fasten criminal liability upon them.” Emphasising the settled position of law, the Court held that for an offence under Section 420 IPC, there must be a demonstrable act of deception attributable to the accused himself, and impressions nurtured by a complainant on the strength of forged documents produced by a third party cannot be a basis to prosecute someone who had no role in the deception. The Court placed considerable reliance on the findings of the Civil Court, noting that the civil judgment had conclusively determined that there was no privity, nexus, or agency relationship between the petitioners and Sachin Shah, and that the alleged allotment and confirmation letters were forged. Justice Bhardwaj observed that once such findings had attained finality, they outweighed mere allegations in a criminal complaint, particularly when the factual substratum of both proceedings was identical. The Court rejected the theory of vicarious criminal liability in the absence of any statutory provision or evidence establishing complicity, holding that a person cannot be criminally tried merely because a third party cheats someone by misusing his name. The Bench explained that any impressions nurtured by the complainant were unilateral, and a unilateral mistake entails consequences only for the person who carries such an impression; such consequences cannot trickle down to a person qua whom such impressions were carried. The Court also found fault with the Magistrate for failing to consider the binding civil court findings and for issuing summons in a mechanical manner, reiterating that summoning an accused is a serious judicial act. Relying on Supreme Court precedents such as Delhi Race Club, JM Laboratories, Mahmood Ali, and B.S. Joshi, the Court underscored that criminal proceedings should not be used as a tool of pressure or harassment and must be quashed where the allegations, even if taken at face value, do not disclose the commission of an offence. Addressing the objection regarding the availability of an alternative remedy, the Court held that the powers under Section 482 CrPC are inherent and can be exercised to prevent abuse of process, especially where the petition had remained pending for nearly a decade and relegating the petitioners to a technical remedy would serve no purpose. In view of these findings, the High Court allowed the petition and quashed the criminal complaint in its entirety as against the petitioners.