Facts of the Case

This is a criminal matter, not a GST dispute. Three employees of M/s Maithan Steel and Power Limited — a Sales Manager, a Senior General Manager, and a Sales Accountant — sought quashing under Section 482 CrPC of proceedings in CR Case No. 69/2022 (Sections 420/465/34 IPC) pending before a Judicial Magistrate at Yupia, Arunachal Pradesh. The complainant, proprietor of M/s Yayo Enterprise, had entered a dealership arrangement with the company after submitting his Aadhaar Card, GST Registration, Trading License and PAN Card for verification, and alleged that a blank cheque he issued was fraudulently obtained and forged by one of the petitioners.

Issues Involved

  1. Whether continuance of the criminal complaint against the petitioners, in their capacity as company employees, was legally sustainable without the company itself being made an accused.
  2. Whether the Magistrate's failure to conduct a mandatory enquiry/investigation under Section 202 CrPC before summoning out-of-jurisdiction accused vitiated the proceedings.

Petitioner's Arguments

  • The blank cheque alleged to be forged was never annexed to the original complaint, undermining the forgery allegation.
  • A criminal complaint under the Negotiable Instruments Act was itself pending, filed by the company against the complainant — showing the dispute was fundamentally commercial/civil in character.
  • A criminal complaint against employees alone, without arraigning the company itself, was not maintainable given that the transaction was between the company and the complainant.
  • The Magistrate summoned the petitioners — residents of West Bengal, outside his ordinary jurisdiction — without conducting the mandatory enquiry required under Section 202 CrPC.

Respondent's Arguments

  • The complainant maintained that the petitioners had fraudulently obtained and misused his blank cheque in the course of the business dealership relationship.

Court Order / Findings

  • The Court found that the cheque alleged to be forged was not annexed to the complaint, and that a related cheque-bounce complaint by the company against the complainant undermined the criminal complaint's foundation.
  • It held that criminal proceedings against employees alone, without the company being made an accused, were not maintainable in these circumstances.
  • Critically, it found the Magistrate had failed to follow the mandatory procedure under Section 202 CrPC (enquiry/investigation before summoning accused residing outside jurisdiction), which alone was sufficient to quash the proceedings.
  • The proceedings in CR Case No. 69/2022 were quashed and set aside as an abuse of process.

Important Clarification

GST appears in this judgment only as one of several identity/registration documents (along with Aadhaar, PAN, and trading licence) that the complainant furnished to establish his business bona fides — it has no bearing on any GST law issue. This is a criminal procedure ruling about the mandatory Section 202 CrPC enquiry before summoning out-of-jurisdiction accused, and about the non-maintainability of a criminal complaint against employees without arraigning the company itself.

Sections Involved

  • Code of Criminal Procedure, 1973 — Sections 200, 202, 482
  • Indian Penal Code, 1860 — Sections 420, 465, 34

Decision – In Favour of

Decided in favour of the Petitioners — the criminal proceedings against them were quashed on procedural grounds.

Case Details

  • Court: Gauhati High Court (Itanagar Bench)
  • Case No.: Crl.Pet/29/2023
  • CNR/Reference: GAHC040002712023
  • Coram: Hon'ble Mr. Justice Mridul Kumar Kalita
  • Date of Judgment: 08.09.2023

Link to Download the Order

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