SURESH LALCHAND LULLA Vs. NEELA SUDHISH TALPADE

JUDGEMENT

(1.) THIS is a quashing petition under section 482 of the Code of Criminal Procedure, 1973.

(2.) RESPONDENT No. 1 -hereinafter to be referred to as complainant-has filed a private complaint in the Court of Metropolitan Magistrate, Andheri at Bombay. Shortly stated, the complaint recites that Flat No. D/1 in Beach House Co-operative Housing society, Gandhigram Road, Juhu, Bombay 400 049 is an acquisition of the complainant. Petitioner Lalchand is the father of petitioners Suresh, Amarnath, Ramesh and one Manohar. These people will hereinafter be referred to as accused-Suresh and Manohar being referred to as accused Nos. 1 and 3 respectively. In about November 1968 accused No. 3 approached the complainant with a request that she give the flat mentioned above for his residential use on a leave and licence basis. The proposal was accepted by the complainant who made it clear that the flat was not to be given to any firm or body corporate as it was meant only for the use of accused No. 3. Accused No. 3 made it clear that he wanted the flat for the residence of himself and his family members. However, he was a partner of a firm doing business in the name and style of M/s. Bombay Spring Works. Having regard to tax planning, he requested that the document of leave and licence be in the name of the firm. Plaintiff acceded to the proposal and on 1-12-1968 a leave and licence document was drawn up. This document or rather the transaction recorded therein was renewed on the same terms and conditions as before on 1-2-1971. In 1972, accused No. 3 requested the complainant to permit his brother accused No. 1 to use the flat for his residence in view of accused No. 3 having left Bombay for settling down in Delhi. Complainant acceded to this request of accused No. 3 which was supplemented by accused No. 1 also. Again, the first accused requested complainant that the leave and licence document be in the name of a firm doing business in the name and style of M/s. Southern Automatic Industries of which accused No. 1 was said to be a partner. This also was to be from the point of view of tax planning. It was made clear that the flat would be used exclusively for residential purposes by the first accused. It was in this background that a leave and licence document was drawn upon 1st April, 1972. Since that time the accused No. 1 was using the flat. None of the other accused were in occupation of the said flat. The occupation of accused No. 1, his wife and maid-servant was reflected in the electoral rolls drawn up in 1972 and 1978. On 30th March, 1978 the five accused instituted a R. A. Declaratory Suit No. 2070 of 1978 in the Court of Small Causes at Bombay. The suit was for a declaration that the accused were tenants and/or protected licences of the flat in dispute. Though the plaint was filed by all the accuse d the verification thereof was by accused No. 1 alone. It was fraudulently averred in the plaint that the leave and licence agreements had been forcibly obtained by the complainant who had represented that the recitals in the agreements were not to be acted upon. The plaint further averred that Southern Automatic Industries and Bombay Spring Works had by then been converted into private limited companies. Apart from the declaratory suit the accused also moved an application for determination of the standard rent. This was the first indication to the complainant that the accused had taken advantage of her trusting nature. Prior to 1-4-1972 she was not aware that M/s. Southern Automatic Industries was in fact a private limited company or that accused No. 1 had any relationship or interest in the said private limited company when the concern came to be converted into a private limited company. The accused preferred an application on 30th October, 1985 which application was for seeking leave to amend the plaint in the declaratory suit. The application for amendment of the plaint was supported by an affidavit of accused No. 1. It averred that the firms afore-mentioned had been eventually converted into private limited companies and that accused were Directors of the said companies and not partners. The case sought to be set up by the amendment application was that complainant had entered into transactions with two companies for which reason it was necessary to implead those companies as plaintiffs Nos. 6 and 7. The amendment application was dismissed by a learned Judge of the Small Causes Court under an order dated 10-12-1985. Complainant had made enquiries to ascertain what the true position was. It was then that she learnt that M/s. Bombay Spring Works Ltd. was incorporated on 15th March, 1972, whereas Southern Automatic Industries Pvt. Ltd. , was in existence way back since 9th of August, 1967. The accused were the Directors of both these companies and M/s. Southern Automatic Industries had not existed at the time of the agreement dated 1-4-1972. Now comes the seventh paragraph on which considerable emphasis has been placed by learned Counsel representing the complainant. For that reason I will reproduce the said paragraph in full :--

(3.) THE Magistrate took cognizance and issued process under sections 420, 465, 468 and 471 read with 34 and 109 of the Indian Penal Code. It is this order which is impugned in the petition before me. Learned Counsel representing the petitioners submits that the issue-process order was unwarranted and that the same deserved to be quashed. This contention is disputed by Counsel representing the complainant. Before we go into the legal aspect of the matter, it is necessary to emphasise the substances of what had been narrated above. To repeat, the complainant makes it clear that she had given the flat to accused No. 3 and after the departure of that gentleman, to accused No. 1. These persons had taken leave and licence agreements in the names of what were given out to be firms, the names of the firms being M/s. Bombay Spring Works and M/s. Southern Automatic Industries respectively. Whatever be the names entered into in the leave an licence agreements vis-a-vis sets of licensees, the licence was for and only in respect of individuals viz, accused Nos. 1 and 3. Complainant had made it clear that she wanted nothing to do with a firm or a body corporate. This was acceptable to accused Nos. 3 and 1 respectively. The two individuals said that they wanted the leave and licence agreements to show the two firms as the licensees-this, being only for the purpose of tax planning. In the face of these recitals I find it difficult to understand how the complainants belated learning of the concerns not being firms but private limited companies, can be said to constitute any offence whatsoever. Her stand continues to be that the licensees were natural persons being accused Nos. 3 and 1. The concerns shown as licensees in the leave and licence agreements were mere name lenders whose names had been inserted in the leave and licence agreements for, to use the words of the complainant, "tax planning purposes". It was argued that be that as it may, the concerns in whose names the leave and licence agreements were taken were given out to be firms whereas in reality they turned out to be private limited companies. Therefore, a false document had been made or induced to be made and that sufficed for the purpose of a prima-facie indication that offences punishable under various section of the Indian Penal Code had been committed. The mere making of a document, some recitals whereof are at variance with reality, does not constitute an offence. Section 463 of the Indian Penal Code which defines forgery makes it clear that the making of a false document or a part of document or a part of document has to be inspired with a certain intention. The intention has to be to cause damage or injury to any person or support any claim or title or to cause any person to part with property or to enter into any express or implied contract or with intent to commit fraud or so that fraud may be committed. Now here the complainant had no interest in as to what was the tax planning method. It is not that the names of the firms or entities were entered into the leave and licence agreements with a view to ensure payment of licence fee to the complainant. The purpose of taking the documents in the name of artificial entities was to enable accused Nos. 3 and 1 to circumvent their liability for tax-planning, evasion or avoidance thereof, whatever it be. Section 464 of the Indian Penal Code makes it clear that in order to constitute an offence of making a false document, the Act must be inspired by dishonesty or fraud. The very first specification of section 464 speaks of dishonesty or fraud inspiring the creation of a false document. Similarly, the second and third specifications also conceive of a dishonest and fraudulent intention behind the creation of a false document. The purpose of the document should be to practise deception on someone or the other. Learned Counsel relies upon the Second Explanation to section 464 to contend that the present case falls within the mischief of section 464. Explanation 2 to section 464 reads as follows:-