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1998 DIGILAW 34 (CAL)

R. P. Jhunjhunwala v. Apple Industries Limited

1998-01-27

ASISH BARAN MUKHERJEE

body1998
JUDGMENT ASISH BARAN MUKHERJEE, J. 1. This revisional application under section 401 read with section 482 of the Criminal Procedure Code has been instituted to quash the complaint case being C-679 of 1996 pending before the Metropolitan Magistrate, 14th Court. Calcutta starting from the date of issuing process culminating in fixing the date for framing of charge against the accused persons being the petitioner in the revisional application. 2. The case of the petitioners is that the opposite party no.1, namely M/s. Apple Industries Limited filed a complaint in the Court of the Chief Metropolitan Magistrate, Calcutta on 16th of April 1996 against the petitioners for alleged offences under section 120B read with section 420 of the Indian Penal Code. In short the allegation is that the Apple Industries Limited is a Public Limited Company engaged in Lease and Hire purchase, Financing of Plant and Equipment. The accused persons approached the opposite party no.1 towards the end of 1994 and introduced themselves to the fact that accused no.1 was the Managing Director, accused no.2 was the Director and accused no.3 was the Chairman of M/s. Grapco Industries Limited having their office which is at present situated at 32, Chowringhee Road, Calcutta. It was represented to the complainant that the company of the accused was engaged in mining and manufacturing of granite products and one of its mines was situated at Balasore. It was further represented that due to financial stringency the Company was not in a position to modernise their mines with latest machineries and in order to boost up their production, they intended to install modern plants which would cost about Rs. 1.5 Crores. They further gave out that they would repay the loan on quarterly installments. They were also willing to enter into a Lease agreement in respect of the plant and machinery which is to be installed at the mines in order to ensure timely payment. They also represented that they would issue post dated cheques and assured that they would be en cashed on presentation. They were even proposed to give personal guarantee regarding timely payment. They also disclosed the names of the Companies who would install the plant and equipments. 3. Giving credit to the representation the Company in all paid Rs. 1,66,91,000/- to the suppliers of plant and machinery as selected by the accused persons. They were even proposed to give personal guarantee regarding timely payment. They also disclosed the names of the Companies who would install the plant and equipments. 3. Giving credit to the representation the Company in all paid Rs. 1,66,91,000/- to the suppliers of plant and machinery as selected by the accused persons. After purchase of the said machinery those were entrusted to the accused persons and they entered into a Lease Agreement stipulating that they would go on paying quarterly installments at the rate of Rs. 11,15,241/-. They also issued two cheques both dated 17.1.96 for Rs. 10,56,483/- and Rs. 58,758/- both drawn on the Grindlays Bank, Sarat Bose Road Branch in favour of the complainant's Company. The said cheques were deposited on 20.1.96 at Park Street Branch of Punjab National Bank but both the cheques were returned being dishonoured with the remarks Payment stopped by the Drawer. Accordingly, it was alleged in the complaint that the accused persons entered into a criminal conspiracy by their false and fradulent representation deceived the complainant's Company and induced them to part with the amount mentioned earlier and as such they directed their banker to stop payment immediately after issuing the cheques. 4. The petitioner's further case is that, initially the constituted attorney of the complainants Company was examined and process was issued accordingly. The accused persons entered appearance and their prayer under section 205 of the Criminal Procedure Code was allowed. Thereafter some witnesses were examined on behalf of the complainant and date was fixed for hearing regarding framing of charge. Their contention is that as per the evidence, so far adduced, there are no ingredients either of section 420 or section 120B of the Indian Penal Code, and accordingly they have prayed for quashing the said proceeding. 5. I have heard the argument advanced on behalf of the petitioners being the accused in the complaint case and also the opposite party no.1 being the complainant of the said case. It is contended by the Ld. Advocate appearing for the petitioners that the complaint does not disclose any offence under section 420 of the Indian Penal Code and in this connection he has referred to Para-6 of the petition of complaint which has been annexed. It is also contended by him that subsequent act of dishonesty cannot give rise to an offence under section 420 of the Indian Penal Code. It is also contended by him that subsequent act of dishonesty cannot give rise to an offence under section 420 of the Indian Penal Code. It is his contention that there was a contractual obligation between the Companies and in case of violation of the said agreement the proper course is to resort a civil action for recovery of the unpaid sum of money. In this connection there was reference to the evidence given at the instance of the complainant. 6. On behalf of the opposite party no.1 my attention has been drawn to para-5 of the complaint and also different sub-paras of para-6. It has also been argued that the case is pending at the charge stage and as such the accused can thrush out their case before the trial Court during hearing of charge. It is also argued that the complainant has the choice of forum and in the event of a case of dishonour of cheques whether there are elements of section 420 of the Indian Penal Code as well, they can resort of either N.I. Act or IPC. It is forcibly contended that there are considerable materials on record in support of a prima facie case under section 420 of the Indian Penal Code. And in this connection reference has been made to para-10 of the complaint. My attention has also been drawn to the evidence adduced by the witnesses. Besides reliance has also been placed on a number of decisions being 1996, Rudra Narayan Singha vs. State of West Bengal & other, 1996 Cal. Cr. LR (Cal) 211, State of Bihar vs. Rajendra Agarwalla, 1996 SCC (Cri) 628 and Bholanath Arora vs. The State, 1982 Cri. LJ 1482. The first case cited on behalf of the opposite party no.1 deals with the duty of the Court at the time of consideration regarding framing of charge and it is the conclusion of the Court that at that stage the concerned Court is to shift and consider the evidence, so as to ascertain whether there was a prima facie case or not. The decision reported in 1996 SCC (Criminal) 628 deals with the question of quashing of a criminal proceeding at the initial stage. The decision reported in 1996 SCC (Criminal) 628 deals with the question of quashing of a criminal proceeding at the initial stage. The Apex Court has laid down that the power should be very sparingly and cautiously exercised and it has been laid down that at that stage that the High Court should not appreciate the evidence so as to find the guilt or otherwise of the accused. The decision reported in 1982 Cri. LJ 1482 deals with an offence under section 420 of the Indian Penal Code. In that case the accused paid certain amount by means of Demand Draft for the goods supplied by the dealer and for the balance amount some cheques were delivered. Such cheques were subsequently dishonoured and it appeared that at no stage any attempt was made by the accused to pay sufficient amount for encashment of the cheque. In such circumstance it was held that there was ground for presuming that accused had committed an offence under section 420 of the Indian Penal Code. 7. Before taking up the issue it is necessary to bear in mind that apart from initial deposition taken by the Court below before issuing the process some other witnesses have also been examined at the stage prior to consideration of charge since it is a case started at the basis of a complaint and also an warrant procedure one. The next stage before the Court below is to consider the evidence and hear the parties in order to ascertain whether there was sufficient materials for framing of the charge. As such, at that stage an exhaustive finding from this Court is bound influence the mind of the trial Court and as such some caution need be exercised in doing so. 8. It appeared from para-5 of the complaint that there is the averment that the accused persons were responsible for the day to day conduct of the business of the Company. para-6 deals with the representations made by the accused persons towards the end of 1994 and the payment of sum of Rs. 1 Crore 66 Lakhs and odd by the complainant Company. There was also lease deed as appears from the complaint and subsequent issuance of cheques numbering two, on 17.1.96 which were presented on 20.1.96 when they were dishonoured with the remarks payment stopped by drawer. 1 Crore 66 Lakhs and odd by the complainant Company. There was also lease deed as appears from the complaint and subsequent issuance of cheques numbering two, on 17.1.96 which were presented on 20.1.96 when they were dishonoured with the remarks payment stopped by drawer. The complainant, besides the constituted attorney, examined an official attached to the Grindlays Bank Sarat Bose Road Branch. He states on his evidence that on 17th of January 1996 the Company of the accused petitioners gave instruction to the Banker for stopping payment of the aforesaid two cheques. It is also his evidence that when these cheques were presented to them for clearance the said Company had not sufficient amount in their account for their clearance. They have also examined an official of Punjab National Bank, Park Street Branch where the account of the Apple Industries stands. The other witness examined is the Manager (Corporate Finance) of the Complainant Company. 9. Without giving any exhaustive reasons for coming to the conclusion this much can be said that on the face of it is not a case in which either the revisional power or the inherent power is to be exercised by this Court for quashing the said proceeding. On the face of it there is no intrinsic defect for which the extraordinary power of quashing can be exercised. On the other hand there being some materials placed by the complainant before the trial Court, the said Court at the time of the hearing regarding consideration of charge is competent enough to deal with the evidence together with the facts and circumstances in order to come to a conclusion whether there is prima facie material in support of the allegations contained in the complaint. In this connection the scope of the trial Court at the stage of consideration regarding charge as laid down in different decisions including 1996 Calcutta Criminal Law Reporter (Calcutta) 211 need be considered by the trial Court. 10. In the result I come to the conclusion that there are no materials on record for which the revisional power or the inherent power can be exercised by this Court for quashing the instant proceeding. Accordingly, the revisional application stands dismissed on contest. All stay orders stand vacated. Lower Court record if any, be sent to the Court below which is directed to expedite disposal of the case. Revisional application dismissed.