Judgment : 1. This petition is filed under Section 482 Cr.P.C to quash the private complaint in E.O.C.C.No.128 of 1999, pending on the file of the learned Additional Chief Metropolitan Magistrate (Economic Offences No.1), Egmore, Chennai, filed by M/s.Granttrust Finance Limited represented by its Authorised Agent and Credit Officer Mr.M.Prabhakar against the petitioners, along with two other accused, who are not before this Court, for offences under Section 68 and 628 of the Companies Act, 1956 and under Sections 409, 420 read with 120-B of the Indian Penal Code. 2. At the outset, I may state that neither of the parties have brought to the notice of the court that under what Section the Magistrate has taken cognizance of the complaint. However, the fact remains that the complaint is only at the initial stage and moreover, this being a private complaint, evidence has to be recorded and only then charges has to be framed by the Magistrate. Therefore, admittedly witnesses have not been examined and charges has not been framed yet. At this stage, the petitioner who are A-1 and A-2 have come forward with the present petition. 3. The gist of the complaint is as follows: (a) The first accused namely the first petitioner M/s.Sundaram Finance Services Limited is the Sponsor for the third accused namely M/s. Vishnu Forge Industries. In order to expand their business operations, the third accused company required finance and accordingly for the said purpose, had along with the first accused approached and induced the complainant to subscribe for shares. Accordingly, the complainant believing their representation to be true subscribed for 50000 equity shares of face value Rs.10 each with a premium of Rs.6 for each share and in that process, enclosed therewith a cheque, addressed to the first petitioner along with the cheque for Rs.8,00,000. The said cheque no doubt was drawn in favour of the third accused. Accordingly the first accused received the cheque amount and placed it to the third accused for having received the said amount. (b) Apart from the above, it was represented to the complainant by the first accused that there is a possibility of the shares being sold for a price not less than Rs.25/-per share, as the third accused company was going public. It is on the basis of this representation that the complainant purchased the shares. (b) Apart from the above, it was represented to the complainant by the first accused that there is a possibility of the shares being sold for a price not less than Rs.25/-per share, as the third accused company was going public. It is on the basis of this representation that the complainant purchased the shares. (c) It is also understood that the first and the third accused entered into a Sponsorship Agreement on 1.9.95 and the very first clause in the Sponsorship Agreement dated 1.9.95 provides that the first accused shall be the Sponsor and shall arrange to offer the Equity Shares for sale to the public not later than April 30 1996 and to get them listed at the Over the Counter Exchange of India (OTCEI), on such terms and conditions as may be decided by the Sponsor in its absolute discretion. It is seen that the copy of the Sponsorship Agreement was also served on the complainant on the same day. (d) In continuance to the above stated agreement, the first accused and the third accused as one party and the complainant along with the other Co-investors as another party, entered into a Divestment Agreement on 1.9.95. Clause 15 of the Divestment Agreement dated 1.9.95, runs as follows: "The sponsor shall arrange to offer the Equity Shares for sale to the public not later than April 30, 1996, to get them listed at the OTCEI, on such terms and conditions as may be decided by the Sponsor in its absolute discretion" (e) About three days prior to the last day for the company to go public i.e on 27.4.96, the first and the third accused wanted a few clause to be amended in the Divestment Agreement already entered into and therefore amended the same and entered into a Supplementary Agreement to the Divestment Agreement with the same parties, in which the second and the fourth accused being the representatives of the first and the third accused, signed the agreement. Pursuant to the substituted Clauses in the Divestment Agreement, the following amendments were carried out. (i)The word "Over The Counter Exchange of India (OTCEI) shall stand altered and be read as "OTCEI or any other Stock Exchange". Pursuant to the substituted Clauses in the Divestment Agreement, the following amendments were carried out. (i)The word "Over The Counter Exchange of India (OTCEI) shall stand altered and be read as "OTCEI or any other Stock Exchange". (ii) The meaning of the word "the shares" stands altered to mean the shares subscribed by the subscribers and bonus shares, if any, issued to the investors before the date of offer for sale. In all other respects, the other Clause and Terms and Conditions of Divestment Agreement stood unaltered. (f) Here, it is important to note that Clause 15 of the Divestment Agreement dated 1.9.95, namely, the Sponsor shall arrange to offer the equity shares for sale to the public not later than 30.04.96, stood unaltered. The complainant only on such representation made by the accused and further it is only on the basis of these Terms and Conditions in the Sponsorship Agreement and Divestment Agreement, believed the same to be true and had purchased the shares to the tune of Rs.8,00,000/-. (g) However, contrary to such representations, promises made and the agreements entered into, the first accused failed to arrange to offer the equity shares for sale to the public by 30.04.96 and moreover, no efforts had been taken by the accused either to list the shares or any thing was done in the direction of going public. (h) In the meantime, surprisingly, pursuant to the criminal conspiracy between them, the first and the third accused had entered into a Supplementary Agreement to Sponsorship Agreement among themselves without the knowledge of the investors, including the complainant on 27.4.96 to the effect that "The sponsor shall arrange to offer the shares for sale to the public and to get them listed at the OTCEI, or any other stock exchange on such terms, conditions and at such time as may be decided by the sponsor in its discretion" (i) Therefore, the complainant is said to have been mislead, or a false promise has been given to the complainant by the Sponsor even at the time of representing that the shares would be offered for sale on 30.4.96, but did not do so and consequently, the offence mentioned above has been committed by the accused. 4. 4. The learned counsel for the petitioner would first argue that the entire transaction would be a civil consequence, in other words, the learned counsel would say that it is only a breach of agreement, for which the remedy is only in the civil court and the parties cannot seek their vengeance through the Criminal Courts. In support of his contention, the learned counsel would cite before me a decision of this Court, reported in R.Ramakrishnan and others v. V.S.Dhanasekar, 1981 L.W.Crl 178, wherein his Lordship has held that "the parties should not be encouraged to resort to criminal Courts in a case, in which the point at issue between them is one, which can more appropriately be decided by a civil Court by unfolding the panoramic facts and the parties should not be allowed to appease their anger by resorting to criminal proceedings". 5. Yet another case has been cited by the learned counsel for the petitioner reported in S.W.Palanitkar and others v. State of Bihar and another, 2002 SCC (Cri) 129, wherein their Lordships have followed an earlier decision of the Supreme Court, reported in Punjab National Bank v. Surendra Prasad Sinha, 1993 Supp(1) SCC 499 wherein it has been stated that judicial process should not be used as an instrument in the hands of the private complainant as vendetta to harass the person needlessly. 6. The learned counsel would further rely upon paragraph 9 of the judgment cited supra in S.W.Palanitkar's case, 2002 SCC (Cri) 129 wherein, it is held as follows: 9. The ingredients in order to constitute a criminal breach of trust are : (i) entrusting a person with property or with any dominion over property, (ii) that person entrusted (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust. 7. 7. The learned counsel for the petitioners would further persuade this Court that what has to be seen is that whether there is any intention of cheating at the time of making the representation and he would stress that the agreement dated 1.9.95 has alone to be considered and on going through the agreement, it is seen that there is absolutely no element of cheating and according to the agreement the date mentioned for the company to go public was on 30.4.96. But due to certain unforeseen circumstance, the said company could not go public and at best, it may only amount to a breach of an agreement, for which the complainant would be entitled to seek remedies before the civil Court. 8. The second limb of the argument advanced by the learned counsel is that even assuming that the company did not go public wilfully, the third accused is the company who has committed an offence and the first accused is also similarly placed as that of the complainant, who has also invested about Rs.21,00,000 for having purchased shares and he has also been victimised. In such circumstances, if at all anybody is said to have been committed an offence, it is only the third and the fourth accused, who may at best be called upon to answer charges and not the petitioners herein. 9. The learned counsel for the complainant would place a decision of the Supreme Court reported in Maratt Rubber Ltd. v. J.K.Marattukalam, JT 2000 (4) SC 387, wherein their Lordships have stated that Section 482 Cr.P.C should be sparingly and cautiously exercised and only when the Court on consideration comes to a conclusion that otherwise it would be a case of abuse or process of Court or that there will be gross miscarriage of justice. Further more, the learned Judge has also held that mere pendency of civil proceedings before any civil Court, will not be a ground for quashing criminal proceedings, or to frame a charge against the accused. 10. Further more, the learned Judge has also held that mere pendency of civil proceedings before any civil Court, will not be a ground for quashing criminal proceedings, or to frame a charge against the accused. 10. In M/s.Medchil Chemicals and Pharma Pvt. Ltd v. M/s. Biological E. Ltd and others, JT 2000 (2) SC 426, their Lordships have followed a decision of Supreme Court reported in Nagpur Steel and Alloys Pvt. Ltd v. P.Radhakrishna, 1997 SCC (Crl) 1073 wherein it has been stated that merely because the offence was committed during the course of commercial transaction, would not be sufficient to hold that the complaint did not warrant a trial. Whether or not the allegations in the complaint were true was to be decided on the basis of evidence to be led at the trial in the complaint case. It certainly was not a case in which the criminal trial should have been cut short. Their Lordships would further go on to state that the High Court while exercising its inherent power, the only requirement is to see whether the continuance of the proceeding would be a total abuse of the process of Court. The Criminal Procedure Code contains a detailed procedure for investigation, charge and trial and in the event, the High Court is desirous of putting a stop to the known procedure of law, the High Court must use a proper circumspection and as noticed above, very care and caution to quash the complaint in exercise of its inherent jurisdiction. 11. At this stage it will not be out of place for me to state as to how a petition under Section 482, Cr.P.C has to be viewed, in the case of a one, which has been instituted on a Police report as opposed to a private complaint. 12. A case instituted on a police report is a culmination of an entire investigation and the entire evidence that is sought to be relied on by prosecution forms part of Section 173, Cr.P.C records and as such the framing of the charge is based purely on such statements and records and consequently, the accused is at liberty to put forth his contention on the basis of the materials that are available under Section 173, Cr.P.C and persuade the Court that the evidence is insufficient to warrant framing of charges. But whereas, in the case of a complaint filed by a private person, there are two stages, one is the stage of taking cognizance and the other is the stage of framing charges. 13. At the stage of taking cognizance by the Magistrate the only material before him is the complaint and the documents in support of the same. He may on certain occasions conduct an enquiry under Section 202, Cr.P.C and then take cognizance or in the absence of the same, if he is satisfied with the complaint and the sworn statement, he is at liberty to take cognizance. But once cognizance has been taken, he has to follow the next process by issuing summons or warrant as the case may be to the accused and after the accused appears before the Court, witnesses are examined on behalf of the prosecution, for the purpose of framing charges. It is only thereafter, the accused is at liberty to cross examine the witnesses and before framing charges both the sides are entitled to put forth their contentions and it is on this basis, the Magistrate can either frame charges or not. 14. Therefore, at the risk of repetition I may state that in a case of a private complaint there are two stages, one is taking cognizance and the other is framing charges. In the present case, we are at the stage of the Magistrate having taken cognizance. So in such circumstances, we have to consider whether it is necessary for the Magistrate to go deep into the complaint and the documents to see whether there are enough materials to frame charges and quashing the prosecution at this stage would amount to nipping the bud. I am afraid that it may not be so, since the Apex Court has stated that if there would be a grave suspicion that the accused would have committed an offence, it is enough for the Court to frame charges. In the judgments reported in Dilwar Balu Kurane v. State of Maharashtra, 2002 SCC (Crl) 210 and in Rajesh Bajaj v. State of NCT of Delhi, 1999 (3) SCC 259 , the Supreme Court has held as follows: "It is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelled out in the complaint, is not the need at this stage. If factual foundation for the offence has been laid in the complaint the Court should not hasten to quash criminal proceedings." 15. Bearing the above propositions of law in mind, I have to now consider the materials before the Court. The respondent has clearly averred in his complaint that the first accused is the Sponsor for the third accused company who tried to float the shares and bring in for sale on or before 30.4.96. An agreement had been entered into between the complainant and the accused with regard to the same. But however three days prior to the expiry of the date i.e on 27.4.96, a Supplementary Agreement has been entered into between the complainant and the third accused in which only certain amendments had been made and those two amendments are to the effect that the words found in the earlier agreement namely "Over The Counter Exchange of India (OTCEI) would stand altered and be read as "OTCEI or any other Stock Exchange" and the second amendment was to the effect that the words "the shares" stands altered to mean the shares subscribed by the subscribers and bonus shares, if any, issued to the investors before the date of offer for sale. In all other respects, the earlier Divestment agreement stood unaltered, that is to say that the earlier commitment made by the third accused along with the first accused that the shares shall be brought for sale on or before 30.04.96 shall stand valid. 16. In all other respects, the earlier Divestment agreement stood unaltered, that is to say that the earlier commitment made by the third accused along with the first accused that the shares shall be brought for sale on or before 30.04.96 shall stand valid. 16. However, the case of the complainant is that on the very same day namely on 27.4.96, without his knowledge, A-1 and A-3 have clandestinely entered into an Supplementary agreement to Sponsorship Agreement, wherein they have made an amendment in relation to Clause 15 of the Sponsorship Agreement, which reads as follows: "The sponsor shall arrange to offer the equity shares for sale to the public not later than April 30 1996 to get them listed at the OTCEI on such terms and conditions as may be decided by the Sponsor in its absolute discretion be altered and read as "The Sponsor shall arrange to offer the shares for sale to the public and to get them listed at the OTCEI or any other stock exchange on such terms, conditions and at such time as may be decided by the Sponsor in its absolute discretion. 17. Apart from the above stated amendment, there has also been an amendment with regard to the date, which runs as follows: "The date "30th April 1996 stands altered and be read as "date to be decided by the Sponsor in his sole discretion" This clause has been found in the document executed by the first and the third accused which has been signed by the second and the fourth accused dated 27.4.96. Further, in the said document, neither the complainant was a party nor was he informed about this amendment. 18. The learned counsel for the petitioner would argue that this document cannot be taken into consideration, since what has to be seen in a case of cheating is the document that pertains to the earliest representation, on the basis of which the accused had parted with the money and this Court has to see whether there was any false representation or deception on that date on which such a representation was made and consequently, any offence is said to have been made out. 19. True, the court must be satisfied to hold that there was deception at the time of representation. But that cannot be gauged only on the basis of the earliest representation alone. 19. True, the court must be satisfied to hold that there was deception at the time of representation. But that cannot be gauged only on the basis of the earliest representation alone. No one would ever at the first instance itself come forward with any misstatements, enabling the person to fall into the trap. On the other hand, a sharp-witted cheat would try to make it appear as if he is making a genuine offer at the first instance and lure people into the transaction and it is only later on, he will bring out his true colours and ultimately cheat him. Therefore, when the matter relates to a chain of events, we cannot take into consideration the earliest document alone and come to a conclusion that there was an element of cheating at the time of representation. The subsequent documents which has been entered into especially the two documents in the form of agreements of one relating to the complainant and the accused herein and the other between the first and the third accused intersee, have been prepared only on 27.4.96 and the agreement in which the complainant is a party does not contain any amendment, or it does not show that the shares should be brought for sale by the Sponsor on the date and time as may be decided by the Sponsor in its absolute discretion. However, in the agreement between A-1 and A-3 this amendment has been carried out. This obviously, is to drag on the process of bringing the shares for sale and admittedly, it transpires that the shares have not yet been brought for sale. 20. The complainant has filed these two agreements along with the complaint. The details of the entire thing have not been brought to this Court and it may not be necessary for me to go into those documents at this stage. In these circumstances, I am again reminded of the decision of the Apex Court reported in Hridaya Ranjan Prasad Verma v. State of Bihar, 2000 (4) SCC 168 , wherein their Lordships have held that the intention of the accused depends upon the inducement, which may be judged by his subsequent conduct also. In these circumstances, I am again reminded of the decision of the Apex Court reported in Hridaya Ranjan Prasad Verma v. State of Bihar, 2000 (4) SCC 168 , wherein their Lordships have held that the intention of the accused depends upon the inducement, which may be judged by his subsequent conduct also. The facts of this case reveals that there are chain of events taking place from the year 1995 to April 1996 and consequently, I find there is sufficient ground for the Magistrate to take cognizance of the offence as against the accused. 21. Yet another argument has been advanced by the learned counsel for the petitioners that for the offence under the Companies Act, the complaint has to be given only by the Registrar. Hereagain, at the risk of repetition, I may state that none of the parties have stated under what Section the Magistrate had taken cognizance and at any rate, this is a matter which could be raised at the time of framing charges by the Magistrate. 22. In the above circumstances, I do not find any reason to quash the complaint. Accordingly, this petition is dismissed. Consequently, connected Crl.M.Ps are closed.