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Madhya Pradesh High Court · body

2006 DIGILAW 1082 (MP)

M. S. Banga v. Bhisham Singh

2006-09-10

AJIT SINGH

body2006
ORDER 1. This petition, under section 482 of the Code of Criminal Procedure, 1973, is for quashing the proceedings of Criminal Complaint Case No. 1791/2004 filed by the respondent No. 1 in the Court of Chief Judicial Magistrate, Seoni. 2. According to the respondent No. 1 he is an authorized agent of the Company, Hindustan Lever Limited (for short; "HLL") since 1.4.1991. There were smooth business dealings between them till January 1999. From 1.9.1999 the Company HLL introduced a new scheme whereby goods were supplied against demand drafts, pursuant to which he submitted demand drafts in the name of Company HLL to the value of Rs. 9,00,000/- but it did not supply him the goods. The grievance of the respondent No. 1 is that he and Narendra (PW 3) met the petitioners in Mumbai office, who are responsible for maintaining his accounts, and requested them either to return money or supply the goods but to no avail. The respondent No. 1, therefore, filed a criminal complaint on 25.10.2001 against the petitioners and 18 others for offences under sections 406 and 420 of the Indian Penal Code in the Court of Chief Judicial Magistrate, Seoni. Thereafter, statements of respondent No. 1 (PW 1), Ashish (PW 2) and Narendra Kumar (PW 3) were recorded. The Magistrate by order dated 7.12.2004 registered an offence under section 406 of the Indian Penal Code against the petitioners and one Gupte and issued process for their appearance. 3. It is to be noted that on 9.10.2001 respondent No. 1 filed a Civil Suit No. 9B/2005 on same allegations in the Court of Second Additional District Judge, Seoni, against the petitioners No. 1, 4, 5 and others for the settlement of account and in that suit an ex-parte preliminary decree has been passed in his favour by judgment and decree dated 24.12.2005. 4. 4. The learned senior counsel has argued that even if all the allegations in the complaint were taken as true, they did not constitute an offence under section 406 of the Indian Penal Code; the complaint related to purely contractual dispute of a civil nature in respect of which the respondent No. 1 had already filed a civil suit; the entire allegations made by the respondent No. 1 were against the Company HLL and, therefore, it alone could be prosecuted as petitioners cannot be made vicariously liable under the Indian Penal Code and lastly the Court at Seoni has no territorial jurisdiction to entertain the complaint as no criminal breach of trust has taken place there. The learned counsel for the respondent No. 1, on the other hand, has defended the registration of the offence under section 406 of the Indian Penal Code against the petitioners by the trial Court. He also argued that no ground for exercising the jurisdiction under section 482 of the Code of Criminal Procedure, 1973 by this Court to quash the criminal complaint in question is made out. 5. Summarizing the principles regarding exercise of jurisdiction under section 482 of the Code of Criminal Procedure, 1973 for quashing the proceedings of criminal complaint case, Honourable R. V. Raveendran, J. recently in Indian Oil Corpn. v. NEPC India Ltd. and others [ (2006) 6 SCC 736 ] held : "(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint. (ii) A complaint may also be quashed where it is a clear abuse of the process of the Court, as when the criminal proceeding is found to have been initiated with malafides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable. (iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. (iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution. (iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. (v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not." 6. In the case of Indian Oil Corpn. (supra) the learned Judge also took notice of a growing tendency in business circles to convert purely civil disputes into criminal cases on account of impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. He also observed that there is an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement and directed the Courts to deprecate such an effort to settle civil disputes and claims, which do not involve any criminal offences by applying pressures through criminal prosecution. He even advised the Courts to exercise powers under section 250 of the Code of Criminal Procedure, 1973 more frequently to curb unnecessary prosecutions and harassment of innocent parties where they discern malice or frivolousness or ulterior motives on the part of complainant. Earlier also, in S. W. Palanitkar and others v. State of Bihar and another [ (2002) 1 SCC 241 ] the Supreme Court had expressed similar views. 7. Earlier also, in S. W. Palanitkar and others v. State of Bihar and another [ (2002) 1 SCC 241 ] the Supreme Court had expressed similar views. 7. In G. Sagar Suri v. State of U.P. [ (2000) 2 SCC 636 the Supreme Court in paragraph 8 observed as under : "It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal Proceedings are not a short cut of other remedies available in law. Before issuing process a criminal Court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any Court or otherwise to secure the ends of justice." 8. The foremost question, which calls for consideration is whether the allegations made in the criminal complaint constitute an offence of criminal breach of trust against the petitioners. The essential ingredients in order to constitute an offence of criminal breach of trust are as follows : "(a) a person should have been entrusted with property, or entrusted with dominion over property; (b) that person should dishonestly misappropriate or convert to his own use that property, or dishonestly use or dispose of that property or willfully suffers any other person to do so; (c) that such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the person has made, touching the discharge of such trust." 9. In the present case, the bank drafts, which were in favour of the Company HLL, were handed over to it by the respondent No. 1. The bank drafts are said to have been encahsed by the Company HLL. The obligation on the Company HLL was to send the goods to the respondent No. 1 against the money, which it received by bank drafts. The goods were allegedly not sent. The encashment of the bank drafts by the Company HLL was not in violation of any direction of law or legal contract which the parties had made. The obligation on the Company HLL was to send the goods to the respondent No. 1 against the money, which it received by bank drafts. The goods were allegedly not sent. The encashment of the bank drafts by the Company HLL was not in violation of any direction of law or legal contract which the parties had made. All that the Company HLL did not do was the sending of goods, which, according to the contract, should have been sent to the respondent No. 1. The bank drafts were meant to be encashed by the Company HLL and, therefore, it cannot be said that its encashment by the Company HLL was in breach of any trust. After the bank drafts, which were in favour of the Company HLL, were handed over by the respondent No. 1 to the Company HLL, they became its property. The Company HLL could utilize them according to its choice. In the circumstances, it cannot be said that there was an entrustment of any property of the respondent No. 1 to the Company HLL. Even if it be assumed that the bank drafts were the property, which were entrusted by the respondent No. 1 to the Company HLL, it cannot be said that it dishonestly misappropriated or converted that property to its own use in violation of any direction of law or legal contract with the respondent No. 1. According to the contract, the Company HLL had full authority to encash the bank drafts in its favour. After encashment, money realized was the property of the Company HLL and there could be no breach of trust in respect of that property. The failure is only of not sending the goods by the Company HLL to the respondent No. 1 which is a breach of contract for which civil suit regarding settlement of account had already been filed. In my opinion, the allegations in the complaint, even if they are accepted on their face value, do not constitute an offence under section 406 of the Indian Penal Code. The complaint appears to have been filed to put a pressure on the Company HLL to settle the matter for which a civil suit had already been filed which is pending after passing of the preliminary decree for account. 10. The complaint appears to have been filed to put a pressure on the Company HLL to settle the matter for which a civil suit had already been filed which is pending after passing of the preliminary decree for account. 10. Since I have accepted the first two grounds argued by the learned senior counsel for petitioners, I do not find it necessary to decide the remaining grounds raised by him. 11. In view of the aforesaid, I quash the proceedings of Criminal Complaint Case No. 1791/2004 filed by the respondent No. 1 in the Court of Chief Judicial Magistrate, Seoni. 12. The petition is allowed.