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2006 DIGILAW 1495 (DEL)

K. JAYRAM v. STATE

2006-08-30

S.N.AGGARWAL

body2006
S. N. AGGARWAL, J. ( 1 ) (ORAL)EXEMPTION granted subject to just exceptions. Bail Appln. No. 3008-09/2006 and Crl. M. A. No. 8780/2006 notice. Mr. Sunil Sharma, APP for the State, accepts notice of this application on behalf of the respondent. Mr. Lalit Kumar, Advocate is also present on behalf of the complainant. ( 2 ) THIS bail application is opposed by the learned APP for the state. He has opposed this bail application on the ground that the amount of alleged cheating involved in this case is quite huge and that other Candf Agents appointed by the petitioners have also filed similar complaints against him in the State of Gujrat, Kerala and West Bengal. ( 3 ) THE facts relevant for the decision of this bail application are as follows:-The petitioners are accused of offences under Section 120b/406/409/420/467/468/471 IPC in case registered against them vide FIR no. 736/2005 with Police Station Punjabi Bagh. The Petitioner No. 1 is the chairman of a company called India Household and Health Care Ltd. (hereinafter referred as IHHL) which was doing the business of importing the health care and household goods of South Korean company named LG House Hold and Health Care Ltd. (hereinafter referred as M/s LGHHL) into India. The Petitioner No. 2 is the wife of the Petitioner No. 1 and a Director of the above named company called IHHL which has been accused by the complainant for cheating and defrauding. ( 4 ) THE complainant M/s Akshatha Services Pvt. Ltd. was appointed as clearing and Forwarding Agent (Candf Agent) by the IHHL when the IHHL was at the advance stage of discussion to acquire exclusive marketing rights for Indian territory for the Fast Moving Consumer Products (FMCG) with the above named south Korean company LGHHL. An agreement dated 01. 06. 2004 between IHHL and the complainant company is Annexure A-1 at Page 18 of the paper book. ( 5 ) ON 01. 11. 2003, the LGHHL had entered into a Memorandum of understanding (MOU), annexed as Annexure A-2 at Page 58 of the paper book. As per the terms of the MOU, the LGHHL had appointed IHHL as its sole representative, importer and licensee for the import, promotion, sale and marketing of the whole range of Fast Moving Consumer Goods of LGHHL. The said mou contemplated the achievement of sale of products of LGHHL by IHHL worth 4. As per the terms of the MOU, the LGHHL had appointed IHHL as its sole representative, importer and licensee for the import, promotion, sale and marketing of the whole range of Fast Moving Consumer Goods of LGHHL. The said mou contemplated the achievement of sale of products of LGHHL by IHHL worth 4. 5 million USD in two years and had an automatic renewal clause based on the performance. The LGHHL had acted upon the MOU and exported its products to India from their factories in Korea, Vietnam. All the products were emblazoned with LG logo along with the name of IHHL printed as sole licensee. ( 6 ) IN order to promote the business, IHHL had appointed several clearing and Forwarding Agents. The complainant on whose complaint the present fir was registered against the petitioners and others is one of such Candf agents. In continuation of the MOU, the LGHHL had executed a License Agreement with the IHHL on 08. 05. 2004 crystallizing the rights and liabilities of the parties. A copy of the said License Agreement is at pages 67 to 90 of the paper book. ( 7 ) IT is contended that pursuant to the aforementioned MOU and the license Agreement, the IHHL had invested huge amount to the tune of Rs. 500 crores on promotion, advertisement, creation of the network of distributors and established 23 warehouses across the India, 4 Regional Headquarters, one corporate Office, appointed 23 major Candf Agents and also created other nation wise infrastructure. It is further contended that under the MOU, the IHHL had given a purchase commitment of 2 million USD for the year 2004-05 and 2. 5 million USD for the year 2005-06. However the IHHL had achieved the entire target of 4. 5 million USD in just 7-8 months and had purchased products worth 4. 5 million USD from LGHHL by August, 2004 The contention of the counsel for the petitioner is that the achievement of the target by the IHHL in such a short time had unearthed the potential of the Indian Market and it has polluted the minds of the officials of LGHHL and on that count LGHHL allegedly started to distant itself from IHHL since September, 2004 onwards. the LGHHL had instructed the IHHL to put on hold the business on the pretext that a serious internal dispute regarding the use of LG logo had arisen in the company and further instructed to put on hold the business until the confusion pertaining to the use of LG logo was resolved within the LG Company. The LGHHL thereafter terminated all business relations with IHHL through a legal notice dated 05. 02. 2005 sent to ihhl. In the aforesaid notice the stand taken by LGHHL was that the documents viz. the MOU dated 01. 11. 2003 and the License Agreement dated 08. 05. 2004 are null and void as the same were executed on behalf of LGHHL by working level officers who were junior in rank to the Management. The counsel for petitioner has contended that the LGHHL official who had signed the contract with IHHL had also signed the contract with many other countries also. He has referred to Page 118-A to 118-I of the paper book (Annexure-A-6-A) to show the copy of one such agreement. ( 8 ) THE learned counsel for the petitioners has argued that the petitioners and the Management of IHHL had done all that was possible to sort out the problem but on account of unilateral termination of the contract of IHHL by LGHHL, the IHHL ran into huge losses on account of unexpected and unforeseen situation created by LGHHL. It is submitted that the IHHL has filed an arbitration agreement before the Supreme Court and the dispute arising out of unilateral termination of its contract by LGHHL is presently pending in the supreme Court where a prayer has been made for referring the same to the panel of arbitrators. The counsel has further contended that the LGHHL has colluded with the complainant in order to defeat and circumvent the claim of the IHHL for the unfortunate and most arbitrary termination of the contractual relationship with IHHL by the LGHHL. The FIR in question registered against the petitioners is alleged to be the outcome of that collusion between LGHHL and the complainant company. The counsel for the complainant has contended that the complainant company was induced by IHHL to make a security deposit of Rs. 1. 5 crores on the pretext that the complainant was going to be appointed as Candf Agent for LG company. The counsel for the complainant has contended that the complainant company was induced by IHHL to make a security deposit of Rs. 1. 5 crores on the pretext that the complainant was going to be appointed as Candf Agent for LG company. This contention is denied by the learned counsel for the petitioners. At this stage, the learned APP for the State has contended that the goods supplied by M/s IHHL to the complainant company were of sub-standard quality and the complainant had asked IHHL to take it back and to return the security deposit of the complainant. It is submitted that neither the goods were taken back by IHHL nor the security amount of the complainant was refunded to it. ( 9 ) THE learned counsel for the petitioners has also argued that vijay R. Singh, Managing Director of IHHL was arrested and he was admitted to regular bail by the Court of Shri O. P. Gupta, ASJ, Rohini, Delhi. In the bail order of petitioners' co-accused Vijay R. Singh, it is mentioned that the dispute between the parties seems to be of civil nature. It is also mentioned in the bail order pertaining to Vijay R. Singh that the genuineness of the documents by and between LGHHL and IHHL is not in dispute, rather the I. O. confirms having verified the same. The bail order in relation to petitioners' co-accused Vijay R. Singh is at pages 152-153 of the paper book. The learned counsel for the petitioners has urged that the petitioners are also entitled to be admitted to bail applying the principle of parity as their co-accused Vijay r. Singh has already been admitted to bail by the Sessions Court. ( 10 ) THE learned APP for the State has disputed the parity claimed by the petitioners. He has submitted that the petitioners' co-accused Vijay R. Singh was granted bail by the Sessions Court after he remained in custody for 45 days. According to him since the petitioners are asking for anticipatory bail, they cannot claim parity with their co-accused Vijay R. Singh. The learned APP has also contended that the custodial presence of the petitioners is required for making recovery of account books and other related documents of the company m/s IHHL from them. According to him since the petitioners are asking for anticipatory bail, they cannot claim parity with their co-accused Vijay R. Singh. The learned APP has also contended that the custodial presence of the petitioners is required for making recovery of account books and other related documents of the company m/s IHHL from them. He has also submitted that the petitioners' co-accused Vijay r. Singh has stated in his disclosure statement that the petitioner No. 1 alone can tell where security deposit of the complainant worth Rs. 1. 5 crores has gone and for that purpose also the custodial presence of the petitioner No. 1 is required. The learned APP has further submitted that the petitioner No. 1 despite orders of the Court in his first anticipatory bail application has not co-operated in the investigation. He has said that except for once the petitioner no. 1 did not appear before the I. O. for his interrogation. This submission of the learned APP implies that the petitioner No. 1 had attended the inquiry into the case before the I. O. at least on one occasion. The contention of the learned app that custodial presence of petitioner No. 1 is required for making recovery of the account books and other related documents of IHHL does not hold any water. I am of the view that if the I. O. could not recover the account books of ihhl from the Managing Director of the said company though he remained in police custody for five days, how could recovery of account books be made from the petitioner No. 1. ( 11 ) IN G. Sagar Suri v. State of UP, 2000 (2) SCC 636 , the Supreme court has observed as under:"it is to be seen if a matter, which is essentially of 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 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. for the accused it is a serious matter. This Court has laid certain principles on the basis of which 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. " ( 12 ) IN M/s. Indian Oil Corporation v. M/s. NEPC India Ltd. and Ors. (Criminal Appeal No. 834/2002 decided on 20. 7. 2006), the Supreme Court has observed that there is a growing tendency in the business circles to convert purely civil disputes into criminal cases on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interest of lenders/creditors. ( 13 ) THE ratio of law laid down by the Supreme Court in the aforementioned two judgments squarely applies to the facts of the present case. In this case also, it prima-facie appears that the complainant company has filed the FIR in question against the petitioners to convert a business dispute of purely civil nature into a criminal case. I am further of the view that in case the petitioners have done any criminal wrong for which FIR in question is registered against them, they can be punished as per law after the trial against them is over. Both the petitioners seeking their anticipatory bail in the present case have roots in the society. There is no apprehension of their absconding the trial. In my view, the petitioners cannot be denied bail particularly when their co-accused Vijay R. Singh has already been admitted to bail. ( 14 ) IN view of the above and having regard to all the facts and circumstances of the case, the petitioners are admitted to anticipatory bail on their executing bail bonds in the sum of Rs. 5 lacs each with two sureties each in the like amount to the satisfaction of the concerned Arresting Officer and subject to the further condition that they shall not leave the country without prior permission of the Court. The petitioners are directed that they shall join the investigation as and when called by the I. O. Order dasti to both sides.