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2006 DIGILAW 2164 (PNJ)

Tarsem Lal v. State Of Punjab

2006-05-17

ASHUTOSH MOHUNTA

body2006
Judgment Ashutosh Mohunta, J. 1. The petitioner has prayed for quashing of FIR (Annexure P-1). 2. Briefly, the facts of the case are that the District Manager of the Punjab State Warehousing Corporation (for short the Corporation), Ferozepur entered into an agreement with the petitioner for de-husking the paddy. The agreement was signed on 9.10.2003. As per the agreement, the petitioner was to de-husk the paddy and return the same to the Corporation. As the petitioner failed to return the paddy, de-husked by him, therefore, the present FIR (Annexure P-1) was registered against him on a complaint filed by Gurmeet Singh, District Manager of the Corporation, Ferozepur under Section 406 IPC. 3. Counsel for the petitioner contends that there was an arbitration clause in the agreement and therefore, proceedings under Section 406 IPC cannot be initiated against the petitioner. 4. A perusal of clause 22 of the agreement shows that in case of any dispute between the rice miller and the procuring agency, the Managing Director of the Corporation will offer an opportunity to the miller to present his case in respect of dues and the decision of the Managing Director shall be final. It has further been mentioned in the clause that in case of dispute, the matter would be adjudicated by the sole arbitration of the Managing Director or his nominee whose decision shall be final and binding. 5. On the basis of the above, Mr. Sidhu contends that as there is an arbitration clause, the present FIR is liable to be quashed. Learned counsel has also relied on the judgment of the Supreme Court in Kailash Verma v. Punjab State Civil Supplies Corporation and another, 2005(1) Apex Criminal 339 : 2005(1) RCR(Criminal) 727, wherein it has been held that where the Government department entrusts paddy to the accused for de-husking and the rice was not returned as per the agreement, then the dispute is essentially of a civil nature and no offence under Section 406 IPC is made out. Mr. Munjal, Sr. Addl. Advocate General, on the other hand contends that the petitioner has misappropriated the paddy given to him and has not returned the same after de-husking, therefore, the petitioner is liable to face trial under Section 406 IPC. 6. Mr. Munjal, Sr. Addl. Advocate General, on the other hand contends that the petitioner has misappropriated the paddy given to him and has not returned the same after de-husking, therefore, the petitioner is liable to face trial under Section 406 IPC. 6. After hearing learned counsel for the parties at length, it is clear that there was an arbitration agreement in the present case according to which in the event of a dispute between the petitioner and the Corporation, the matter would be referred to an Arbitrator, to be appointed by the Managing Director. The offence in the present case is of a civil nature and therefore, in view of the dictum in Kailash Vermas case (supra), no case under Section 406 IPC is made out. In view of the above, I quash FIR (Annexure P-1). All proceedings initiated in pursuance of the lodging of the FIR are also quashed. The petition is allowed in the above terms.