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2006 DIGILAW 653 (PAT)

Steel Authority Of India Ltd. v. State Of Bihar

2006-07-28

REKHA KUMARI

body2006
Judgment 1. This is an application filed under Section 482 of the Code of Criminal Procedure, 1973 for quashing the order dated 5.7.2005 passed by the Sub-divisional Judicial Magistrate, Patna in complaint case No. 1784 (C) of 2005 by which he has ordered to issue summons against the petitioners for facing trial for offences under Sections 406. 420 and 120-B of the Indian Penal Code. 2. Heard both sides. 3. The case of the complainant-Opposite Party No. 2 in nut shell is that a tender was invited by the petitioners for supply of High Silica Sand of M/s. Standard Mercantile Company Limited of which Opposite Party No. 2 is the Manager having its Head Office at Patna and which deals in Silica Sand etc. from the mines at Raj Mahal (Jharkhand) submitted tender. His tender was accepted. Then in pursuance of the purchase order dated 15.9.2003. Opposite Party No. 2 supplied the goods in instalments. He had also to deposit some earnest money as security. It is further said that though on account of the supply of the goods and the security money deposited total amounting to Rs. 11,72.607.00 fell due but in spite of several reminders the petitioners with mala fide intention did not pay the amount. 4. Opposite Party No. 2 hence, filed a complaint for taking action against the petitioners who are officials of M/s. Steel Authority of India Limited, Bokaro (Jharkhand) for taking action for the offences under Sections 406, 420 and 120-B of the Indian Penal Code, 5. The complainant then was examined on solemn affirmation. He also examined a witness in enquiry under Section 202, Cr PC. The learned Magistrate after considering the complaint petition, statement of the complainant on solemn affirmation and the statement of the witness, found a prima facie case under Sections 406, 420 and 120-B of the Indian Penal Code against the petitioners and passed the impugned order. 6. Learned counsel for the petitioners submitted that even if the entire allegations made in the complaint petition are accepted no offence under Section 420 or 406 of the Indian Penal Code is made out and the dispute is of civil nature. His further submission is that the Court at Patna has no territorial jurisdiction to enquire or try the case and on the ground also the impugned order is bad. 7. His further submission is that the Court at Patna has no territorial jurisdiction to enquire or try the case and on the ground also the impugned order is bad. 7. Learned counsel for Opposite Party No. 2 defended the order and further submitted that it is premature to hold at this stage that no offence under Sections 420 and 406 of the Indian Penal Code is made out. 8. It is well settled that in order to constitute an offence of cheating (i) there must be deception of any person and (ii) fraudulently or dishonestly inducing that person to deliver any property to any person. But in this case the legal notice attached with the complaint petition shows that there was business transaction between the parties from 30 years before the occurrence. The case of the complainant also is that tenders were invited and after acceptance of tender supply order was issued and then the goods were sent to the petitioners. 9. So. by no stretch of imagination, it can be said that the petitioners, by any deceitful means had dishonestly or fraudulently induced the Opposite Party No. 2 to enter into agreement for supply of goods. It is also well settled that deception must exist from the very start of transaction, but the same is very much wanting in this case. So. even if the price of the goods has not been paid, the petitioners cannot be liable for cheating punishable under Section 420 of the Indian Penal Code. 10. Then for an offence under Section 406 of the Indian Penal Code there must be an entrustment of the property in respect of which the offence is said to have been committed, that means, the ownership or beneficial interest in the property must be in some person other than the accused and the accused must hold it on account of some person or in some way, for his benefit. But in this case, the goods were sold to the petitioners and the ownership had passed to the petitioners. Therefore, there was no entrustment and no question of any criminal breach of trust. As regards the price of the goods also, there was no entrustment of the same by the Opposite Party No. 2 to the petitioners. So, no offence under Section 406 of the Indian Penal Code arises for non-payment of the price. Therefore, there was no entrustment and no question of any criminal breach of trust. As regards the price of the goods also, there was no entrustment of the same by the Opposite Party No. 2 to the petitioners. So, no offence under Section 406 of the Indian Penal Code arises for non-payment of the price. Then, so far as the security money, even though the sme was entrusted by Opposite Party No. 2 to the petitioners, the allegation in the complaint petition is that according to the petitioners, there was shortage of 182960 M.T. of goods despatched. Therefore, if on account of the shortage of any goods supplied, the security money has been withheld, it cannot be said that the petitioners had any dishonest intention in withholding it. So, there was no criminal misappropriation of that amount, and no offence punishable under Section 406 of the Indian Penal Code is made out. 11. As regards the territorial jurisdiction of the Court at Patna, though there is no embargo under Section 190 (1), Cr PC as to territorial jurisdiction for taking cognizance, Sections 177 to 189, Cr PC relate to jurisdiction of the criminal Courts in inquiries and trials. Among these Sections, Sections 177, 179 and 181 are relevant for the purpose at hand. Section 177, Cr PC provides the ordinary rules and reads that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. According to Section 179, Cr PC when an act is an offence by reason of anything which has been done and of consequence which has ensued then the offence may be inquired into or tried by a Court within whose local jurisdiction such thing has been done or such consequence has ensued. The relevant portion of Section 181 (4), Cr PC says that any offence of criminal misappropriation or criminal breach of trust may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or any part of the property which is subject-matter of the offence was received or retained or was required to be returned or accounted for by the accused persons. 12. In this case, though the complaint petition shows that the Company of the complainant has its Head Office at Kid-waipuri, Patna, there is not a word therein that any part of occurrence took place there. 12. In this case, though the complaint petition shows that the Company of the complainant has its Head Office at Kid-waipuri, Patna, there is not a word therein that any part of occurrence took place there. There is also nothing therein to show that any deception was practised on Opposite Party No. 2 at Patna so as to be covered by Section 179, Cr PC. Therefore, only because Opposite Party No. 2 has its Head Office at Patna, that would not confer jurisdiction on the Court at Patna for the purpose of inquiry or trial. Then, the invoices attached with the complaint petition show that the goods were sent from Raj Mahal to Bokaro Steel City (both places falling in the State of Jharkhand). Therefore, in view of Section 181 (4), Cr PC the Court at Patna had no territorial jurisdiction to inquire into or try the case. 13. Therefore, it is evident that no part of cause of action for the complainant arose in Patna. The Supreme Court in the case of V. Abraham Ajith and others V/s. Inspector of Police, Chennai and others, AIR 2004 SC 4286 while discussing place of trial held "when the aforesaid legal principles are applied to the factual scenario disclosed by the complainant in the complaint petition, the inevitable conclusion is that no part of cause of action arose in Chennai and, therefore, the concerned Court had no jurisdiction to deal with the matter." Hence, in view of this decision, when no part of cause of action arose at Patna the learned Additional Chief Judicial Magistrate, Patna had not jurisdiction to pass the impugned order. 14. I, thus find substance in the submission of the learned counsel for the petitioners that the complaint petition does not disclose any offence under Sections 420, 406 and 120-B of the Indian Penal Code and the dispute is purely of civil nature and that the Courts at Patna had also no jurisdiction to deal with the matter. 15. in the result, this application is allowed and the impugned order is hereby quashed.