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Calcutta High Court · body

2007 DIGILAW 798 (CAL)

Harshad Himmatlal Rupani v. STATE OF WEST BENGAL

2007-10-12

ASHIM KUMAR ROY

body2007
Judgment :- (1) THE petitioner in the instant criminal revisional application sought for quashing of the charge-sheet under Section 420 of the Indian Penal Code submitted in the Court of Learned Metropolitan Magistrate, 5th Court, Calcutta in connection with G. R. Case No. 2462/04 arising out of Hare Street Police station Case No. 573 dated September 24, 2004. (2) IT appears from the various averments made in the revisional application and grounds relied upon therein as well as from the written notes of arguments submitted on behalf of the petitioner and the submissions made in support of this application, during the hearing the aforesaid charge-sheet was challenged and prayer for quashing of the same has been made on the following contentions. (a) The basic facts contained in the First Information Report is lacking of essential elements of offence of cheating punishable under Section 420 of the Indian Penal Code and the materials collected during the investigation does not also make out any case of cheating as against the petitioner. (b) There is no allegation of initial deception. (c) There is nothing to show about the existence of fraudulent and dishonest intention on the part of the petitioner right from the beginning of the transaction in question. (d) Over the dishonour of the self-same cheques five separate cases under Section 138 of the Negotiable Instruments Act were instituted about one year eleven months before the lodging of the FIR, which are still pending. (e) In the complaint made under Section 138 of the Negotiable instruments Act nothing has been alleged constituting an offence under Section 420 of the Indian Penal Code. (f) In connection with the self-same transactions complainant having received part payment no case of cheating can be said to have been made out and there cannot be any question of initial deception or existence of dishonest or fraudulent intention on the part of the accused to cheat the complainant right from the beginning when the transaction was entered into. (g) The facts of alleged receipt of dues by the accused from Nasik municipal Corporation was admittedly known to the complainant since September, 2002 despite that the complainant attempted to make out a case of cheating nearly 2 years after. (3) MR. Uday Shankar Gupta, the learned Counsel appearing on behalf of the petitioner assisted by Mr. Tirthankar Ghosh and Mr. (3) MR. Uday Shankar Gupta, the learned Counsel appearing on behalf of the petitioner assisted by Mr. Tirthankar Ghosh and Mr. Manish Dougar submitted before this Court that continuance of any proceeding on the basis of the impugned charge-sheet would be completely an abuse of process of Court. According to Mr. Gupta not only the allegations made in the FIR has not contained the basic facts constituting the commission of an offence punishable under Section 420 of the Indian Penal Code nor any materials was collected by the police during investigation to constitute such offence, much prior to that nearly one year and eleven months back for dishonour of the selfsame cheques six separate cases under Section 138 of the Negotiable Instruments Act were instituted and the same are still pending. He further submitted in the complaints relates to the offence under Section 138 of the Negotiable Instruments Act there was no allegation which constitutes commission of offence of cheating. According to him admittedly as in the instant case part payment has been made and as such it cannot be said that there was any cheating punishable under Section 420 of the Indian Penal Code has been committed by the petitioner. Mr. Gupta further submitted allegations that the accused got the work executed on credit by the complainant on a representation that upon receipt of payment from Nasik Municipal Corporation all the dues would be paid and when the complainant came to know in September, 2002 about the receipt of payment by the accused and inspite of receipt of such payment no payment has been made to the complainant despite thereof no allegation of cheating has been made in the complaint under Section 138 of the Negotiable instruments Act but a story has been fabricated thereupon in 2004. (4) IN-SUPPORT of his contention Mr. Gupta referred several decisions but as it appears from his oral submissions made before this Court he mainly stresses on the observation of the Honble Apex Court made in Paragraph 14, in the case of G. Sagar Suri and Anr. v. The State of U. P. and Ors. , reported in (2000)2 SCC 636 : 2000 C Cr LR (SC) 136. Paragraph 15 and 16 in the case of Hridaya Ranjan Prasad Varma and Ors. v. State of Bihar, reported in (2000) 4 SCC 168 : 2000 C Cr LR (SC) 293. v. The State of U. P. and Ors. , reported in (2000)2 SCC 636 : 2000 C Cr LR (SC) 136. Paragraph 15 and 16 in the case of Hridaya Ranjan Prasad Varma and Ors. v. State of Bihar, reported in (2000) 4 SCC 168 : 2000 C Cr LR (SC) 293. Paragraph 21, 22 and 23 in the case of S. W. Palanitkar and Ors. v. State of Bihar and Ors. , reported in (2002) 2 SCC 241. Paragraph 3, 4, 5,6,7 and 8 in the case of U. Dhar and Anr. v. State of Jharkhand, reported in (2003)2 SCC 219 . Paragraph 12, 13 and 14 in the case of Indian oil Corporation v. NEPC India Limited and Ors. , reported in (2006) 6 SCC 736 : (2007)1 C Cr LR (SC) 52. (a) In the case of G. Sagar Suri and Anr. v. State of U. P. and Ors. (supra)the Apex Court observed in Paragraph 14 as follows, "we agree with the submission of the appellants that the whole attempt of the complainant is evidently to rope in all the members of the family particularly those who are the parents of the Managing Director of Ganga automobiles Ltd. in the instant criminal case without regard to their role or participation in the alleged offences with the sole purpose of getting the loan due to the Finance Company by browbeating and tyrannising the appellants with criminal prosecution. A criminal complaint under Section 138 of the negotiable Instruments Act is already pending against the appellants and other accused. They would suffer the consequences if offence under Section 138 is proved against them. In any case there is no occasion for the complainant to prosecute the appellants under Sections 406/420,i. P. C. and in his doing so it is clearly an abuse of the process of law and prosecution against the appellants for those offences is liable to be quashed, which we do. " (Para 14) (b) In the case of Hridaya Ranjan Prasad Verma and Ors. v. State of Bihar (supra) the Supreme Court observed in Paragraph 15 and 16 as follows, "in determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. " (Para 14) (b) In the case of Hridaya Ranjan Prasad Verma and Ors. v. State of Bihar (supra) the Supreme Court observed in Paragraph 15 and 16 as follows, "in determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed. " (Para 15)"judged on the touchstone of the principles noted above, the present case, in our considered view warrants interference inasmuch as the ingredients of the offence of cheating punishable under Section 420, I. P. C. and its allied offences under Sections 418 and 423 has not been made out. So far as the offences under Sections 469, 504 and 120-B are concerned even the basic allegations making out a case thereunder are not contained in the complaint. That being the position the case comes within the first category of cases enumerated in State of Harayana v. Bhajan Lal and as such warrants interference by the Court . Reading the averments in the complaint in entirety and accepting the allegations to be true, the ingredients of intentional deception on the part of the accused right at the beginning of the negotiations for the transaction has neither been expressly stated nor indirectly suggested in the complaint. All that Respondent 2 has alleged against the appellants is that they did not disclose to him that one of their brothers had filed a partition suit which was pending. All that Respondent 2 has alleged against the appellants is that they did not disclose to him that one of their brothers had filed a partition suit which was pending. The requirement that the information was not disclosed by the appellants intentionally in order to make Respondent 2 part with the property is not alleged expressly or even impliedly in the complaint. Therefore the core postulate of dishonest intention in order to deceive the complainant-Respondent 2 is not made out even accepting all the averments in the complaint on their face value. In such a situation continuing the criminal proceeding against the accused will be, in our considered view, an abuse of the process of the Court. The High Court was not right in declining to quash the complaint and the proceeding initiated on the basis of the same. " (Para 16). (c) In the case of S. W. Palanitkar and Ors. v. State of Bihar and Ors. (supra), the Supreme Court observed in Paragraph 21, 22 and 23 as follows, "it is clear from the allegations made in the complaint and the sworn statements that Appellant 1 Company entered into an agreement with respondent 2 on certain terms and conditions. It is alleged that appellant 7 went to Patna and contacted Respondent 2 and induced him to enter into an agreement assuring him of huge profit. At the time of arriving at such an agreement, none of the other appellants either met Respondent 2 or induced him to enter into any agreement with a view to cheat him. The agreement was further renewed for a period of one year. It is not the case that there was no supply of goods at all as it has come on record that there was supply of 400 tons of fertilizer, may be it was far less than the required quantity. The allegations made against the appellants other than Appellant 7 are very vague and bald. From the material that was placed before the Magistrate, even prima facie, it cannot be said that there was conspiracy or connivance between the other appellants and Appellant 7. If the appellants have committed breach of agreement, it is open to Respondent 2 to seek redressal in a competent Court or forum to recover damages, if permissible in law in case he had sustained any loss. If the appellants have committed breach of agreement, it is open to Respondent 2 to seek redressal in a competent Court or forum to recover damages, if permissible in law in case he had sustained any loss. In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating. " (Para 21) "looking to the complaint and the grievances made by the complainant therein and having regard to the agreement, it is clear that the dispute and grievances arise out of the said agreement. Clause 29 of the agreement : provides for reference to arbitration in case of disputes or controversy between the parties and the said clause is wide enough to cover almost all sorts of disputes arising out of the agreement. As a matter of fact, it is also brought to our notice that the complainant issued a notice dated 3. 10. 1997 to the appellants invoking this arbitration clause claiming Rs. 15 lakhs. It is thereafter the present complaint was filed. For the alleged breach of the agreement in relation to commercial transaction, it is open to Respondent 2 to proceed against the appellants for his redressal for recovery of money by way of damages for the loss caused, if any. Merely because there is an arbitration clause in the agreement, that cannot prevent criminal. prosecution against the accused if an act constituting a criminal offence is made out even prima facie. " (Para 22)"many a times, complaints are filed under Section 200, Cr. P. C. by the parties with an oblique motive or for collateral purposes to harass, to wreck vengeance, to pressurize the accused to bring them to their own terms or to enforce the obligations arising out of breach of contract touching commercial transactions instead of approaching civil Courts with a view to realize money at the earliest. P. C. by the parties with an oblique motive or for collateral purposes to harass, to wreck vengeance, to pressurize the accused to bring them to their own terms or to enforce the obligations arising out of breach of contract touching commercial transactions instead of approaching civil Courts with a view to realize money at the earliest. It is also to be kept in mind that when parties commit a wrongful act constituting a criminal offence satisfying necessary ingredients of an offence, they cannot be allowed to walk away with an impression that no action could be taken against them on the criminal side. A wrongful or illegal act such as criminal breach of trust, misappropriation, cheating or defamation may give rise to action both on civil as well as on the criminal side when it is clear from the complaint and sworn statements that necessary ingredients of constituting an offence are made out. May be parties are entitled to proceed on civil side only in a given situation in the absence of an act constituting an offence but not to proceed against the accused in a criminal prosecution. Hence before issuing a process a Magistrate has to essentially keep in mind the scheme contained in the provisions of Sections 200-203, Cr. P. C. keeping in mind the position of law stated above and pass an order judiciously and not mechanically or in a routine manner. " (Para 23)(d) In the case of U. Dhar and Anr. v. State of Jharkhand (supra), the supreme Court observed in Paragraph 3, 4, 5, 6, 7 and 8 as follows, "briefly, the facts are that Bokaro Steel Plant, a unit of Steel Authority of india Limited (for short SAIL) awarded a contract to M/s Tata Iron and Steel Co. Ltd. (for short TISCO) growth shop for certain works. TISCO growth shop completed supply part of the work and erection part of the work was entrusted by it to M/s Tata Construction and Project Ltd. (for short TCPL). TCPL in turn issued tender enquiry and awarded the work to M/s Singh Construction Co., the complainant. According to the complainant, after completing the work it demanded payment of the balance amount under the contract, from TCPL. The appellants herein are the Managing Director and receive the payment for the work done, they filed a complaint on 11. 1. TCPL in turn issued tender enquiry and awarded the work to M/s Singh Construction Co., the complainant. According to the complainant, after completing the work it demanded payment of the balance amount under the contract, from TCPL. The appellants herein are the Managing Director and receive the payment for the work done, they filed a complaint on 11. 1. 2001 under Sections 403, 406, 420 and 120-B, I. P. C. at Bokaro. The Magistrate concerned took cognizance of the alleged offences and issued summons vide order dated 19. 6. 2001 to the appellants. The appellants challenged the said order by filing Crl. MP No. 4780 of 2001 in the High Court to Jharkhand at Ranchi. The impugned order was passed by the High Court dismissing the said petition on 3. 5. 2002. " (Para 3)"the present appeal has been filed against the said order of the High court whereby the High Court refused to quash the order of the learned Chief judicial Magistrate taking cognizance of the alleged offences against the appellants. The learned Counsel for the appellants argued that a perusal of the complaint would show that no case is made out against the appellants for the alleged offences, and, therefore, the order passed by the learned Chief judicial Magistrate is wholly without jurisdiction. According to the learned counsel for the appellants, the controversy relates to a purely civil dispute regarding payment of money and no case for criminal complaint for the alleged offences is made out. We have been taken through the complaint as well as our attention has been drawn to the impugned order passed by the Chief Judicial magistrate and the confirming order of the High Court. After careful consideration of the facts placed on record, it appears to us that the dispute between the parties is purely of a civil nature. The grievance of the complainant is about the failure of TCPL to pay the balance amount under the contract even though according to it the work stands completed. The appellants have disputed this. After careful consideration of the facts placed on record, it appears to us that the dispute between the parties is purely of a civil nature. The grievance of the complainant is about the failure of TCPL to pay the balance amount under the contract even though according to it the work stands completed. The appellants have disputed this. " (Para 4)"in our view, what is relevant is that the contract between TCPL and the complainant is an independent contract regarding execution of certain works and even assuming the case of the complainant to be correct, at best it is a matter of recovery of money on account of failure of TCPL to pay the amount said to be due under the contract. The complainant has alleged that TCPL has already received the money from SAIL for the work in question and it has misappropriated the same for its own use instead of paying it to the complainant and it is for this reason that the offences are alleged under Sections 403, 406 and 420 etc. " (Para 5)"the Courts below have overlooked the fact that the contract between bokaro Steel (a unit of SAIL) and TCPL is a separate and independent contract. The contract between the complainant and TCPL is altogether a different contract. The contractual obligations under both the contracts are separate and independent of each other. The rights and obligations of the parties i.e. the complainant and TCPL are to be governed by the contract between them for which the contract between TCPL and Bokaro Steel (SAIL) has no relevance. Therefore, even if Bokaro Steel has made the payment to TCPL under its contract with the latter, it will not give rise to plea of misappropriation of money because that money is not money or movable property of the complainant. " (Para 6)"further, Section 403 uses the words "dishonestly" and "misappropriate". These are necessary ingredients of an offence under Section 403,i. P. C. Neither of these ingredients is satisfied in the facts and circumstances of the case. In para 14 of the complaint, the complainant has stated as under: ". . . " (Para 6)"further, Section 403 uses the words "dishonestly" and "misappropriate". These are necessary ingredients of an offence under Section 403,i. P. C. Neither of these ingredients is satisfied in the facts and circumstances of the case. In para 14 of the complaint, the complainant has stated as under: ". . . Release of payments to the complainant was never dependent on the payment released by Bokaro Steel Plant, a unit of SAIL to TISCO growth shop and TCPL" (Para 7)"thus, admittedly, the two contracts are independent of each other and payment under one has no relevance quo the other. It cannot be said that there is any dishonest intention on the part of the appellants nor can it be said that TCPL or the appellants have misappropriated or converted the movable property of the complainant to their own use. Since the basic ingredients of the relevant section in the Indian Penal Code are not satisfied, the order taking cognizance of the offence as well as the issue of summons to the appellants is wholly uncalled for. Such an order brings about serious repercussions. So far as the appellants are concerned, when no case is made out for the alleged offences even as per the complainant filed by the complainant, there is no reason to permit the appellants to be subjected to trial for the alleged offences. Hence, the appeal is allowed. The impugned orders of the High Court: as well as of the Chief Judicial Magistrate are hereby ordered to be quashed. " (Para 8) (e) In the case of Indian Oil Corporation v. NEPC India Limited and Ors. (supra) the Supreme Court observed in Paragraph 12,13, and 14 as follows," the principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few-Madhavrao Jiwajirao Scindia v. Sarnbhajirao Chandrojirao Angre, State of Harayana v. Bhajan Lal, Rupan Deol Bajaj v. Kanwar Pal Singh Gill, Central bureau of Investigation v. Duncans Agro Industries Ltd., State of Bihar v. Rajendra Agarwalla, Rajesh Bajaj v. State NCT of Delhi, Medchl Chemicals and pharma (P) Ltd. v. Biological E. Ltd. , Hridaya Ranjan Prasad Verma v. State of Bihar, M. Krishnan v. Vijay Singh and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque. Sharaful Haque. The principles, relevant to our purpose are : (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 mala fides/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. 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 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. The test is whether the allegations in the complaint disclose a criminal offence or not. " (Para 12)"while on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged. In G. Sagar Suri v. State of U. P, this Court observed : "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. " (Para 13)"while no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the Courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under Section 250, Cr. P. C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may. " (Para 14) (5) MR. Joymalya Bagchi, the learned Advocate appearing on behalf of the complainant/opposite party reiterated the same thing which have been alleged in the First Information Report. P. C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may. " (Para 14) (5) MR. Joymalya Bagchi, the learned Advocate appearing on behalf of the complainant/opposite party reiterated the same thing which have been alleged in the First Information Report. According to Mr. Bagchi, neither the delay of about 2 years in lodging the FIR, nor the pendency of proceedings under Section 138 of the Negotiable Instruments Act against the dishonour of the self-same cheques are valid grounds for quashing. Mr. Bagchi submitted that the suppression of the facts by the accused that he has received payment from Nasik Municipal Corporation clearly divulged his dishonest and fraudulent intention to cheat the complainant. According to Mr. Bagchi that by filing a supplementary affidavit the accused has produced documents which have been supplied to him by the learned Court below that are intended to be relied upon by the prosecution. The averment made in the petition of complaint if is read harmoniously with the statement of the officer of the defacto-complainant recorded under Section 161 of the Code the same clearly makes out the offence punishable under Section 420 of the Indian Penal Code. Mr. Bagchi further submitted that the facts divulged in the First Information Report subsequently gained flesh in course of investigation and resulted in submission of chargesheet by the police under Section 420 of the Indian Penal Code and thus there cannot be any question of quashing of charge-sheet. The delay by itself is no ground for quashing of the case. He further contended that mere pendency of civil suit or availability of civil remedy is not by itself a ground to quash the criminal proceedings. (a) In support of his submissions Mr. Bagchi firstly relied on the decision of the Supreme Court in the case of State of Orissa and Anr. He further contended that mere pendency of civil suit or availability of civil remedy is not by itself a ground to quash the criminal proceedings. (a) In support of his submissions Mr. Bagchi firstly relied on the decision of the Supreme Court in the case of State of Orissa and Anr. v. Saroj Kumar sahoo, reported in (2006)2 SCC (Cr) 272, and draws the attention of this Court where the Apex Court held that, "the High Court being the highest Court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient materials. " (b) Mr. Bagchi further referred the decision of the Honble Supreme court in the case of Indian Oil Corporation v. NEPC India Limited and Ors. (supra), also relied upon by the learned Advocate of the petitioner, and relied on the following observation made therein, "a commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may in 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 of, is not by itself a ground to quash the criminal proceeding. The test is whether the allegations in the complaint disclose a criminal offence or not. " (c) Referring the decision of the Apex Court in the case of M/s. Medchl chemicals and Pharma Pvt. Ltd. v. M/s. Biological E. Ltd. and Ors. reported in JT (2000)2 SC 426 : 2000 C Cr LR (SC) 203, Mr. Bagchi relied on the following observations made therein, "simply because of the fact that there is a remedy provided for breach of contract, that does not by itself cloth the Court to come to a conclusion that civil remedy is the only remedy available to the appellant. Both criminal law and civil law remedy can be pursued in diverse situation. Bagchi relied on the following observations made therein, "simply because of the fact that there is a remedy provided for breach of contract, that does not by itself cloth the Court to come to a conclusion that civil remedy is the only remedy available to the appellant. Both criminal law and civil law remedy can be pursued in diverse situation. As a matter of fact they are not mutually exclusive but clearly co-extensive and essentially differ in their contents and consequence. The object of criminal law is to punish an offender who commits an offence against a person, property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect civil remedies at all for suing the wrong-doer in cases like arson, accident etc. It is anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two types of actions are quite different in contents, scope arid import. " (d) Lastly, Mr. Bagchi referred two other decisions of the Honble supreme Court and relying on the following observations made therein. In the case of Rajesh Bajaj v. NCT of Delhi, reported in JT (1999)2 SC 112 : 1999 c Cr LR (SC) 234, the Apex Court observed,. . . . . . many a cheatings are committed in the course of commercial and also money transactions. " (6) WHEREAS in the case of M. Krishnan v. Vijay Singh and Anr., reported in 2002 SCC (Cr) 19, the Supreme Court held,. . . . . . . . . . . . . . Where factual foundations for the offence have been laid down in the complaint, the High Court should not hasten to quash the criminal proceedings merely on the premises that one or two ingredients have not been stated with the details or that the facts narrated reveal the existence of commercial or money transactions between the parties. " (7) MR. Swapan Kumar Mullick, the learned Advocate appearing on behalf of the State produced the Case Diary and submitted before this Court since on the materials collected during investigation the police has come to a definite conclusion the offence alleged against the petitioner in the FIR has been made out there is no question of quashing of this case and according to mr. Mullick only upon conclusion of the trial the guilt or innocence of the accused can be determined. (8) HEARD, the learned Counsels appearing on behalf of the parties. Considered their respective submissions. Perused the First Information Report and the materials collected by the police during the course of investigation. (9) IN the instant case, since the question is one of quashing of charge-sheet all that is essential for this Court to take a prima facie look into the allegations made in the FIR and in the accompaniments together with the evidentiary materials collected by the police during the course of investigation and that too for the limited purpose to ascertain whether those materials on the face of the same has disclosed commission of offences or not for which charge-sheet has been submitted. As the law stands normally Court shall refrain itself from giving a prima facie decision in a case where entire facts are complete and hazy and more so when evidence has not been completely collected and produced before the court i. e. where investigation is still continuing. There is no dispute that merely because a civil remedy is available or has been availed of, not by itself is a ground for quashing of a criminal case where the materials collected during investigation clearly discloses commission of criminal offences. However, it is equally true one of the basic ingredients of offence of cheating is initial deception mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown existing right at the beginning of the transaction i. e. the time when the offence is said to have been committed. In order to constitute an offence of cheating the intention to deceive should be in existence at the time when the inducement was made i.e. right at the beginning of the transaction. There must be some materials to show that a person had fraudulent or dishonest intention at the time of making the promise and from a mere failure to keep up promise subsequently such a culpable intention right at the beginning, i. e. when he made the promise cannot be presumed.- Subsequent failure to keep promise does not amount to cheating. Furthermore, this is a case collection of evidence by the Investigating agency is over and charge-sheet has been submitted. Furthermore, this is a case collection of evidence by the Investigating agency is over and charge-sheet has been submitted. (10) THE basic facts contained in the FIR of this case are as follows ; (a) In usual course of business the complainant company was approached by the accused and the accused person informed that he has obtained a contractual work from Nasik Municipal Corporation and for which they needed ductile iron pipes. As the complainant company was a leading manufacturer of iron pipes the accused person expressed his desire to place an order with the complainant company. The complainant company being approached with such business proposal agreed to supply the ductile iron pipes and to undertake the required work. (b) The accused placed the work order under reference No. HHR/nmc/ w-0308/01, dated 31. 8. 2001. (c) It was further represented by the accused that payment to the complainant company was secured and the company need not be worried for the same. (d) On such representation the complainant company was induced to undertake the work as specified in the aforesaid work order and after completion of the work vide its letter dated July 29,2002 requested the accused to pay the outstanding amount of Rs. 29,07,616/- and odd. (e) The accused since made no payment the request for payment was once again reiterated by the complainant company through another letter dated august 1, 2002 and in response to such request accused issued a post dated cheque for a sum of Rs. 29,07,616/ -. The earlier dues was secured by the accused through issuance of six post dated cheques covering a total sum of Rs. 2. 65 crores. One of such cheque was for Rs. 15 lakhs and the remaining 5 cheques each of Rs. 50 lakhs. (f) The complainant company thereafter deposited one of such cheque of Rs. 15 lakhs but same was dishonoured. (g) Subsequently, the accused in its letter dated August 16, 2002 made out a story that those cheques were issued in anticipation that by that time they would be able to realise the payment from Nasik Municipal Corporation but due to some unforseen circumstances no payment was received from nasik Municipal Corporation and the complainant company was requested not to present the remaining cheques any further and the amount covered under the said cheques would be paid by a pay order. (h) Since the complainant company came to learn that accused has already received the entire payment from Nasik Municipal Corporation, vide its letter dated August 21,2002 requested the complainant company to liquidate the entire outstanding by end of September, 2002. The complainant company also expressed surprise at the receipt of the said letter dated August 16,2002 where the accused requested the complainant company to wait till December, 2002. (i) Then again by another letter dated August 24, 2002 the complainant company informed the accused person that there was no commitment that the cheques would not he deposited for encashment and same would be presented to the bank as and when those cheques will be due and payable unless receipt of payment. (j) The complainant company by its letter dated August 22,2002 informed the accused that they are intend to deposit one of the cheque dated August 17, 2002 for realisation of the payment. Despite of such early intimation the cheque on being presented for encashment was dishonoured. (k) Thereafter, the complainant company through his Advocates letter intimated the accused person about such dishonour of cheque and demanded payment. (I) Subsequently, the remaining other cheques were also presented for encashment on their due dates but same were also dishonoured. Despite receipt of such notice of dishonour no payment; was made by the accused. (11) ANNEXURE b to the said First Information Report is a letter dated July 29, 2002 addressed to the accused persons by the complainant asking for payment of its outstanding against supply of DT-K9 Pipes to Nasik Municipal corporation Project against work order No. HHR/nmc/w-O-308-01 dated 31.8.2001. It appears from the said letter that out of total outstanding of Rs. 5, 79, 07, 616/-admittedly a sum of Rs. 2. 85 crores has been paid and post dated cheques for Rs. 2.65 crores have been issued by the accused person leaving an outstanding balance of Rs. 29, 07, 616/- . (12) UPON perusal of the Case Diary it appears the police examined one Shankar Kumar Ghosal who happened to be the Manager of the complainant company M/s. Electro Steel Casting Ltd. In his aforesaid statement the said Mr. Shankar Kumar Ghosal who is also the first informant stated that, "to get confidence of my company M/s. H. H. Rupani initially gave a bank guarantee of Rs. 20 lakhs and some post dated cheques. Shankar Kumar Ghosal who is also the first informant stated that, "to get confidence of my company M/s. H. H. Rupani initially gave a bank guarantee of Rs. 20 lakhs and some post dated cheques. During supply we raised three running account bills upon M/s. H. H. Rupani for Rs. 4. 33 crores, Rs. 1. 6 crores and Rs. 41 lakhs on 24. 12. 2001, 23rd March 2002 and 26th July, 2002 respectively to get confidence of company they made payment of Rs, 3. 05 crores in 8 cheques between 29. 11. 2001 and 5. 2. 2003 but during checking of the account it was found that Rs. 2. 94 crores is lying due. Accordingly, we issued a letter dated 29. 7. 02 to M/s. H. H. Rupani claiming our dues. In reply to that the accused gave a letter stating that they have already issued seven post dated cheques for Rs. 2. 94 crores. But on presentation all the cheques were returned unpaid by the banker. " (13) NOW on the face of the contents of the FIR and the documents filed with the same as well as from the face of the evidentiary materials collected by the police during the investigation and the uncontroverted materials on record the following facts very clearly emerges ; (a) The complainant company on the representation of the accused that there is nothing to worry about the payment undertake the work in terms of the work order placed by the accused person. (b) The complainant company by its letter dated July 29, 2002 which is annexure b to the FIR demanded payment for outstanding dues amounting to Rs. 29,07,616. 93/ -. (c) It appears from the aforesaid letter dated 29. 07. 2002 that out of total cost of the said work amounting to Rs. 5,79,0761/-admittedly a sum of Rs. 2. 85 crores has been received by the complainant company whereas the accused issued post dated cheques for Rs. 2. 65 crores leaving a balance outstanding of Rs. 29,07,616/ -. (d) The complainant Shankar Kumar Ghosh who happened to be the manager of the complainant company in his statement recorded under Section 161 of the Code of Criminal Procedure also stated as follows : "during supply we raised three running accounts bill upon M/s. H. H. Rupani for Rs. 4. 34 crores, Rs. 1. 6 crores and Rs. 41 lakhs on 24. 12. 4. 34 crores, Rs. 1. 6 crores and Rs. 41 lakhs on 24. 12. 2001, 23. 3. 2002 and 26. 7. 2002 respectively to get confidence the company made a payment of Rs. 3. 05 crores by 8 cheques between 29. 11. 2001 and February 5, 2003 but during the checking of the account it was found that Rs. 2. 95 crores was lying due. Accordingly, by its letter dated July 29,2002 the accused was requested to make payment. In reply to that the accused gave a letter stating that they have already issued 7 post dated cheques for Rs. 2. 94 crores but on presentation of all the cheques, for encashment the same were returned unpaid. " (e) Against the bouncing of the aforesaid 7 cheques 5 different cases under Section 138 of the Negotiable Instruments Act have been filed by the complainant against the accused about one year 10 months before. In none of those complaints under Section 138 of the Negotiable Instruments Act no facts have been disclosed nor any allegations have been made which at the same time also constituted an offence under Section 420 of the Indian Penal Code. (14) THUS, having a prima facie appraisal of the materials on record, i.e. the allegations contained in the FIR and in the accompaniments thereof as well as the evidentiary materials collected in support thereof during the course of investigation it is found that the complainant undertook the job believing the initial representation of the accused about the assurance of making payment. It is an admitted position that during the continuance of job three running account bills were raised and out of actual dues Rs. 5. 79 crores, a sum of Rs. 2. 84 crores have been admittedly paid to the complainant company leaving a balance of Rs. 2. 94 crores. Therefore, this is not a case where no payment has been made against the completion of the job but admittedly it is a case of part payment i. e. payment of nearly 50% of the bill amount. There is no factual foundation of the allegation of initial deception and such allegation is mere an inference drawn by the complainant from subsequent failure of the accused to keep his promise by making payment of the balance amount even though according to the complainant the work stands completed. There is no factual foundation of the allegation of initial deception and such allegation is mere an inference drawn by the complainant from subsequent failure of the accused to keep his promise by making payment of the balance amount even though according to the complainant the work stands completed. The basic facts constituting initial deception by way of false representation on the part of the accused at the outset of initiation of transaction has neither been expressly stated nor otherwise suggested in the FIR, the same also does not appear from the evidentiary material collected by the investigating agency. When a part payment of Rs. 2. 85 crores have been admittedly paid against running bills it cannot be said that the accused has no intention to pay right from the beginning of the transaction. Thus, initial deception which is the basic ingredient of the cheating is conspicuously absent in this case. The case is bereft of the basic ingredient of offence of cheating i. e. the initial deception. According to the complainant even after completion of the entire job a part payment has been made but inspite of repeated demand the balance have not been paid. After careful consideration of the materials on record, as aforesaid it appears to me that the dispute between the parties is purely civil in nature arises on the failure of the accused to keep his promise subsequently. It is a breach of agreement. The other aspect of this case is also equally very important. It is alleged when the complainant made demand for payment of the balance amount some cheques were given to liquidate the said outstanding. However, all those cheques were dishonoured. It is very important to note that following the dishonour of those cheques the cases under Section 138 of the Negotiable instruments Act was filed nearly one year ten months before the lodging of the fir. Although, it cannot be said on the same set of facts both the offences punishable under the Negotiable Instruments Act as Well as the offence of cheating cannot be constituted but in the said complaint under Section 138 of the Negotiable Instruments Act except alleging commission of an offence under section 420 of the Indian Penal Code no basic facts have been alleged as to how the accused committed an offence of cheating. Neither the failure to pay balance dues nor dishonour of cheques to liquidate outstanding balance of pre-existing or antecedent liability give rise to an offence under Section 420 of the Indian Penal Code, in my opinion, this is an attempt to give a dispute which is essentially civil in nature a cloak of criminal offence. In this connection the observations of the Apex Court in the case of indian Oil Corporation v. NEPC India Ltd. and Ors. (supra) in Paragraph 13 and 14 are very relevant. Where the Apex Court observed, "while on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged. In G. Sagar Suri v. State of U. P. this Court observed : "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. " (Para 13)"while no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the Courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under Section 250, Cr. P. C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may. " (Para 14)It is one other allegation of the complainant that after completion of the job when a demand for payment of the balance amount was made the accused assured that balance amount would be paid after they receipt payment from nasik Municipal Corporation thereafter when the complainant came to learn that Nasik Municipal Corporation has cleared all the dues of the accused persons they deposited the cheques which were earlier handed over to them for realisation of the balance dues but the cheques were returned unpaid. In this connection the observation of the Honble Supreme Court in the case of U. Dhar and Anr. v. State of Jharkhand (supra) made in Paragraphs 5, 6 and 8 thereof is very relevant and are quoted below :"in our view, what is relevant is that the contract between TCPL and the complainant is an independent contract regarding execution of certain works and even assuming the case of the complainant to be correct, at best it is a matter of recovery of money on account of failure of TCPL to pay the amount said to be due under the contract. The complainant has alleged that TCPL has already received the money from SAIL for the work in question and it has misappropriated the same for its own use instead of paying it to the complainant and it is for this reason that the offences are alleged under Sections 403, 406 and 420 etc. " (Para 5)"the Courts below have overlooked the fact that the Contract between bokaro Steel (a unit of SAIL) and TCPL is a separate and independent contract. The contract between the complainant and TCPL is altogether a different contract. The contractual obligations under both the contracts are separate and independent of each other. The rights and obligations of the parties i. e. the complainant and TCPL are to be governed by the contract between them for which the contract between TCPL and Bokaro Steel (SAIL) has no relevance. The contractual obligations under both the contracts are separate and independent of each other. The rights and obligations of the parties i. e. the complainant and TCPL are to be governed by the contract between them for which the contract between TCPL and Bokaro Steel (SAIL) has no relevance. Therefore, even if Bokaro Steel has made the payment to TCPL under its contract with the latter, it will not give rise to plea of misappropriation of money because that money is not money or movable property of the complainant. " (Para 6)"thus, admittedly, the two contracts are independent of each other and payment under one has no relevance quo the other. It cannot be said that there is any dishonest intention on the part of the appellants nor can it be said that TCPL or the appellants have misappropriated or converted the movable property of the complainant to their own use. Since the basic ingredients of the relevant section in the Indian Penal Code are not satisfied, the order taking cognizance of the offence as well as the issue of summons to the appellants is wholly uncahed for. Such an order brings about serious repercussions. So far as the appellants are concerned, when no case is made out for the alleged offences even as per the complainant filed by the complainant, there is no reason to permit the appellants to be subjected to trial for the alleged offences. Hence, the appeal is allowed. The impugned orders of the High Court as well as of the Chief Judicial Magistrate are hereby ordered to be quashed. " (Para 8) (15) HENCE, in my opinion, the prosecution of the petitioner under Section 420 of the Indian Penal Code on the basis of the impugned charge-sheet is clearly an abuse of process of law and is liable to be quashed. In the result the instant criminal revisional application stands allowed and the charge-sheet relating to the Hare Street Police Station Case No. 573 dated September 24, 2004 and the proceeding relating to the G. R. Case No. 2462/04 arises therefrom now pending before the Learned Metropolitan Magistrate, 5th Court, Calcutta stands quashed.