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2008 DIGILAW 428 (CAL)

Shri Ram Nath Poddar v. STATE OF WEST BENGAL

2008-04-23

KALIDAS MUKHERJEE

body2008
JUDGMENT:- (1) THESE are the two revisional applications bearing Nos. C. R. R. 521 of 1995 and 2424 of 1996 under Sections 401 and 482, Cr. P. C. filed by the petitioners. In C. R. R. 521 of 1995 the petitioners have prayed for quashing of the proceedings being G. R. Case No. 834 of 1994 corresponding to Bally P. S. Case No. 89 dated 20. 4. 1994 pending before the learned Sub-Divisional judicial Magistrate, Howrah and the impugned order dated 13. 02. 95 whereby and where under the learned Magistrate was pleased to pass an order not accepting the final report and directing the Special Superintendent, C. I. D., west Bengal to take up further investigation by an experienced officer of the department. In the C. R. R. No. 2424 of 1996 the petitioners have prayed for quashing/setting aside the order dated 19. 6. 1996 and 25. 7. 1996 passed in the said G. R. Case by learned S. D. J. M., Howrah and quashing the charge sheet submitted on 25. 7. 1996 in the aforesaid G. R. Case. (2) THE petition of complaint was filed before the Court of learned sub-Divisional Judicial Magistrate at Howrah alleging that the complainant is a business man and permanent resident of Jharia, Bihar and temporarily residing at Belur, Howrah. The accused persons are the brokers in share market at Calcutta and run a firm under the name and style M/s. Ramnath poddar and Co., 135a, Biplabi Rash Behari Basu Road, Calcuta - 700 001. The accused No. 1 is the proprietor of the said firm and accused Nos. 2 and 3 are the sons of accused No. 1. In the month of June, 1991 the accused No. 1 came to the house of the complainant at Howrah and introduced himself as the share broker. After enquiry the Complainant started transaction with accused No. 1 in the month of August, 1991 and sold some shares to him. After a few days the accused No. 1 gave him money after deducting the brokerage charge and in this way there was transaction of selling and purchasing of shares for about one year without any interruption and/or dispute, From 02. 7. 1993 to 22. 7. 1993 the complainant sold huge shares of various reputed companies to the accused persons in presence of witness nos. 2, 3 and 4 totalling to Rs. 7. 1993 to 22. 7. 1993 the complainant sold huge shares of various reputed companies to the accused persons in presence of witness nos. 2, 3 and 4 totalling to Rs. 92,400/-and had purchased some shares amounting to Rs. 9,825/-. After adjusting the said amount, Rs. 82,575/-only was due to be paid by the accused to the complainant. The complainant visited the office of the accused several times, but, they refused to pay on some pretext or other and finally the accused No. 1 wrote a letter dated 19.8.1992 to one Shri Gobind Gutgutia of Dhanbad requesting him to make payment of the sum of Rs. 82,575/-to the complainant. The complainant along with witness No. 4 met Shri Gutgutia, but, he refused to make payment. After returning from Dhanbad, the complainant went to the office of accused persons and demanded his dues. At this stage, the accused No. 1 issued three different cheques amounting to Rs. 47,575/-to the complainant. As such, the sum of Rs. 35,000/- still remained due to be paid by the accused to the complainant. Under the circumstances, the complainant filed a complaint before the Court of the learned Magistrate under Sections 420/ 406/120b/506, I.P.C. and it was sent to the P. S. under Section 156 (3), cr. P. C. (3) AFTER investigation of the case, the police submitted final report and the complainant filed a Narazi petition. The learned Magistrate on hearing the said Narazi petition passed the impugned order on 13.2.1995 whereby the final report was not accepted and Special Superintendent, C.I.D., West Bengal was directed to take up further investigation by an experienced officer of the department. Being aggrieved by the said order, the accused persons preferred Criminal Revision No. 521 of 1995 challenging the said order dated 13.02.1995 and for quashing of the proceeding. (4) IN C. R. R. No. 521 of 1995 ad interim order of stay was passed on 30.11.1995. On 22.12.1995 the said interim order was extended until further orders. Inspite of the order of stay passed by this Honble Court, the investigation continued and charge-sheet was submitted by S.I. of Police, C.I.D., West Bengal on 25.7.1996 under Sections 420/406/120b/506, I.P.C. Under the circumstances, another Revisional Application bearing No. C.R.R. 2424 of 1996 was filed by the accused persons wherein an order was passed on 30. 8. Inspite of the order of stay passed by this Honble Court, the investigation continued and charge-sheet was submitted by S.I. of Police, C.I.D., West Bengal on 25.7.1996 under Sections 420/406/120b/506, I.P.C. Under the circumstances, another Revisional Application bearing No. C.R.R. 2424 of 1996 was filed by the accused persons wherein an order was passed on 30. 8. 1996 and it was observed that there was already an order of stay and it was made clear that there shall not be any further progress in the concerned G. R. case tili the disposal of the revisional application. (5) BOTH the revisional applications bearing No. C.R.R. 521 of 1995 and C. R. R. 2424 of 1996 have been heard together. (6) MR. Dastoor, learned Advocate appearing on behalf of the petitioners herein submits that the charge under Section 420 or 406 cannot be levelled against the accused persons, inasmuch as, there was no dishonest intention on the part of the accused persons from the very beginning of the transaction and the accused persons made final payment after deducting the loss of Rs. 35,000/-in the sale of shares and the amount of Rs. 47,575/- has been paid to the complainant towards the final settlement of the transaction. Mr. Dastoor further submits that the dispute raised by the complainant is civil in nature and the I. O. rightly submitted final report. Mr. Dastoor further contended that the learned Magistrate has no jurisdiction to direct the C. I. D., west Bengal to take up further investigation of the case and investigation done by C. I. D., West Bengal is bad in-law. Mr. Dastoor submits that inspite of the order of stay passed by this Honble Court, the investigation continued and charge-sheet was submitted before the learned Magistrate. Mr. Dastoor submits that the entire proceedings should be quashed. Mr. Dastoor has referred to and cited the decisions reported in (1998)8 SCC 745 (Dr. Sharma s Nursing Home v. Delhi Admn. and Ors.) ; (2005) 10 SCC 336 (Uma shankar Gopalika v. State of Bihar and Mr.) ; (1999)1 Cal LJ 493 (Wares Ali and Ors. v. State) ; (2003)3 SCC 11 (Ajay Mitra v. State of M. P, and Ors.) and 2001 SCC (Cr) 524 : 2001 C Cr LR (SC) 116 (Central Bureau of Investigation v. State of Rajasthan and Anr.). (7) MR. v. State) ; (2003)3 SCC 11 (Ajay Mitra v. State of M. P, and Ors.) and 2001 SCC (Cr) 524 : 2001 C Cr LR (SC) 116 (Central Bureau of Investigation v. State of Rajasthan and Anr.). (7) MR. Roy, learned Advocate appearing on behalf of the State submits that the complainant empowered the accused to sell the shares and remit the money to him. Mr. Roy submits that Rs. 47,575/- was paid, but, the sum of Rs. 35,000/- still remains to be paid by the accused to the complainant and, as such, the complaint was filed before the learned magistrate. Mr. Roy submits that by not making the payment of Rs. 35,000/-the accused converted the said sum to his own use and benefit and thereby committed the offence under Section 420/406, I.P.C. Mr. Roy submits that there was entrustment as required under the law and by not making the payment of Rs. 35,000/-, the accused persons acted dishonestly. (8) MR. Roy submits that the order of stay was passed by which proceedings of the G. R. case was stayed, but it does not necessarily include the investigation which was done independently under the law. Mr. Roy submits that the learned Magistrate did not take cognizance on the basis of the charge-sheet and merely kept it on record and if the investigation done by the C.I.D. is found to be illegal, the Honble Court may please direct who will investigate into the matter. (9) REGARDING the power of the learned Magistrate to direct C.I.D., west Bengal for further investigation, Mr. Dastoor has referred to and cited a decision reported in (1999) 1 Cal LJ 493 para 2 (supra) wherein the Division bench of this Honble Court observed as follows :- "2. The provision of Section 156 (3), Cr. P. C. contains that the officer-in-charge of a police station can take up investigation on receipt of a written complaint forwarded to the Officer-in-Charge concerned by the Magistrate with a direction to treat that complaint as F.I.R. Thus it appears that the provision of Section 156 (3) confers the power of investigation to the Officer-in-Charge of a police station. Under sub-section (1) the Officer-in-Charge of a police station may investigate any cognizable case and under sub-section (3) any Magistrate empowered under Section 190, cr. P.C. may order such investigation as mentioned above i.e., under Section 156 (1). Under sub-section (1) the Officer-in-Charge of a police station may investigate any cognizable case and under sub-section (3) any Magistrate empowered under Section 190, cr. P.C. may order such investigation as mentioned above i.e., under Section 156 (1). Therefore, the power has been given to the Magistrate to direct investigation by the Officer-in-Charge of a police station and not by any Superior Officer like D. C., Central. Accordingly, the initial order passed by the learned Chief metropolitan Magistrate was wrong and not according to law. Therefore, the subsequent proceedings followed from that order all have turned bad and illegal. " (10) IN another decision reported in 2001 SCC (Cr) 524 (supra) the observation of the Honble Apex Court as made in para 16 is quoted hereunder:- "16., As the present discussion is restricted to the question whether a Magistrate can direct CBI to conduct investigation in exercise of his powers under Section 156 (3) of the Code it is unnecessary for us to travel beyond the scope of that issue. We, therefore, reiterate that the magisterial power cannot be stretched under the said subsection beyond directing the officer-in-charge of a police station to conduct the investigation. " (11) RELYING on the aforesaid decisions, I find that the direction given by the learned Magistrate to the Special Superintendent, C. I. D., West Bengal to take up further investigation was illegal. The consequent submission of charge-sheet by C. I. D. West Bengal was also illegal. (12) AS regards the prayer for quashing of the proceedings, Mr. Dastoor has referred to a decision reported in (2005)10 SCC 336 and submits that from the very nature of the transaction it is clear that there was no dishonest intention from the very beginning and the dispute as raised by the complainant is civil in nature. In the said decision the observation of the honble Apex Court in para 6 is quoted hereunder:- "6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of complaint any criminal offence whatsoever is made out much less offences under. Sections 420/120b, IPC. The only allegation in the complaint petition against the accused persons is that they assured the complainant that when they receive the insurance claim amounting to Rs. 4,20,000/- they would pay a sum of Rs. Sections 420/120b, IPC. The only allegation in the complaint petition against the accused persons is that they assured the complainant that when they receive the insurance claim amounting to Rs. 4,20,000/- they would pay a sum of Rs. 2,60,000/-to the complainant out of that but the same has never been paid. Apart from that there is no other allegation in the petition of complaint. It was pointed out on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the consumer Forum in relation to the claim of Rs. 4,20,000/ It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420, IPC. " (13) MR. Roy submits that apart from the allegation under Section 420, there is allegation under Section 406 which shows that the accused was entrusted with the sale of the shares and there was dishonest intention by not making payment of Rs. 35,000/ -. (14) IN the decision reported in (1998)8 SCC 745 para 3 (Supra) the observation of the Honble Apex Court is quoted hereunder:- "3. We have carefully gone through the complaint, the documents annexed thereto and the deposition of the complainant. On a perusal thereof, we are unable to hold that a prima facie case under Section 420, IPC has been made out. From, the judgments of the Additional Sessions Judge and the High Court, we find that both the learned Courts have rested their findings on deception only and did not go into the question whether the complaint and its accompaniments disclosed the other essential ingredient of the offence under Section 420, IPC, namely, dishonest inducement. From, the judgments of the Additional Sessions Judge and the High Court, we find that both the learned Courts have rested their findings on deception only and did not go into the question whether the complaint and its accompaniments disclosed the other essential ingredient of the offence under Section 420, IPC, namely, dishonest inducement. "dishonesty" has been defined in Section 24, IPC to mean deliberate intention to cause wrongful gain or wrongful loss ; and when with such intention, deception is practised and delivery of property is induced then the offence under Section 420, IPC can be said to have been committed. Judged in that context, we find that there are no materials from which it can be said even prima facie that the appellant "dishonestly induced the complainant to part with his money. " (15) FROM the facts of the case it is clear that there was long standing transactions between the complainant and the accused persons for purchase and sale of shares. From annexure A to the Revisional Application No. 521 of 1995 it would appear that the complainant lodged a complaint with the secretary, Investor Cell, Calcutta Stock Exchange on 27. 08. 1993 alleging that the sum of Rs. 35,000/-was due from the said broker since 19.9.1992. The Calcutta Stock Exchange Association Ltd. by letter dated 02. 9.1993 asked the accused to clarify on the point raised by the complainant. The accused vide letter dated 15.9.1993 replied that the sum of Rs. 47,575/-was paid to the complainant and the bill for Rs. 35,000/-has been intentionally ignored by the complainant. The contention of Mr. Dastoor is that for the sale of the shares there was loss of Rs. 35,000/- which was deducted in making final payment. It is also the contention of Mr. Dastoor that as per terms of contract, the complainant referred the matter to the calcutta Stock Exchange and pending that decision he chose to file the complaint which is not maintainable. Mr. Dastoor further submits that in para 5 of the complaint it has been mentioned that the accused No. 1 wrote a letter on 19. 8. 1992 to Shri Gobind Gutgutia requesting him to make payment of the dues amounting to Rs. 82,575/- to the complainant. Mr. Dastoor submits that from para 5 of the complaint it is clear that there was no dishonest intention on the part of the accused persons Mr. 8. 1992 to Shri Gobind Gutgutia requesting him to make payment of the dues amounting to Rs. 82,575/- to the complainant. Mr. Dastoor submits that from para 5 of the complaint it is clear that there was no dishonest intention on the part of the accused persons Mr. Dastoor submits that both under Sections 420 and 406, I. P. C. there must be dishonest intention which is conspicuously lacking in the instant case. (16) FROM the facts of the case as discussed above, it appears that there was long standing transactions between the complainant and the accused persons and there was non-payment of Rs. 35,000/- as alleged in the complaint. It is the contention of the accused persons that Rs. 35,000/-was deducted due to the loss suffered for the sale of the shares and there was the no further amount due to be paid by the accused to the complainant. From the ratio of the decisions referred to above as to the requirement of law, it is clear that the facts complained of must disclose the commission of an offence and there must be dishonest intention from the very inception of the transaction. (17) IN the instant case, the facts complained of do not constitute any offence. If the proceedings are allowed to be continued, it would amount to the abuse of the process of the Court. That apart, the very nature of the transaction indicates that the dispute is civil in nature. In view of the ratio of the decisions cited above, the facts and circumstances of the case and giving anxious consideration to the submissions of the learned Counsels of the respective parties, I am of the considered view that it is a fit case for quashing of the proceedings under Section 482, Cr. P. C. Accordingly, the proceedings of the G. R. Case No. 834 of 1994 corresponding to P. S. Case no. 89 dated 20. 4. 1994 pending before the learned Sub-Divisional Judicial magistrate, Howrah stand quashed and the petitioners are discharged. Both the C. R. R. No. 521 of 1995 and C.R. R. No. 2424 of 1996 stand disposed of accordingly.