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Gauhati High Court · body

2008 DIGILAW 675 (GAU)

Nanotech (P) Ltd. v. Nilkamal Ltd.

2008-09-10

BIPLAB KUMAR SHARMA

body2008
JUDGMENT B.K. Sharma, J. 1. The issue raised in this writ petition is the maintainability of the particular criminal proceeding initiated against the petitioner by the respondent No. 1. 2. The respondent No. 1 who is the complainant in the criminal proceeding initiated against the petitioners is a Company incorporated under the provision of Companies Act. It is engaged in the business of manufacture and sale of crafts, bins and furniture. Its registered office and factory is at Silvassa in the Union Territory of Dadra and Nagar Haveli. 3. The petitioner No. 1 is also a Company incorporated under the provision of the Companies Act and the petitioners No. 2 to 5 are the Directors of the Company. 4. The present proceeding has arisen out of the criminal complaint lodged by the respondent No. 1 against the petitioners in the Court of the Judicial Magistrate, Dadra and Nagar Haveli at Silvassa registered and numbered as Criminal Complaint No. 119/06 and the orders passed therein. The petitioners by means of this application under Article 226 of the Constitution of India has prayed for setting aside and quashing of the aforesaid Criminal Complaint No. 119/06 and the order dated 30.11.2006 by which the learned Judicial Magistrate, Dadra and Nagar Haveli at Silvassa issued process to the petitioners upon taking cognizance of the complaint lodged by the respondent No. 1 against the petitioners expressing prima facie satisfaction to proceed against the accused/petitioner under Sections 406, 415, 417, 420 read with Section 120(B), IPC. 5. In the complaint lodged by the respondent No. 1 against the petitioners, it has been stated that the accused petitioners No. 2 to 5 are the directors of the accused petitioner No. 1 Company. As the directors are actually involved in the business and are looking after the affairs of the Company, all the accused petitioners are responsible for day to day working of the Company and it had interacting with the respondent No. 1/complaint for various transactions between them. 6. It has been stated in the complaint that the respondent No. 1/complainant has been dealing with the petitioner No. 1 Company since many years and has been purchasing plastic materials from the accused petitioner No. 1 as per the agreement entered into between them. They entered into an agreement on 6.3.2002 for manufacturing and sale of injection moulded plastic articles. It has been stated in the complaint that the respondent No. 1/complainant has been dealing with the petitioner No. 1 Company since many years and has been purchasing plastic materials from the accused petitioner No. 1 as per the agreement entered into between them. They entered into an agreement on 6.3.2002 for manufacturing and sale of injection moulded plastic articles. For the purpose of starting manufacturing facilities, the accused were in need of finance and hence requested the respondent No. 1/complainant for a short term loan on certain terms and conditions with the respondent No. 1/complainant agreed in view of the good business relations with the petitioners. Consequently, the agreement dated 6.3.2002 was signed by the parties with the provision for short term loan of Rs.2 crores. 7. As per the complaint, the aforesaid loan was secured by first charge on the building situated in the premises in which the accused/petitioners carry on their business and also on the plaint and machinery. The loan was utilized for the purpose as mentioned in the agreement in terms of which the respondent No. 1 advanced a sum of Rs.13,45,000/- from 31.3.2002 onwards in five installments towards inter-corporate deposit at the rate of 15% per annum. As per the agreement, the installments were due half yearly. However, the accused petitioners started to pay only in July, 2004. It is the case of the complainant/respondent No. 1 that the accused petitioners owe a sum of Rs.75,05,000/- to the complainant/respondent No. 1 towards repaying of the loan. 8. For the purpose of carrying out of the business activities, namely manufacturing of plastic articles and as provided in the agreement, the complainant/respondent No. 1 forwarded injection mould from time to time to the accused petitioners. The moulds were required for manufacturing of plastic articles. The respondent No. 1 complainant has mentioned about sending of such injection moulds at the cost of Rs.54,47,266/- to the accused/petitioners under invoice No. 6103005808 on 6.3.2006. 9. According to the complaint lodged by the respondent No. 1/complainant, contrary to the agreement, the accused/petitioners stopped supplying the finished goods to the complainant/respondent No. 1 from the month of July, 2006 without any reason. 9. According to the complaint lodged by the respondent No. 1/complainant, contrary to the agreement, the accused/petitioners stopped supplying the finished goods to the complainant/respondent No. 1 from the month of July, 2006 without any reason. It has been stated in the complaint that for the period of 11.4.2006 to 30.7.2006 the complainant had placed and orders for 10,840 numbers of shares, but the accused/petitioners did not comply with the order and sent the goods in parts. The complainant in all received only 5321 number of shares as against the order of 10,480 number of shares and the balance 5519 number of shares was still lying with the accused/petitioners. 10. On failure on the part of the accused/petitioners and they having acted contrary to the terms and conditions of the agreement, the respondent No. 1 demanded back its mould earlier given to the accused/petitioners. The complainant by its letter dated 13.7.2006 had demanded back their mould furnished to the accused/petitioners on 6.3.2006. The complainant called upon the accused to return back the mould before 19.7.2006 and to send requisition for another one, if required and in the event of the accused/petitioners deciding to supply the goods as ordered. In spite of receipt of the letter, the accused/petitioners failed to respond to the same and also did not return back the mould. The complainant alleging that the accused/petitioners in one or other pretext kept on postponing the return of the moulds, has stated that the complainant/petitioners kept the mould belonging to the complainant/respondent No. 1 without any justifiable reason. In addition, the accused petitioners also stopped delivery of the goods without any reason. It has been stated in the complaint that the accused/petitioners are making use of the mould for their own use and purpose and have been carrying on their business with the moulds belonging to the complainant/respondent No. 1. As per the complaint they have been producing the goods with the help of the mould and selling the same to other persons contrary to the terms of the agreement. Thus, according to the complaint, the accused petitioners have committed breach of trust. 11. As per the complaint they have been producing the goods with the help of the mould and selling the same to other persons contrary to the terms of the agreement. Thus, according to the complaint, the accused petitioners have committed breach of trust. 11. It has further been stated in the complaint that the accused petitioners had accused to make payments against the amount due to the complainant but failed to clear the outstanding dues obtained by way of ICD and an amount of Rs.75,00,000/-is still due and payable to the complainant. Although the accused petitioners have forwarded some cheques to the complainant for payments, but the same were of lesser value and not sufficient to clear the outstanding dues. Some of the cheques were also dishonoured and the complainant had initiated separate proceeding in respect of the same. According to the complainant, the accused petitioners are holding back both the amount due as well as the mould of the complainant illegally and are making illegal gains by making use of the same. 12. It has further been stated in the complaint that the accused/petitioners misrepresented the complainant about their financial capacity. The illegal action on the part of the accused/petitioners inducted and deceived the respondent No. 1/complainant to advance ICD and to part with the mould which the complainant would not have done, but for such deceitful act on the part accused petitioners. It has also been stated in the complaint that the faction of the accused in not to repay the ICD and consequently the retention of property illegally without authority has caused loss, harm and damages to the complainant with consequential immense mental tension. 13. According to the complaint, the accused/petitioners had contained the mould with the intention to retain the same permanently and to use for their own purpose. The accused/petitioners never revealed their such intention and at all material time made the complainant to believe that they would return the same and make the payment. According to the respondent No. 1/complainant such conduct on the part of the accused/petitioners are nothing but commission of offence of criminal breach of trust and cheating. It is the case of the complainant that the accused/petitioners are liable for hatching conspiracy of duping the complainant by obtaining ICD and not repaying back and also to retain mould and to use if for the purpose of other than the agreement. It is the case of the complainant that the accused/petitioners are liable for hatching conspiracy of duping the complainant by obtaining ICD and not repaying back and also to retain mould and to use if for the purpose of other than the agreement. 14. In the complaint it has been stated that the complainant has been dealing with the accused from its registered office at Silvassa in the Union Territory of Dadra and Nagar Haveli. Consequences of the illegal retention of the mould and failure to repay the amount as per the agreement has resulted in loss to the respondent No. 1 Company and the conduct on the part of the accused/petitioners has given rise to the offence under Sections 406, 415, 417 read with Section 120(B), IPC. 15. Learned Judicial Magistrate, Dadra and Nagar Haveli at Silvassa having taken cognizance of the complaint lodged by the respondent No. 1 recording prima facie satisfaction of the offence alleged committed by the accused/petitioners under the aforesaid sections, the petitioners have invoked the writ jurisdiction of this Court for setting aside and quashing of the said proceeding. The grounds urged for such relief have been indicated under paragraph 6 as the ground numbers (A) to (D). While dealing with the purported factual aspect of the matter controverting the facts stated in the complaint, it has been urged by the petitioners that not a single event has taken place at Silvassa in respect of the allegations made in the complaint and consequently the Court at Silvassa lacks jurisdiction It is the case of the petitioners that even if any offence has been committed by the accused/petitioners same being within the jurisdiction of Guwahati, the Court at Silvassa cannot assume jurisdiction. 16. Further grounds urged in the writ petition is that the use of the mould at Guwahati even if attracts the ingredients of criminal breach of trust, then also, same having being utilized in Guwahati, the Court at Silvassa cannot have any jurisdiction. According to the petitioners the alleged non-payment of the amount as per the agreement even if taken on the face value, same cannot tantamount to commission of criminal offence. According to the accused/petitioners, the petitioner No. 1 being a body corporate, cannot be prosecuted under the law for the alleged commission of the offence narrated in the complaint. 17. According to the petitioners the alleged non-payment of the amount as per the agreement even if taken on the face value, same cannot tantamount to commission of criminal offence. According to the accused/petitioners, the petitioner No. 1 being a body corporate, cannot be prosecuted under the law for the alleged commission of the offence narrated in the complaint. 17. As against the aforesaid stand of the petitioners, the respondent No. 1/complainant in its affidavit in opposite has justified the action on its part to lodge the criminal complaint at Silvassa and issuance of process upon taking cognizance of the complaint by the learned Judicial Magistrate. It has been brought on record that the accused/petitioners duly appeared before the Judicial Magistrate at Silvassa as many as 5 items and prayed for adjournments. Further, the accused/petitioners No. 2 to 5 by way of filing the application on 2.2.2007 prayed for exemption from personal appearance under Section 205 of the Cr PC. As regards the plea of the accused petitioners that the respondent No. 1 Company in absence of any mens rea cannot be made liable for any criminal offence, it has been stated in the affidavit that the company is vicariously liable for the crime committed by its Directors in the course of their agency. Further ground urged in the affidavit is that if at all the petitioners are aggrieved by initiation of process by the learned Judicial Magistrate at Silvassa, their remedy lies before the Bombay High Court under whose jurisdiction the Silvassa Criminal Court functions. 18. I have heard Mr. G.N. Sahewalla, learned Sr. counsel assisted by Mr. Aslam and Mr. D. Senapati, learned Counsel for the petitioners. I have also heard Mr. D. Das, learned Counsel assisted by Mr. J. Lahiri, learned Counsel for the respondent No. 1. I have also considered the entire materials on record. 19. While Mr. Sahewalla, learned Sr. counsel for the petitioners submitted that on perusal of the complaint petition, no ingredients of any criminal offence are traceable, Mr. Das, learned Counsel for the respondent No. 1 submitted that a prima facie crime offence having been committed by the petitioners, learned Judicial Magistrate at Silvassa has rightly taken cognizance of the matter and the writ Court will be reluctant to interfere with the same. Accordingly to Mr. Das, learned Counsel for the respondent No. 1 submitted that a prima facie crime offence having been committed by the petitioners, learned Judicial Magistrate at Silvassa has rightly taken cognizance of the matter and the writ Court will be reluctant to interfere with the same. Accordingly to Mr. Das the writ petition is also not maintainable having regard to the fact that the dispute involved is between the private parties. He further submitted that even if any case is made out for quashing the criminal proceeding, this Court having no territorial jurisdiction, will not do so and the right course of action for the petitioners will be approach the Bombay High Court under which the Criminal Court at Silvassa functions. 20. While Mr. Sahewalla, learned Counsel for the petitioner has placed reliance on the following decisions: (i) (1998) 5 SCC 749 Pepsi Foods Ltd. and Anr. v. Special Judicial Magistrate and Ors. (ii) (2000) 7 SCC 640 Navinchandra N. Majithia v. State of Maharashtra and Ors. (iii) 2005 (1) GLT 67 Bhabesh Ch. Baroowa v. Escorts Finance Ltd. (iv) 2004 (3) GLT 582 HPS India (P) Ltd. and Ors. v. Shri International Finance Ltd. (v) (2005) 10 SCC 228 Anil Mahajan v. Bhor Industries Ltd. and Anr. 21. Mr. Das, learned Counsel for the respondent No. 1 has placed reliance on the following decisions: (i) (2006) 3 SCC 658 Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd. and Ors. (ii) (1998) 5 SCC 749 Pepsi Foods Ltd. and Anr. v. Special Judicial Magistrate and Ors. (iii) (2005) 4 SCC 530 Standard Chartered Bank and Ors. v. Directorate of Enforcement and Ors. (iv) (2003) 10 SCC 733 M.C. Mehta v. U.O.I. (v) (2003) 8 SCC 639 General Manager, Kisan Sahkari Chini Mills Ltd., Sultanpur, U.P. v. Satrughan Nishad and Ors. (vi) (2005) 6 SCC 616 U.P. State Road Transport Corporation v. Omaditya Verma and Ors. (vii) 2004 (3) GLT 582 HPS India (P) Ltd. and Ors. v. Shri International Finance Ltd. (viii) (2005) 6 SCC 657 Binny Ltd. v. V. Sadasivan. 22. Before dealing with the respective merits of the case of the parties, it will be appropriate to appreciate the principles enunciated in such type of matters highlighting which, the learned Counsel for the parties have placed reliance on the aforesaid decisions. 23. In the case Pepsi Foods Ltd. and Anr. 22. Before dealing with the respective merits of the case of the parties, it will be appropriate to appreciate the principles enunciated in such type of matters highlighting which, the learned Counsel for the parties have placed reliance on the aforesaid decisions. 23. In the case Pepsi Foods Ltd. and Anr. (supra), the Apex Court dealing with the scope of the High Court's power in quashing the criminal proceeding in exercise of power under Articles 226 and 227 or Section 482 of the Cr PC observed that nomenclature under which petition is filed is not so relevant and the petition under Article 482 of the Constitution can be treated as one under Article 227 or Section 482, Cr PC. This case has been pressed into service so as to contend that the writ Court is empowered to quash criminal proceeding. The decision in the case of Navinchandra N. Majithia (supra), has been pressed into service so as to contend that this Court has territorial jurisdiction in the matter. In that case writ petition was filed before the Bombay High Court for quashing the criminal complaint filed at Shillong on the ground that it was false and had been filed with the mala fide intention of causing harassment and putting pressure on the petitioner. It was held that Bombay High Court erred in dismissing the writ petition on ground of back of jurisdiction. It was found that part of cause of action arose within the territorial limits of Bombay High Court. In the instant case, it is the case of the petitioner that even if cause of action, if any, part of it having arisen in Guwahati, the writ petition is maintainable. 24. In the case of Bhabesh Ch. Baroowa (supra), same view has been expressed in respect of territorial jurisdiction. In that case the cheques were presented by the opposite party with its Banker at Gurgaon. Information regarding dishonouring the cheques was also conveyed at Gurgaon. Notice of demand was issued from Delhi at the petitioner's address at Guwahati. It was held that refusal to make the payment demanded having occurred at Guwahati, this Court had the territorial jurisdiction to entertain the writ petition. In the case of HPS India (P) Ltd. (supra), also similar view has been expressed. 25. Notice of demand was issued from Delhi at the petitioner's address at Guwahati. It was held that refusal to make the payment demanded having occurred at Guwahati, this Court had the territorial jurisdiction to entertain the writ petition. In the case of HPS India (P) Ltd. (supra), also similar view has been expressed. 25. In Anil Mahajan (supra), dealing with the question of cheating, the Apex Court observed that fraudulent dishonest intention must be shown to be existent form the very beginning of the transaction and that the mere failure to keep the promise at a subsequent stage would not lead to offence of cheating. It was observed that mere use of the words 'cheating' in the complaint would not be sufficient and the substance of the complaint is to be seen. 26. In the case reported in (2005) 6 SCC 657 Biny Ltd. and Anr. v. V. Sadasivan and Ors. the Apex Court dealt with the question of maintainability of the writ petition under Article 226 of the Constitution. The Apex Court pointed out that the remedy under Article 226 is pre-eminently a public law remedy and it is available against a private body or persons if such private body is discharging the public function. According to the learned Counsel for the respondent No. 1 since there is no allotment of public duty by and between the parties, the writ petition filed by the petitioner is not maintainable. Same view has been expressed by the Apex Court in the case of General Manager, Kisan Sahkari Chini Mills Ltd. (supra). 27. In the case of Mosaraf Hossain Khan (supra), it was held by the Apex Court that the High Court in exercising the power under Article 226 of the Constitution of India should not ordinarily interfere with the order passed by a competent Court except in a appropriate case. It was further held that only such High Court within whose jurisdiction the subordinate Court passes order has jurisdiction to entertain the application under Article 227 of the Constitution. It was observed that the High Court must also keep in mind the doctrine of forum non conveniens. 28. The case Standard Chartered Bank (supra), has been pressed into service to emphasise on prosecution and fixation of criminal liability of the Corporate body (Company and Farms). 29. It was observed that the High Court must also keep in mind the doctrine of forum non conveniens. 28. The case Standard Chartered Bank (supra), has been pressed into service to emphasise on prosecution and fixation of criminal liability of the Corporate body (Company and Farms). 29. As regards the plea of the respondent No. 1 that since the dispute relates to private parties, the writ petition is not maintainable, I am of the considered opinion that the argument is misplaced. This Court is not entertaining the writ petition to resolve any dispute between the two private parties, but the writ petition is primarily for quashing the criminal proceeding initiated by the Judicial Magistrate at Silvassa. As to whether the criminal proceeding is liable to be interfered with or not will be altogether a different matter, but to say that the question cannot be gone into entertaining the writ petition since the private disputes are involved, will be altogether different. The petitioners have approached this Court by filing the writ petition under Article 226 of the Constitution questioning the very imitation of the criminal proceeding and taking cognizance of the same by the learned Judicial Magistrate at Silvassa. Thus, the question primarily is, whether the learned Judicial Magistrate is within its competence and jurisdiction to entertain the complaint and to issue process and not to resolve any dispute between the two private parties. 30. As regards the plea of the petitioners that the petitioner No. 1 Company cannot be prosecuted, there cannot be any dispute that the Company is liable to be prosecuted and punished for criminal offence. Although there are earlier authorities to the effect that Corporations cannot commit a crime, the generally accepted modern rule is that except for such crimes as a Corporation is held incapable of committing by reason of the fact that they involve personal malicious intent, a Corporation may be subjected to indictment or other criminal process, although the criminal act is committed through its agents. In this connection, the observation of the Apex Court in the case of Standard Chartered Bank (supra), may be indicated. 7. In this connection, the observation of the Apex Court in the case of Standard Chartered Bank (supra), may be indicated. 7. As in the case of torts, the general rule prevails that he Corporation may be criminally liable for the acts of an officer or agent, assumed to be done by him when exercising authorized powers, and without proof that his act was expressly authorized or approved by the Corporation. In the statutes defining crimes, the prohibition is frequently directed against any "person" who commits the prohibited act, and in many statutes the term "person" is defined. Even if usually construed to include a Corporation so as to bring it within the prohibition of the statute and subject it to punishment. In most of the statutes, the word "person" is defined to include a Corporation. 31. Apart from the above, the petitioner No. 1 Company is represented by its Directors who are the accused/petitioner Nos. 2 to 5. In the complaint petition it has been specifically stated that the said accused/petitioners being the Directors of the accused petitioner No. 1 are actively involved in the business and are looking after the affairs of the Company and that they are responsible for the day to day working of the Company and have been dealing with the complaint/respondent No. 1 for various transactions between the two Companies. In such a situation apart from the liability of the accused petitioner Nos. 2 to 5, the transaction being in the name of the petitioner No. 1 Company represented by the said Directors, it cannot be said that apart from the other petitioners, the petitioner No. 1 Company is not liable for the nature of the criminal offence allegedly committed by it. 32. As regards the territorial jurisdiction of this Court as has been raised by the respondent No. 1, same will have to be viewed from the perspective of the provision of Section 181 of the Cr PC. Section 177, Cr PC provides that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. Section 177, Cr PC provides that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. While it is the case of the respondent No. 1 complainant that the accused/petitioners committed the offence within the local jurisdiction of the Criminal Court, Silvassa, it is the case of the accused/petitioners that even if any offence has been committed, the same having been committed at Guwahati, the Criminal Court at Silvassa does not have any jurisdiction. Section 181(4) of the Cr PC provides that any offence of criminal misappropriation or of 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 the subject to the offence was received or retained, or was required to be returned or accounted for, by the accused person. 33. In the instant case both the agreements, i.e. the loan agreement (Annexure II) and the manufacturing agreement (Annexure I), were arrived at by the between the parties. In the agreement the first party is the respondent No. 1 complainant and the second party is the petitioner No. 1 Company. Some of the clauses in Annexure I manufacturing agreement having relevance to the issue are reproduced below: Whereas the party of the Second Part is fully seized/possessed of/well and sufficiently entitled to commercial premises being Nanotech Pvt. Ltd., Shed No. 3, E.P.I.P. Amin Gaon, Guwahati, Assam (hereinafter referred to' as "the said Premises"). And whereas the Party of the Second part has expressed desire to utilize the said premises and facilities therein for manufacturing moulded furniture, artifacts and Crates and it's accessories (hereinafter referred to as "the said products)" in the said premises by way of necessary injection moulding machines and the required in fracture and therefore has approached the Party of the First Part to manufacture and sell the said products to the Party of the First Part on principal to principal basis. (1)(i) The Party of the Second Part is fully seized/possessed of/well and sufficiently entitled to commercial premises at Nanotech Pvt. Ltd. Shed No. 3, E.P.I.P. Amin Gaon, Guwahati, Assam (herein- after referred to as "the said premises") and shall provide all documents, deeds, agreement and other things to the Satisfaction of the Party of the First Part as may be required by them or their counsel at this execution. (ii) The Party of the Second Part has not entered into any forward contract or any commitment or agreement with any person or party either for acquiring technical know-how or for starting Moulding Divisions or for sale or under writing of the production of the Party of the Second Part for the moulded furniture, artifacts and Crates and accessories. (iii) There is no petition filed by anybody for winding up the party of this Second Part Company and no such notice is received in that regards. (iv) The Party of the Second Part has not been restrained either by any agreement or Treaty or any Commitment entered into by the Party of the Second Part or claimed by any person or Party against the party of the Second Part from entering into this agreement with the Party of the First Part and Party of the Second Part is fully entitled to entered into this agreement with the Party of the First Part as hereinafter appearing. (2)(i) The Party of the Second Part has agreed to install the necessary infrastructure entirely at their cost and expenses such as installing Injection Moulding Machines, setting up or cranes, cable work, civil work, chiller, oil filtration machine, quality control equipment and other ancillary and incidental facilitate (hereinafter collectively called 'the Plant") (4) The Party of the Second Part has agreed that the moulded furniture, artifacts and crates and accessories will be manufacture at the said plant as per the specifications and requirements of the Party of the First Part for a period of five and half years from the date of first commercial production on outright purchase or job work basis as may be required by the Party of the First Part. (10) The Party of the Second Part agrees that it shall always endeavour to conduct the operations of manufacture of the said products for the supply to the Party of the First Part in diligent manner and ensure the production level of the said products as assured to the Party of the First Part and to ensure that there is industrial peace in the establishment of the Party of the Second Part and not to declare any lockout or closure of the manufacturing activities of the Party of the Second Part during the tenure of this agreement. The Party of the Second Part also expressly agrees and covenant with the party of the First Part to not to create any mortgage, charge or encumbrance on the assets of the party of the First Part. (11) It is agreed between the Party of the First Part and the Party of the Second Part that the Party of the First Part has agreed to enter into this agreement with the Party of the Second Part in view of the Party of the Second Part having undertaken that the production of the products manufactured as per the instructions of the party of the First Part will be exclusively sold to the Privy of the First Part by the Party of the Second part and the party of the Second Part shall not deal with the said products or manufacture or market the said products in any manner prejudicial to the interest of the Party of the First Part. (18) The Party of the First Part shall supply the moulds as per its requirement to the Party of the Second Part and the Party of the Second Part shall be liable to be manufacturing products only form the moulds supplied by the Party of the First Part to the Party of the Second Part. During the continuance of this agreement, the moulds supplied by the Part of the First Part to the Party of the Second Part shall not be removed from the said premises by the Party of the Second Part and/or their agents and servants without the written permission of the Party of the First Part and the moulds shall be maintained in good working condition subject to normal wear and tear. It is specifically made clear by the parties hereto that the party of the Second Part shall have no right, title or interest in respect of the moulds of the Party of the First Part nor shall create any encumbrances on the said moulds. It shall always remain the property of the Party of the First Part and the party of the Second Part shall hold the said Moulds as Trustee for and on behalf of the party of the First Part and the Party of the Second Part shall be liable to return the moulds so supplied by the Party of the First Part, as and when called upon to do so in good working condition. In case of any damage caused to the moulds, while in possession or usage then the same shall be repaired or replaced at the cost of the Party of the Second Part. The Party of the Second undertakes to bear all costs, charges and expenses incurred in the day to day maintenance of the moulds. The cost towards transportation charge, taxes and control and non-refundable entry tax, if any, that may be levied for transporting the moulds to and from the said premises shall be borne by the Party of the First Part. 34. Some of the clauses in Annexure II agreement also having relevance to the issue involved, are quoted below: 2(i) The aforesaid short term loan shall carry an interest @ 15% (fifteen per cent) per annum on reducing balance, which shall be payable by the Party of the Second Part on or before 31st March, 30th June, 30th September and 31st December each year commencing from the date of first disbursement of the said loan on the principal amount of loan outstanding being remaining payable by the Party of the Second Part to the Part of the First Part. The payment of interest shall be made on or before the 7th day of each succeeding month of the due dates for interest payment mentioned herein above. (ii) The said loan shall be utilized only for the purchase of machinery, its spares and other capital expenditure as may be required for the manufacture of the said products and for no other purpose for which the party of Second Part agrees that it shall give a detailed note of the amount of expenditure incurred with the value of such expenditure. (iii) The said loan shall be secured by way of irrevocable first charge on the building situate at the said premises, all plaint and machinery, stores, spares and other assets (moveable and immovable) past and present lying at the said premises or anywhere else, including the assets purchased by the Party of Second Part out of the said loan (a list of which shall be provided by the Party of Second Part to the Party of the First Part as per Clause (ii) above more specifically as mentioned in the Schedule A to this agreement) and that the Party of Second Part shall execute all deeds of hypothecation, mortgage, pledge or any such documents, deeds or agreement required to that extent and shall register the same with the Registrar of Companies, Assam within the prescribed time and with such other authorities as may be required by the Party of First Part. The Party of the Second Part shall not encumber or charge any of the assets being charged in favour of the Party of the First Part, either before or after the execution of this present. (3) The parties hereto agree that this agreement shall run parallel with the manufacturing agreement dated 6th March, 2002 between the parties hereto and thereto and shall remain valid and effective until the expiry/termination of the manufacturing agreement. In cases of earlier termination of the manufacturing aforesaid, this agreement shall also come to an end and all amount of outstanding principal loan amount and the interest (including accrued, if any) shall immediately become payable by the Party of the Second Part to the Party of the First Part. Falling to make such payments the Party of the First Part shall be at liberty to invoke their charge and liquidate the proceedings as mentioned above in Clause 2 sub -clause (v). 35. On perusal of the aforesaid clauses, it will be seen that the respondent No. 1 complainant was made to understand that the business premises of the accused/petitioners was fully seized/possessed of/well and sufficiently entitled to commercial premises. Contrary to such disclosure made at the time of agreement, the petitioner has stated in the writ petition that the petitioner No. 1 Company is not the real owner of the land and the building, but in fact it is the Assam Industrial Development Corporation Ltd. which is the real owner of the said premises. Contrary to such disclosure made at the time of agreement, the petitioner has stated in the writ petition that the petitioner No. 1 Company is not the real owner of the land and the building, but in fact it is the Assam Industrial Development Corporation Ltd. which is the real owner of the said premises. The said premises was taken on lease by another Company and the said Company allowed the petitioner No. 1 Company to run its factory on payment of rent. 36. In paragraph 3 of the writ petition it has been stated that in the loan agreement dated 6.3.2002 a clause has been incorporated by the respondent No. 1 that the Board of Directors of the petitioner Company adopted a unanimous resolution in its meeting held on 1.3.2002 for borrowing money from the respondents, although same are incorrect. Upon reference to the aforesaid agreements it has been stated in the writ petition that the respondent Company illegally created some charge/hypothecation in respect of the land and building including the machinery although the land and building did not belong to the petitioner No. 1. 37. From the stand in the writ petition what has transpired is that the accused/petitioners have even gone to the extent of dishonouring the terms and conditions of the aforesaid agreements which they signed with the respondent No. 1 complainant for the purpose of mentioned in the agreement. 38. In Anil Mahajan (supra), on which the learned Counsel for the petitioners has placed reliance, the Apex Court while observing that mere failure to keep promise at a subsequent stage will not lead to an offence of cheating unless fraudulent and dishonest intention is shown to be existent from the very beginning of the transaction. In the instant case such intention on the part of the accused/petitioners is explicit on the face of it in view of the stand in the writ petition relating to the very clauses in the agreement upon incorporation of which they induced the respondent No. 1 Company to arrive at an agreement with the accused/petitioners. The accused/petitioners being a party to both the agreements cannot disown the terms and conditions thereof even to the extent of saying that the land and the building which were the secured assets did not belong to them. 39. The accused/petitioners being a party to both the agreements cannot disown the terms and conditions thereof even to the extent of saying that the land and the building which were the secured assets did not belong to them. 39. In the agreement it was clearly indicated by the accused/petitioners that the land and the building and/or business premises are fully seized/possessed of/well and sufficiently entitled to commercial premises on the basis of first party, i.e. the respondent No. 1 agreed for supply of mould and providing loan to the accused/petitioners. Now in the writ petition, the accused/petitioners have turned around such position depicted in the agreement even to the extent of disowning the land and the building. If this is not fraudulent and dishonest intention on the part of the accused/petitioners from the beginning of the transaction, nothing else could be said to be so. In view of such a position, it is clear that the respondent No. 1 complainant has been able to show a prima facie case of dishonest and fraudulent intention on the part of the accused/petitioners and having disclosed such prima facie case in the complaint petition, learned Judicial Magistrate, Silvassa has rightly taken cognizance of the same by way of issuing process to the accused/petitioners. 40. Having regard to the terms and conditions of the agreement and the offence alleged, it cannot be said to be a case of exclusion of jurisdiction of Criminal Court at Silvassa. As noted above, Section 181(4), Cr PC dealing with the place and trial in case of certain offence provides that any offence of criminal misappropriation or of 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 of the offence was received or retained, or was required to be returned or accounted for, by the accused person. In the instant case it was the requirement of the accused/petitioners to return the mould to the respondent No. 1 at Silvassa and so also supply the goods at Silvassa, payment was also to be made at Silvassa. Contrary to the terms of the agreement, the accused/petitioners have retained the mould allegedly for use other than the purpose provided for in the manufacturing agreement. Contrary to the terms of the agreement, the accused/petitioners have retained the mould allegedly for use other than the purpose provided for in the manufacturing agreement. Having regard to such a situation it cannot be said to be a case of exclusion of jurisdiction at Silvassa. Once it is held that cause of action also arose at Silvassa, plea of the respondent No. 1 complainant that such cause of action arose only at Silvassa and not in Guwahati need not be gone into. 41. This now leads us to the plea of the learned Counsel for the accused/petitioners that the cause of action, even if any, arose only in Guwahati. As noted above, the accused/petitioners were to supply the goods and return the mould of the respondent No. 1 complainant at Silvassa which they allegedly did not do in violation of the terms of the agreement. The allegation is that they have also not repaid the loan to the respondent No. 1 complainant at Silvassa. Once it is established that the ingredients of Section 181(4) of the Cr PC come into operation, then that aspect of the matter need not detain us since the respondent No. 1 complainant was to be supplied with the goods, returned with the mould and return the loan amount at Silvassa, I am of the considered opinion that Silvassa Court has the jurisdiction to try the offence against the accused/petitioners. 42. The complaint has been lodged and entertained under Sections 406, 415, 417 420 and 120(B)of the IPC. The provisions are relating to criminal breach of trust, cheating and criminal conspiracy. Going by the facts and circumstances involved in the case about which discussions have been made above, it cannot be said to be not a prima facie case of criminal breach of trust and cheating. In Mosaraf Hossain Khan (supra), the Apex Court observed that a writ of certiorari ordinarily would not be issued by a writ Court under Article 226 of the Constitution against a Judicial Officer. It is no doubt true that a Judicial Court would also be subject to exercise of writ jurisdiction' of the High Court. However, at the same time such jurisdiction can be exercised only when an error apparent must be self evident. The instant case cannot be said to be a case of that nature warranting interference under Article 226 of the Constitution of India. 43. However, at the same time such jurisdiction can be exercised only when an error apparent must be self evident. The instant case cannot be said to be a case of that nature warranting interference under Article 226 of the Constitution of India. 43. As regards the contention on merit of the case of the petitioners this is not the stage in which same can be gone into. At this stage, the High Court in exercising its jurisdiction under Article 226 of the Constitution of India cannot quash the criminal proceeding merely on the basis of the assertion made in the writ petition. The law is well settled that the power of quashing the criminal proceeding should be exercised very sparingly and with circumspection. At this stage, it will not be justified for this Court in embarking upon an enquiry as to reliability or genuineness or otherwise of the allegations made in the complaint. Inherent power or jurisdiction under Article 226 of the Constitution does not confer any jurisdiction so as to go into merit of the case or come to a conclusion that there is no liability on the part of the accused/petitioners. 44. Going by the own case of the accused/petitioners, the fraudulent or dishonest intention on their part was existing at the time of entering into the agreement about which discussions have been made above. In such a situation, cognizance taken by the learned Judicial Magistrate cannot be said to be a manifest error warranting interference of this Court to correct that error. 45. In the instant case, a prima facie offence having been disclosed in the complaint, I am not inclined to interfere with the same exercising jurisdiction under Article 226 of the Constitution of India. As has been held in State of Haryana v. Bhajanlal reported in 1992 (Supp) l SCC 335, the power of quashing a criminal proceeding should be exercised sparingly and with circumspection and that too in the rarest of the rare cases. The present case is not rarest of the rare cases. In view of the specific allegations made in the complaint, it cannot be said that no prima facie case has been made out against the accused/petitioners and that the complaint does not disclose a cognizable offence. The present case is not rarest of the rare cases. In view of the specific allegations made in the complaint, it cannot be said that no prima facie case has been made out against the accused/petitioners and that the complaint does not disclose a cognizable offence. The instant case is not this category of case, where the extraordinary power under Article 226 of the Constitution or inherent power under Section 482 of the Cr PC can be exercised either to prevent abuse of the process of law or otherwise to secure the ends of justice. 46. For the forgoing reasons and discussions, I am of the considered opinion that the writ petition is misconceived and merit dismissal which, I according do. 47. The writ petition is dismissed. Interim order stands vacated. The criminal proceeding initiated against the petitioners shall now proceed in accordance with law. Petition dismissed.