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2008 DIGILAW 819 (CAL)

Subrata Kumar Mishra v. Sundaram Finance Ltd.

2008-08-13

ASHIM KUMAR ROY

body2008
Judgement ORDER :- In this criminal revisional application invoking the provisions of Section 482 of the Code of Criminal Procedure, the petitioner challenged the order dated January 17, 2008 passed by the Learned Additional Chief Judicial Magistrate, Durgapur, in connection with M.P. Case No. 157 of 2008 whereby the Learned Magistrate in exercise of power under Section 156 (3) of the Code of Criminal Procedure directed the complaint made to the Court by the opposite party No. 1 against the petitioners alleging commission of offences punishable under Sections 406/420/34/120B of the Indian Penal Code, be forwarded to the Officer-in-Charge, Durgapur Police Station with a further direction that same be treated as a First Information Report and to cause investigation. 2. Mr. Arabinda Chatterjee, the Learned Counsel, appearing for the petitioners in support of his prayer for quashing urged as follows; (a) The allegations contained in the complaint has not disclosed any offence and the Learned Magistrate mechanically passed the impugned order. (b) The complainant made a wrong and false statement because as per the award the complainant is only entitled to a sum of Rs. 6,88,677/- plus interest @ 18% P.A. from March 22, 2007 till the realization, with costs and other incidental charges. (c) In the said award there was no direction for return of the vehicles but in the complaint it has been falsely alleged that complainant succeeded to get an arbitration award and also entitled to sell the said vehicle after obtaining the possession of the same from the petitioners. (d) In the complaint it has not only been falsely alleged as regards to the possession of vehicle as per the award but a deliberate false statement has been made alleging that the petitioners were intending to sell the vehicle for their wrongful gain. (e) The allegations that the petitioners are intending to sell the vehicle has been aimed to give the case a criminal flavour and for avoiding the execution proceedings as envisaged under Section 36 of the Arbitration and Conciliation Act, 1996. (f) There is no iota of materials to show that the petitioners are attempting to dispose of the vehicle for their wrongful gain. (f) There is no iota of materials to show that the petitioners are attempting to dispose of the vehicle for their wrongful gain. (g) As per the award the complainant is only entitled for the sum as awarded and have no claim and or right over the vehicle because the award has all the force of decree of a competent court and in the event by any action of the judgment-debtor the award is likely to be frustrated in that case the decree holder is always entitled to move the necessary application under Section 9 of the Arbitration and Conciliation Act, 1996 for protection of the subject matter. But, in the instant case, without availing the remedies the complainant i.e. the decree holder straightway approach the criminal court with false, frivolous and utterly misconceived allegations. (h) Since the hire purchase agreement has been terminated at the instance of the complainant and they approached the Learned Arbitrator, the financier i.e. the complainant herein has no legal right to go for enforcement of any of the clauses contained in the said agreement. (i) There is suppression of material facts and the complaint has been filed to abuse of process of the court with a mala fide intention for wrecking vengeance and the allegations are absurd and inherently improbable. In support of his submissions Mr. Chatterjee relied on the following decisions; (i) Indian Oil Corporation v. NEPC India Limited and Ors., reported in (2OO6) 6 SCC 736 : ( AIR 2006 SC 2780 ), (ii) Harishchandra Prasad Mani v. State of Jharkhand, reported in 2007 (1) Supreme 827 : ( AIR 2007 SC 1117 ), (iii) Thelapalli Raghavaiah v. Station House Officer, reported in AIR 2007 SC (Supple) 46 : (2007 Cri LJ 1813). 3. On the other hand, Mr. Joy Sengupta, the Learned Counsel, appearing on behalf of the opposite party No. 1/the complainant submitted as follows; (a) A plain reading of the allegations contained in the First Information Report clearly makes out a prima facie case of commission of the cognizable offences punishable under Sections 406/420/34/120B of the Indian Penal Code. 3. On the other hand, Mr. Joy Sengupta, the Learned Counsel, appearing on behalf of the opposite party No. 1/the complainant submitted as follows; (a) A plain reading of the allegations contained in the First Information Report clearly makes out a prima facie case of commission of the cognizable offences punishable under Sections 406/420/34/120B of the Indian Penal Code. (b) Upon failure of the hirer to pay the monthly instalments in terms of the Hire Purchase agreement, the financier took recourse to the arbitration proceedings and obtained an award and the accused persons i.e. the hirer and in one hand challenged the award, on the other hand removed the vehicle and sold it out before the award could be executed. (c) Irrespective of any award the petitioner in the absence of any order of a competent court has no right to sell the vehicle in violation of terms of Hire Purchase agreement. 4. I have given my anxious and thoughtful consideration to the rival submissions of the parties. I have also considered the materials on record as well as the decisions relied upon by the parties. 5. Admittedly, this is a case where upon the failure of the hirer to make payment of the instalment amounts, the financier/opposite party No. 1 took recourse to arbitral proceedings for recovery of the outstanding amount by raising a dispute, in terms of the hire purchase agreement but on such failure of the hirer to make payment of the instalments, the financier never came out with any case of commission of criminal offences by the hirer. In the said arbitration proceeding a claim has been made for recovery of a sum of Rs. 6,88,677/- from the hirer with an interest at the rate of 24% per annum from March 22, 2007 till the realization, with costs, besides that there was no prayer towards the repossession of the vehicle. The financier/opposite party No. 1 succeeded in such arbitration proceeding and obtained an award in his favour. In the arbitral award, it was directed that the hirer shall pay the entire claim amount with interest at the rate of 18% per annum from March 22, 2007 till the realization with costs no order as regards to the vehicle in question. Such arbitration proceeding was instituted sometime in March, 2007 for default of payment on and from January, 2006. Such arbitration proceeding was instituted sometime in March, 2007 for default of payment on and from January, 2006. However, after the pronouncement of the award on August 7, 2007 as aforesaid and five months thereafter on January 16, 2008 the financier/opposite party No. 1 made a complaint before the Learned Additional Chief Judicial Magistrate, Durgapur, against the present petitioner i.e. hirer alleging commission of an offence punishable under Section 406/420/34/120B of the Indian Penal Code with a prayer for sending such complaint to the Officer-in-Charge, Durgapur Police Station for registering a First Information Report and to cause investigation. Pursuant to which the Learned Additional Chief Judicial Magistrate, Durgapur made an order under Section 156 (3) of the Code of Criminal Procedure for treating the said complaint as FIR and for causing investigation. 6. The very basis of such complaint, in other words, the foundation of the case of the opposite party No. 1 is based on the following averment which is quoted below :- "That on failure to pay the loan amount by the accused No. 01 the complainant brought an reference for adjudication of dispute due to non-payment of installment by the accused Nos. 1 and 2 before Arbitrator Mr. S. Santhanakrishnan (Retired District Judge) as per arbitration clause of that agreement dated 04.12.2003 and succeed to get an arbitration award and also entitled to sale the said vehicle after obtaining possession of the said vehicle. That, after obtaining said arbitration award i.e. on 07.08.2007 the complainant and his men's agents tried to search out the said vehicle in each and every place at Durgapur and during search the complainant came to know that accused persons in collusion with each other send the said vehicle out of Durgapur with intend to sale by way of illegal means with a view to make wrongful gain for themselves and to wrongful loss to the complainant. That the accused persons with a view to cheat and misappropriate the money of complainant sold the said truck without making payment of loan amount." 7. That the accused persons with a view to cheat and misappropriate the money of complainant sold the said truck without making payment of loan amount." 7. Although, according to the allegations made in the aforesaid complaint it has been claimed that in terms of the arbitral award the decree holder i.e. the opposite party No. 2 herein was entitled to sell the said vehicle after obtaining the possession of the same towards the realization of the award but from the reading of the award itself that does not appear to be so. In any event after expiry time prescribed for challenging the award or after the rejection of such challenge an award may be enforced in terms of the provisions of the Code of Civil Procedure, as if that was decree of a court. 8. It is no doubt true that mere availability of a civil remedy and even availing of such remedy is never an impediment to maintain a criminal proceeding, provided the complaint disclose the offence alleged. Similarly, merely because a hire purchase agreement contained an arbitration clause that would not by itself operate as a bar for a criminal prosecution, when the facts and circumstances of any particular case constitute criminal offences. It is equally true that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or prosecution. In the case of State of Karnataka v. L. Muniswamy, reported in AIR 1977 SC 1489 : (1977 Cri LJ 1125) the Apex Court held as follows; "The saving of the High Court's inherent powers, both in civil and criminal matters, is designed to achieve a salutary public purpose which is that a court proceedings ought not to be permitted to degenerate into a weapon of harassment or prosecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceedings in the interests of justice. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the Legislature. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the Legislature. The object and purpose of this provision which enable the High Court to do justice between the State and its subjects has to be properly realized and the width and contours of that salient jurisdiction appreciated." In the instant case, upon the failure of the petitioner in making payment of the instalment amounts in terms of the hire purchase agreement, no allegation was made against him for the offence of criminal breach of trust or of cheating, presumably because there was no case nor there could be any case of criminal offence on mere failure to make payment of instalments, after 25th instalment was paid. However, when the arbitral award was pronounced, although in the award there was nothing to indicate that by virtue of such award the decree holder became entitled to execute and enforce the award by obtaining the possession of the vehicle and by sale it of in the market, still by making such allegations the opposite party No. 2 herein filed a complaint against the present petitioner. Admittedly such award has not become enforceable as yet and on the strength of such award the petitioner i.e. the decree holder is not entitled to put the same for execution against the judgement-debtor. However, the petitioner i.e. the decree holder is not without any remedy and is legally entitled to take recourse to the interim remedy available in terms of the provisions of Section 9 of the Arbitration and Conciliation Act, 1996 which among other, provides for an interim measure of protection, before or during arbitral proceeding or after the making of arbitral award for the detention or preservation of any property which is the subject matter of arbitration agreement by way of interim injunction or by way of appointment of a receiver but the opposite party No. 2 without going for the same instituted a criminal case against the judgment-debtor alleging as aforesaid. In my view, this is nothing but a glaring example of abusing a court proceedings and for ends of justice which cannot be permitted and the impugned complaint and the order passed thereupon must be quashed. Accordingly, this criminal revisional application succeeds and the impugned complaint as well as the order passed in connection therewith stands quashed. In my view, this is nothing but a glaring example of abusing a court proceedings and for ends of justice which cannot be permitted and the impugned complaint and the order passed thereupon must be quashed. Accordingly, this criminal revisional application succeeds and the impugned complaint as well as the order passed in connection therewith stands quashed. Urgent xerox certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible. Application allowed.