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Madhya Pradesh High Court · body

2008 DIGILAW 913 (MP)

V. C. Raam Sukaesh v. State of M. P.

2008-07-25

A.P.SHRIVASTAVA

body2008
ORDER 1. Heard on the petition under section 482 of CrPC held by the petitioners for quashing FIR in Crime No. 140/05, registered at Police Station Morar, Gwalior (M.P.) under sections 406, 409, 420 and 424 of the Indian Penal Code. 2. Brief facts of the case are that respondent No.3 complainant filed a complaint against the petitioners on the basis of which case was registered by respondent No.1 with the instructions of respondent No.2. It is submitted that petitioners No.1 to 3 are carrying on business under the name and style of M/s. Vinbros and Company which is a partnership firm and petitioners No.1 and 3 are its working partner and petitioner No.3 is a sleeping partner. They are engaged in the manufacture of Indian Made Foreign Liquor (IMFL) and they are in the business for the last more than 60 years. The petitioners are supplying their products throughout India and as such they have appointed marketing consultants with certain terms and conditions to promote their products in different places. The petitioners had appointed one M/s. Divine and Company through proprietor respondent No.3 Mr. Mahendra Nathani of Gwalior, as their marketing consultant with an area network of Madhya Pradesh, Delhi and Chhattisgarh vide appointment letter dated 5th November, 2001. As per appointment letter, all the expenses were to be borne by the respondent No.3, copy of which is marked as Annexure A-1. The petitioners entered into tripartite agreement on 6.3.2001 with respondent No.3 Mr. Mahendra Nathani and M/s. V.M. Associates, copy of which is marked as Annexure A-2. A tripartite agreement was also entered into between the parties on 7.8.2003, copy of which is marked as Annexure A-3. The petitioners renewed the appointment of respondent No.3 w.e.f. 1st November, 2003 for a period of two years, copy of which is marked as Annexure A-4. Similarly, some relevant documents were also executed which are referred in the petition from Annexure A-4 to A-27. 3. The main submission of the counsel for the petitioners is that complaint was filed by the respondent No.1 with the instructions of respondent No.3 and the investigation carried by the police amounts to abuse of the process of law due to which the petitioners are suffering from physical shock and mental agony. 3. The main submission of the counsel for the petitioners is that complaint was filed by the respondent No.1 with the instructions of respondent No.3 and the investigation carried by the police amounts to abuse of the process of law due to which the petitioners are suffering from physical shock and mental agony. It is also submitted that the factual aspect which emerges with the documents filed by the petitioners, shows that the dispute is of civil nature and no offence of criminal breach of trust and/or cheating under section 406 and/or of section 409 and/or of section 424 of the IPC is constituted against the petitioners. It is also submitted that if the allegations made in the first information report even if taken at their face value and in their entirety, do not prima facie constitute any offence or make out a case against the petitioners. It is also submitted that the respondent No.3 was the marketing consultant of the petitioners since 2001 and all the expenses have to be borne out by him. It is also pertinent to mention that at no point of time did the petitioners call upon the respondent No.3 to make a huge investment of Rs.65 lacs. The respondent No.3 and himself admitted in his letter dated 18th August 2004 that only an amount of Rs.1,33,531.17 was remaining outstanding payable to the petitioners and in that letter also nowhere it was mentioned that an amount of Rs.65 lacs was due from the petitioners. The above facts clearly establish that the allegations made by respondent No.3 through his Advocate's reply notice dated 2nd September, 2004 was incorrect, false and baseless. 4. The respondent No.3 lodged the abovesaid FIR on false and baseless grounds to escape from the consequences of criminal case which has been lodged under section 138 of Negotiable Instruments Act before the Judicial Magistrate First Class in Criminal Case No.66/2005 at Pondicherry by the petitioners. Therefore, it is submitted that the first information report which is registered against the petitioners be quashed. 5. In reply, respondent No.3 denied the allegation which was put forward by the petitioners. Therefore, it is submitted that the first information report which is registered against the petitioners be quashed. 5. In reply, respondent No.3 denied the allegation which was put forward by the petitioners. The petitioners applied anticipatory bail before the High Court of Madras and on 5.1.2005 in Case No.4013/04 same was granted for a period of four weeks and it was directed that on getting the certified copy of the order to surrender before the concerning Court and if the order will not comply, the operation of the impugned order shall remain extinguished (Annexure R-3). Respondent No.3 also filed various documents Annexure R-1 to Annexure R-27. Respondents No.1 and 2 also denied the allegations put forward by the petitioners and it is submitted that the investigation in the matter is going on in accordance with law. It is also denied that the transaction is not of a civil nature and the process of collection of evidence is going on. 6. During the course of arguments, much stress has been given by the counsel for the petitioners that looking to the nature of dispute, the matter comes within the purview of civil dispute and there is no prima facie material to constitute an offence for criminal liability as registered by the police under the various sections of Indian Penal Code. Further, it is submitted that respondent No.3 filed complaint against the petitioners because the petitioners had filed a criminal complaint under section 138 of Negotiable Instruments Act and only to give, pressure, a false report was lodged against the petitioners. 7. In support of his contention, learned counsel for the petitioners relied on a decision of the Hon'ble apex Court in the case of Madhavrao Jiwajirao Scindia and others v. Sambhajirao Chandrojirao Angre and others in Criminal Appeals No.657-58 of 1986,judgment dated 9.2.1988 [1988(1) MPWN 225], in which it is held that the legal position is well settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the Court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. It is also for the Court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. Counsel for the petitioners also placed reliance in the case of Sunil Kumar v. M/s. Escorts Yamaha Motors Ltd. and others, in which the Division Bench of the Hon'ble apex Court in para 5 of its judgment dated 27.10.1999, bearing Criminal Appeal No.1191 of 1999 [@ SLP (CRL) No.583 of 1999] observed as under: "5. Bearing in mind the law laid down by this Court in the case referred to earlier and the contentions raised by the learned counsel appearing for the parties and on examining the allegations made in the FIR, we are persuaded to accept the submission of Mr. H.N. Salve and Mr. Arun Jaitley, appearing for the respondents, that necessary ingredients of the offence of cheating or criminal breach of trust have not been made out and on the other hand the attendant circumstances indicate that the FIR was lodged to pre-empt the filing of the criminal complaint against the informant under section 138 of the Negotiable Instruments Act. The High Court, therefore, was well within its power in quashing the FIR as otherwise it would tantamount to an abuse of process of Court. We, therefore, see no justification for our interference with the impugned decision of the High Court in exercise of power under Article 136 of the Constitution." 8. Further, counsel for the petitioners relied on Escorts Yamaha Motors Ltd. v. State and another, in which the High Court of Delhi in para 17 of its judgment dated 20.11.1998 bearing Criminal Writ No.562 of 1998 observed as under: "17. It is the admitted case that the cheques were presented and the same were not honoured. It is not in dispute that in March, 1998, a petition under the Arbitration and Reconciliation Act, 1996 praying for appointment of Arbitrator and referring disputes and differences, mentioned in the said petition for adjudication by the Arbitrator and also seeking direction against the petitioner Company to resume supply of motor-cycles immediately on cash basis was filed in this Court by respondent No.2. One of the disputes on which reference has been sought by respondent No.2 is : "Whether the respondents have any right to misappropriate and convert the blank signed cheques given by the petitioner to the respondents towards the supply of future lot of motor bicycles/motorcycles, had a right to forge the said cheques and misappropriate the said amounts for any other purposes or towards the alleged dues, whereas the petitioner has been regularly clearing the payments in accordance with the agreement settlement/arrangements already arrived in between the parties and the respondents had also never objected to the said arrangements and as to how much amount of loss/damages the petitioner is entitled from the respondents." In the said petition by M/s. S.K. Automobiles seeking appointment of Arbitrator, it is alleged that the petitioner through its letter dated 16.3.1998 has threatened to deposit two cheques in the amount of Rs.75,00,000/- each. The same formed part of 50 blank signed cheques, handed over to the petitioner towards future supply of goods, under a covering letter dated 19.1.1998. The deposit/encashment of the two cheques of Rs.75,00,000/- each is illegal and mala tide and the petitioner cannot be allowed to misappropriate the said amount when no such amount is due and payable to the petitioner by M/s. S.K. Automobiles. The petitioner further states that through their letter dated 16.3.1998 the petitioner was informed not to present the cheques and also informed the Bank not to honour the same on presentation. Thus it is a case where the complainant allege breach of an agreement under which blank cheques are stated to have been handed over to the petitioner. Contrary to the alleged terms of agreement (not in writing) the cheques are alleged to have been drawn by filling in the blanks and thereby an effort is alleged to have been made to get them enhanced. Much prior to lodging the complaint respondent No.2 approached civil Court for appointment of an Arbitrator to adjudicate upon the question which squarely is the subject-matter of FIR." 9. Much prior to lodging the complaint respondent No.2 approached civil Court for appointment of an Arbitrator to adjudicate upon the question which squarely is the subject-matter of FIR." 9. Lastly, learned counsel for the petitioner also placed reliance in the case of Anil Mahajan v. Rhor Industries Ltd. and another, reported in (2005) 10 SCC 228 in which the Hon'ble apex Court held as under: "From mere failure of a person to keep up promise subsequently, a culpable intention right at the beginning, that is, when he made the promises cannot be presumed. A distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction. The substance of the complaint is to be seen. Mere use of the expression 'cheating' in the complaint is of no consequences." 10. Shri Tomar, learned counsel on behalf of respondent No.3 relied on T. Vengama Naidu v. T. Dora Swamy Naidu and others, report in 2007(2) CCSC 1014 (SC), in which the Division Bench of the Hon'ble apex Court in para 7 of its judgment observed as under: "7. It cannot be disputed that a private complaint was filed before the learned Magistrate who had made over the said complaint for investigation under section 156(3), CrPC. That order of the Magistrate has not been challenged. On the basis of that order the police registered a crime probably treating the complaint as the FIR. It is settled law that an FIR and the consequent investigation cannot be quashed unless there is no offence spelt out from the same. The law in this respect is settled that the said FIR has to be taken on its face value and then it is to be examined as to whether it spells out the offences complained of. There was no question of considering the merits of the allegations contained in the FIR at that stage or testing the veracity of allegations. In this case, admittedly, the investigation was in progress. The police had also not reported back to the Magistrate the result of their investigation. There was no question of considering the merits of the allegations contained in the FIR at that stage or testing the veracity of allegations. In this case, admittedly, the investigation was in progress. The police had also not reported back to the Magistrate the result of their investigation. Under such circumstances, the FIR, could have been quashed only and only if there appeared to be no offence spelt out therein. A glance at the FIR suggests that there were serious allegations against both the accused, respondents No.1 and 2 herein inasmuch as it was specifically alleged that in spite of the revocation of the General Power of Attorney and in spite of a specific notice to that effect by the complainant went on dishonestly to execute the sale-deed in favour of his daughter on the basis of the said revoked General Power of Attorney. It is alleged against the first respondent that he had no right over the property and yet he had executed a document in favour of the second respondent without any authority with an intention to cause loss to the complainant and to cheat him. It was alleged against the second respondent that she was well aware that the first respondent was not competent to sell the property so as to defraud and cheat the complainant and, therefore, she also was liable punished under sections 464, 423, 420 read with section 34, IPC. It was not for the learned Judge at the stage of investigation to examine the nature of the transaction and further to examine as to whether any offence was actually committed by the accused persons or not. At that stage the only inquiry which could have been made was as to whether the complaint or the FIR did contain allegations of any offence. Whether those offences were made out, even prima facie, could not have been examined at that stage as the investigation was pending then. We, therefore, do not agree with the learned Single Judge that the FIR was liable to be quashed. We also do not agree with the learned Judge that there are no ingredients of the offences complained of in the FIR and this was a civil dispute. However, we do not wish to go deeper into that question. We, therefore, do not agree with the learned Single Judge that the FIR was liable to be quashed. We also do not agree with the learned Judge that there are no ingredients of the offences complained of in the FIR and this was a civil dispute. However, we do not wish to go deeper into that question. Our prima facie examination satisfies us that there were ingredients of offences complained of and, therefore, at that stage the High Court could not have quashed the FIR as well as the investigation. The appeal, therefore, has to be allowed, setting aside the order of the learned Single Judge." 11. Similarly, learned counsel on behalf of respondent No.3 placed reliance in the case of State of Orissa and another v. Saroj Kumar Sahoo, reported in 2006 CrLR (SC) 63, in which the Division Bench of the Hon'ble apex Court in paras 11 and 14 of its judgment also observed as under: "11. As noted above, the power possessed by the High Court under section 482 of the CrPC are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. 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 issue involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage {See : Janata Dal v. H.S. Chowdhary [ (1992)4 SCC 305 ], and Raghubir Saran (Dr.) v. State of Bihar [ AIR 1964 SC 1 ]}. It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in Court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings {See: Dhanalakshmi v. R. Prasanna Kumar [(1990) Supp. SCC 686], and State of Bihar v. P.P. Sharma [ AIR 1996 SC 309 ]}. 14. It is to be noted that the investigation was not complete and at that stage it was impermissible for the High Court to look into materials, the acceptability of which is essentially a matter of trial. While exercising jurisdiction under section 482 of the CrPC, it is not permissible for the Court to act as if it was a trial Court. Even when charge is framed at that stage, the Court has to only prima facie be satisfied about existence of sufficient ground for proceeding against the accused. For that limited purpose, the Court can evaluate material and documents on record but it cannot appreciate evidence. The Court is not required to appreciate evidence to conclude whether the materials produced are sufficient or not for convicting the accused. In Chand Dhawan (Smt.) v. Jawahar Lal and others [ (1992)3 SCC 317 ], it was observed that when the materials relied upon by a party are required to be proved, no inference can be drawn on the basis of those materials to conclude the complaint to be unacceptable. The Court should not act on annexures to petitions under section 482 of the CrPC, which cannot be termed as evidence without being tested and proved." 12. The Court should not act on annexures to petitions under section 482 of the CrPC, which cannot be termed as evidence without being tested and proved." 12. In this case, two points are involved; whether the allegation against the petitioners comes within the ambit of civil dispute and further, whether the crime was registered by the police, the investigation has not yet been completed, it would be proper to quash the proceeding? 13. In the case of M/s. Medcl Chemicals and Phanna (P) Ltd. v. M/s. Biological E. Ltd. and others [ AIR 2000 SC 1869 ], the Hon'ble apex Court observed that criminal proceeding cannot be quashed merely on the ground that civil remedy is available. In the matter of exercise of High Court's inherent power, the only requirement is to see whether continuance of the proceeding would be a total abuse of the process of Court. The Criminal Procedure Code contains a detailed procedure for investigation, charge and trial and in the event, the High Court is desirous of putting a stop to the known procedure of law, the High Court must use a proper circumspection and as noticed above, very great care and caution has to be taken to quash the complaint in exercise of its inherent jurisdiction. 14. Similarly, in the case of the Delhi Development Authority v. Lila D. Bhagat, reported in AIR 1975 SC 495 , the Hon'ble apex Court held that it was a question of fact in each case whether the Master Plan had specified a particular use of a particular building and whether the person prosecuted had incurred the penal liability under section 29(2) for the alleged violation of section 14. The High Court, instead of leaving that matter to be decided by the criminal Court unjustifiably and illegally on the facts and in the circumstances of the cases, took upon itself the task of holding on interpretation of and on reading the Master Plan that it had not specified any use of building as distinguished from land. It was primarily and essentially within the domain of the criminal Court where the prosecutions were pending to arrive at its own conclusion on appreciation of the entire evidence placed before it. 15. It was primarily and essentially within the domain of the criminal Court where the prosecutions were pending to arrive at its own conclusion on appreciation of the entire evidence placed before it. 15. Regarding investigation, in the case of Kurukshetra University and another v. State of Haryana and another, reported in AIR 1977 SC 2229 , the Hon'ble apex Court held as under: "Inherent powers do not confer an arbitrary jurisdiction on the High Court to act according to whim or caprice. That statutory power has to be exercised sparingly, with circumspection and in the rarest of rare cases. Thus, the High Court in exercise of inherent powers under section 482, Criminal Procedure Code cannot quash a first information report more so when the police had not even commenced the investigation and no proceeding at all is pending in any Court in pursuance of the said FIR." 16. Similarly, in the case of M/s. Paragon Associates and another v. M/s. Pasupati Feeds [2001 CriLJ 3737, Orissa High Court was pleased to held as under : "Quashing of criminal proceedings accused allegedly charged for cheating for non-supply for machinery in breach of contract -- Whether or not allegations in complaint are otherwise correct -- Has to be decided on the basis of evidence to be led at the time of trial -Proceedings cannot be quashed merely because there is civil law remedy for breach of contract." 17. In a recent judgment dated 11.3.2008 in Criminal Appeal No.472/08, the Hon 'ble apex Court in case of Divine Retreat Centre v. State of Kerala and others, discussed various aspect of the inherent jurisdiction under section 482 of CrPC. On relying upon the decision of King Emperor v. Khwaja Nazir Ahmed [AIR 1945 PC 18], it is observed by the Privy Council that just as it is essential that every one accused of a crime should have free access to a Court of justice so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes upon them the duty of enquiry. 18. 18. In the case of West Bengal v. S.N. Basak, reported in 1963(2) SCR 52 , in which the Hon'ble apex Court laid down the principle that the police has statutory right to investigate into circumstances of any alleged cognizable offence without authority from a Magistrate and that power of police to investigate cannot be interfered with by the exercise of power under the inherent power of the High Court. 19. In the case of Hazari Lal Gupta v. Rameshwar Prasad and another, reported in (1972)1 SCC 452 , the Hon'ble apex Court, while explaining the nature and purport of the inherent jurisdiction of the High Court observed that in exercising jurisdiction under section 561A of the Criminal Procedure Code 1898, the High Court can quash the proceedings if there is no legal evidence or if there is any impediment to the institution or continuance of proceedings but the High Court does not ordinarily enquire as to whether the evidence is reliable or not. Where again, investigation into circumstances of an alleged cognizable offence is carried on under the provisions of the Criminal Procedure Code the High Court does not interfere with such investigation because it would then be impeding investigation and jurisdiction of statutory authorities to exercise power in accordance with the provisions of the Criminal Procedure Code. 20. Similarly, in the case of Nirmalji Singh Hoon v. The State of West Bengal and another, reported in (1973)3 SCC 753 , it is observed that the police authorities have under sections 154 and 156 of the Code a statutory right to investigate into a cognizable offence without requiring any sanction from a judicial authority and even the High Court has no inherent power under section 561A of the Code to interfere with the exercise of that statutory power. 21. After having heard learned counsel for the parties and various decisions .rendered by the Hon'ble apex Court as well as High Court, it would not be appropriate to interfere with the investigation of the police as the investigation is in progress. Therefore, no sufficient ground is made out to quash first information report as prayed by the petitioners in the petition. Accordingly, the MCrC stands dismissed.