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2009 DIGILAW 272 (ORI)

Lilasons Breweries Ltd. v. Sujata Manjari Pati

2009-03-27

B.K.PATEL

body2009
ORDER :- Petitioners, who are the accused persons in I.C.C. No. 11 of 1993 of the Court of learned S.D.J.M., Bhubaneswar instituted by the opposite party-complainant. have made prayer in this application under Section 482, Cr.P.C. to quash the order dated 12-3-2007 taking cognizance of offences under Sections 420 and 406. I.P.C. and issuing summons to the petitioners. 2. Case of the opposite party-complainant is that accused No. 1 is a registered company engaged in manufacture and sale of breweries in the brand name of Khajuraho Super Strong Lager Beer" and accused No. 2 is the Managing Director of the Company. The company is situated and the Opposite Party No.2 is residing at Bhopal in the State of Madhya Pradesh. They entered with an arrangement with the complainant by letter dated 24-12-2000 for the purpose of marketing and sales promotion of their product through the Orissa State Beverage Corporation. As per the arrangement the complainant was to deposit Rs. 24 lakhs with the accused persons as security deposit which was to be refunded within 20 days from the date of termination of the agreement along with any other dues payable to the complainant. As per the agreement/arrangement the complainant is to receive commission at the rate of Rs. 28/- on sale of each case of beer. As required by the accused persons the complainant deposited Rs. 24 lakhs through bank draft. In between 2000-01 to 2004-05 the complainant carried out marketing and sales promotion entitling her to receive Rs. 30.38.000/- as commission. However, she is yet to receive Rs. 8.15.375/- out of the commission due to her. As the accused persons discontinued supply of products to Orissa the complainant decided to withdraw from the arrangement and accordingly initiated intimated the accused No. 1. Accused No.1 remitted Rs. 13 lakhs on 7-12-2005 towards refund of security deposit. On 9-12-2005 the complainant sent a letter to accused No.2 demanding refund of balance amount of Rs. 19.15.375/- i.e. balance security of Rs. 11 lakhs and balance commission of Rs. 8.15.3.75/ -. It is alleged that accused No.1 sent letter dated 31-12-2005 admitting the claim of the complainant but expressed inability to pay the amount on the ground that dues from Orissa State Beverage Corporation have not been received. The complainant sent a lawyer's notice on 16-6-2006 to which the accused persons sent reply dated 5-7 -2006 stating that balance Claim amount of Rs. The complainant sent a lawyer's notice on 16-6-2006 to which the accused persons sent reply dated 5-7 -2006 stating that balance Claim amount of Rs. 11 lakhs would be paid soon after the amount is refunded by the Orissa State Beverage Corporation. In the background of such factual averments it is alleged in the complaint petition that the accused persons induced the complainant to accept the promotion ship of their product as it was lucrative in the market and as per their inducement the complaint had deposited Rs. 24 lakhs with the Orissa State Beverage Corporation. However, with ulterior motive accused persons stopped payment of the balance security of Rs. 11 lakhs and commission amounting to Rs. 8.15.375/- for which they are liable to be proceeded for commission of offences of cheating under Section 420. I.P.C. and misappropriation under Section 406, I.P.C. On receipt of the complaint petition on 7-2-2007 learned S.D.J.M., Bhubaneswar posted the case to 26-2-2007 for recording of initial statement of the complainant. On 26-2-2007 complainant's initial statement was recorded and the case was posted for enquiry to 12-3-2007 on which date the case was adjourned for enquiry to 20-3-2007. On 20-3-2007 the complainant declined to adduce any evidence in the enquiry and the case was posted for order on 21-3-2007 when the impugned order was passed. 3. In assailing the legality of the impugned order learned counsel for the petitioners raised two contentions. Firstly, it was contended that as the petitioner-accused persons resided at a place beyond the area in which the learned S.D.J.M., Bhubaneswar exercises his jurisdiction issue of processes against the accused persons without receiving any evidence in course of enquiry under Section 202, Cr.P.C. is illegal and is liable to be quashed. Secondly, it was argued that a plain reading of the complaint petition as well as initial statement of the complainant, clearly shows that the dispute between the parties is civil in nature. Even if the averments made in the complaint petition are accepted on face value, allegations contained therein do not indicate commission of offence of either cheating or misappropriation. Learned counsel for the petitioners relied upon decision of this Court in Jagadish Prasad Padhy v. K. Nageswar Senapathy & Anr., (2007) 36 OCR,220. 4. In reply, it was argued by the learned counsel for the opposite party that notwithstanding the amended provision contained in Section_202 (1) Cr. Learned counsel for the petitioners relied upon decision of this Court in Jagadish Prasad Padhy v. K. Nageswar Senapathy & Anr., (2007) 36 OCR,220. 4. In reply, it was argued by the learned counsel for the opposite party that notwithstanding the amended provision contained in Section_202 (1) Cr. P.C., Magistrate authorized to take cognizance need not postpone the issue of processes against the accused even, if the accused is residing at a place outside his jurisdiction, if allegations in the complaint petition and initial statement of the complainant prima facie appear sufficient to proceed and the facts constituting the alleged offences are disclosed. In this connection, decision of the Madras High Court in Piof. D. Kannamma1 v. Smt. Renuga Palanisamy, (Cri. O.P. No. 36249 of 2007 reported in-2008 (1) Mad LJ (Cri) 629 and M.P. Nos. 1 and 2 of 2007) was relied upon. It was also argued that as accused persons in spite of their admission that the complainant is entitled to receive amounts towards balance security deposit and commission did not pay the dues they are liable for commission of offences under Sections 420 and 406 I.P.C. in addition to any other civil liability. In this connection, reliance was placed on the decisions of Hon'ble Supreme Court in Mustaque Ahmad v. Mohd. Habibur Rehman Faizi and others, AIR 1996 SC 2982 : (1996 Cri W 1877) and Rashida Makaluddin Syed and another v. Shaiks Saheblal Mardan (dead) through L.Rs. and another. 2007 (1) OLR (SC) 577 : (2007 Cri W 2306), and of this Court in Mahindra and Mahindra Financial Services Ltd. and another v. Rajiv Dubey, 2006 (supp. 1) OLR 240: (2006 Cri W (NO C) 573 (Ori) and Meghanad Bhainsal and others v. State of Orissa and another, 2007 (Supp. II) OLR 286. 5. The amended provision contained in Section 202(1) of the Cr. P.C. makes it mandatory on the part of the Magistrate to postpone the issue of process against the accused in a case where the accused is residing beyond the area in which the learned Magistrate exercises his jurisdiction and to either enquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding. Admittedly, in the present case the accused persons reside beyond the area in which learned S.D.J.M., Bhubaneswar exercises jurisdiction. It is evident that learned S.D.J.M., Bhubaneswar did not issue processes against the accused persons immediately after presentation of the complaint petition and examination of the complainant. On the contrary, after recording initial statement of the complainant on 26-2-2007, issue of processes was postponed till 20-3-2007 in order to conduct enquiry under Section 202 Cr. P.C. It is a different matter that the complainant did not choose to examine any witness in course of such enquiry. Therefore there is no basis to allege noncompliance on amended provision under Section 202 (1) of the Cr. P.C. 6. On a close scrutiny of the averments made in the complaint petition it is found that there is no allegation that from the very inception of the arrangement between the parties for sale of product of the accused persons in Orissa, there was dishonest intention on the part of the accused persons. Rather in the complaint petition it has been specifically averred that a letter of offer was sent to the complainant by accused persons on 24-12-2000 and the complainant accepted the offer by her letter dated 14-3-2001. There were written communications between the parties before the complainants deposited security amount. She admits to have earned profit by way of commission in course of the transaction lasting for a period of about five years. In her statement also complainant has not made any allegation that the accused persons harboured any dishonest intention from the very inception of commencement of contractual obligations between the parties. She is totally silent about any dishonest intention on the part of the accused persons. Allegations made by the complainant may at the worst amount to breach of contractual obligations on the part of the accused persons. As has been adverted to earlier, the complainant does not dispute that the accused persons admitted their liabilities under the commercial arrangement between the parties. Existence of dishonest intention is one of the essential ingredients of offence of cheating punishable under Section 420 I.P.C. as well as misappropriation punishable under Section 406 I.P.C. Learned counsel for the petitioners has rightly placed reliance on the decision of this Court in Jagadish Prasad Padhy v. K. Nageswar Senapathy and Anr. (supra). Existence of dishonest intention is one of the essential ingredients of offence of cheating punishable under Section 420 I.P.C. as well as misappropriation punishable under Section 406 I.P.C. Learned counsel for the petitioners has rightly placed reliance on the decision of this Court in Jagadish Prasad Padhy v. K. Nageswar Senapathy and Anr. (supra). In absence of any material on record or even any allegation to the effect that the accused persons fraudulently or dishonestly deceived, or dishonestly misappropriated or converted to their own use or used, or disposed of any amount, the impugned order of taking cognizance is found to have passed without application of mind. Continuance of the proceeding on the basis of the impugned order would, therefore, amount to abuse of process of Court and in order to secure ends of justice the impugned order as well as the criminal proceedings are liable to be quashed. As has been reiterated in Mahindra and Mahindra Financial Services Ltd. and another v. Rajiv Dubey 2006 Cri LJ (NOC) 573 (supra) inherent power under Section 482 Cr. P.C. should be exercised where allegations made in F.I.R. or the complaint even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused, and where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not either disclose the commission of any offence or make out a case against the accused. Decisions relied upon by the learned counsel for the petitioners having no bearing upon the facts and circumstances of the present case, are of no assistance to the petitioners. 7. In view of the above, the CRLMC is allowed. The impugned order and the proceeding in I.C.C. No. 11 of 1993 of the Court of learned S.D.J.M., Bhubaneswar are quashed. Application allowed.