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2009 DIGILAW 275 (ORI)

Lilasons Breweries Limited v. Sujata Manjari Pati

2009-03-27

B.K.PATEL

body2009
JUDGMENT B.K. PATEL, J. — Petitioners, who are the accused persons in I.C.C. No.11 of 1993 of the Court of learned S.D.J.M., Bhuba¬neswar 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 Sec¬tions 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 ar¬rangement, 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 complain¬ant decided to withdraw from the arrangement and accordingly 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.8,15,375/-. 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. 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.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 in¬duced the complainant to accept the promotionship of their product as it was lucrative in the market and as per their in¬ducement the complainant 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 complaint. On 26.2.2007 complainants initial statement was recorded and the case was posted for en¬quiry 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 petitioners 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 ac¬cused persons without receiving any evidence in course of enquiry under Section 202 C.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. 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 Jagdish 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 con¬tained 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 ini¬tial 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 in Prof. D.Kannammal v. Smt. Renuga Palanisamy (Crl. O.P.No.36249 of 2007 and M.P. Nos.1 and 2 of 2007) was relied upon. It was also argued that as accused persons inspite 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 connec¬tion, reliance was placed on the decisions of Hon’ble Supreme Court in Mustaque Ahmad v. Mohd. Habibur Rehman Faizi and others, AIR 1996 S.C. 2982 ; and Rashida Makaluddin Syed and another v. Shaiks Saheblal Mardan (dead) through L.Rs. and another, 2007(I) OLR (SC) 577; and of this Court in Mahindra & Mahindra Financial Services Ltd. And another v. Rajiv Dubey, 2006(Supp.I) OLR 240; and Meghanad Bhainsal and others v. State of Orissa and another, 2007 (Supp.II) OLR 286. 5. and another, 2007(I) OLR (SC) 577; and of this Court in Mahindra & Mahindra Financial Services Ltd. And another v. Rajiv Dubey, 2006(Supp.I) OLR 240; 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 en¬quiry 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 non-compliance of amended provision under Section 202(1) of the Cr.P.C. 6. On a close scrutiny of the averments made in the com¬plaint 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 complainant 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 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 com¬plainant may at the worst amount to breach of contractual obliga¬tions on the part of the accused persons. As has been adverted to earlier, the complainant does not dispute that the accused per¬sons 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 & 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 proceeding are liable to be quashed. As has been reiter¬ated in Mahindra & Mahindra Financial Services Ltd. And another v. Rajiv Dubey (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 accept¬ed in their entirety, do not prima facie constitute any offence or make out a case against the accused, and where the uncontro¬verted 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. Decision 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. Decision 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 im¬pugned order and the proceeding in I.C.C. No.11 of 1993 of the Court of learned S.D.J.M., Bhubaneswar are quashed. CRLMC allowed.