Judgment Nirmaljit Kaur, J. 1 This is a petition under Section 482 Cr.P.C. for quashing of FIR No. 16 dated 03.04.2001 under Section 406, 408, 409 Indian Penal code registered at Police Station Vigilance Bureau Jalandhar District Jalandhar at the behest of respondent No. 3 as well as for quashing of report under Section 173 Cr.P.C. 2 Facts of the case, in brief, are that the petitioners are partners in firm M/s. Avon Rice Trading Company, Qadian and were running the business of milling of paddy belonging to government Agencies and paddy procured by them. This business was started by the petitioners in the year 1989 and wound up in the year 1998. A written agreement was executed between petitioner No.2 on behalf of petitioner No. 1 and respondent No. 3 on 10.10.1995 and the date was later changed to 13.10.1995. In view of the above mentioned agreement, 22.153.95 quintals of paddy fine and 8,537.75 quintals of paddy common (IR8) were allotted to the firm for custom milling by respondent No. 3 for milling and was stored in the premises of the petitioners. 3 It is admitted in the notice dated 23.06.1997 that 8537.75 quintals of common paddy and 22,153.95 quintals of fine paddy were stored with the firm for custom milling, out of which rice of fine quality of the entire above paddy allotted to the petitioners firm were received by respondent No. 2 as per the agreement and that only 4771.93 quintals rice of paddy common for the crop year 1995-96 was still undelivered. 4 It is further admitted that the firm had already paid cash Rs. 17,00,000/- on account of provisional costs of 2453.09 quintals of rice common. Accordingly, the firm deposited an amount of Rs. 17,00,000/- vide cheque No. 684751 dated 07.08.1996 for Rs. 5,00,000/-, cheque No. 684752 dated 05.11.1996 for Rs. 5,00,000/- and cheque No. 68396 dated 10.09.1996 for Rs. 4,00,000/- and demand draft for Rs. 3,00,000/- in the accounts of respondent No. 5 as provisional costs of 2453.09 quintals of rice common and this receipt of provisional cost was latter admitted by respondent No. 3 vide letter dated 23.06.1997. 5 Thus, only balance rice i.e. 2318.34 was pending. 6 Subsequently, the firm also delivered 2135.00 quintal rice of fine quality from their stock in lieu office of common quality on different dates. 5 Thus, only balance rice i.e. 2318.34 was pending. 6 Subsequently, the firm also delivered 2135.00 quintal rice of fine quality from their stock in lieu office of common quality on different dates. The said fact is acknowledged by respondent No. 4 vide its letter dated 09.03.1998, copy of which is placed on record as Annexure P-ll. Vide the aforesaid letter, the Warehouse Manger, Qadian requested the District Manager, Punjab State Warehousing Corporation, Gurdaspur, to return of cheques of cash guarantee of the petitioner as per conditions of agreement as the entire rise already stood delivered. However, instead of releasing the cheques to the petitioner, respondent No. 4 lodged FIR and even the cheques issued were presented in the bank. The said cheques stood dishonoured. Accordingly, two complaints under Section 138 of Negotiable Instruments Act were filed against the petitioners. However, on the direction of respondent No. 5, respondent No. 4 withdrew both the complaints No. 7/97 and 69/97 from the court of Judicial Magistrate Ist Class, Batala on 11.07.2007. The said complaints were withdrawn with reference to Annexure P-23 which was exhibited as Ex.CWl/A in the said Court. Respondent No. 4 made the following statements in both the said cases on 11.07.2007:- "I withdraw the complaint on the direction of Managing Director Chandigarh Punjab State Warehouse Corporation, the copy of the order is Ex.CWl/A." 7 Accordingly, the trial court passed the orders Annexures P-24 and P-25 in both the above said complaints, dismissing the said complaints as withdrawn. 8 It is pertinent to mention here that on 30.12.1997, a certificate of No dues was given to the petitioners firm by respondent No. 4, certifying that all the dead stock articles including wooden crates tarpaulins and paddy for the crop year 1995-96 issued to the firm, has been received back by respondent No. 4 and that nothing was due towards the firm. True copy of the certificate signed by respondent No. 4 under his seal has been filed as Annexure P-16. 9 Learned counsel for the respondents, however, vehemently opposed the petition on the ground that the present petition was not maintainable as charges against the present petitioner stood framed and that criminal liability is independent of the civil remedy. It is further argued that no objection certificate was only a non existing document. 9 Learned counsel for the respondents, however, vehemently opposed the petition on the ground that the present petition was not maintainable as charges against the present petitioner stood framed and that criminal liability is independent of the civil remedy. It is further argued that no objection certificate was only a non existing document. A perusal of the same shows that it is with respect to the crates tarpaulins for the crop year 1995-96 and not with respect to amount or rice. It is further submitted that although the principal amount has been received but the interest amount is still pending. 10 Learned counsel for the parties have been heard. 11 There is merit in the arguments raised by the learned counsel for the petitioner. 12 Some of the admitted facts that emerge in the present case are :- 1. That a total 22,153.95 quintal paddy of fine quality and 8,537.75 quintals of common paddy were allotted to the petitioner firm. 2. The fine quality of rice stood delivered. 3. Provisional costs equivalent to 2453.09 quintals rice of common was deposited in lieu of the balance common rice variety. 4. 2135.00 quintals rice of fine quality was delivered by the firm in lieu of common paddy. The same is acknowledged vide letter dated 09.03.1998 (P-11), addressed by the Warehouse Manager, State Warehouse, Qadian to the District Manager, Punjab State Warehousing Corporation, Gurdaspur. In spite of that, FIR is still pending. The operative part of the letter dated 29.06.2007 (P-23) written by the Manager on behalf of Managing Director to the District Manager, PSWC, Gurdaspur reads as under :- "The matter has been considered at Head office level and it has been decided. The principal amount of Rs. 8,38,830/- from the party is deposited by them vide above said cheques. As far as interest amount, the same shall be made award of the arbitrator. As such, you are advised to withdraw the criminal cases against the said firm under intimation to this office." 13 It is an admitted position that the entire amount towards the shortage of paddy stands paid. Thus, admittedly, the principal amount has been paid. The respondents are raising the dispute with respect to the amount of interest only. The same is a subject matter of arbitration. Arbitration proceedings are pending. Thus, admittedly, the principal amount has been paid. The respondents are raising the dispute with respect to the amount of interest only. The same is a subject matter of arbitration. Arbitration proceedings are pending. Thus, it is apparent that the entire dispute stands settled and a letter was also written by the Department to withdraw the cases against the present petitioner. In spite of that, proceedings are still going on. It is dispute of a civil nature. No offence under Section under Section 406, 408, 409 Indian Penal code can be said to be made out against the present petitioner. 14 Honble the Supreme Court in the case Kailash Verma v, Punjab State Civil Supplies Corporation and another reported as 2005(1) Apex Criminal 339 : 2005(1) RCR (Criminal) 727, in similar circumstances held that where arbitration proceedings are pending, the order of discharge passed by the Magistrate was correct and therefore, the High Court should not have set aside the said order of discharge under Section 482 Cr.P.C and while allowing the appeals, the Honble Supreme court held as under:- "7. In the present case, the appellant was discharged by the Chief Judicial Magistrate and the revisional court confirmed that order after elaborately considering the facts and circumstances of the case. It may also be noted in BalKishan Das v. P C Naya, 1991 Supp (2) SCC 412, under similar facts and circumstances, this court held that no offences were made out under Section 406 IPC as it was a matter of civil nature. The respondent corporation had also initiated steps for arbitration proceedings on the basis of the arbitration clause in the agreement. In our view, the High Court was not justified in exercising its inherent power under Section 482 of the Criminal Procedure Code in this case. It cannot be either said that there was miscarriage of justice warranting interference by the High Court. Hence, we allow these appeals and set side the judgement of the High Court. The order of discharge passed by the learned Magistrate in favour of the appellant is affirmed." 15 Similar view was taken by this Court in Criminal Misc. No. 76899 M of 2006 titled as Khirati Lal Marwah and others v. State of Punjab and another (decided on 11.03.2008). The order of discharge passed by the learned Magistrate in favour of the appellant is affirmed." 15 Similar view was taken by this Court in Criminal Misc. No. 76899 M of 2006 titled as Khirati Lal Marwah and others v. State of Punjab and another (decided on 11.03.2008). 16 Honble the Supreme Court in the case of Bal Krishan Dass v. P C Nayar, reported as 1991 (3) RCR (Criminal) 374, where arbitration proceedings were pending, held as under :- "4. After hearing the counsel for both the parties and perusing the documents, we are of the opinion that this matter is purely of a civil nature. As pointed out earlier, there was an arbitration proceedings and further the matter is pending for more than 17 years. Having regard to all the circumstances, particular that the matter is purely of a civil nature, we feel that it is a fit case in which the proceedings taken by the Chief Judicial Magistrate are to be quashed. Accordingly, the entire proceedings now pending on the file of the Chief Judicial Magistrate, Ganiam are quashed. The appeal is accordingly allowed." 17 In view of the facts and discussion made above, the continuation of the criminal proceedings are a sheer misuse of process of law. The fact that the deficiency in the paddy stands satisfied, nothing is pending towards the principal amount. Only the question of payment of interest remains. The arbitration proceedings qua the same have been initiated which are still pending and the dispute is purely of a civil nature, No offence under sections 406,408,409 Indian Penal Code can be said to be made out against the present petitioner. Pendency of the criminal proceedings in the fact of the present case are an abuse of the process of law. 18 Accordingly, FIR No. 16 dated 03.04.2001 under Section 406, 408, 409 Indian Penal code registered at Police Station Vigilance Bureau Jalandhar District Jalandhar as well as further proceedings arising out of the same qua the present petitioner are quashed. Allowed in the above said terms.