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2010 DIGILAW 187 (JK)

Refex Refrigerants Ltd. v. Kolane Refrigerants

2010-04-08

GH.HASNAIN MASSODI

body2010
1. Inherent powers of this Court under section 561-A Code of Criminal Procedure are sought to be invoked through this petition, to get the order of Learned Judicial Magistrate (Ist Class) Pulwama dated 25.6.2007 in complaint "M/s Kolane Refrigerants v. T. Anil Jain and others" quashed, whereby Learned Magistrate has taken cognizance of offence punishable under section 420 of Ranbir Penal Code and directed issuance of process against the petitioners. 2. The complainant - respondent herein on 25.6.2007, filed a complaint against the present petitioners/ accused in the court of Judicial Magistrate (Ist Class) Pulwama, alleging commission of offence punishable under section 420 & 407 RPC against petitioners/ accused. 3. The complainants case was that the complainant has been running a factory at Industrial Complex Lassipora Pulwama and is doing business of refilling refrigerant gases. The complainant alleged that the petitioners/accused No.2 to 4, Directors of the business concern of M/s Refex Refrigerants Limited, approached the complainant/ respondent in second week of November 2006 at respondents factory at Lassipora, Pulwama and made the complainant to believe that the petitioners/accused were dealing in import and marketing of refrigerant gases in India. The complainant alleged that the petitioners/accused induced the complainant/respondent that the petitioner/accused was having business with complainants wife at Delhi and persuaded the complainant to enter into a business relationship with him. The petitioners/accused, it was alleged, are assured to import refrigerant gases for the complainant from China on the condition that the complainant agreed to finance the purchase of such gases by opening a letter of credit in favour of the manufacturer of gases from China. The petitioners/accused are alleged to have made the complainant to opt for High Sea Sales that did not require the complainant to have any export - import license. The petitioners/accused are also said to have further induced the complainant to place an order for 14 ton tanks with the petitioners/accused and agreed to supply 14 ton tanks at the price of Rs.3.00 lacs. The petitioners/accused by acting in the aforesaid manner are said to have induced the complainant to pay an amount of Rs.22.00 Lacs to the petitioners/accused and to have pursuant to the preplanned conspiracy cheated complainant of the said amount. The complainant alleged that petitioners/accused induced him to open a letter of credit for 45000 USD in favour of M/s Jiangsu Kangtai Flourine Chemical Co. The complainant alleged that petitioners/accused induced him to open a letter of credit for 45000 USD in favour of M/s Jiangsu Kangtai Flourine Chemical Co. Ltd. China - CIF Value for purchase of 18000 Kgs of refrigerant gases and also made the complainant to pay an amount of Rs. 3.00 Lacs as full and final payment of 14 ton tanks through a Cross Cheque No.112355 drawn on Union Bank of India, favouring Refex Refrigerants Limited, that the petitioners/accused promised to deliver within 20 days. The complainant is said to have on inducement made further payment of Rs.1.30 Lacs through DD No. 520922, on 15th March 2007, to the petitioners/accused, to be adjusted by the petitioners/accused against the sale price of refrigerant gases. It was alleged that the petitioner/accused were found to have no facility for manufacturing ton tanks nor to have placed any order for 140 ton tanks for onward supply to the complainant and to have received 18000 Kgs of Refrigerant Gases from Chennai Customs and to have not made the payment of sale proceeds including the profit amount promised to the complainant. The complainant alleged that the intention of the petitioners/ accused was fraudulent from the very beginning and that the petitioners/accused had, through false representation, induced the complainant to part with Rs.22.00 Lacs and thus cheated the complainant. 4. Learned Judicial Magistrate (Ist Class) Pulwama on receipt of complaint as also documents (Annexure A to K), recorded statement of the complainant and one witness, and proceeded to make the impugned order, taking cognizance of the offence punishable under Section 420 RPC and directed issuance of process against the petitioners/ accused. 5. The order impugned in the present petition is impugned on the grounds that the dispute, if any, between the parties is of civil nature and the averments made in the complaint even when taken on their face value do not constitute an offence. It is urged that a dispute of pure civil nature cannot be given color of criminal case. The petitioners/accused dispute the jurisdiction of the Trial Magistrate to take cognizance of the matter and proceed against the petitioners/accused inasmuch as according to the petitioners/accused the agreements were arrived and executed at Delhi and not at Lassipora Pulwama as alleged in the complaint. The complaint is said to be intended to harass the petitioners/accused, who have nothing to do with the matter in controversy. The complaint is said to be intended to harass the petitioners/accused, who have nothing to do with the matter in controversy. The petitioners/accused, while admitting to have business transactions with the respondent/complainant, have denied to have committed any offence muchless one cognizance of which has been taken by the Learned Judicial Magistrate (Ist Class) Pulwama. 6. Heard and considered. It needs to be pointed out at the outset that after the petitioners/accused succeeded in getting the record summoned from the court of Learned Judicial Magistrate (Ist Class) Pulwama, they played a game of hide and seek with the Court. The counsel for the petitioners/accused has not appeared to prosecute the matter. The petition was dismissed for non-prosecution on 16th of May 2008 and thereafter on 29th of July 2008 the order dated 16.5.2008, dismissing the petition for want of prosecution, was recalled. On 25th of September 2008, the record was summoned, which has been retained till date. The counsel for the petitioners/accused, thereafter, again absented himself from the proceedings. Though the petition was formally admitted for hearing on 20.3.2009, the petitioners continued to stay away from the proceedings and avoid prosecution of the matter. There was no representation for the petitioners on 24.4.2009, 10.7.2009, 13.8.2009, 26.8.2009, 4.11.2009, 19.11.2009, 23.12.2009 and 9.3.2010, when the petition was listed before the Bench. The petition, for the obvious reasons, cannot be dismissed in default. The only option left with the Court, in the circumstances, is either to helplessly adjourn the matter date after date and allow it to clog the system or dispose it of on merits. 7. In my opinion, it would be appropriate to dispose of the matter on merits rather than allow it to be deferred endlessly. 8. The inherent powers available to the Court under Section 561-A of Code of Criminal Procedure are to be exercised only to prevent abuse of process of the Court or secure the ends of justice or to give effect to an order under the Code. No doubt, the inherent powers, vested in this Court, are an inalienable attribute of the position this Court hold with respect to the courts subordinate to this Court, yet the powers are to be exercised rarely, sparingly and with utmost circumspection. It would be apt to extract hereunder the following observations made by the Supreme Court in case Som Mittal v. Govt. of Karnataka, AIR 2008, SC 1126:- "10. It would be apt to extract hereunder the following observations made by the Supreme Court in case Som Mittal v. Govt. of Karnataka, AIR 2008, SC 1126:- "10. In a catena of decisions this Court has deprecated the interference by the High Court in exercise of its inherent powers under Section 482. It has been consistently held that the power under Section 482 must be exercised sparingly, with circumspection and in rarest of rate cases. Exercise of inherent power under Section 482 of the Code of Criminal Procedure is not the rule but it is an exception. The exception is applied only when it is brought to the notice of the Court that grave miscarriage of justice would be committed if the trial is allowed to proceed where the accused would be harassed unnecessarily if the trial is allowed to linger when prima facie it appears to Court that the trial would likely to be ended in acquittal. In other words, the inherent power of the Court under Section 482 of the Code of Criminal Procedure can be invoked by the High Court either to prevent abuse of process of any Court or otherwise to secure the ends of justice. xxxxxxxxxxxxxxxxxxxxxxxxx 19. We may observe that despite this Court consistently held in catena of decisions that inherent power of the High Court should not be exercised according to whims and caprice and it has to be exercised sparingly, with circumspection and in the rarest of rare cases, we often, come across the High Court exercising the inherent power under Section 482 of the Code of Criminal Procedure in a routine manner at its whims and caprice setting at naught the cognizance taken and the FIR lodged at the threshold committing grave, miscarriage of justice. While it is true that so long as the inherent power of Section 482 is in the Statute Book, exercise of such power is not impermissible but it must be noted that such power has to be exercised sparingly with circumspection and in the rarest of rare cases, the sole aim of which is to secure the ends of justice. The power under Section 482 is not intended to scuttle justice at the threshold." 9. The power under Section 482 is not intended to scuttle justice at the threshold." 9. In the petition in hand, the main plank of case set up by the petitioners/accused is that the dispute if any between the parties is of pure civil nature and Learned Trial Magistrate, by taking cognizance of the offence punishable under section 420 RPC on the complaint of the respondents, has given color of an offence to a simple and pure business transaction. It is insisted that the complaint and the material submitted therewith when taken on its face value does not disclose commission of offence punishable under section 420 RPC, by the petitioners/ accused. The order dated 25.6.2007 is thus said to amount to abuse of process of court and warrant interference under section 561-A Code of Criminal Procedure. The next ground urged in the petition is that the business transaction between the parties having shaped up at Delhi, the Court, at Pulwama had no jurisdiction to entertain the complaint muchless take cognizance of the offences, alleged in the complaint and issue process against the petitioners/accused. It is vehemently disputed and denied that the petitioners/accused visited the respondent/ complainant at Lassipora Pulwama and entered into business transaction, as alleged in the complaint and also admitted in the petition. The third and last ground urged in the petition is that the complaint is aimed at harassment of the petitioners/accused and coerce the petitioners/accused to yield to the demands made by the respondent/complainant and settle the dispute, on his terms. 10. The grounds urged in the petition make it necessary to revisit though briefly the allegations set out in the complaint. The respondent/complainant alleged that the petitioners accused nursed a deceitful and fraudulent intention from the very beginning and motivated by such an intention, induce him to believe that the petitioners/accused shall supply ton tanks to the respondent/complainant and also pass(sic) the profit at the particular rate from the proceeds of High Sea Sale for purchase of Refrigerant Gases, to the respondent/ complainant and that the respondent/ complainant, acting on such inducement, made payment of Rs.22.00 Lacs through various Instruments, detailed in the complaint, to the petitioners/accused. The respondent/ complainant further alleged that the petitioners/accused neither had any facility for manufacturing 14 ton tanks, they promised to supply to the respondent/complainant nor did make any supply and as a matter of fact and that the petitioners/accused did not pay the amount due to the petitioners/accused on account of investment and profit in connection with High Sea Sales purchase of Refrigerant Gas, made by the respondent/complaint through the petitioners/accused. The allegations made in the complaint were supported by the statement of the complainant as also his witness recorded by the Learned Trial Magistrate and the documents appended to the complaint. The material thus prima facie discloses commission of offence punishable under section 420 RPC by the petitioners/accused as all the necessary elements of the offence of cheating were expressly alleged in the complaint. The Learned Trial Magistrate has thus acted within four corners of law while taking cognizance of the offence punishable under section 420 RPC, alleged in the complaint, and directed issuance of process against the petitioners/accused. Only because the allegations set out in the complaint would also give rise to a civil action, is not to persuade this Court to hold the order taking cognizance of an offence on the complaint as abuse of process of court. 11. In Lalmuni Devi v. State of Bihar & Ors, 2000 IX AD (S.C.) 562, where in exercise of inherent powers in a criminal complaint alleging commission of offence punishable under section 419, 420, 467 & 120-B IPC, was quashed on the ground that the complaint spelt out civil wrong and continuance of criminal proceedings would be abuse of process of court. The Supreme Court observed: "8. There could be no dispute to the proposition that if the complaint does not make out an offence it can be quashed. However, it is also settled law that facts may give rise to a civil claim and also amount to an offence. Merely because a civil claim is maintainable does not mean that the criminal-complaint cannot be maintained. In this case, on the facts, it cannot be stated, at this prima facie stage, that this is a frivolous complaint. The High Court does not state that on facts of no offence is made out. If that be so, then merely on the ground that it was a civil wrong the criminal prosecution could not have been quashed. 9. In this case, on the facts, it cannot be stated, at this prima facie stage, that this is a frivolous complaint. The High Court does not state that on facts of no offence is made out. If that be so, then merely on the ground that it was a civil wrong the criminal prosecution could not have been quashed. 9. In our view, the Order of the High Court cannot be maintained and is accordingly set aside." 12. In Maratt Rubber Ltd v. J.K.Marattukalam, 2000 VII AD (S.C.) 34, it has been held that scrutiny and weighing with the material by the High Court that pertain to civil proceedings between the parties was certainly in excess of the inherent jurisdiction, conferred on the High Court and the High Court exceeded its jurisdiction in quashing criminal proceedings. 13. The principle was reiterated in Kamaladevi Agarwal v. State of West Bengal, 2001 IX AD (S.C.) 122, where the Magistrate issued process in a complaint, alleging commission of offence under section 465, 467, 468, 471 & 120-B IPC and the High Court quashed the complaint, basically, on the ground that a civil case is pending between the parties before a superior court and therefore it would not be proper to try the matter. Supreme Court held:- "7. This Court has consistently held that the revisional or inherent powers of quashing the proceedings at the initial stage should be exercised sparingly and only where the allegations made in the complaint or the FIR, even if taken it at the face value and accepted in entirety, do not prima facie disclose the commission of an offence. XXXXXXXXXXXXXXXXXXXX 9. Criminal prosecution cannot be thwarted at the initial stage merely because civil proceedings are also pending. After referring to judgments in State of Haryana v. Bhajan Lal (1992 Suppl. (1) SCC 335], Rajesh Bajaj v. State NCT of Delhi [1999(3) SCC 259] this Court in Trisuns Chemical Industry v. Rajesh Agarwal & Ors. XXXXXXXXXXXXXXXXXXXX 9. Criminal prosecution cannot be thwarted at the initial stage merely because civil proceedings are also pending. After referring to judgments in State of Haryana v. Bhajan Lal (1992 Suppl. (1) SCC 335], Rajesh Bajaj v. State NCT of Delhi [1999(3) SCC 259] this Court in Trisuns Chemical Industry v. Rajesh Agarwal & Ors. [1999(8) SCC 687] held: "Time and again this Court has been pointing out that quashing of FIR or a complaint in exercise of the inherent powers of the High Court should be limited to very extreme exceptions [vide State of Haryana v. Bhajan Lal 1992 Supp(1) SCC 335 and Rajesh Bajaj v. State NCT of Delhi 1999(3) SCC 259], In the last referred case this court also pointed out that merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. We quote the following observations: (SCC p.263, para 10) "10. It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating were committed in the course of commercial and also money transaction." 14. The court, after making review of catena of judicial pronouncements on the subject, observed:- "17. In view of the preponderance of authorities to the contrary, we are satisfied that the High Court was not justified in quashing the proceedings initiated by the appellant against the respondents. We are also not impressed by the argument that as the civil suit was pending in the High Court, the Magistrate was not justified to proceed with the criminal case either in law or on the basis of propriety. Criminal cases have to be proceeded with in accordance with the procedure as prescribed under the Code of Criminal Procedure and the pendency of a civil action in a different court even though higher status and authority, cannot be made a basis for quashing of the proceedings." 15. The law laid down by the Supreme Court is squarely applicable to the present case. The challenge to the impugned order cannot succeed merely because alleged occurrence has civil dimensions as well. 16. In the circumstances and for the reasons discussed above the petition is without any merit and liable to be dismissed. The petition is, accordingly, dismissed. The law laid down by the Supreme Court is squarely applicable to the present case. The challenge to the impugned order cannot succeed merely because alleged occurrence has civil dimensions as well. 16. In the circumstances and for the reasons discussed above the petition is without any merit and liable to be dismissed. The petition is, accordingly, dismissed. The Trial Magistrate is directed to proceed further in the matter in accordance with law. Record be sent down. Parties to appear before the Trial Magistrate on 26th of April 2010.