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2011 DIGILAW 1103 (CAL)

Ramapada Shaw v. STATE OF WEST BENGAL

2011-08-16

SYAMAL KANTI CHAKRABARTI

body2011
JUDGMENT Syamal Kanti Chakrabarti, J. 1. THE instant revisional application under Section 482 Cr.P.C. has been preferred for quashing the entire proceeding of G.R. Case No. 1548 of 2005 arising out of Memari Police Station Case No. 242 of 2005 under Sections 406/420 IPC now pending before the learned Judicial Magistrate, 5th Court, Burdwan. 2. IT is submitted on behalf of the petitioner Ramapada Shaw that on 11.11.2005 one Susanta Kumar Majilla, the District Manager, BENFED, Burdwan Branch under the West Bengal State Cooperative Marketing Federation Limited lodged a complaint against Messrs. Ma Chandi Rice Mill, Jabui, P.S. Memari, District Burdwan and its members namely, Ramapada Shaw (the present petitioner), Shyamapada Show and Muktipada Show alleging, inter alia, that all the partners of the above rice mill have dishonestly misappropriated 23,860.71 quintals of paddy which were entrusted to the aforesaid rice mill between the period from 25.01.2005 to 08.03.2005 which were procured from different cooperative societies of the district under the direction of the District Manager of Milling. The said quantity of paddy was required to be hasked and to deliver the resultant rice thereof to the District Controller (Food and Supplies), Burdwan under the support price scheme of the State Government. According to the complainant the resultant rice of the said entrusted paddy would be 1503.18 Metric Tonne (M.T.) but the mill delivered only 300 M.T. up to August, 2005 and was bound to deliver the remaining quantity of 1203.18 M.T. by September, 2005. The price of the said outstanding quantity of rice would be Rs. 1,12,58,400/-. Several reminders were issued to the said rice mill on several occasions, but to no effect and thus, they misappropriated the price of undelivered huge quantity of rice as aforesaid and thereby also cheated the Government and as such liable for prosecution under Section 406/420 IPC. On the basis of such complaint the aforesaid Memari P.S. Case no. 242 of 2005 dated 12.11.2005 under Section 406/420 IPC was started. 3. ON receipt of such information the petitioner filed an application under Section 438 Cr.P.C. before the learned Additional District and Sessions Judge, Burdwan who rejected the prayer and thereafter similar prayer was made before this Honble Court. In course of consideration of such prayer the Honble Court was pleased to direct the petitioner to pay a sum of Rs. 10,00,000/- to the de facto complainant which was complied with. In course of consideration of such prayer the Honble Court was pleased to direct the petitioner to pay a sum of Rs. 10,00,000/- to the de facto complainant which was complied with. The other two accused persons filed a special leave to appeal being no. 1312 of 2006 before the Honble Apex Court praying for grant of bail and Their Lordships were pleased to direct those petitioners to pay a further sum of Rs. 20,00,000/- to the Assistant Registrar of Cooperative Society, Burdwan Range I, District Burdwan which was also complied with on 18.05.2006. It is further submitted on behalf of the petitioner that after completion of investigation charge-sheet has been filed in this case under Section 406/420 IPC and the case has been subsequently transferred to the Court of learned Judicial Magistrate, 5th Court, Burdwan. Being aggrieved by and dissatisfied with the result of such investigation the petitioners have assailed the entire proceedings contending, inter alia, that there was an agreement between the petitioner and the opposite party no. 2, District Manager, BENFED under the West Bengal State Cooperative Marketing Federation Limited, Burdwan Branch, District Burdwan for such supply of rice against receipt of certain quantity of paddy and accordingly from time to time the petitioner used to deliver the rice. Unfortunately on 20.02.2005 the petitioner met with a serious accident at Benagram, District Burdwan and was subjected to prolonged treatment on various places and ultimately he was released from the Divine Nursing Home in July, 2005. In spite of such serious accident the petitioner delivered 3,000 quintals of rice to the opposite party no. 2 between the period from March, 2005 and August, 2005. The business of the petitioner had suffered a loss during his prolonged treatment and they had to bear the interest of loan of Rs. 45,00,000/- received from bank authorities. So in response to the notice of the opposite party dated 28.07.2005 the petitioner could not supply the balance quantity of rice. ON 12.08.2005 the petitioner made a request in writing praying for extension of time to deliver the balance quantity of rice as he was still in bed-ridden condition. In the meantime the petitioner supplied 108 M.T. of common paddy and 10.090 M.T. common paddy on 31.08.2005 to the opposite party no. 2 in spite of his financial hardship and ailing condition. As the opposite party no. In the meantime the petitioner supplied 108 M.T. of common paddy and 10.090 M.T. common paddy on 31.08.2005 to the opposite party no. 2 in spite of his financial hardship and ailing condition. As the opposite party no. 2 remained silent after receipt of his representation for extension of time the petitioner filed an application under Article 226 of the Constitution before this Honble Court being registered as W.P. No. 17625(W) of 2005 which was dismissed for default on 22.02.2006 for which another application for restoration was filed which has been registered as the CAN 1696 of 2006, which is still pending. 4. IT is further contended that on 1st December, 2005 the opposite party no. 2 further filed a dispute case before the Assistant Registrar of Cooperative Societies, Burdwan Range-I, District Burdwan for recovery of the alleged sum which has been registered as Dispute Case No. 4 of 2005-06 praying for a direction upon the partners of the said firm either to deliver 1200 M.T. of rice or equivalent price being Rs. 1,12,58,400/- with 9 per cent interest till the date of application and thereafter at the rate of 18 per cent per annum till realisation and to appoint a Receiver for the said rice mill and attach the property of the defendant firm etc. has been finally disposed of by Cooperative Tribunal in the meantime. Under the aforesaid circumstances it is contended on behalf of the petitioners that the instant proceeding is not sustainable in law on the grounds that the opposite party no. 2 has not stated anything regarding entrustment of paddy by different cooperative societies to the Manager, BENFED for delivery to the petitioner company. No document has been filed to show that in fact 2386.71 quintal of paddy was actually delivered to the rice mill during the period from 25.01.2005 to 08.03.2005. Therefore, in absence of valid entrustment no case under Section 406 IPC will lie against the petitioner within the meaning of Section 405 IPC. Secondly, from the admission in the complaint it will appear that there has been part delivery of rice against receipt of total quantity of paddy and the said fact itself proves that there is no deception at the initial stage of transaction and as such there is no prima facie material on record to proceed against the present petitioner under Section 420 IPC. The definition of fraudulently and dishonestly mentioned in Sections 24 and 25 of the Indian Penal Code will fortify such arguments. Therefore, the petition of complaint does not disclose at all any material fact constituting the alleged offence of Section 406 and 420 IPC. At best in the instant case IO could investigate for commission of offence under Section 403 IPC. But such a prosecution is also not sustainable in law without previous sanction of the Magistrate which has not been accorded in the instant case. 5. IT is further submitted that if the special statute like the West Bengal Cooperative Societies Act, 1983 provides penal provision the general provision of the IPC cannot be attracted. In the instant case the provisions laid down in Section 138 of the Act contain some specified acts the breach of which will come under the mischief of the aforesaid penal provision mentioned in the Fourth Schedule to the Act of 1983. The penalty specified in respect of eight such violation is saddled with fine or imprisonment which may extend to six months only and as such the same will be summons triable case. Above all it is further submitted that the opposite party no. 2 has referred the dispute to the Cooperative Tribunal and at the same time prosecuting the persons in criminal Courts which is not sustainable in law. By a supplementary affidavit the petitioner has filed a copy of the agreement in terms of which the above transactions were conducted along with certain other documents to show his accident and prolonged treatment. 6. THE de facto complainant opposite party no. 2 has stated that as per agreement dated 24.02.2005, 63 per cent of the paddy converted to rice is to be delivered within five days from the date of supply. In the instant case the FIR was lodged on 12.11.2005 while the dispute was referred to the Assistant Registrar of Cooperative Society on 01.12.2005 after delivery of 1200 M.T. of rice or equivalent price. On 25.01.2006 the Assistant Registrar of Cooperative decided the matter in favour of opposite party no. 2 and an appeal being no. 20 of 2006 was preferred by the said forum which was also dismissed by the Cooperative Tribunal. On 25.01.2006 the Assistant Registrar of Cooperative decided the matter in favour of opposite party no. 2 and an appeal being no. 20 of 2006 was preferred by the said forum which was also dismissed by the Cooperative Tribunal. It is further contended by the learned lawyer for the de facto complainant that there is no legal bar to prosecute a person and to claim compensation on the civil side as decided in the case of Kamala Devi reported in 2002(1) SCC 555 (paragraph 17). It is pointed out that the provision of Section 138 of the Cooperative Societies Act has been deleted by amendment and the earlier provisions of Section 95 of the Act has limited application and as such there is no merit in the aforesaid application which should be dismissed. Learned lawyer for the state has also supported the case of the opposite party no. 2 and contended, inter alia, that partial delivery of rice against receipt of a certain quantity of paddy itself is a proof of entrustment of paddy. Moreover, in the W.P. No. 17625(W) of 2005 the delivery of entire quantity of paddy mentioned in the FIR was admitted by the rice mill in paragraph 17. In the supplementary affidavit the petitioner has filed statement of accounts in respect of previous transactions which has no connection with the disputed transaction mentioned in the FIR. Learned lawyer has further relied upon and referred to the case reported in AIR 1960 SC 889 in which it has been held, inter alia, that if the petitioner fails to give satisfactory account of failure to discharge their obligation of contract such conduct will be treated as misappropriation. This will be further proved from the seizure list dated 12.11.2005 while no stock of paddy was found in the godown of the mill in course of such search. He has also referred to the principle laid down in 2000 SCC (Cri) 47 (paragraph 7, 8 and 9) in which it has been held that criminal prosecution of a case having a civil out fit is permissible. Therefore, at this stage this Honble Court cannot exercise its inherent power and quash the proceeding without trial. Non-supply of the balance quantity of paddy against receipt of paddy under the agreement constitutes a criminal liability which cannot be compounded by payment of compensation only as decided by the Cooperative Tribunal. Therefore, at this stage this Honble Court cannot exercise its inherent power and quash the proceeding without trial. Non-supply of the balance quantity of paddy against receipt of paddy under the agreement constitutes a criminal liability which cannot be compounded by payment of compensation only as decided by the Cooperative Tribunal. In this respect he has referred to and relied upon the principles laid down in 2009(2) SCC (Cri) 1063 (paragraph 3, 4, 5, 6, 44, 45 and 46). So far as the offence under Section 420 IPC is concerned it is further claimed that the argument advanced by the learned lawyer for the petitioner can be agitated at the time of consideration of charge. It is further contended by the learned lawyer for the state that though as per agreement the dispute may be referred to arbitration there is no bar to proceed against the accused under Section 406 IPC in view of the principles laid down in (2010) 3 SCC (Cri) 398. Therefore, the application should set aside. 7. UNDER the aforesaid circumstances the following points need now be consdiered: a) Whether the prosecution is sustainable in law in view of referring the matter to the arbitrator as per agreement; AND b) Whether the conduct of the petitioner will come under the mischief of Sections 420 and 406 IPC justifying continuation of further proceedings. 8. FOR the sake of convenience both these points are taken up together for consideration. Admitted position in this case is that the FIR was lodged on 12th November, 2005 and the dispute was referred to the Assistant Registrar on 1st December, 2005 while unamended West Bengal Cooperative Societies Act, 1983 was in operation. It is also admitted fact that the transactions did take place in terms of agreement dated 24th February, 2005 a copy of which has been furnished by the petitioner along with his supplementary affidavit. Clauses 10 and 12 of the said agreement (Annexure C to the supplementary affidavit) are quoted below: Clause 10.- The Second party will be held responsible in case of production of inferior quality rice and excess moisture content. The production ration as mentioned by Govt. should have to be maintained. In case of failure to supply the above agreed quantity and quality as per production ratio, the value of the deficit quantity/ quality at Govt. levy rate should be recovered from the Second party. The production ration as mentioned by Govt. should have to be maintained. In case of failure to supply the above agreed quantity and quality as per production ratio, the value of the deficit quantity/ quality at Govt. levy rate should be recovered from the Second party. Clause 12.- All disputes shall primarily be preferred before the Managing Director of First Party and on failure to settle the same may be referred to the Registrar of Cooperative Societies, West Bengal for arbitration. All legal dispute shall be subject to the jurisdiction of Calcutta High Court. 9. AT the material time the mode of settlement of disputes under the Act of 1983 was provided in Chapter XI of the Act. For the purpose of better appreciation the provisions of Section 95(d), 96(1)(a) and 96(7) are quoted below: Chapter XI Section 95- Disputes to be referred to Registrar.- (1) Any dispute concerning the business of a co-operative society capable of being the subject of civil litigation or any dispute relating to the affairs of a co-operative society (other than a dispute relation to the disciplinary action taken by a co-operative society against the paid employees of the co-operative society of the terms and conditions of the service of the paid employees of the co-operative society) shall be referred to in the prescribed manner to the Registrar, if the parties thereto are among the, (d) any other co-operative society or any person including any financing bank having transaction with a co-operative society or any liquidator of a co-operative society. Section 96.- Settlement of disputes.- (1) On receipt of a reference under sub-section (1) of section 95, the Registrar shall, subject to the rules,- (a) decide the dispute himself, Section 96(7)- In the case of a dispute relating to recovery of money, the provisions of this section shall apply notwithstanding that any party thereto is punishable for an offence under any law for the time being in force. 10. FROM the nature of the agreement it will appear from Clause 10 above that any breach of contract as regards quantity and quality the value of the deficit quality and quantity at Government levy should be recovered from the second party. 10. FROM the nature of the agreement it will appear from Clause 10 above that any breach of contract as regards quantity and quality the value of the deficit quality and quantity at Government levy should be recovered from the second party. Clause 12 of the agreement also specifically provides that all disputes arising out of such contract shall primarily be preferred before the Managing Director of the first party and on failure to settle the same the same may be referred to the Registrar of Cooperative Societies, West Bengal for arbitration. FROM the conduct of the parties as well as admission in the petition of complaint it will appear that this type of transaction was going on by and between the parties for a long time which will be evident from the supplementary affidavit filed by the petitioner and previously there was no such breach of contract. However, on account of sudden accidental injuries of the petitioner there was breach of contract for which the State has already referred the matter to the Registrar of Cooperative Societies for arbitration and in course of argument it has been brought to the notice that the arbitration award has already been affirmed in appeal. There was partial acceptance of the delivery in the usual course of business in terms of such contract and from the partial delivery it is evident that the petitioner had no dishonest intention or motive of deception. Therefore, it cannot be treated as cheating. Under the old Act in terms of Section 96(7) it was optional for the aggrieved party to prosecute the offender and under the aforesaid provision the prosecution itself is not illegal but unless the FIR discloses any prima facie case of fraud or cheating no such cause shall lie. The petitioner has already deposited the amount as per direction of the Honble Courts as referred to above. Therefore, his initial and subsequent conduct are sufficient proof of the fact that he had bona fide intention to obey the contractual obligation and accordingly I hold that the dispute arising between the parties is purely civil in nature and the petitioner should not be harassed taking advantage of the provisions of Section 96(7) of the old Act even after settlement or final settlement of the dues through arbitration as per Clause 12 of their agreement. The cases referred to and relied upon by the learned lawyer for the State and the opposite parties are not identical with the facts and circumstances of this case and so without going through unnecessary details I hold that the FIR does not disclose any offence under Section 406/420 IPC and further continuation of the instant proceeding will be an abuse of the process of law. Therefore, I hold that there is sufficient merit in this application and to prevent the abuse of the process of law the Court should exercise its inherent power under Section 482 Cr.P.C. Therefore, the instant proceeding against the present petitioner is hereby quashed and he is discharged and released from his bail bond. Urgent certified photocopies of this order, if applied for, be supplied to the parties, on compliance of all requisite formalities.