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2011 DIGILAW 345 (CAL)

Sunil Sawant v. STATE OF WEST BENGAL

2011-03-10

ASHIM KUMAR BANERJEE

body2011
JUDGMENT 1. THE respondent No. 2 International Combustion (Indian) Ltd used to manufacture "IC-Bauser Products". THE petitioners were the officers of Asia Pacific Brands India Ltd. THEy approached International Combustion expressing there eagerness to have a distributorship of IC-Bauser Products belonged to the said company. On November 14,2006, the parties entered into a distributorship agreement wherein Asia Pacific would sell the products of International Combustion and would get commission @ forty five per cent as and by way of discount. THE said agreement for distributorship also recorded other terms and conditions to be followed by the parties. 2. ON August 27, 2007 International found a sum of Rs, 2,89,237/- being due and payable by Asia Pacific on account of sale of their goods after giving available credit as also debit note for some defectives materials. ON a query the learned Counsel appearing for the International informed me that a sum of Rs. 13,38,477/- covering eight invoices was already paid by Asia Pacific in 2007. Under the said agreement, the dispute, if any, between the parties was to be resolved through arbitration within the local limits of Mumbai and the Courts having jurisdiction over the Municipal Limits of City of Mumbai would be the appropriate forum for resolution of any such dispute. In the above premises International filed a complaint before the learned Metropolitan Calcutta under Section 403/420 of Indian Penal Code alleging breach of contract by Asia Pacific. It was alleged that they failed and neglected to keep their promise by making payment of the balance sum and instead they sent truckload of junk said to be rejected materials squaring off the account. The learned Magistrate took cognizance, which prompted Asia Pacific to approach this Court for quashing of the same. Mr. Swapan Kumar Mallick learned Counsel appearing for the . Asia Pacific contended that from the nature of the dispute as would appear from the pleading it was clear that the alleged offence was civil in nature and could not be tried by the learned Magistrate under Section 403 or 420 of the Indian Penal Code. Mr. Mallick further contended that the agreement would denote that the parties agreed to a forum to have their dispute resolved through arbitration. In any event, they agreed to submit to the jurisdiction of the Court within Municipal limits of Mumbai. Mr. Mallick further contended that the agreement would denote that the parties agreed to a forum to have their dispute resolved through arbitration. In any event, they agreed to submit to the jurisdiction of the Court within Municipal limits of Mumbai. No offence being committed at Calcutta, the learned Magistrate was not competent to entertain the complaint. Mr. Mallick further contended that International in their complaint had admitted earlier payments. Hence pre-requisite of Section 420 being absent complaint was not maintainable. Mr. Mallick also relied on the Memo dated December 13, 2008 which would show that a sum of Rs. 4094.00/- was paid by Asia Pacific in full and final settlement. 3. TO support his contention Mr. Mallick relied on two Apex Court decisions reported in (2009) Volume-I Supreme Court Cases (Criminal) Page-282 (B. Suresh Yadav v. Sharifa Bee) and 2009 Volume-14 Supreme Court Cases Page-696 (Dalip Kaur v. Jagnar Singh). 4. OPPOSING the application Mr. Bhaskar Sen learned Counsel appearing for the International contended that the outstanding dues or the quantum thereof was not at all relevant in the complaint made under Section 403 / 420 of Indian Penal Code. According to Mr. Sen, when the outstanding was demanded Asia Pacific sent truckload of junk and attempted to square off the account. Such act was nothing but an attempt to cheat International attracting mischief of Section 420 of the Indian Penal Code. He contended that the Asia Pacific might have paid in the recent past which would not be relevant considering their post conduct. According to Mr. Sen, the element of criminality was present in the complaint attracting the mischief of Section 403 / 420. To support his contention Mr. Sen cited the following decisions – i) (2006) Volume-VI Supreme Court Cases Page-736 : (2007)1 C Cr LR (SC) 52 (Indian Oil Corpn v. NEPC India Ltd. ii) (1999) Volume-VIII Supreme Court Cases Page-686 : 1999 C Cr LR (SC) 364 (Trisuns Chemical Industry v. Rajesh Agarwal) iii) (1985) Volume-ll Supreme Court Cases Page-370 (Pratibha Rani v. Suraj Kumar) iv) (2010) Volume-VI Supreme Court Cases Page- 562 (S.P. Gupta v. Ashutosh Gupta) 5. I have carefully perused the pleadings. I have considered the precedents cited at the bar. I have considered their rival contentions. The series of decisions cited by Mr. I have carefully perused the pleadings. I have considered the precedents cited at the bar. I have considered their rival contentions. The series of decisions cited by Mr. Sen mostly relate to fraud being committed in a commercial transaction attracting Section 420 of the Indian Penal Code. 6. IN the case of Alpic Finance Ltd. (supra), the Apex Court observed that merely because remedy by way of civil suit is available, is not an impediment in maintaining a criminal complaint. IN the case of Indian Oil Corporation (supra), the Apex Court observed that the dispute involved breach of contract for which the parties already availed the civil remedy. The remedy under the criminal law however was not a bar if the allegations disclosed a criminal offence. The decision in the case of Dalip Kaur and Ors. (supra) and B. Suresh Yadav (supra) were cited by Mr. Mullick wherein the Apex Court observed, since the dispute between the parties was of a civil nature the criminal proceeding was nothing but an abuse of process. The Apex Court also observed, non-refund of any amount paid as advance would be a simple breach of contract and would not amount to cheating or criminal breach of trust. Hence, FIR was liable to be quashed under Section 482. Coming back to the present case, I search in vain the element of criminality involved in the instant case although Mr. Sen by his eloquent submissions made a frantic attempt to persuade me to hold it otherwise. In course of hearing Mr. Sen took me to the petition of complaint filed before the learned Magistrate which, however, did not accompany the correspondence entered into between the parties. Mr. Sen thus, filed a complete set of correspondence and/or documents pertaining to be subject transaction. The bunch is kept on record. 7. IF we peruse the written complaint we would find that the parties entered into a distributorship agreement under which the products of International was marketed by Asia Pacific. As observed hereinbefore, total transaction was approximately rupees fifteen lacs. More than rupees thirteen lacs was already paid leaving a balance sum of rupees two lacs eighty-nine thousand two hundred and thirty-seven which was disputed by Asia Pacific. I also find from the voucher dated December 30, 2008 that Asia Pacific paid a sum of rupees four thousand ninety-four only in full and final settlement. More than rupees thirteen lacs was already paid leaving a balance sum of rupees two lacs eighty-nine thousand two hundred and thirty-seven which was disputed by Asia Pacific. I also find from the voucher dated December 30, 2008 that Asia Pacific paid a sum of rupees four thousand ninety-four only in full and final settlement. On perusal of the documents filed by Mr. Sen, I find only one letter written by International being dated December 18, 2008 where from it would appear that Asia Pacific wanted to square off the accounts by returning a part of the materials which International did not agree. This dispute, in my view, could not be termed as a dispute involving element of criminality where parties entered into a commercial transaction. From the petition of complaint, it is clear that up to a certain stage there was no dispute. Hence, to satisfy prerequisite of Section 420 to attract the said provision, the complainant has to prove that his counterpart dishonestly induced him, deceived to deliver any property. In the instant case, International supplied goods to Asia Pacific who, in turn, marketed the same and paid back the price after getting commission as agreed upon. Substantial part of the transaction was undisputedly squared off by Asia Pacific by making payment to International. The amount due as of date was a small part of the total transaction which Asia Pacific treated as closed in exchange of part of the materials and International did not agree to such proposal. Neither there was any dishonest inducement nor anyone is deceived. 8. WITH regard to Section 403 the complainant has to prove that there was dishonest misappropriation of any movable property belonging to the complainant. I am unable to find out any cogent reason how this provision could be attracted even if I take the entire complaint on its face value. Mr. Sen strenuously contended that the outstanding dues or its quantum had no relevance in the instant case for which International could approach the Civil Court. According to Mr. 8en, once Asia Pacific attempted to square off the accounts by sending truckloads of junk the element of criminality was proved. WITH deepest regard I have for Mr. Sen and with all humility may I put my note of dissent. One party says that the goods are of no use. According to Mr. 8en, once Asia Pacific attempted to square off the accounts by sending truckloads of junk the element of criminality was proved. WITH deepest regard I have for Mr. Sen and with all humility may I put my note of dissent. One party says that the goods are of no use. The other party refuses to accept the same as according to them those have been already sold to the other party and they are entitled to the price. This dispute squarely covers the civil element and is liable to be adjudicated only by a Civil Court. There is another facet. The agreement denotes that the parties agreed to resolve their dispute in a Mumbai Court. They incorporated a forum selection clause in the agreement. They also incorporated arbitration clause agreeing to resolve their dispute through alternate dispute resolution mode. Filing a criminal complaint at Calcutta was nothing but an attempt to harass the other party. 9. THE application succeeds and is allowed. Complaint Case No.C-6106 of 2009 pending in the Court of learned Metropolitan Magistrate, 14th Bench, Calcutta be quashed and set aside along with the orders, if any, passed from time to time thereunder. 10. THIS order would, however, not preclude International to approach the appropriate civil forum to ventilate their grievance as against the petitioner Asia Pacific.