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2012 DIGILAW 1489 (JHR)

Dheeraj Lulla v. State of Jharkhand

2012-09-28

D.N.UPADHYAY

body2012
JUDGMENT D.N. UPADHYAY, J. 1. This Writ Application (Criminal) has been filed for quashing the entire criminal proceedings arising out of C. No. 1061/2007 including the order dated 29.5.2009, passed by learned Judicial Magistrate, Ranchi in connection with the said case whereby cognizance under Section 420 of the Indian Penal Code has been taken against the petitioner and he has been directed to face trial and in consequent, warrant of arrest also issued on 9.11.2009. 2. The brief facts of the case is that the Complainant/Respondent No.2 [hereinafter referred to as 'R–2' in short) filed a Complaint Case No.1061 of 2007 against the petitioner alleging therein that the petitioner, being the Managing Director of M/s. Endo Labs Ltd., a Company manufacturing medical goods, authorised him to obtain supply orders from RCH, Ranchi for supply of medicines for which tenders were invited by Jharkhand State Health and Family Welfare Society, Ranchi. The complainant was authorised for quoting rates, submitting tenders, participating in negotiation and receiving payments against supply made on behalf of Endo Labs Ltd. In this context an agreement and power of attorney were executed by the petitioner. It was agreed that the R–2 would get suitable commission against the supply order, if made in favour of the petitioner. The R–2 being a local businessman, having business connections agreed to the proposal and managed the contract in favour of the petitioner. It was contended in the complaint that investment of a sum of Rs. 5 Lacs as earnest money deposited with the RCH, Ranchi; a sum of Rs. 5 Lacs as contributory deposit with M/s. Endo Labs Ltd. and a sum of Rs. 4,67,000/- paid to various key persons of RCH, Ranchi, was made by the complainant. It was assured by the petitioner that said sum of Rs. 15 Lacs would be reimbursed and Rs. 9 Lacs as commission would also be paid to him after receiving 90% payment from RCH against supply of medicines. It is further contended that the R–2 managed the contract in favour of M/s. Endo Labs. It was assured by the petitioner that said sum of Rs. 15 Lacs would be reimbursed and Rs. 9 Lacs as commission would also be paid to him after receiving 90% payment from RCH against supply of medicines. It is further contended that the R–2 managed the contract in favour of M/s. Endo Labs. Ltd. but after getting the supply order and after performing necessary supply and receipt of payment, the petitioner did not honour the terms and assurance and complainant was called at Indore where the petitioner took all original documents from him and tore the same in his presence and further asked him to enter into a fresh agreement and agreed only to pay Rs. 1 Lac as commission to which the complainant refused and having been felt cheated, lodged the instant complaint. After due enquiry, the petitioner has been summoned to face trial vide order dated 29.5.2009 passed in Complaint Case No. 1061 of 2007. 3. The petitioner has contended that the complainant in his statement on solemn affirmation (hereinafter referred to as 'SA' in short) has clearly admitted that he has lodged this case with a purpose to receive old dues lying against the petitioner. He has not come up with fair hands. The earnest money which he had deposited with RCH, Ranchi, was refunded to him. So far contributory deposit of Rs. 5 Lac is concerned, the petitioner has all along admitted in his reply to the notice and he was always ready to tender that amount but the complainant instead of accepting the same, lodged this case with false and frivolous allegation which do not constitute offence for which the complaint is filed. It is said that Rs. 4,67,000/- was given to various key persons of RCH, Ranchi for managing the contract at the instance of the petitioner, which is nothing but a white lie. The R–2 cannot claim that money which, according to his own admission, was spent on illegal head describing it Miscellaneous Expenses. The petitioner never instructed R–2 to spend any amount for managing the contract in his favour. In other words, it can be said that the complainant has been claiming the illegal gratification which he had given to the various key persons of RCH, Ranchi and if it is correct, the erring person, including the R–2, are liable to be prosecuted. The petitioner never instructed R–2 to spend any amount for managing the contract in his favour. In other words, it can be said that the complainant has been claiming the illegal gratification which he had given to the various key persons of RCH, Ranchi and if it is correct, the erring person, including the R–2, are liable to be prosecuted. Furthermore, the R–2 has failed to bring on record any agreement in support of his claim and therefore, the basic ingredients of offence of cheating, as defined in Section 415 of the Indian Penal Code, are lacking. 4. The Points needs to be addressed are:– (i) Whether ab-initio dishonest intention was present? (ii) Whether it is a case of breach of promise or violation of contractual obligation? (iii) Whether an agreement, if any, for unlawful object or unlawful consideration, is a contract in the eyes of law and breach of such contract would constitute an offence of cheating? 5. The most important point involved in this case is that the R–2 has claimed for commission for obtaining a contract in favour of the petitioner and the contract, according to him, was obtained by obliging and making payment to various key persons of RCH, Ranchi. Thus, it is clear that the R–2 has completely failed to bring on record any such assurance given by the petitioner. For the arguments sake, even assuming it to be correct that the petitioner had agreed to pay commission to the R–2 after his performance, for which he was authorised by the petitioner Company and the dispute arose in respect of payment of commission on latter stage that can well be redressed in a civil suit and the ingredients of cheating would not attract. In the complaint, there is no allegation that there was fraud or dishonest inducement and the R–2 parted with money under that inducement. 6. In support of his case, the learned counsel for the petitioner has relied on the following Judgments:– (i) (2001)3 SCC 513 [Alpic Finance vs. P. Sadasivan (relevant Paras 1 and 10)]; (ii) (1973)2 SCC 823 [Hari Prasad Chamaria vs. Bishun (relevant Paras 2 and 4); (iii) (2008)5 SCC 662 [S.K. Alugh vs. State of U.P. (relevant Paras 16, 19 and 20)]; (iv) (2007)14 SCC 776 [2008(1) JLJR (SC) 51] [All Cargo vs. Dhanesh (relevant Para 16)]. 7. 7. On the other hand, learned counsel appearing for the complainant has submitted that the ingredients of cheating, as defined under Section 415 of the Indian Penal Code, are well attracted. The petitioner was having deceptive intention from the very beginning when he induced the R–2 to part with money for getting the contract in favour of the petitioner. The petitioner did not dispute that the R–2 was not authorised to do correspondence with the RCH, Ranchi for getting the supply in favour of the petitioner. It is admitted that a sum of Rs. 5 Lacs as contributory deposit was made by the R–2 with the accused, earnest money of Rs. 5 Lacs was deposited by the complainant with RCH Ranchi and the complainant took all efforts to get the contract job in favour of the petitioner. He was assured that a sum of Rs. 9 Lacs would be given to him as commission after receiving 90% payment against the supply of medicines made by the petitioner and investment made by him shall also be reimbursed. The complainant had sent legal notice making demand of Rs. 24 Lacs giving details but no reply was given rather he was directed to come with original documents at Indore in the office of the petitioner where all the original documents which he had with him, were taken and torn. He was asked to enter into a fresh agreement and the petitioner was agreed to pay Rs. 1 Lac. This conduct of the petitioner is sufficient to show that he was having deceptive intention from the very beginning when he contacted the R. No. 2 and requested him to obtain supply order. It is further contended that the petitioner is a man of ill repute and the Company–M/s Endo Labs Ltd. is also blacklisted in other States. To substantiate this contention, the R. No.2 has given reference of four cases being C-III-191/2010, C-III-192/2010, C-III-193/2010 and C-III-194/2010 instituted under the Drugs and Cosmetics Control Act. The sub–standard medicines were supplied to the Government and as per the Tender No. 03/RCH-2006, the petitioner has submitted the list of pharmaceuticals items to be manufactured but for the item of Endofer Forte Tablets, the Company has got no licence to manufacture. The sub–standard medicines were supplied to the Government and as per the Tender No. 03/RCH-2006, the petitioner has submitted the list of pharmaceuticals items to be manufactured but for the item of Endofer Forte Tablets, the Company has got no licence to manufacture. When R–2 was chasing for the commission and the amount spent by him, it was uttered by the petitioner that he has cheated the Government of Jharkhand then what is the status of yours (R–2)? Such indecent remarks and utterance is sufficient to indicate that the petitioner was having deceptive intention and the R–2 was dishonestly and fraudulently induced to part with money. It is pointed out that the allegations in the complaint if taken at their face value, constitute criminal offence, the complaint cannot be quashed merely because it relates to a commercial transaction or breach of contract for which civil remedy is available or has been availed. A commercial transaction or dispute may also involve criminal offence. 8. In support of his case, the learned counsel for the R. No.2 has relied on the following judgments:– (i) 1990(2) BLJ 252 [1991 (1) PLJR 121]; (ii) (2006)6 SCC 736 ; (iii) (1999)8 SCC 686 ; (iv) 1996(2) All Patna Law Reporter 1307 [1997(1) PLJR 334]. 9. Having heard rival submissions, considering the judgments relied upon and also considering the contention made in the complaint, I find that the R–2 was authorised by the petitioner to discharge some obligations and he was authorised on behalf of M/s Endo Labs. Ltd. to do correspondence with RCH, Ranchi in order to have contract for supply of medicines to the Government of Jharkhand. The earnest money deposited by the R–2 was refunded to him, which is apparent from the order of the Hon'ble Lokayukta, Jharkhand dated 21.1.2011 and it was not disputed by the R–2 in course of arguments. So far contributory deposits of Rs. 5 Lacs is concerned, it is evident from the documents and submissions that the petitioner has admitted the same and shown his willingness to refund. 10. The pertinent question which is admitted by R–2 in writing in Para–6 of his complaint is that he has been claiming a sum of Rs. 4,67,000/- which, according to him, was paid to various key persons of RCH, Ranchi. 10. The pertinent question which is admitted by R–2 in writing in Para–6 of his complaint is that he has been claiming a sum of Rs. 4,67,000/- which, according to him, was paid to various key persons of RCH, Ranchi. If the contention of the R–2 is true, he had managed the contract in favour of the petitioner by paying illegal gratification. All cases of illegal gratification are requires to be inquired into. If the result of inquiry substantiate the said fact, the person at fault are liable to be prosecuted. 11. In course of arguments, it was indicated that the petitioner and the Company in whose favour R–2 managed and obtained supply orders, is a Company of ill repute and also blacklisted in some of the States of the country. These contention of the complainant are sufficient to show that he is also not fair and he has been claiming commission against supply order granted in favour of the petitioner, obtained by applying unfair means. Besides the above he has not brought on record any agreement to show as to what was the terms and conditions entered into between the parties. Since no averment with regard to execution of any agreement is appearing, question of breach of contract resulting in cheating, does not arise. The complainant has simply asserted that the petitioner had verbally assured him to pay suitable commission if the supply order is obtained in his favour. 12. The R. No. 2 admits that Rs. 4,67,000/- was paid to various key persons of RCH, Ranchi which suggests that unfair means was applied for obtaining the supply order and against such supply order, he has been claiming commission for which he has lodged this complaint and he is saying that he has been cheated. In view of the above admitted facts, I do not find that ingredients of Section 415 of the Indian Penal Code are attracted in the case at hand. So far the amount claimed by the R–2 is concerned, that can well be redressed in a civil suit if there will be any substance. Since the R. No. 2 has created a peculiar circumstances by admitting himself that he has paid a sum of Rs. 4,67,000/- to various key persons of RCH, Ranchi for obtaining a contract, the judgments relied above by the parties do not required to be dealt with. 13. Since the R. No. 2 has created a peculiar circumstances by admitting himself that he has paid a sum of Rs. 4,67,000/- to various key persons of RCH, Ranchi for obtaining a contract, the judgments relied above by the parties do not required to be dealt with. 13. In the result, the entire criminal proceedings arising out of C. No. 1061/2007 including the order dated 29.5.2009, passed by learned Judicial Magistrate, Ranchi in connection with the said case whereby cognizance under Section 420 of the Indian Penal Code has been taken against the petitioner and he has been directed to face trial and in consequent, warrant of arrest also issued on 9.11.2009 and consequent orders, are hereby quashed. In the result, the instant application stands allowed. This Writ Petition (Criminal) has been allowed but I feel it desirable to send the instant complaint i.e. C. No. 1061/2007 alongwith this order to Vigilance Bureau, Jharkhand as also to the Principal Secretary (Home), Government of Jharkhand to hold a preliminary enquiry as to how and under what circumstances a sum of Rs. 4,67,000/-, as claimed by the Complainant/Respondent No.2, was paid to which of the key persons of RCH, Ranchi for obtaining said contract for supply of medicines for which tenders were invited by Jharkhand State Health and Family Welfare Society, Ranchi. If the preliminary enquiry indicates substance that unfair means was applied in obtaining said contract, the Vigilance Department shall register a regular case against the erring persons and investigate into the matter and/or may include it in investigation, if any, already started in relation to fraud or malpractices committed in RCH, Ranchi. Let a copy of this order alongwith copy of records including a copy of Complaint and S.A. of the Complainant, be sent to Vigilance Bureau, Jharkhand and the Principal Secretary (Home), Government of Jharkhand, Ranchi.