Natco Pharma Limited v. S. M. S. Pharmaceuticals Limited
2014-10-27
S.RAVI KUMAR
body2014
DigiLaw.ai
ORDER S. Ravi Kumar, J. 1. This petition is filed to quash proceedings in C.C. No. 52/2001 on the file of XII Additional Chief Metropolitan Magistrate, Hyderabad. 2. Petitioners herein are A1 to A3 in the above referred C.C. No. 52/2001. First respondent herein filed a private complaint against petitioners alleging that first petitioner is engaged in undertaking job works for conversion of raw material into bulk drugs and intermediate products. The first petitioner entered into a agreement, dated 10-09-1998, with the first respondent herein undertaking job work for conversion of raw material provided by first respondent into certain intermediates and products and accordingly first respondent entrusted material to first petitioner for job work and to return the finished products, but the first petitioner who is bound to return the finished products, committed breach of trust and dishonestly misappropriated the raw-material of the first respondent to an extent of Rs. 2,41,53,058/- and thereby, cheated the first respondent company and also committed breach of trust and liable for offences punishable under Sections 403, 408, 418 & 420 IPC and the learned Magistrate, after recording the sworn statement of the complainant and another, took cognizance for the offences under Sections 403, 406 & 418IPC and thereafter, took evidence of complainant before framing charges under Section 244 Cr.P.C., thereafter, petitioners filed discharge petition before the trial Court and the said petition was allowed against which, the complainant preferred revision to the Sessions Court and the Sessions Court allowed the revision and remitted back the matter to the trial Court and after remand, the trial Court dismissed discharge application and as against that, the petitioners preferred revision to the Sessions Court and the Sessions Court dismissed the revision and confirmed the order of the trial Court and thereafter, charges were framed against the petitioners for the offences under Sections 403, 406 & 418 IPC and now challenging the said charges, present quash petition is filed. 3. Heard both sides. 4. The main contention of the petitioners is that learned Magistrate framed charges for the offences under Sections 403, 406 & 418 IPC without any material attracting those offences, therefore, continuation of proceedings against the petitioners would amount to abuse of process of Court.
3. Heard both sides. 4. The main contention of the petitioners is that learned Magistrate framed charges for the offences under Sections 403, 406 & 418 IPC without any material attracting those offences, therefore, continuation of proceedings against the petitioners would amount to abuse of process of Court. One of the contentions raised on behalf of petitioners is that as per Section 246 Cr.P.C., charges are to be framed basing upon the evidence and evidence means chief examination, cross-examination and re-examination, but the Magistrate, without affording opportunity to the petitioners to cross-examine the witnesses, framed the charges and that caused great prejudice to the petitioners. It is further contended that complaint averments and the evidence of P.Ws. 1 & 2 do not attract the essential ingredients for the offences under Sections 403, 406 & 418 IPC and the transactions between parties are commercial transactions for which only a civil remedy is available and both parties have already filed civil suits against each other and the matters are now pending at appellate stage. It is further contended that if the allegations in the complaint are accepted in toto, they would only amount to violation of agreement conditions, which would only attract a breach of contract in respect of raw-material/finished goods and when civil suits were already filed, without any material showing that there was dishonest misappropriation of the raw-material, the criminal complaint cannot be sustained. 5. It is further contended that in the civil proceedings, an Advocate Commissioner noticed existence of raw-material, therefore, the allegation of misappropriation is apparently false. It is further contended that the learned Magistrate wrongly framed charges, therefore, this Court exercising inherent powers can quash those charges and consequently, proceedings in C.C. No. 52/2001. 6. On the other hand, learned counsel for first respondent contended that the petition filed under Section 482 Cr.P.C., is misconceived and the present petition is another attempt to drag the case further. It is contended that the contents of complaint and the evidence of P.Ws. 1 & 2 would prima facie establish that there is material for the offences under Sections 403, 406 & 418 IPC and the learned Magistrate rightly framed the charges. 7.
It is contended that the contents of complaint and the evidence of P.Ws. 1 & 2 would prima facie establish that there is material for the offences under Sections 403, 406 & 418 IPC and the learned Magistrate rightly framed the charges. 7. It is further contended that in a private complaint, a remedy is available for the accused to cross-examine the witnesses of complainant before framing of charges also, and that opportunity was given to the petitioners, but they have not availed it and without availing that remedy, now they cannot complain and contend that evidence means chief examination, cross-examination and re-examination. It is submitted that in the evidence of P.W. 1, it is clearly recorded that accused did not choose to cross-examine, but so far as P.W. 2 is concerned, on the request of accused, cross-examination was referred, but without conducting cross-examination, they filed discharge petition and thereafter, the other proceedings. 8. It is further contended that the grounds urged in the petition during course of arguments pertains to merits of the case, which have to be adjudicated only upon appreciation of evidence during trial and those grounds cannot be considered in quashing of charges framed. 9. It is further contended that charges have to be framed only on the basis of prima facie material and this Court has to examine whether the material relied on by the Court below is sufficient to frame charges and only if the material is not sufficient, this Court can interfere, but here in this case, there is sufficient material attracting charges under Sections 403, 406 & 418 IPC and all the objections raised on behalf of petitioners are the defences available, which they have to urge during trial and on the basis of the defences, proceedings cannot be quashed. 10. Now the point that would arise for my consideration in this petition is whether the proceedings in C.C. No. 52/2001 on the file of XII Additional Chief Metropolitan Magistrate, Hyderabad are liable to be quashed or not? 11. Point:- Before going into the merits and demerits of the case, I must refer here to chronological events relating to this case. Both parties entered into agreement for job work on 10-09-1998. First respondent herein filed private complaint on 06-03-2000, which was referred to police on the basis of which, Crime No. 105/2000 was registered.
11. Point:- Before going into the merits and demerits of the case, I must refer here to chronological events relating to this case. Both parties entered into agreement for job work on 10-09-1998. First respondent herein filed private complaint on 06-03-2000, which was referred to police on the basis of which, Crime No. 105/2000 was registered. Investigating Officer filed final report on 15-04-2000 referring the case as of civil nature. Complainant filed Protest Petition on 03-07-2000 in Crl. M.P. No. 1986/2000 in that protest petition, learned Magistrate recorded sworn statement of Mr. Y. Nagarjun Rao on 18-09-2000 and Mr. A. Hari Babu on 28-10-2000. On the basis of these sworn statements, cognizance was taken on 17-04-2001 for the offences under Sections 403, 406 & 418 IPC and registered the complaint as C.C. No. 52/2001. On 08-10-2002, first petitioner herein filed O.S. No. 304/2002 in City Civil Court, Hyderabad praying for a decree for an amount of Rs. 5,62,79,529/-. On 11-10-2002, complainant i.e., first respondent herein filed O.S. No. 323/2002 for recovery of Rs. 15,62,90,614-87 P.S. On 11-08-2004, P.W. 1 is examined and on 16-09-2004, P.W. 2 is examined in the said C.C. under Section 244 Cr.P.C. On 25-04-2005, discharge petition filed by petitioners was allowed and all the petitioners were discharged. On 13-06-2005, the complainant filed revision in Criminal Revision Petition No. 83/2005 against the discharge order dated 25-04-2005. On 14-3-2006, Crl. R.P. No. 83/2005 was allowed and the discharge order was set aside and the matter was remitted back to the trial Court. After remand, trial Court dismissed the discharge petition on 15-11-2010. Petitioners filed revision against the dismissal of the discharge petition on 03-12-2010 in Crl. R.P. No. 268/2010. On 13-12-2011, Crl. R.P. No. 268/2010 was dismissed confirming the dismissal of discharge petition. On 29-02-2012, Civil Suits filed by the petitioners were disposed of. Suit filed by petitioners in O.S. No. 304/2002 was dismissed holding that petitioners are entitled to receive an amount of Rs. 18,64,026/-, which was deposited by the Commissioner into Court towards the sale proceed and the material auction. Civil Suit filed by complainant in O.S. No. 323/2002 was decreed with costs of Rs. 15,62,90,914-87 P.S. Petitioners filed appeal against decree in O.S. No. 323/2002 on 28-06-2012 in C.C.C.A. No. 73/2012 and obtained interim stay on condition of depositing 1/3rd of the appeal amount.
Civil Suit filed by complainant in O.S. No. 323/2002 was decreed with costs of Rs. 15,62,90,914-87 P.S. Petitioners filed appeal against decree in O.S. No. 323/2002 on 28-06-2012 in C.C.C.A. No. 73/2012 and obtained interim stay on condition of depositing 1/3rd of the appeal amount. Petitioners also filed appeal against the orders in O.S. No. 304/2002 on 09-07-2012 in C.C.C.A. No. 105/2012. On 05-02-2013, the petition filed by petitioners in C.C.C.A. No. 105/2012 seeking permission to destroy raw-material lying in the premises was allowed. On 31-05-2013, charges were framed in C.C. No. 52/2001 and on 18-02-2014, this quash petition is filed to quash the charges that were framed in CCNo. 52/2001. 12. Now the main objection of the petitioners is that the entire allegations in the complaint, evidence of P.Ws. 1 & 2 and documents marked on behalf of complainant would only establish a breach of contract, but they nowhere establish any inducement or criminal misappropriation or criminal breach of trust, therefore, the Court below is wrong in framing charges against the petitioners. Now as seen from the record, the first charge against the petitioners is that the complainant entrusted raw-material to the accused to undertake the job work, after conversion into desired products, but the first accused dishonestly misappropriated the same for its own use with the connivance of A2 & A3. The other charge against the petitioners is that they failed to return finished products having agreed for conversion of the raw-material into intermediate products and thereby, committed criminal breach of trust. The other contention of the petitioners is that the said act of the accused would attract an offence under Section 418 IPC. From the material, it is clear that the learned Magistrate, after considering the evidence of witnesses, examined prior to framing of charges and the documents produced for these three charges framed the charges. Admittedly, these charges were framed only after the dismissal of the discharge petition and its confirmation by the revisional Court. Once the petition for discharge was dismissed and confirmed by the Sessions Court, normal course that has to be followed is trial has to be conducted. Now the objections urged in the quash petition, are the very same objections that were raised in the discharge petition and also before the revisional Court. Both trial Court and revisional Court negatived these objections for the reason that the evidence of P.Ws.
Now the objections urged in the quash petition, are the very same objections that were raised in the discharge petition and also before the revisional Court. Both trial Court and revisional Court negatived these objections for the reason that the evidence of P.Ws. 1 & 2 coupled with complaint allegations and documents produced on behalf of complainant would prima facie show that there is material to proceed against the petitioners. As seen from the above referred chronological events, the petitioners without proceeding with the trial are repeatedly filing petitions one after the other and not allowing the trial to take place. 13. Learned counsel for the petitioners referred two judgments of Supreme Court in HRIDAY RANJAN PRASAD VERMA AND OTHERS vs. STATE OF BIHAR AND ANOTHER (2000) 4 Supreme Court Cases 168 & SATISH MEHRA vs. STATE (NCT DELHI) AND ANOTHER (2012) 13 Supreme Court Cases 614, for the proposition that the proceedings have to be quashed when the material on record would disclose that continuation of proceedings would amount to abuse of process of Court, but these two decisions are no way applicable to the case on hand as the evidence of P.Ws. 1 & 2 coupled with the complaint allegations in the document would attract the ingredients for offences of criminal breach of trust and misappropriation. Petitioners admitted that they have received raw-material from the complainant and when the complainant alleged that the said material was misused by the petitioners and when the fact remains that the finished goods were not delivered to the complainant as alleged whether there was dishonest intention on the part of petitioners in not delivering the finished goods whether there was any misappropriation as alleged or it amounts to temporary misappropriation is a matter of evidence, which cannot be decided in a quash petition, therefore, continuation of complaint would never amount to abuse of process of Court. When continuation of complaint in this case would not amount to abuse of process of Court, above decisions have no application. 14. Learned counsel for petitioners also relied on a decisions in U. DHAR AND ANOHTER vs. STATE OF JHARKHAND AND ANOTHER (2003) 2 Supreme Court Cases 219 & ANIL MAHAJAN vs. BHOR INDUSTRIES LTD. AND ANOHTER (2005) 10 Supreme Court Cases 228. 15.
14. Learned counsel for petitioners also relied on a decisions in U. DHAR AND ANOHTER vs. STATE OF JHARKHAND AND ANOTHER (2003) 2 Supreme Court Cases 219 & ANIL MAHAJAN vs. BHOR INDUSTRIES LTD. AND ANOHTER (2005) 10 Supreme Court Cases 228. 15. In ANIL MAHAJAN's Case (Supra), Hon'ble Supreme Court differentiated between breach of contract and cheating, but here in our case, the Court below has not taken cognizance for the offence under Section 420 IPC though complainant alleged offence of 420 IPC also and the main offences in this case is misappropriation and criminal breach of trust, therefore, this decision has no application to the facts of this case. 16. In U. Dhar's case (supra), after full-fledged trial, the Court found that there is no evidence to show that there was dishonest misappropriation, but here whether there was dishonest misappropriation or not is a matter yet to be decided, therefore, this decision is also not applicable. 17. In GANESH NARYAN HEGDE vs. S. BANGARAPPA AND OTHERS (Crl. A. No. 564/1995), Hon'ble Supreme Court observed that exercise of inherent power is called for only where complaint does not disclose any offence or that the complaint is frivolous or vexatious. Here in our case, the complaint filed by first respondent herein and the evidence of P.Ws. 1 & 2 on the basis of which, charges are framed cannot be termed as frivolous or vexatious, therefore, inherent powers under Section 482 Cr.P.C., cannot be exercised. 18. As seen from the material, petitioners have not chosen to cross-examine P.Ws. 1 & 2 before framing of charges though an opportunity was afforded to them. 19. Under Section 245 Cr.P.C., the Court has power to discharge the accused, after considering the evidence recorded under Section 244 Cr.P.C., if it feels that the said evidence if taken as it is, would not warrant conviction of the accused. When the accused are not discharged under Section244 Cr.P.C., the Magistrate has to frame a charge and then proceed with the trial. The trial Court, after considering the evidence of P.Ws. 1 & 2 and documents Exs. P1 to P96, held that evidence on record is sufficient to frame charges. Now here, what is to be seen is whether that evidence of P.Ws. 1 & 2 and documents Exs.
The trial Court, after considering the evidence of P.Ws. 1 & 2 and documents Exs. P1 to P96, held that evidence on record is sufficient to frame charges. Now here, what is to be seen is whether that evidence of P.Ws. 1 & 2 and documents Exs. P1 to P96 even if they are accepted as it is in toto, if it would not warrant a conviction, then the petitioners can claim discharge and in such case, the charges framed by the Court below can be quashed. The entire argument of advocate for petitioners is that Advocate Commissioner noticed existence of raw material, therefore, the allegations against petitioners are incorrect. At the stage of framing charges, defence evidence cannot be looked in to and the trial Court rightly considered the material on record for framing charges. On a scrutiny of the evidence of these two witnesses and the documents, the trial Court found that evidence would attract offences under Sections 403, 406 &418 IPC. I do not find any wrong approach by the trial Court, because the complaint averments and the evidence of P.Ws. 1 & 2 supported by documents would attract prima facie ingredients for the offences under Sections 403, 406 & 418 IPC, therefore, there are absolutely no grounds to exercise the powers under Section 482 Cr.P.C. 20. On a scrutiny of the entire material on record, I have to accept the submissions of the learned counsel for the first respondent that the present petition is yet another dilatory tactics being adopted by the petitioners, therefore, I feel that the Court below has to be directed to expedite the trial and fix some time for its disposal. 21. For these reasons, I am of the view that there are no merits in the petition and the same is liable to be dismissed. 22. Accordingly, Criminal Petition is dismissed and the trial Court is directed to expedite the trial and dispose of the case on merits independently without being influenced by any of the observations made by this Court in this order, as early as possible, preferably within eight (8) months from the date of receipt of this order. 23. As a sequel, miscellaneous petitions, if any, pending in this Criminal Petition, shall stand dismissed. Petition dismissed