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Rajasthan High Court · body

2015 DIGILAW 1176 (RAJ)

Umesh Verma v. State of Rajasthan

2015-06-11

PRASHANT KUMAR AGARWAL

body2015
JUDGMENT : Prashant Kumar Agarwal, J. Heard learned counsel for the parties. 2. The accused-petitioner has filed this criminal misc. petition under Section 482 Cr.P.C. with a prayer to quash the FIR No.309/2012 registered at Police Station Gandhi Nagar, Jaipur City (East) for the offences under Sections 420, 406, 409 read with Section 120-B IPC mainly on the ground that the dispute between the parties is essentially of civil nature. 3. Brief relevant facts for the disposal of this petition are that the complainant-respondent filed a written complaint before the Court of Additional Chief Metropolitan Magistrate No.2, Jaipur Metropolitan, Jaipur with the averment that the petitioner and co-accused being partners of M/s Sunnar situated at Delhi came to the showroom of the complainant-company situated at Jaipur on 14.6.2011 and purchased gold and diamond jewelery of Rs. 11,17,674/- through Bill No.208 dated 14.6.2011 and in lieu of payment of the sale price of the aforesaid goods issued four postdated cheques with a promise that when the cheques would be presented for payment, they would be honoured by the bank of the petitioner and the co-accused. It was further averred in the complaint that the cheque dated 14.9.2011 for the amount of Rs. 1,28,850/- when presented for encashment on the due date, payment was made to the complainant-company and taking advantage of the same, the petitioner and co-accused further purchased gold and diamond jewelery of Rs. 26,55,099/- from the complainant-company on 15.9.2011 through Bill No.266 and also on 14.10.2011 of Rs. 13,14,639/- through Bill No.235 without making any cash payment or giving cheques against the sale price with the promise that payment of sale price of these items will be made within a period of 120 days. It was further averred that when the remaining above three cheques were presented for encashment, the same were dishonoured by the reason that sufficient fund was not available in the bank account of the petitioner and co-accused. It was also averred that on the direction of the petitioner and co-accused the aforesaid cheques were again presented in the bank concerned for payment, but again payment could not be made. It was also averred that on the direction of the petitioner and co-accused the aforesaid cheques were again presented in the bank concerned for payment, but again payment could not be made. It was averred that when their efforts to get the payment of the remaining amount could not succeed, on enquiry being made by the complainant-company it was found that the petitioner and co-accused have closed their business and by selling all the goods available with them they have misappropriated the sale proceeds for their own use. It was also averred that the aforesaid act of the petitioner and co-accused is an offence punishable under Sections 420, 406, 409 readwith Section 120-B IPC. The written complaint so filed by the complainant-company was sent for investigation under Section 156(3) Cr.P.C. to Police Station Gandhi Nagar, Jaipur where the aforesaid FIR was registered and investigation commenced. In these circumstances, one of the accused is before this Court by way of this petition. 4. In support of the petition, learned counsel for the petitioner raised following grounds : (i) Even if the facts averred in the complaint are taken up at their face value and treated to be true in entirety even then it is manifest that the dispute between the parties is purely of civil nature, as it relates to a business transaction allegedly taken place between the parties and at the most it is a case of non-payment of sale price of certain goods which were allegedly sold by the complainant-company to the petitioner and co-accused and, therefore, no offence of any kind can be said to be committed by the petitioner and/or by the co-accused. (ii) The appropriate remedy available to the complainant-company was to file a recovery suit against the petitioner and the co-accused, but taking advantage of the fact that the complainant-company is situated at Jaipur, it with connivance with the police got registered the aforesaid FIR with a sole purpose of harass, pressurise and humiliate the petitioner and co-accused so that its illegal demand of money can be fulfilled. (iii) It is well settled legal position that for an offence to be made out under Section 420 IPC, it is essential to show that from the very beginning i.e. when the offence of cheating was committed, the accused had a fraudulent or dishonest intention to cheat the complainant, but in the present case even prima facie no facts/allegations have been shown by the complainant that the petitioner and co-accused had such intention on 14.6.2011 when they allegedly purchased gold and diamond jewelery from the complainant and issued four cheques towards payment of the sale price. (iv) Although, subsequent conduct of an accused is not a relevant factor to infer his fraudulent or dishonest intention at the time of commission of offence of cheating, but even if for the sake of arguments, it is admitted that subsequent conduct of accused is also relevant to determine his initial intention but in the present case there is no such conduct of the petitioner and co-accused even prima facie showing that they had fraudulent or dishonest intention at the time when offence under Section 420 IPC was allegedly committed. Merely because the entire sale price was paid through postdated cheques, three of the cheques were dishonoured by the reason that sufficient fund was not available in the bank account and the petitioner and co-accused closed their business without any reasonable cause after selling all goods available with them cannot be said to be such a conduct by which it can be inferred that he and co-accused had the aforesaid intention from the very beginning. From the averments made in the complaint, it is clear that the complainant was fully satisfied with the financial and business condition of the petitioner and co-accused and without any hesitation agreed to sale jewelery items against postdated cheques. If the petitioner and the co-accused would be having any fraudulent or dishonest intention from the very beginning there was no question of payment of the first cheque dated 14.9.2011. (v) Even the essential ingredients for commission of offence under Section 406 IPC are not available in the present case. If the petitioner and the co-accused would be having any fraudulent or dishonest intention from the very beginning there was no question of payment of the first cheque dated 14.9.2011. (v) Even the essential ingredients for commission of offence under Section 406 IPC are not available in the present case. For such an offence, apart from others, it is necessary to show that the accused was "entrusted" with some property or had dominion over it, whereas in the present case no such entrustment or dominion over the jewelery can be said to be disclosed from the complaint as it is the case of complainant itself that the goods were sold to them against payment of sale price. It cannot also be said that the goods so handed over to the accused were misappropriated by them or they dishonestly converted the same for their own use or disposed of it in violation of any legal contract entered between them, as it is clear from the averments made in the complaint that the goods were handed over to the petitioner and co-accused as a result of sale transaction against price and they were entitled to use it according to their free will. (vi) So far as offence under Section 409 IPC is concerned, it is not at all made out, as offence under this provision can be committed only when the accused is either a public servant or a banker or a merchant or a factor or a broker or an attorney or an agent. It is not even the case of complainant itself that the goods in question were entrusted to the petitioner and co-accused in any of the aforesaid capacity. (vii) Similarly, offence under Section 120-B IPC is also not disclosed because the essential ingredients as enumerated in Section 120-A IPC are not available. It has not been averred in the complaint itself that the petitioner and co-accused entered into an agreement to cheat the complainant. (vii) Similarly, offence under Section 120-B IPC is also not disclosed because the essential ingredients as enumerated in Section 120-A IPC are not available. It has not been averred in the complaint itself that the petitioner and co-accused entered into an agreement to cheat the complainant. (viii) Although, it is well settled legal position that High Court while exercising its discretionary jurisdiction under Section 482 Cr.P.C. or Article 226 of the Constitution of India can quash an FIR only when it is found by it that even if the facts stated or allegation levelled in it are taken up entirely true, even then no offence is made out, but at the same time it is also well settled legal position that if by way of registration of FIR an attempt has been made to give criminal colour to a dispute, which is essentially civil in nature, the Court is empowered to exercise its discretion and to quash such FIR to prevent the abuse of process of law. (ix) It is well settled legal position that essential averments are required to be made in the complaint/FIR regarding fraudulent and dishonest intention of the accused at the time of commission of the offence i.e. at the very beginning of the transaction, but in the present case such essential averments have not been made. Similarly, in the notice dated 16.5.2012 sent by the complainant-company through his counsel essential averments regarding commission of aforesaid offences or any of them were not made. A close look at the notice shows that only a demand of remaining sale price along with interest @ 18% per annum as damages and expenses of notice was made, which fact further shows that at that time the complainant was of the view that the dispute between the parties is only for non-payment of the sale price, but subsequently without any foundation the criminal complaint was filed before the Court. (x) The letter dated 25.5.2012, which has been filed along with the petition, shows that Sales Executive (Mr. Hemendra) of the complainant-company submitted this letter before SHO, Subhash Palace Thana, Delhi with the averment that gold jewelery of Rs. 11 lac was delivered by him to the showroom of the petitioner and co-accused against which the petitioner handed over signed cheques to him in favour of the complainant-company. Hemendra) of the complainant-company submitted this letter before SHO, Subhash Palace Thana, Delhi with the averment that gold jewelery of Rs. 11 lac was delivered by him to the showroom of the petitioner and co-accused against which the petitioner handed over signed cheques to him in favour of the complainant-company. This letter clearly shows that the business transaction between the parties actually took place at Delhi and not at Jaipur as alleged in the complaint and that is why the Sales Executive Mr. Hemendra submitted the aforesaid letter before a police station at Delhi. This fact shows that even if an offence was committed by the petitioner and/or the co-accused, it was committed at Delhi and not at Jaipur and it has wrongly been registered at Jaipur by concealing essential and relevant facts. (xi) The copy of the plaint filed along with the petition shows that the dispute regarding payment of Rs. 1,48,000/- arose between the parties and recovery suit was filed on behalf of the partnership firm of the petitioner and co-accused against the complainant-company at a Delhi Court on 12.2.2013. Thus, when there is already a civil suit pending between the parties regarding payment/repayment of money, the complainant-company has a right to make its submission regarding non-payment of the sale price by the petitioner and co-accused in the aforesaid suit. (xii) In view of the legal position that undisputed documents filed by the accused can also be seen while considering the issue of quashing of an FIR, in the present case the letter dated 25.5.2012 and copy of the plaint dated 12.2.2013 can be taken into consideration by this Court while arriving at a conclusion whether the FIR is liable to be quashed or not in the present case. (xiii) The appropriate criminal remedy available with complainant was to file complaint for offence under Section 138 of N.I. Act but the same was not pursued and when the period of limitation expired, present complaint was filed without any foundation for any of the offence alleged therein. 5. In support of his submissions, learned counsel for the petitioner relied upon a large number of decisions. 6. 5. In support of his submissions, learned counsel for the petitioner relied upon a large number of decisions. 6. On the other hand, learned Public Prosecutor assisted by learned counsel for the complainant-respondent controverting the submissions made on behalf of the petitioner, submitted as below : (i) Although, for an offence to be made out under Section 420 IPC, it is essential to prove that the accused had fraudulent or dishonest intention from the very beginning i.e. when such offence was committed but to infer such an intention subsequent conduct of the accused is also relevant and it can be considered to arrive at a conclusion whether he had such intention from the beginning or not. In the present case, the overall conduct of the petitioner and co-accused is clear indication of the fact that they from the very beginning were having fraudulent and dishonest intention to cheat the complainant-company as they issued four postdated cheques against the sale price out of which only the first was honoured on the due date and amount was paid to the complainant and the petitioner and co-accused taking advantage of this fact on the same date further purchased a huge quantity of gold and diamond jewelery without making any payment and also purchased similar goods on 15.10.2011. Non-payment of remaining three cheques due to insufficient fund in the bank account of the petitioner and co-accused and closer of business by them after selling all the goods available with them is also indication of the fact that from the very beginning they did not intend to make payment for the goods purchased by them. Investigation is yet to be conducted by the Investigation Officer and on the basis of evidence so collected only it can be ascertained whether the petitioner and co-accused had such intention or not. (ii) It is well settled legal position that an act of accused can give rise both civil and criminal proceedings and both can be pursued simultaneously. In the present case, remedy of filing of recovery suit is available with the complainant-company and it was also entitled to file complaint for offence under Section 138 of Negotiable Instrument Act, but the overall conduct of the petitioner and co-accused prima facie shows criminality on their part is also involved in it. In the present case, remedy of filing of recovery suit is available with the complainant-company and it was also entitled to file complaint for offence under Section 138 of Negotiable Instrument Act, but the overall conduct of the petitioner and co-accused prima facie shows criminality on their part is also involved in it. It is well settled legal position that the cheating and criminal breach of trust are both a civil wrong and criminal offence and both proceedings can be pursued by the victim simultaneously and, therefore, even if the complainant has a remedy to file civil suit for the recovery of unpaid amount, even then it cannot be said criminal proceeding initiated by him is barred. It is also well settled that offence of cheating/breach of trust may also be committed in the course of commercial and money transaction. (iii) Offence under Section 406 IPC is also prima facie made out against the petitioner and co-accused as the goods were handed over to them with an understanding that the payment of sale price of the same would be received by the complainant through postdated cheques so issued by the petitioner and co-accused and until payment is received, the goods shall be deemed to be in their entrustment. It is only after collection of evidence during investigation it can be ascertained in what circumstances the payment of sale price could not be made or the goods could not be returned. (iv) So far as offence under Section 120-B IPC is concerned, it is well settled legal position that for such an offence it is almost impossible to collect direct evidence and on the basis of circumstantial evidence and other surrounding facts, it can be inferred whether such an offence was committed or not. In the present case, it has not been disputed that the petitioner and co-accused were the partners of the aforesaid firm. From the averments made in the complaint, it is clear that the petitioner and co-accused both came to the showroom of the complainant-company situated at Jaipur and purchased jewelery items and against sale price four postdated cheques of the firm were given to the complainant. From the averments made in the complaint, it is clear that the petitioner and co-accused both came to the showroom of the complainant-company situated at Jaipur and purchased jewelery items and against sale price four postdated cheques of the firm were given to the complainant. Being partners of the firm both the petitioner and co-accused were liable to make payment of the sale price or to return the goods handed over to them and as they failed to do so, it can easily be inferred that they entered into criminal conspiracy and in pursuance of the same the other offences were committed. (v) In the present case, it cannot be said that essential ingredients of the offences, which are alleged to have been committed by the petitioner and co-accused, have not been averred in the complaint. It is well settled legal position that the language used in the provision under which an offence has been defined is not required to be reproduced in the FIR/complaint and only substance of the same is required to be averred and in the present case the substance of the aforesaid offences has clearly been mentioned. Merely because by way of legal notice sent on behalf of the complainant demand of remaining amount along with interest and expenses was made, it cannot be said that at that time the complainant was of the view that the dispute between the parties is purely of civil nature. In the notice so sent apart from demand of the remaining amount, it has also been mentioned that the overall conduct of the petitioner and co-accused is clear indication of their criminal act and the complainant-company intends to initiate proceedings against them not only for offence under Section 138 of N.I. Act but also for the offences under Sections 420 & 406 IPC. It is to be noted that the notice remained unreplied. These two documents are not admitted or undisputed document whereas the suit for recovery has been filed by the firm after registration of the FIR. It is to be noted that the notice remained unreplied. These two documents are not admitted or undisputed document whereas the suit for recovery has been filed by the firm after registration of the FIR. (vi) It is well settled legal position that at the stage of considering the issue of quashing of FIR in exercise of jurisdiction conferred upon the High Court under Section 482 Cr.P.C., defence or proposed defence of the accused cannot be considered and only on the basis of prima facie perusal of the FIR and documents filed along with it, it is to be decided whether from them an offence is made out or not. In view of the same, letter dated 25.5.2012 or copy of the plaint allegedly filed by the petitioner on behalf of the firm cannot be taken into consideration more particularly, in view of the fact that the letter dated 25.5.2012 does not clarify to which transaction it relates and whether Mr. Hemendra was authorised by the complainant to submit such a letter before the police station at Delhi. It is not the case of the petitioner that the letter dated 25.5.2012 was within the knowledge of the complainant and in absence thereof, it cannot be said that a material fact was concealed by the complainant from the Court below. These two documents are not admitted or undisputed document whereas the suit for recovery has been filed by the firm after registration of the FIR. 7. Learned Public Prosecutor and learned counsel for the complainant also relied upon a large number of decisions. 8. I have considered the submissions made on behalf of the respective parties and the material made available on record as well as the relevant legal provisions and the case law. In the facts and circumstances of the case and material made available on record and in the light of well settled legal position, it is to be considered whether the aforesaid offences or any of them is made out or disclosed against the petitioner and the co-accused or not. Offence under Sections 406 & 409 IPC 9. In the facts and circumstances of the case and material made available on record and in the light of well settled legal position, it is to be considered whether the aforesaid offences or any of them is made out or disclosed against the petitioner and the co-accused or not. Offence under Sections 406 & 409 IPC 9. For an offence to be made out under Sections 406 & 409 IPC, first of all it is to be seen whether there was any criminal breach of trust as defined under Section 405 IPC on the part of the accused and for an offence to be made out under Section 409 IPC it is further to be seen whether the accused was one of the persons as mentioned in the provision. As per Section 405 IPC, whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust. Thus, the first and paramount ingredient for an offence of criminal breach of trust to be made out it is required to be shown that some property was entrusted to the accused or he having dominion over such property dishonestly misappropriated or converted for own use that property. In the present case, it cannot be said that the gold and diamond jewellery was handed over by the complainant to the petitioner and co-accused in entrustment or they had dominion over it in any manner on behalf of the complainant. It is the case of the complainant himself that in lieu of sale price the jewellery was sold and handed over to the petitioner and co-accused. I am of the opinion that as soon as the jewellery was handed over to the accused by the complainant against promised payment of sale price the sale was complete and title in the same transferred to the accused and they were free to disposes of it in the manner they liked. I am of the opinion that as soon as the jewellery was handed over to the accused by the complainant against promised payment of sale price the sale was complete and title in the same transferred to the accused and they were free to disposes of it in the manner they liked. It is not the case of the complainant himself that there was a contract between them and the accused were bound to use the jewellery sold to them only in the manner as shown in such a contract. When the essential ingredients to make an act of an accused to be criminal breach of trust within the meaning of Section 405 IPC are completely absent, the offence punishable under Section 406 IPC cannot be said to be made out even prima facie against the petitioner and the co-accused. Section 409 IPC provides that whoever being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. It is thus clear that the offence under this provision is an aggravated form of criminal breach of trust when it is committed by a person mentioned in the provision itself. By any stretch of imagination the petitioner and/or the co-accused cannot be said to be covered within the purview of this provision. In the present case, as already said, the jewelery in question was neither entrusted to the accused or they had dominion over it on behalf of the complainant. Merely because during the course of a business transaction the jewelery was handed over to accused, it cannot be said that they have committed offence punishable under this provision. In the present case, as already said, the jewelery in question was neither entrusted to the accused or they had dominion over it on behalf of the complainant. Merely because during the course of a business transaction the jewelery was handed over to accused, it cannot be said that they have committed offence punishable under this provision. Even if for the sake of arguments, it is admitted that the jewelery in question was entrusted to accused or they were having dominion over it in any manner on behalf of the complainant even then as it was handed over to them during the course of the said business transaction not in the capacity of a person mentioned in this provision, offence under this provision cannot be said to be made out against them and, therefore, the complaint/FIR to that extent is liable to be quashed. Offence under Section 420 readwith Section 120-B IPC 10. Section 420 IPC provides that whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. It is thus clear that for an offence to be made out under Section 420 IPC, it is to be shown that the accused cheats a person. The word "cheating" has been defined under Section 415 IPC, which provides that whoever by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or it likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat". It is now well settled legal position that in order to constitute an offence of cheating the intention to deceive should be in existent at the time when the inducement was made. It is now well settled legal position that in order to constitute an offence of cheating the intention to deceive should be in existent at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating, but at the same time it is also well settled legal position that subsequent conduct of the accused is also a relevant factor to infer whether he had fraudulent or dishonest intention at the inception i.e. when the offence was committed. In the present case, the subsequent conduct of the petitioner and co-accused as pointed out by the learned counsel for the complainant-respondent and which have already been referred above, in my opinion are sufficient to prima facie infer that the petitioner and co-accused from the very beginning were having a fraudulent or dishonest intention to deceive the complainant and to obtain from him jewelery in question without intention to make full payment of the same. As already mentioned, no payment at all was made by the accused to the complainant against the sale price when the transaction of sale took place between them and only four postdated cheques were given. Although, the first cheque dated 14.9.2011 of Rs. 1,28,850/- was honoured on the due date and payment of it was received by the complainant, but it is also relevant to note that on the date on which payment of aforesaid cheque was received, the accused purchased more jewelery of Rs. 26,55,099/- through Bill No.226 from the complainant without making any payment with a promise to make the payment within a period of 120 days. As the payment of aforesaid cheque was received by the complainant on the due date, there was nothing suspect for the complainant to sell more jewelery to the accused without receiving any payment in cash or through cheque. As the payment of aforesaid cheque was received by the complainant on the due date, there was nothing suspect for the complainant to sell more jewelery to the accused without receiving any payment in cash or through cheque. From the allegations levelled in the complaint, which are taken to be true at this stage of the proceedings, it is further clear that the remaining cheques could not be honoured by the reason that sufficient fund was not available in the bank account against which they were issued although they were presented for payment before the bank concerned twice. Unless the accused were having fraudulent or dishonest intention not to make payment of the remaining amount of the sale price there was no reason for them to make arrangement in advance so that the cheques as given by them could be honoured. Apart from dishonour of these three cheques, this conduct of the accused is also relevant to ascertain prima-facie their intention to deceive the complainant that within few months of the said purchase they without any cause closed their business of jewelery and sold their entire goods and used the sale proceeds for their own use without taking steps to make payment to the complainant. Even if for the sake of arguments, it is admitted that due to some reasons, which were not in their control, the accused were compelled to close their business and to sell their entire goods, even then it was their duty to take necessary steps to make payment to the complainant out of sale proceeds received by them and in absence of the same, at this stage of the proceedings, it can be inferred that from the very beginning they were having intention to deceive the complainant. So far as offence under Section 120-B IPC is concerned, it is well settled that direct evidence for such an offence is hardly available and offence under this provision can be inferred even on the basis of circumstantial evidence made available on record. In the present case, both the accused came to the business place of complainant at Jaipur and jointly entered into business transaction with him. In the present case, both the accused came to the business place of complainant at Jaipur and jointly entered into business transaction with him. Both of them are partners of the aforesaid firm and the cheques were issued by them on behalf of the firm and business of the firm was also closed by them jointly and, therefore, at this stage it can be prima facie said that this offence is also disclosed against them. 11. So far as the dispute between the parties is essentially a dispute of civil nature is concerned, it is well settled legal position that if prima facie there are ingredients of an offence, as disclosed from the complaint/FIR, the same cannot be quashed on the ground that civil proceedings can also be filed against the accused on the basis of same facts. It is now well settled legal position that both civil and criminal proceedings can proceed simultaneously, if essential ingredients of the offence are also made out. 12. Therefore, so far as offences under Sections 420 & 120-B IPC are concerned, it cannot be said that they are not even prima facie made out from the allegations levelled in the complaint lodged by the complainant-respondent. 13. Consequently, the misc. petition is partly allowed and the FIR No.309/2012 registered at Police Station Gandhi Nagar, Jaipur City (East) to the extent of offences under Sections 406 & 409 IPC is quashed, but to the extent of offences under Sections 420 & 120-B IPC, misc. petition is dismissed.