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2015 DIGILAW 278 (JHR)

Murlidhar Agarwal v. State of Jharkhand

2015-02-20

RONGON MUKHOPADHYAY

body2015
JUDGMENT : Heard Mr. P.A.S. Pati, learned counsel for the petitioners and Mr. Sumeet Gadodia, learned counsel for O.P. No. 2. 2. In this application, the petitioners have prayed for quashing the entire criminal proceedings in connection with Dhanbad Bank More P.S. Case No. 904 of 2012, corresponding to G.R. No. 3568 of 2012, which has been instituted for the offence punishable under sections 406 and 420 of the Indian Penal Code. 3. The prosecution story as would appear from the complaint petition originally instituted as C.P. Case No. 1874 of 2012 is that the complainant is the Director of M/s Dwarika Coke Pvt. Ltd. and the accused no. 1 is a Company registered under the Companies Act, whereas the accused no. 2 is the Director of accused no. 1. It has been stated therein that the complainant deals with coal and coke including pearl coke and since the accused persons were in need of pearl coke in their Ferro Alloys Factory, they requested the complainant to supply the said coke according to the specifications and thereby got issued purchase orders dated 30.12.2010. It has been alleged that on the instruction of the accused persons, pearl coke was supplied as per specification and quantities demanded and bills were raised accordingly. It has been alleged that the complainant supplied to the accused persons pearl coke through various bills and challans worth Rs.99,38,445.62/-and payment was made by the accused persons only to the tune of Rs.42,61,226.62/-and the outstanding amount to the tune of Rs.56,77,219.62 was not paid and in spite of the request by the complainant, the same was not acceded to. It was also alleged therein that the accused persons had sent Form-C to the complainant for the coke in question sold to them thereby admitting the transactions as well as the amount in question due. It has further been alleged that a legal notice was sent by the complainant on 1.3.2012 but in spite of the same neither the legal notice was replied to nor the amount outstanding was paid to the complainant. 4. It has further been alleged that a legal notice was sent by the complainant on 1.3.2012 but in spite of the same neither the legal notice was replied to nor the amount outstanding was paid to the complainant. 4. After the complaint case was instituted, the same was sent to the police under the provisions of Section 156(3) of the Code of Criminal Procedure for instituting and registering a case and pursuant thereto Dhanbad (Bankmore) P.S. Case No. 904 of 2012 was instituted for the offence punishable under sections 406 and 420 of the Indian Penal Code. 5. Learned counsel for the petitioner has submitted that the complaint petition reveals purely a case of civil nature inasmuch as the dispute is with respect to the alleged non payment of dues on account of supply of pearl coke to the complainant. He has further submitted that there is no deception on the part of the petitioner who has been arrayed as accused no. 2 being the Director of accused no. 1 from its inception and since the allegations are with respect to non payment of the outstanding dues to the complainant, no case under sections 406 and 420 of the Indian Penal Code is made out. In this context, he has referred to the judgments of Hon’ble Supreme Court rendered in the case of Vir Prakash Sharma Vs. Anil Kumar Agarwal & Anr., reported in (2007) 7 SCC 373 and in the case of Rashmi Jain Vs. State of Utter Pradesh and Anr., reported in (2014) 13 SCC 553. 6. Learned counsel for O.P. No. 2, on the other hand, has submitted that the allegations made in the complaint petition clearly reveal a case of breach of trust and cheating on the part of the petitioner since on the assurance of the petitioner that pearl coke, as per specifications and as per the required quantity was supplied, but the petitioner on one pretext or the other ignored in making rest amount of payment to the complainant. He has further submitted that paragraphs 4 and 7 of the original complaint petition signify the criminal intent on the part of the petitioner to cheat the complainant by his act of deception. He has further submitted that paragraphs 4 and 7 of the original complaint petition signify the criminal intent on the part of the petitioner to cheat the complainant by his act of deception. He has also submitted that infact the complainant would subsequently come to know that the petitioner is in the habit of convincing suppliers to supply coal on a credit basis but refuses to make payment, for which an instance has been highlighted with respect to institution of an FIR against the petitioner in a similar case being Dhansar P.S. Case No. 461 of 2014. It has also been submitted by the learned counsel for O.P. No. 2 that in Dhansar P.S. Case No. 461 of 2014, it has come to the knowledge of O.P. No. 2 that the petitioner was taken into judicial custody and is languishing in jail. Accordingly, he submits that in view of the antecedents of the petitioner and in view of the specific allegations levelled against him, a case under sections 406 and 420 of the Indian Penal Code is made out. Learned counsel for O.P. No. 2 has also placed reliance in the case of Vir Prakash Sharma Vs. Anil Kumar Agarwal & Anr., reported in (2007) 7 SCC 373 . 7. After hearing the learned counsel for the parties and after going through the records, I find that the original complaint petition, which was instituted by the opposite party no. 2, relates to a business transaction, which had been entered into by the petitioner and opposite party no. 2 with respect to supply of pearl coke to the petitioner as per his specifications and as per the quantity demanded by him. It has been admitted by opposite party no. 2 that on account of the said supply, an amount of Rs.42,61,226.62/-was received by the opposite party no. 2 but with respect to the balance amount, the same remained outstanding in spite of sending legal notice by O.P. No. 2 to the petitioner. The opposite party no. 2 in his original petition has also admitted the fact that Form-C was sent to the complainant for the coke in question thereby admitting the transaction, which was entered into by both the sides. This admissions on the part of the opposite party no. 2 signifies absence of deception on the part of the petitioner from its very inception. 2 in his original petition has also admitted the fact that Form-C was sent to the complainant for the coke in question thereby admitting the transaction, which was entered into by both the sides. This admissions on the part of the opposite party no. 2 signifies absence of deception on the part of the petitioner from its very inception. The case purely revolves around non payment of the outstanding dues to the opposite party no. 2. It is not the case of opposite party no. 2 that supply of pearl coke was made to the petitioner but no amount towards the said supply was ever received by the opposite party no. 2. These admissions on the part of the opposite party no. 2 clearly reveal that there was no criminal intent on the part of the petitioner in deceiving O.P. no. 2. 8. In the case of Vir Prakash Sharma (supra), it was held as follows:- 8. The dispute between the parties herein is essentially a civil dispute. Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Penal Code can be said to have been made out in the instant case. Section 405 of the Penal Code reads, thus: “405. Criminal breach of trust.—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’.” Neither any allegation has been made to show existence of the ingredients of the aforementioned provision nor any statement in that behalf has been made. 9. Ordinarily, bouncing of a cheque constitutes an offence under Section 138 of the Negotiable Instruments Act. No complaint thereunder had been taken. 10. We are, therefore, left only with the question as to whether in a situation of this nature any offence of cheating can be said to have been made out. 11. 9. Ordinarily, bouncing of a cheque constitutes an offence under Section 138 of the Negotiable Instruments Act. No complaint thereunder had been taken. 10. We are, therefore, left only with the question as to whether in a situation of this nature any offence of cheating can be said to have been made out. 11. Section 415 of the Penal Code defines cheating to mean: “415. Cheating.—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 is likely to cause damage or harm to that person in body, mind, reputation or property, is said to ‘cheat’.” 12. In Hridaya Ranjan Prasad Verma v. State of Bihar this Court held: (SCC pp. 176-77, paras 14-15) “14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of -acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest. 15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is, the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is, the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed.” (See also Indian Oil Corpn. v. NEPC India Ltd.) 9. Subsequently, in the said judgment while dealing with the ingredients of Section 420 of the Indian Penal Code, it was held as follows:- 13. The ingredients of Section 420 of the Penal Code are as follows: (i) Deception of any persons; (ii) Fraudulently or dishonestly inducing any person to deliver any property; or (iii) To consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. No act of inducement on the part of the appellant has been alleged by the respondent. No allegation has been made that he had an intention to cheat the respondent from the very inception. 14. What has been alleged in the complaint petition as also the statement of the complainant and his witnesses relate to his subsequent conduct. The date when such statements were allegedly made by the appellant had not been disclosed by the witnesses of the complainant. It is really absurd to opine that any such statement would be made by the appellant before all of them at the same time and that too in his own district. They, thus, appear to be wholly unnatural. 10. The date when such statements were allegedly made by the appellant had not been disclosed by the witnesses of the complainant. It is really absurd to opine that any such statement would be made by the appellant before all of them at the same time and that too in his own district. They, thus, appear to be wholly unnatural. 10. In the case of Rashmi Jain (supra), it was held as follows:- To take the complaint out of the realm of a purely civil dispute, it is maliciously alleged in the complaint that when Respondent 2 approached the appellant for payment, the appellant stated as follows: “On 22.3.2009, the applicant met the accused in the market of Bazarganj Saraitareen and asked for his balance amount, but the accused in the presence of two other persons flatly refused to pay the same and threatened the applicant that if he ever asked for the payment again he will be killed and stated that you don't know me. I have not paid to the high and mighty people, who are you. I had to usurp your money and I had done so. Thereafter she went in a car.” In our opinion, the aforesaid averment has been made only to foist criminal liability on the appellant by converting a purely civil dispute into criminal act, alleged to have been committed by the appellant. The allegations are absurd and outlandish on the face of it; firstly, the appellant is a lady, a widow, who was not accompanied by anybody else at the time of the alleged occurrence; secondly she though being a resident of Delhi, misbehaved with number of high and mighty parties with whom she had earlier transacted business at Moradabad. In our opinion, these are allegations which on the fact of it, cannot be taken seriously by any reasonable person. The High Court, in our opinion, has committed jurisdictional error in dismissing the criminal petition filed by the appellant on the ground that it involves disputed questions of fact, which can only be gone into by the trial court. 11. As has been indicated above, the original complaint petition does not reveal fraudulent or dishonest intention on the part of the petitioner from the very inception. The averments made in the original complaint petition by opposite party no. 11. As has been indicated above, the original complaint petition does not reveal fraudulent or dishonest intention on the part of the petitioner from the very inception. The averments made in the original complaint petition by opposite party no. 2 seem to make out a case of purely of a civil nature arising out of non payment of outstanding dues on account of business transaction between the petitioner and the opposite party no. 2. No doubt, an act may make out a civil wrong as well as a criminal offence but the real test is to determine as to whether the allegations make out the ingredients so as to constitute an offence under the Indian Penal Code and as has been held above, the allegation does appear to constitute purely a case of a civil nature in absence of any criminal intent on the part of the petitioner. 12. In such circumstances and in view of what has been held above, continuation of criminal proceeding as against the petitioner would be an abuse of the process of court and hence the same is liable to be quashed. 13. Accordingly, this application is allowed and the entire criminal proceeding in connection with Dhanbad Bank More P.S. Case No. 904 of 2012, corresponding to G.R. No. 3568 of 2012, which has been instituted for the offence punishable under sections 406 and 420 of the Indian Penal Code, is hereby quashed, so far as petitioner is concerned. 14. Consequently, I.A. No. 3736 of 2014 is disposed of.