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2017 DIGILAW 1380 (ALL)

SUKUMAR NAND LAL SHAH v. STATE OF U. P.

2017-05-24

SURYA PRAKASH KESARWANI

body2017
JUDGMENT : Hon'ble Surya Prakash Kesarwani,J. 1. Heard Sri Hitesh Pachori, learned counsel for the applicant, learned A.G.A. for the State and Sri D.K. Misra and I.K. Chaturvedi, learned counsel for opposite party no.2. 2. Briefly stated, the facts of the present case are that the opposite party no.2 is a Company incorporated under the Companies Act having its registered office at Delhi and Head Office at Block 54, Sanjay Place, Agra. The applicant company is also incorporated under the Companies Act, having its registered office at Thane (Maharashtra). 3. As per paragraph-2 of the complaint, the applicant herein and Sri Rahul Sukumar Shah (son of the applicant herein) came to the office of the complainant-opposite party no.2 at Agra and demanded loan and gave assurance that they have well understood the terms and conditions and the rules and further assured that all the instalments shall be paid in time. A loan of Rs.70,00,000/- was sanctioned by the opposite party no.2 on 1.8.2013. The accused-applicant assured the opposite party no.2 for payment of loan under the agreement executed on 1.8.2013. 4. It is alleged in paragraph-4 of the complaint that the accused were having deceitful intention from the very beginning and to gain trust of the opposite party no.2, they initially, paid certain instalments and thereafter, they did not pay any single penny and thus, they cheated the opposite party no.2. 5- It is stated in paragraph-6 of the complaint that in their evil design to do so and to cause loss to the opposite party no.2 by cheating, the accused Rahul Sukumar fled away to Canada. It is stated in paragraph-7 of the complaint that on 21.5.2014 at about 1.00 p.m. two persons came at the office of the opposite party no.2 and said that the accused-applicant has sent the message that the opposite party no.2 should not make any effort either to recover the loan or to initiate any legal proceeding and if the opposite party no.2 does so, then he has to face dire consequences. Further allegations have made in paragraph-8 of the complaint for cheating and breach of trust. 6. The statements under sections 200 and 202 Cr.P.C. were recorded which supported the complaint version. On these facts the learned Additional Chief Judicial Magistrate (Court No.4), Agra, passed the impugned summoning order dated 12.4.2016 in Complaint Case No.1861 of 2014 (S.E. Investment Ltd. Vs. Further allegations have made in paragraph-8 of the complaint for cheating and breach of trust. 6. The statements under sections 200 and 202 Cr.P.C. were recorded which supported the complaint version. On these facts the learned Additional Chief Judicial Magistrate (Court No.4), Agra, passed the impugned summoning order dated 12.4.2016 in Complaint Case No.1861 of 2014 (S.E. Investment Ltd. Vs. M/s Texplast and others), under Section 420 I.P.C., P.S. Hari Parvat, district Agra, whereby the applicant and his son Sri Rahul Sukumar have been summoned under section 420 I.P.C. 7. Submission of the learned counsel for the applicant is that as per hypothecation/loan agreement dated 1.8.2013 entered between the applicant and the opposite party no.2, a sum of Rs.70,00,000/- was given as loan by the opposite party no.2 to M/s. Taxplast Industries Ltd., the applicant and Sri Rahul Sukumar. It is submitted that as per Clause-22 of the agreement, the Courts at New Delhi subject to arbitration clause, have exclusive jurisdiction in the event of any disputes and differences arising between the parties. It is submitted that it is a civil dispute and, therefore, the impugned proceedings of complaint case is merely an abuse of the process of Court. He submits that the opposite party no.2 has tried to convert the civil dispute in criminal case. 8. In support of his submission the learned counsel for the applicant has relied upon the judgment of Hon'ble Supreme Court in V.P. Srivastava v. Indian Explosive Ltd. and others, 2010 (10) SCC 361 (Paragraph no.26), the judgment of this Court in the case of K.L. Agarwal, Ashok Agrawal, Arun Agarwal v. State of U.P. and another, 2016 (11) ADJ 808 (Paragraph Nos. 15,17 and 24) and the judgment in the case of M/s. Ankur Steel Corporation v. M/s Ashoka Merchantile Limited, (2016)5 ADJ 141 (paragraph no.7). 9. Sri I.K. Chaturvedi, learned counsel for the opposite no.2 submits that in the present set of facts, the offence under section 420 I.P.C. has been prima-facie made out and, therefore, even if there is civil remedy, it can not bar the institution of the criminal case. In support of his submission he relied upon the decision of Hon'ble Supreme Court in the case of Indian Oil Corporation v. NEPC India Ltd. & others, 2006 (6) SCC736 (paragraph Nos. 11,12 and 13) and Iqbal Singh Marwah v. Meenakshi Marwah, 2005 SC 486 (paragraph Nos. In support of his submission he relied upon the decision of Hon'ble Supreme Court in the case of Indian Oil Corporation v. NEPC India Ltd. & others, 2006 (6) SCC736 (paragraph Nos. 11,12 and 13) and Iqbal Singh Marwah v. Meenakshi Marwah, 2005 SC 486 (paragraph Nos. 24, 25 and 26). He further submits that the existence of the arbitration clause in the agreement or the remedy of arbitration is not a bar in institution of a criminal case, inasmuch as the arbitrator can not conduct any trial for acts amounting to an offence. He submits that the offence has been committed within the jurisdiction of the criminal court at Agra and, therefore, the concerned court below has committed no error to take cognizance in view of the provisions of Section 200 and 202 Cr.P.C. He relied upon the decision of Hon'ble Supreme Court in the case of Trisuns Chemical Industry v. Rajesh Agarwal, 1999 (8) SCC 686 (Paragraph Nos. 9, 11, 12, 13, 14 and 15). 10. I have carefully considered the submissions of the learned counsel for the parties. 11. In paragraph-15 of the affidavit accompanying application, the applicant has clearly stated that the opposite party no.2 has invoked the arbitration clause under the agreement and one Sri L.C. Jain was appointed as sole arbitrator to adjudicate the Arbitration Case No.ARB/LCJ/28/14 filed by opposite party no.2 in which there is no allegation of cheating or fraud against the applicant. This paragraph has been replied by the opposite party no.2 in paragraph-10 of the counter affidavit in which these facts, have not been disputed or denied. Instead the opposite party no.2 has merely stated that the arbitrator has passed the award on 28.3.2016, but the accused-applicant has not paid even a single penny till date which establishes his fraudulent and maladfide intention. 12. It is stated in paragraph-7 of the rejoinder affidavit that the award has been challenged by the applicant before Hon'ble Delhi High Court in Petition No.OMP (Common) 160/2017 in which an interim order has been passed and the matter is subjudice before Delhi High Court. 13. Thus, with respect to the acts of the parties and subject matter of the agreement in question the opposite party no.2 has already invoked arbitration clause. 13. Thus, with respect to the acts of the parties and subject matter of the agreement in question the opposite party no.2 has already invoked arbitration clause. The Arbitrator has given award which has been challenged in a petition before the Delhi High Court in which an interim order has been passed. The object behind institution of the complaint case in question by the opposite party no.2 is reflected from the averments made by the opposite party no.2 in para-10 of the counter affidavit that despite award dated 28.3.2016, the accused applicant has not paid single penny. On these facts it cannot be said that any element of cheating is involved in the present case. 14. In the case of V.P. Srivastava v. Indian Explosive Ltd. and others (supra) relied upon by the learned counsel for the applicant, the facts were that on account some agreement some ammonium nitrate was supplied by FCIL through IEL but subsequently, the supply was stopped. The Board of Directors of FCIL resolved that the company had become a sick company and hence a reference should be filed before the BIFR. The FCIL was declared as sick company on 6.11.1992. The BIFR formed its final opinion for winding up of FCIL and forwarded the same to Delhi High Court. Some writ petitions were also filed before the High Court. On these facts, the IEL instituted a criminal case under sections 120-B, 406 and 420 read with Sections 540 and 542 of the Companies Act,1956 against the applicants and another before the Supreme Court. On these facts Hon'ble Supreme Court held that "the substance of the complaint" is to be seen. Mere use of the expression 'cheating' in the complaint is of no consequence. The facts of the present case as stated in the complaint and supported by the statements under sections 200 and 202 Cr.P.C., prima-facie, does not show commission of offence under section 420 I.P.C. 15. The judgment in the case of M/s.Ankur Steel Corporation (supra) relied by the learned counsel for the applicant has no relevance on the facts of the present case, inasmuch as, it deals with the place of suing under section 15 to 20 of the Code of Civil Procedure. In the case of Iqbal Singh Marwah (supra), Hon'ble Supreme Court considered the question of conflict between civil and criminal cases and held as under : "24. In the case of Iqbal Singh Marwah (supra), Hon'ble Supreme Court considered the question of conflict between civil and criminal cases and held as under : "24. Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal Courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given. There is neither any statutory provision nor any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein. While examining a similar contention in an appeal against an order directing filing of a complaint under Section 476 of old Code, the following observations made by a Constitution Bench in M.S. Sheriff vs. State of Madras AIR 1954 SC 397 give a complete answer to the problem posed : "(15) As between the civil and the criminal proceedings we are of the opinion that the criminal matters should be given precedence. There is some difference of opinion in the High Courts of India on this point. No hard and fast rule can be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal Courts is a relevant consideration. The law envisages such an eventuality when it expressly refrains from making the decision of one Court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages. The only relevant consideration here is the likelihood of embarrassment. (16) Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prosecution should wait till everybody concerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure; that the guilty should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. The public interests demand that criminal justice should be swift and sure; that the guilty should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too dim to trust. This, however, is not a hard and fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it inexpedient to stay it in order to give precedence to a prosecution ordered under S.476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished." 16. In the case of Trisuns Chemical Industry (supra), Hon'ble Supreme Court considered the question of jurisdiction in the event of availability of remedy of arbitration and held as under : "(9). WE are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases as indicated in State of Haryana vs. Bhajaj Lal (Supra). (11). IT is an erroneous view that the Magistrate taking cognizance of an offence must necessarily have territorial jurisdiction to try the case as well. Ch. XIII of the Code relates to jurisdiction of the criminal courts "in enquiries and trials." That Ch. contains provisions regarding the place where the enquiry and trial are to take place. (11). IT is an erroneous view that the Magistrate taking cognizance of an offence must necessarily have territorial jurisdiction to try the case as well. Ch. XIII of the Code relates to jurisdiction of the criminal courts "in enquiries and trials." That Ch. contains provisions regarding the place where the enquiry and trial are to take place. Section 177 says that "every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed." But section 179 says that when an act is an offence by reason of anything which has been done and of a consequence which has ensued, the place of enquiry and trial can as well be in a court within whose local jurisdiction such thing has been done or such consequence has ensued.. It cannot be overlooked that the said provisions do not trammel the powers of any court to take cognizance of the offence. Power of the court to take cognizance of the offence is laid in Section 190 of the Code. Sub-sections (1) & (2) read thus: "(I) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under sub-section (2), may take cognizance of any offence-(a) Upon receiving a complaint of facts which constitute such offence; (b) Upon a police report of such facts; (c) Upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed. (ii) The Chief Judicial Magistrate may empower any Magistrate of the second class to take cognizance under sub-section (1) of such offences as are within his competence to inquire into or try." (12) SECTION 193 imposes a restriction on the court of sessions to take cognizance of any offence as a court of original jurisdiction. But any Magistrate of the First Class has the power to take cognizance of any offence, no matter that the offence was committed within his jurisdiction or not. (13) THE only restriction contained in Section 190 is that the power to take cognizance is "subject to the provisions of this Chapter." There are 9 Sections in Chapter XIV most of which contain one or other restriction imposed on the power of a first class magistrate in taking cognizance of an offence. (13) THE only restriction contained in Section 190 is that the power to take cognizance is "subject to the provisions of this Chapter." There are 9 Sections in Chapter XIV most of which contain one or other restriction imposed on the power of a first class magistrate in taking cognizance of an offence. But none of them incorporates any curtailment on such powers in relation to territorial barrier. In the corresponding provision in the old Code of Criminal Procedure (1898) the commencing words were like these: "Except as hereinafter provided." Those words are now replaced by "Subject to the provisions of this chapter." Therefore, when there is nothing in Chapter XIV of the Code to impair the power of a judicial magistrate of first class taking cognizance of the offence on the strength of any territorial reason it is impermissible to deprive such a magistrate of the power to take cognizance of an offence- of course, in certain special enactments special provisions are incorporated for restricting the power of taking cognizance of offences falling under such acts. But such provisions are protected by non-obstante clauses. Any way that is a different matter. (14) The jurisdictional aspect becomes relevant only when the question of enquiry or trial arises. It is therefore a fallacious thinking that only a magistrate having jurisdiction to try the case has the power to take cognizance of the offence. If he is a Magistrate of the First Class his power to take cognizance of the offence is not impaired by territorial restrictions. After taking cognizance he may have to decide as to the court which has jurisdiction to enquire into or try the offence and that situation would reach only during the post cognizance stage and not earlier. (15) UNFORTUNATELY, the High court, without considering any of the aforesaid legal aspects rushed to the erroneous conclusion that the "judicial magistrate of first class, Gandhidham has no power to take cognizance of the offences alleged" merely because such offences could have been committed outside the territorial limits of the State of Gujrat. Even otherwise, without being apprised of the fuller conspectus a decision on the question of jurisdiction should not have been taken by the High court at a grossly premature stage as this." (Emphasis supplied by me) 17. Even otherwise, without being apprised of the fuller conspectus a decision on the question of jurisdiction should not have been taken by the High court at a grossly premature stage as this." (Emphasis supplied by me) 17. In the case of State of Haryana and others v. Bhajan Lal and others, 1992 (Suppl.1) SCC 335 (Paragraph 102 and 103), Hon'ble Supreme Court carved out the cogent reasons by way of illustration wherein power under Section 482 Cr.P.C. should be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice as under : "102. In the backdrop of the interpretation of the various relevant provisions of the ode under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1) where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not primafacie constitute any offence or make out a case against the accused. (2) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) where the uncontroverted allegations made in the FIR or 'complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (3) where the uncontroverted allegations made in the FIR or 'complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) where a criminal proceeding is manifestly attended with malafide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. 103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases, that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice." 18. In the case of Rajeev Thapar v. Madan Lal Kapoor 2013 (3) SCC 330 (Paragraph 30), Hon'ble Supreme Court laid down certain parameters to be followed by High Court, while exercising the inherent power under Article 227 or the inherent power under Section 482 of the Code. "30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashing, raised by an accused by invoking the power vested in the High Court under Section 482 of the Cr.P.C.:- 30.1. "30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashing, raised by an accused by invoking the power vested in the High Court under Section 482 of the Cr.P.C.:- 30.1. Step one: whether the material relied upon by the accused is sound, reasonable, and indubitable, i.e., the material is of sterling and impeccable quality? 30.2. Step two: whether the material relied upon by the accused, would rule out the assertions contained in the charges levelled against the accused, i.e., the material is sufficient to reject and overrule the factual assertions contained in the complaint, i.e., the material is such, as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false. 30.3. Step three: whether the material relied upon by the accused, has not been refuted by the prosecution/complainant; and/or the material is such, that it cannot be justifiably refuted by the prosecution/complainant? 30.4. Step four: whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice? 30.5. If the answer to all the steps is in the affirmative, judicial conscience of the High Court should persuade it to quash such criminal proceedings, in exercise of power vested in it under Section 482 of the Cr.P.C. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as, proceedings arising therefrom) specially when, it is clear that the same would not conclude in the conviction of the accused." (Emphasis supplied by me) 19. The law laid down by Hon'ble Supreme Court in the case of Bhajan Lal (supra) and Rajeev Thapar (supra) has been followed and reiterated by Hon'ble Supreme Court in the case of Aman Ullah and another v. State of Bihar and others, 2016 (6) SCC 699 (paragraph 26 and 27). 20. The averments made in the affidavit accompanying application, the documents annexed and the counter affidavit filed by opposite party no.2 and the rejoinder affidavit filed by the applicant indicate the following undisputed facts giving rise to the present application: (i). 20. The averments made in the affidavit accompanying application, the documents annexed and the counter affidavit filed by opposite party no.2 and the rejoinder affidavit filed by the applicant indicate the following undisputed facts giving rise to the present application: (i). M/s Texplast Industries Limited of which the applicant is a Director as well as Guarantor, has applied for loan to the opposite party no.2 and a sum of Rs. 70,00,000/- as loan was sanctioned and disbursed by the opposite party no.2 to the aforesaid M/s Texplast Industries Limited through its Director, namely, the applicant and his son Rahul Sukumar Shah and a hypothecation/loan agreement was duly executed between the opposite party no.2 and the aforesaid company/applicant/borrower/ guarantor. (ii). Para Nos. 20, 21 and 22 of the aforesaid hypothecation/loan agreement contain an arbitration clause and the clause for jurisdiction of courts as under : "20. Any conflict, difference, controversies, or disputes arising between the parties shall be resolved amicably at the first instance. Unresolved dispute, if any, shall be submitted/referred to the arbitration of the Sole Arbitrator. Sole Arbitrator shall be nominated/appointed by S.E. Investments Ltd. The Arbitration shall be conducted in accordance with the provisions of Arbitration and Conciliation Act, 1996 and Rules thereunder, any amendments, or re-enactments thereto and the language of the Arbitration shall be English. The decision/award of the Arbitrator shall be final/conclusive and binding on the parties. The venue of Arbitration shall be at New Delhi. (21) the borrower hereby undertakes and covenant that : (a) In case there is default in repayment of any one or more instalments for any reason what soever the company has rights to depute a chartered Accountant for verification of the accounts of the borrower's at cost for which the borrower shall have no objection and extent full cooperation to the person so deputed. (b) Submit half yearly and audited yearly balance sheet to the company immediately on preparation/completion of audit along with audit report and tax audit report. Non-submission of balance sheets in above manner shall be treated as breach of trust. (c) shall keep the company informed of all the fresh limits sanction to it or modification to the existing limit made from time to time or any other credit facility availed by it through banking channel or through other financial institution. Non-submission of balance sheets in above manner shall be treated as breach of trust. (c) shall keep the company informed of all the fresh limits sanction to it or modification to the existing limit made from time to time or any other credit facility availed by it through banking channel or through other financial institution. (22) The Courts at New Delhi shall, subject to arbitration clause above, have exclusive jurisdiction under this Agreement in the event of any dispute(s) and difference (s) arising between the parties." (iii) Undisputedly, the company/borrower/guarantor failed to pay the instalments under the aforesaid agreement. Consequently, the opposite party no.2 invoked the arbitration clause and appointed Sri L.C. Jain as sole Arbitrator. The opposite party no.2 submitted a statement of claim before the Arbitrator on 30.8.2014. There is no allegation of cheating or fraud against the applicant/borrower company. (iv) The only allegation of criminal act against the borrower company/ the applicant is in para-17 of the statement of claim filed by the opposite party no.2 before the Arbitrator in which allegation of criminal breach of trust under Sections 406 and 409 I.P.C. and fabricated and false allegation under sections 191 and 192 I.P.C. have been made. (v) The statement of claim dated 30.8.2014 filed by the opposite party no.2, as aforementioned is an act subsequent to the filing of the complaint case in question i.e., the complaint Case No.186 of 2013 dated 10.6.2014. (vi) The crux of the complaint-application dated 10.6.2014 is that the applicant/guarantor were legally bound to return the loan amount to the opposite party no. 2, but they deliberately did not pay and stopped payment of instalments after 3.6.2014 and thus attempted to usurp a sum of Rs.79,55,372/- which were in arrears. (vii) The Arbitrator gave his award dated 28.3.2016, which was challenged by the applicant/borrower before Delhi High Court by means of Petition No. OMP (Common) 160/2017 in which an interim order has been passed and the matter is sub-judice before Delhi High Court. (viii)- The grievance of the opposite party no.2 is reflected in the averments made in paragraph no.10 of the counter affidavit in which it has been stated that despite award dated 28.3.2016 the accused applicant has not paid single penny. 21. (viii)- The grievance of the opposite party no.2 is reflected in the averments made in paragraph no.10 of the counter affidavit in which it has been stated that despite award dated 28.3.2016 the accused applicant has not paid single penny. 21. The undisputed facts, as briefly noted above, leaves no manner of doubt that there is some dispute between the applicant and the opposite party no.2 arising from the loan agreement, dated 1.8.2013 and in terms of Clause-20 of the agreement, the matter was referred by the opposite party no.2 to the Arbitrator. Before the Arbitrator, the opposite party no.2 filed a statement of claim dated 30.8.2014 which does not contain any allegation of cheating. The arbitrator has given his award dated 28.3.2016, which has been challenged by the applicant/borrower company before the Delhi High Court in Petition No. OMP (Common) 160/2017 in which an interim order has been passed and the matter is sub-judice. 22. The grievance of the opposite party no.2 is reflected from own averments in paragraph no.10 of the counter affidavit in which it has been stated that despite award dated 23.8.2016, the accused/applicant has not paid even a single penny. The averments have been made in the complaint dated 10.6.2014 with respect to non-return of the loan amount and interest by the applicant to the opposite party no.2. It is also important to note here that clause-10 of the Hypothecation/loan agreement dated 1.8.2013, as quoted above, clearly indicates that the opposite party no.2, in case of default in re-payment of loan or one or more instalments for any reason, whatsoever, has a right to depute chartered accountant for verification of the accounts of the borrower. Thus, the opposite party no.2 was having access for verification of the account of the borrower company by deputing a Chartered Accountant. The borrower was also to submit half yearly balance sheet and audited yearly balance sheet along with tax audit report as per Sub clause (b) of Clause 21 of the agreement, to the opposite party no.2. Thus, the opposite party no.2 was also having access to the balance sheet of the borrower company. These materials being own documents of the opposite party no.2 are such as would persuade a reasonable person to dismiss and condemn the factual basis of the accusation as false. Thus, the opposite party no.2 was also having access to the balance sheet of the borrower company. These materials being own documents of the opposite party no.2 are such as would persuade a reasonable person to dismiss and condemn the factual basis of the accusation as false. The material referred by the accused-applicant, as briefly noted in the preceding paragraphs, has not been refuted by the complainant-opposite party no.2 being its own documents or the arbitration award and the interim order passed by the Delhi High Court. 23. Considering all these facts, I have no hesitation to hold that the impugned proceedings of the Complaint Case No.1861 of 2014 (S.E. Investment Ltd. Vs. M/s Texplast and others), under Section 420 I.P.C., P.S. Hari Parvat, district Agra, is an abuse of the process of Court and would not serve the ends of justice. 24. In view of the aforesaid, the impugned criminal proceeding is manifestly attended with malafide and the proceedings have been maliciously instituted. Consequently, the proceedings cannot be sustained. The application is allowed. The impugned summoning order dated 12.4.2016 passed by the A.C.J.M. (Court No.4), Agra in Complaint Case No.1861 of 2014 (S.E. Investment Ltd. Vs. M/s Texplast and others), under Section 420 I.P.C., P.S. Hari Parvat, district Agra, is hereby quashed.