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Gujarat High Court · body

2017 DIGILAW 1919 (GUJ)

Manish Jitendrabhai Joshi v. State of Gujarat

2017-12-15

B.N.KARIA

body2017
JUDGMENT : 1. The present application has been preferred by the applicant/original accused no.2 under Section 482 of the Code of Criminal Procedure (for brevity “CrPC”) praying to quash and set aside the complaint, being C.R. No. I-545 of 2010 registered with Naroda Police Station, Ahmedabad for an offence punishable under Sections 406, 420 and 114 of the Indian Penal Code, so also to quash entire proceedings of Criminal Case No. 4/2011 pending in the court of learned Metropolitan Magistrate, Court No. 18, Ahmedabad. 2. Brief facts of the case are that the complainant was a running partner in a partnership firm comprising of family members under the name and style of “Sona Trading” since 20 years and doing business of sale and purchase of grains as well as running a Rice Mill in the name of “Kishan Rice Mill” in partnership, which is closed since three years. That, as the complainant was intending to give rice mill on rent, one Kodarbhai J. Prajapati came with (1) Rameshbhai N. Gondaliya (accused no.1) and (2) Manishbhai J. Joshi (accused no.2) and both had a talk with the complainant to run the rice mill on rent and on 25.10.2008, a rent agreement was entered between them and Rameshbhai and Manishbhai gave Rs. 2 lacs by cheque as deposit and thereafter, both have paid rent of Rs. 40,000/- per month up to one year and during that time, both have purchased ‘Dangar’ from Sona Trading and that amount was also paid and they were running business in the name of Vimal Mamra Factory. Thereafter, the rent agreement was renewed on 29.10.2009 by fixing rent at Rs. 50,000/- per month, and thereafter, rent was due from 01.11.2009, and Rameshbhai and Manishbhai, for their business, purchased Dangar (grains) of Rs. 13,55,881/- from the complainant and out of that cash amount of Rs. 3,80,000/- was paid and Rs. 9,75,881/- was outstanding and in March 2010, the Accountant informed the complainant that Rameshbhai and Manishbhai went away. Thereafter, complainant contacted telephonically and met Rameshbhai and Manishbhai for payment, but they did not give the outstanding amount. 13,55,881/- from the complainant and out of that cash amount of Rs. 3,80,000/- was paid and Rs. 9,75,881/- was outstanding and in March 2010, the Accountant informed the complainant that Rameshbhai and Manishbhai went away. Thereafter, complainant contacted telephonically and met Rameshbhai and Manishbhai for payment, but they did not give the outstanding amount. That, before starting business in Ahmedabad District with Rameshbhai Gondaliya-accused in partnership, he was doing business with Rameshbhai Gondaliya and Pravinbhai at Gondal in partnership for about two years in the name of Vimal Mamra Factory by taking the factory of respondent no.2 on rent by an agreement for one year @ Rs. 45,000/- per month and they had given Rs. 2,00,000/- advance on account of deposit, which was paid to the respondent no.2-complainant, thereafter, the rent agreement was renewed and firm suffered losses and it was not possible to run the business and later on, the factory was closed in the month of February 2010. That, the accused no.1-Rameshbhai was handling accounts and managing the same. The applicant was informed by Rameshbhai that the account of the complainant-respondent was cleared. Thereafter, the applicant came back to Gondal and started business of commission out of the Mamara (goods) being delivered to Gudgaon, UP and Maharashtra for about one and half year. Thereafter, applicant again started business of packing Mamra (goods) in partnership with other persons in the name and style of “Sadashiv” at Gondal and presently doing the same. For the purpose of running a Mamra factory in the rented premises i.e., Mill of the complainant-respondent no.2, the partners have purchased machineries worth Rs. 10 lacs from the amount of partnership firm and installed in the Factory. The applicant came to know from Rameshbhai Gondaliya that those machineries were sold out by the respondent no.2-complainant in Rs. 5 lacs to the third party, without even informing the partners of Vimal Mamra Factory. As the firm-Vimal Mamra was not in position to continue with the business and was not in a position to pay rent and could not pay the rent from 01.11.2009 to February 2011, the respondent no.2-complainant filed the impugned complaint. 3. Heard learned advocate Mr. Tushar L. Sheth appearing on behalf of the applicant, learned advocate Mr. Vilav K. Bhatiya appearing on behalf of the respondent no.2 and learned APP Mr. LB Dabhi appearing on behalf of the respondent No.1-State. 4. Learned advocate Mr. 3. Heard learned advocate Mr. Tushar L. Sheth appearing on behalf of the applicant, learned advocate Mr. Vilav K. Bhatiya appearing on behalf of the respondent no.2 and learned APP Mr. LB Dabhi appearing on behalf of the respondent No.1-State. 4. Learned advocate Mr. Tushar L. Sheth appearing on behalf of the applicant has submitted that the present complaint has been filed on 20.09.2010 ie., after two years from the date of business transaction. That, when there is a sale transaction between the parties, provisions of Sections 406 and 420 IPC are not attracted. It is further submitted that no case is made out by the complainant under Sections 406, 420 IPC, as there are no ingredients of Section of fraudulently or inducing the complainant to deliver any property to the petitioner. That, no details of goods are given in the entire charge-sheet, which has been filed by the Investigating Agency. That, there was no intention on the part of the petitioner to cheat or to deceive the complainant. As per the averments made in the complaint, some material was purchased in consideration of Rs. 13 (Thirteen) lacs and the amount was not paid by the petitioner. That, these averments if are accepted as true, then it would treated to be a contract in existence between the parties. That, the rent agreement executed between the parties was extended thereafter. That, though, it was a pure civil dispute, the complainant has tried to convert it into a criminal dispute. That, continuing of criminal proceedings against the petitioner would amount to abuse of process of the Court. That, the Police Officer, investigate the allegation made in the FIR, has filed charge-sheet against the petitioner wrongly. In support of his arguments, he has relied upon decisions in the cases of (a) M/s. HICEL Pharma Limited & Ors., v. State of Andhra Pradesh & Ors., reported in 2000 CR.L.J. 2566, (b) Vir Prakash Sharma v. Anil Kumar Agarwal & Anr., reported in (2007) 7 SCC 373 , (c) G. Sagar Suri & Anr., v. State of U.P. & Anr., reported in (2000) 2 SCC 636 and (d) Hridaya Ranjan Prasad Verma & Anr., v. State of Bihar & Anr., reported in (2000)4 SCC 168 . Ultimately, it was requested by him to quash and set aside the impugned complaint lodged at Naroda Police Station, being C.R. No. 545/2010 on 20.09.2010 for the offence punishable under Sections 406, 420 and 114 IPC and subsequent proceedings in Criminal Case No. 4/2011 pending in the court of learned Metropolitan Magistrate, Ahmedabad. 5. Mr. Vilav K. Bhatia, learned advocate appearing on behalf of the respondent no.2 strongly opposed the submissions made by learned advocate for the petitioner and submitted that there was a clear deception by the petitioner, who fraudulently and dishonestly induced the respondent no.2 to deliver the goods to him and retained the property supplied by the respondent no.2. That, intention of the petitioner for cheating is clearly established by the complainant by making necessary averments in his complaint. That, property/goods supplied by the complainant was used by the petitioner for a period of 1 year, as he had purchased the goods in consideration of Rs. 13(Thirteen) lacs and the amount was not paid, though, demanded frequently from the petitioner. That, the contract was in existence and rent agreement was extended. He has relied upon the statement of Vishnubhai Kacharabhai, who supported the allegations made by the complainant in his complaint stating that within overnight, the business was closed by the petitioner. That, it was a clear case of cheating and criminal breach of trust by the petitioner. That, after completing the investigation, Police has filed charge-sheet against the petitioner and criminal case is pending before the learned Metropolitan Magistrate Court at Ahmedabad. That, this would be a premature stage to accept the prayer of the petitioner to quash the complaint. That, a prima facie case is made out against the petitioner, as the sufficient evidence is available with Investigating Agency. That, no power may be exercised in favour of the petitioner under section 482 CrPC. Hence, it was requested by him to dismiss the petition. 6. Mr. LB Dabhi, learned APP appearing on behalf of the respondent no.1-State has supported the arguments advanced by the learned advocate Mr. Bhatiya for the complainant and further submitted that the conduct of the petitioner needs to be considered by this Court, at this stage. That, intention to commit cheating is prima facie established by making necessary averments in his complaint by the respondent no.2. Bhatiya for the complainant and further submitted that the conduct of the petitioner needs to be considered by this Court, at this stage. That, intention to commit cheating is prima facie established by making necessary averments in his complaint by the respondent no.2. That, without trial, no prayer can be accepted by exercising the powers under Section 482 CrPC by this Court, as the investigating agency, after collecting the material evidence against the petitioner, has filed the charge-sheet. Hence, it was requested by him to dismiss the petition. 7. Having considered the facts of the case and submissions made by learned advocates appearing on behalf of the respective parties as well as learned APP appearing on behalf of the respondent no.1-State, when the petition is filed for quashing the complaint and criminal proceedings initiated under the basis of the complaint, this Court would like to refer the definition of Section 415 CrPC, which defines cheating, as under: Section 415 IPC which defines cheating requires- (1) Deception of any person. (2) (a) Fraudulently or dishonestly inducing that person (i) to deliver any property to any person; or (ii) to consent that any person shall retain any property; or (b) intentionally inducing that person 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. 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. 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. 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. 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 to 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. 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. 8. It appears that on 20th September 2010, the respondent no.2 lodged a complaint against the present petitioner and other co-accused alleging that he is running partnership firm in the name of Sona Trading since 20 years and doing business of sell and purchase of grains and also running rice mill in the name of Kishan Rice Mill, which was closed since last three years. It is alleged that on 25th October 2008, as the complainant was intending to give rice mill on rent, one Kodarbhai J. Prajapati came with Rameshbhai N. Gondaliya (accused no.1) and the present petitioner and both had talked with the complainant to occupy the rice mill on rental basis. A rent agreement was executed between them on the very same day and the petitioner and one Shri Rameshbhai gondaliya paid Rs. 2 lacs by way of cheque to the complainant, and thereafter, paid Rs. 40,000/- as rent, as agreed for the period of one year to the complainant per month. A rent agreement was executed between them on the very same day and the petitioner and one Shri Rameshbhai gondaliya paid Rs. 2 lacs by way of cheque to the complainant, and thereafter, paid Rs. 40,000/- as rent, as agreed for the period of one year to the complainant per month. It is further alleged in the complaint that during this period, present petitioner and co-accused Rameshbhai purchased Dangar (grains) from the partnership firm namely “Sona Traders” and the amount of outstanding account of purchasing the goods was paid, as they were running their business in the name and style of Vimal Mamara Factory. As per the agreement of rent, it was renewed on 29th October 2009 and rent was increased to Rs. 50,000/- per month. As rent was due from the petitioner and co-accused, as stated on 1st November 2009, both of them purchased the goods Dangar(Grains) for consideration of Rs. 13,55,881/- from the complainant and out of that they paid Rs. 3,80,000/- to the complainant by cash and remaining amount of Rs. 9,57,881/- was outstanding. The complainant came to know in March 2010 from his Accountant that the present petitioner and the co-accused have fled away from the premises rented to them, and therefore, the complainant tried to contact them telephonically and had even paid visit for recovery of remaining due, but they did not repay the outstanding amount to the complainant saying that complainant can do whatever he deems fit and they would not pay outstanding amount to him. Hence, as per the allegations made in the complaint initially cordial relationship was maintained by both of the accused with the complainant during one year and a trust was developed, however, payment accrued towards purchase of crops of danger (grain) and machineries by them between 11.09.2009 and March 2010 for a total consideration of Rs. 13,55,881/- and Rs. Rs. 9,57,881/- still remained outstanding to be paid by them. Hence, offence of cheating was committed by the accused and hence, a complaint was lodged. From the averments made, prima facie, it appears that some goods ‘Danger’ was purchased by the present petitioner and co-accused from the complainant and certain amount was initially paid by them, however certain amount still remained outstanding to the tune of Rs. Hence, offence of cheating was committed by the accused and hence, a complaint was lodged. From the averments made, prima facie, it appears that some goods ‘Danger’ was purchased by the present petitioner and co-accused from the complainant and certain amount was initially paid by them, however certain amount still remained outstanding to the tune of Rs. 9,57,881/- which was demanded by him, but the present petitioner and the other co-accused refused to clear the outstanding amount, and hence, a complaint was lodged by him. Prima facie, the dispute between the parties herein essentially appears to be a civil dispute. Non-payment or underpayment of the price of goods by itself does not constitute an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust, as contained in section 405 IPC reads, prima facie appears to have been committed. Apt, it would be, to reproduce the Section 405 IPC, which 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 willfully suffers any other person so to do, commits ‘criminal breach of trust’. 9. The complainant in his complaint has made no ingredients of the aforementioned provision nor any statement in that behalf has been made. If we consider the facts of the case in context of Section 415 IPC to consider an offence of cheating, the accused ought to have deceived the complainant and fraudulently or dishonestly induced him to deliver any property to the petitioner. Here, delivery of goods i.e., “Dangar” (Grains) was sold by the complainant to the present petitioner and co-accused is a normal course of business sale transaction. In absence of any specific allegation that at the time of sale, the accused made any specific representation which was found to be false and deceptive and that the accused made such false representation fraudulently induced the complainant to deliver the goods are not satisfying the requirement of first part of Section 415 IPC. In absence of any specific allegation that at the time of sale, the accused made any specific representation which was found to be false and deceptive and that the accused made such false representation fraudulently induced the complainant to deliver the goods are not satisfying the requirement of first part of Section 415 IPC. Admittedly, as seen from allegations made in the complaint, it is a normal sale transaction in which the complainant supplied goods to the accused on credit. Non-payment of the amount due, as claimed, does not lead to involvement of the applicant in any deceitful act or false representation, which induces the complainant to do or commit to do anything, as contemplated in Section 415 IPC. Thus, the facts as narrated in the complaint relating to the sale of goods and the issue of non paying of outstanding amount towards sale of goods on credit do not make out any case, constituting ingredients of an offence of cheating, as defined in Section 415 IPC. The same view was taken by the High Court of Andhra Pradesh in a case of M/s. HICEL Pharma Limited & Ors., v. State of Andhra Pradesh & Ors., reported in 2000 CR.L.J. 2566. True that, here two witnesses in their statements under section 162 CrPC, have tried to support the complainant on the basis of information given by the complainant himself that an outstanding amount was not paid to the complainant by the petitioner. This Court is of the view that allegations contained in the complaint, even if are taken as its face value, it does not disclose any offence as alleged, as non-payment or underpayment of price of goods by itself does not constitute an offence of cheating or criminal breach of trust, which is admittedly, a civil dispute. 10. For the reasons aforementioned, the impugned complaint, being C.R. No. I-545 of 2010 registered with Naroda Police Station, Ahmedabad deserves to be quashed. Accordingly, this Criminal Misc. Application is allowed. Complaint, being C.R. No. I- 545 of 2010 registered with Naroda Police Station, Ahmedabad, qua the present petitioner is quashed and the proceedings of Criminal Case No. 4/2011 pending in the court of learned Metropolitan Magistrate, Court No. 18, Ahmedabad are hereby quashed and set aside, qua the present petitioner. Rule is made absolute. Interim relief granted earlier stands confirmed. No costs.