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2018 DIGILAW 649 (ORI)

Sunil Kumar Wadhwa v. Siba Prasad Sahu

2018-07-09

S.K.SAHOO

body2018
JUDGMENT S. K. SAHOO, J. - The petitioners Sunil Kumar Wadhwa, Sanjeeb Borbora and Manoj Kumar Dash have filed this application under Section 482 of the Criminal Procedure Code challenging the impugned order dated 11.09.2006 passed by the learned Subdivisional Judicial Magistrate, Sadar, Cuttack in I.C.C. No.606 of 2006 in taking cognizance of offences under Sections 406, 420 read with Section 34 of the Indian Penal Code and issuance of process against them. 2. The complainant-opposite party no.1 Siba Prasad Sahu filed the complaint petition on 14.08.2006 alleging therein that he was the proprietor of M/s. Sahu Electrical Enterprises, Manisahu Chowk, Buxi Bazar, Cuttack and dealing with electrical equipments such as machinery parts, pump sets and he was also the authorized dealer of M/s. Usha International Ltd. (hereafter ‘the company’) for ‘USHA’ brand pump sets and electrical appliances. The petitioner no.1 was the Managing Director of the company and petitioners nos.2 and 3 were the Divisional Manager and Sales Manager of the company respectively who are working under Divisional Sales Office at Cuttack. It is the further case of the complainant that he was the authorized dealer of the company for more than ten years and fulfilled all the criteria and eligibility to be an authorized dealer and furnished security deposit before becoming an authorized dealer. The complainant used to receive the products of the petitioners on cash and credit basis after issuing cheques against the invoices. The complainant for his best performance was selling the products of the petitioners and he had been rewarded several times as a number one dealer in Odisha. During the transactions with the petitioners, the complainant had performed his duty with best of his ability and never been questioned or received any objection from the side of petitioners till end of the year 2005. The complainant verified all his transactions and accounts and found some deficit of amount showing outstanding against the petitioners and as such the complainant wrote several letters and reminders during the year 2005 explaining the details of accounts which was showing as outstanding against the petitioners and requested the company to settle the accounts as early as possible for better relationship. After several correspondences to the petitioners, the complainant wrote a letter dated 08.06.2006 to them to clear up all the outstanding dues failing which the complainant would be forced to bring the matter to proper Court of law for his redressal and also for recovery of all the dues as shown as outstanding against the petitioners. The complainant after verifying the books of accounts and detailed transactions thoroughly from year 2000- 2001 to 2005-2006, found Rs.1,35,815/- was showing outstanding against the petitioners. It is the further case of the complainant that after several correspondences of letters and reminders, the petitioners did not come forward to the complainant for settlement of accounts and with an ulterior motive and ill intention and in order to escape from the liability, there was every chance of institution of false and frivolous case against the complainant by utilizing the blank signed cheque which has been issued by the complainant to the petitioners on good faith and for better transactions during the business dealings as wholesaler and dealer at the time of good relationship between the parties. The petitioners nos. 2 and 3 were stated to be intentionally cheating the complainant as they have misappropriated the amount continuously without forwarding the same in their accounts and the petitioner no.1 being the controlling officer of petitioners nos. 2 and 3 has never initiated any action against them although the complainant time and again intimated to settle the accounts. It is the further case of the complainant that the petitioners were jointly and severally liable for the misappropriation of the money of the complainant by manipulating the official documents for cheating with a common intention. Petitioners nos. 2 and 3 were stated to have misappropriated the amount received from Orissa Agro Industries Corporation Ltd. towards the supply of two nos. diesel pump sets of 3-5 HP made by complainant of worth Rs.23,943/-. In that respect, Orissa Agro Industries Corporation Ltd. clarified and confirmed vide his letter no.700 dated 10.05.2006 addressing to the complainant stating that the amount towards the payment of complainant has been received by the petitioners nos.2 and 3. diesel pump sets of 3-5 HP made by complainant of worth Rs.23,943/-. In that respect, Orissa Agro Industries Corporation Ltd. clarified and confirmed vide his letter no.700 dated 10.05.2006 addressing to the complainant stating that the amount towards the payment of complainant has been received by the petitioners nos.2 and 3. It is the further case of the complainant that besides the security money, other outstanding dues as per other books of accounts of Rs.1,35,815.00 was payable by the petitioners to the complainant and accordingly he prayed to take cognizance of offences under Sections 406, 420, 467, 468 read with Section 34 of the Indian Penal Code. 3. After filing of the complaint petition with documents, the case was registered and the initial statement of the complainant was recorded on 28.08.2006 and the case was posted for holding inquiry under Section 202 of Cr.P.C. and on 06.09.2006 one witness namely Krushna Chandra Sahoo was examined by the complainant and a memo was filed not to adduce further evidence and on 11.09.2006 the learned Magistrate after perusing the complaint petition, initial statement of the complainant recorded under Section 200 of Cr.P.C. and the statement of the witness Krushna Chandra Sahoo recorded during inquiry under Section 202 of Cr.P.C., found prima facie case under Sections 406, 420 read with Section 34 of the Indian Penal Code and passed the impugned order. 4. Mr. Umesh Chandra Behura, learned counsel appearing for the petitioners contended that the petitioners nos.1, 2 and 3 were the Managing Director, Divisional Manager and Sales Manager of the company respectively. The complainant was appointed as dealer of the company on 10.09.1996 and on 07.10.2004 the performance of the complainant was reviewed and it was found that the sale of the company products has come down and numbers of cheques issued by the complainant were dishonoured. The complainant confirmed in writing that the balance amount of Rs.51,887/- in monoblock pump would be paid as soon as possible. The complainant issued cheque no.439195 dated 20.12.2005 of Rs.51,887/- drawn in Bank of Baroda but the said cheque was dishonoured by the Bank on the ground of ‘stopped by drawer’. The petitioner no.2 being the Divisional Manager of the company at Cuttack issued notice to the complainant by registered post with A.D. demanding payment of the amount. The complainant issued cheque no.439195 dated 20.12.2005 of Rs.51,887/- drawn in Bank of Baroda but the said cheque was dishonoured by the Bank on the ground of ‘stopped by drawer’. The petitioner no.2 being the Divisional Manager of the company at Cuttack issued notice to the complainant by registered post with A.D. demanding payment of the amount. Since the complainant did not pay the amount despite demand, the petitioner no.2 filed a complaint petition against the complainant for commission of offence under Section 138 of Negotiable Instruments Act which was registered as I.C.C. Case No.152 of 2006 in the Court of learned S.D.J.M., Sadar, Cuttack and after cognizance of offence was taken, summons was issued against the complainant and in order to counter such complaint petition, a frivolous complaint vide I.C.C. Case No.606 of 2006 was filed against the petitioners. It is further contended that the letters issued by the complainant to the petitioners would indicate that basically his grievance is for settlement of the accounts and therefore, the dispute between the parties being civil in nature, the filing of complaint petition was uncalled for and therefore, this Court should exercise its inherent power under Section 482 of Cr.P.C. to quash the same in order to prevent abuse of process. It is further contended that the ingredients of offences under which cognizance has been taken are not attracted and the proceeding has been initiated with an ulterior motive. Learned counsel for the petitioners filed a written note of submission and placed relied upon the decisions of the Hon’ble Supreme Court in the cases of G. Sagar Suri -Vrs.- State of U.P. reported in A.I.R. 2000 S.C. 754, Uma Shankar Gopalika -Vrs.- State of Bihar reported in (2005) 10 Supreme Court Cases 336, Hotline Teletubes -Vrs.- State of Bihar reported in (2005) 32 Orissa Criminal Reports (SC) 789, M/s. Indian Oil Corporation -Vrs.- M/s. NEPC India Ltd. reported in A.I.R. 2006 S.C. 2780 and State of Haryana -Vrs.- Bhajan Lal reported in A.I.R. 1992 S.C. 604 on points canvassed. Mr. Mr. Bijay Kumar Mohanty, learned counsel appearing for the complainant-opposite party no.1 supported the impugned order and submitted a memo of citations in which he has relied upon the decisions of the Hon’ble Supreme Court in the cases of Iridium India Telecom Ltd. -Vrs.- Motorola reported in (2011) 48 Orissa Criminal Reports (SC) 116, Smt. Nagawwa -Vrs.- Veeranna reported in A.I.R. 1976 S.C. 1947 and Fiona Shrikhande -Vrs.- State of Maharashtra reported in (2014) 57 Orissa Criminal Reports (SC) 285. 5. Adverting to the contentions raised by the learned counsels for the respective parties, it appears that whereas it is the case of the complainant that his books of accounts and detailed transaction during the period 2000-2001 to 2005-2006 indicate that Rs.1,35,815/- was outstanding against the petitioners and in spite of receipt of cost of the diesel pump sets from Orissa Agro Industries Corporation Ltd., the petitioners nos.2 and 3 misappropriated the amount and petitioner no.1 being the controlling officer of the petitioners nos. 2 and 3 did not take any action against them, it is the case of the petitioners that due to filing of a complaint petition by the petitioner no.2 against the complainant under Section 138 of the N.I. Act for dishonour of the cheque issued by him, a false case has been foisted with an ulterior motive. In case of G. Sagar Suri -Vrs.- State of U.P. reported in A.I.R. 2000 S.C. 754, it is held that jurisdiction under Section 482 of Cr.P.C. has to be exercised by the High Court with a great care and not superficially. It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process, a Criminal Court has to exercise a great deal of caution. For the accused, it is a serious matter. In case of Uma Shankar Gopalika -Vrs.- State of Bihar reported in (2005) 10 Supreme Court Cases 336, it is held that every breach contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. If the intention to cheat has developed later on, the same cannot amount to cheating. In case of Hotline Teletubes -Vrs.- State of Bihar reported in (2005) 32 Orissa Criminal Reports (SC) 789, the Hon’ble Supreme Court after going through the complaint petition held that there is no whisper in the complaint that at the very inception of the contract between the parties, there was any intention to cheat and it is a case of purely civil liability and allowing the prosecution to continue would amount to an abuse of process of Court and to prevent the same, it would be just and expedient to quash the same. In case of M/s. Indian Oil Corporation -Vrs.- M/s. NEPC India Ltd. reported in A.I.R. 2006 S.C. 2780, it is held that a growing tendency in business circles to convert purely civil dispute into criminal cases is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil dispute and claims, by applying pressure through criminal prosecution should be deprecated and discouraged. In the case of Iridium India Telecom Ltd. -Vrs.- Motorola reported in (2011) 48 Orissa Criminal Reports (SC) 116, it is held that power to quash proceedings at the initial stage have to be exercised sparingly with circumspection and in the rarest of the rare cases. The power is to be exercised ex debito justitiae. Such power can be exercised where a criminal proceeding is manifestly attended with malafide and have been instituted maliciously with ulterior motive. This inherent power ought not to be exercised to stifle a legitimate prosecution. The power is to be exercised ex debito justitiae. Such power can be exercised where a criminal proceeding is manifestly attended with malafide and have been instituted maliciously with ulterior motive. This inherent power ought not to be exercised to stifle a legitimate prosecution. In the case of Smt. Nagawwa -Vrs.- Veeranna reported in A.I.R. 1976 S.C. 1947, it is held as follows:- “Thus it may be safely held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside: (1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; (2) where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; (3) where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like. The cases mentioned by us are purely illustrative and provide sufficient guidelines to indicate contingencies where the High Court can quash proceedings.” In the case of Fiona Shrikhande -Vrs.- State of Maharashtra reported in (2014) 57 Orissa Criminal Reports (SC) 285, it is held that the law as regards issuance of process in criminal cases is well settled. At the complaint stage, the Magistrate is merely concerned with the allegations made out in the complaint and has only to prima facie satisfy whether there are sufficient grounds to proceed against the accused and it is not the province of the Magistrate to enquire into a detailed discussion on the merits or demerits of the case. The scope of enquiry under Section 202 is extremely limited in the sense that the Magistrate, at this stage, is expected to examine prima facie the truth or falsehood of the allegations made in the complaint. The scope of enquiry under Section 202 is extremely limited in the sense that the Magistrate, at this stage, is expected to examine prima facie the truth or falsehood of the allegations made in the complaint. Magistrate is not expected to embark upon a detailed discussion of the merits or demerits of the case, but only consider the inherent probabilities apparent on the statement made in the complaint. 6. On careful analysis of the averments made in the complaint petition with the initial statement of the complainant and the witness examined on behalf of the complainant during inquiry under Section 202 of Cr.P.C., it appears that one of the allegations made by the complainant is that his books of accounts and detailed transaction during the period 2000-2001 to 2005-2006 indicate that Rs.1,35,815/- was outstanding against the petitioners and in spite of several correspondence and reminders by the complainant, the petitioners did not come forward for settlement of accounts. Such allegations, in my humble view, are essentially of civil nature. The complainant has to adduce documentary evidence in that respect before the Civil Court and after giving due opportunity to the petitioners, the Court has to give a finding as to whether any such outstanding amount is there against the petitioners or not and if so, what relief can be granted in favour of the complainant. On the face of it, such allegations do not make out any criminal offence. The other accusation made by the complainant against the petitioners is that in spite of receipt of cost of the diesel pump sets from Orissa Agro Industries Corporation Ltd., the petitioners nos.2 and 3 misappropriated the amount and cheated the complainant and petitioner no.1 being the controlling officer of the petitioners nos. 2 and 3 did not take any action against them. It is pertinent to note that in the complaint petition, a categorical assertion has been made that Orissa Agro Industries Corporation clarified and confirmed vide letter no.700 dated 10.05.2006 addressing to the complainant stating that the amount towards payment of the complainant has been received by the petitioners nos. 2 and 3. Since that letter was the basis of accusation of misappropriation against the petitioners nos.2 and 3, the learned counsel for the complainant-opposite party no.1 was asked to produce the copy of such letter. 2 and 3. Since that letter was the basis of accusation of misappropriation against the petitioners nos.2 and 3, the learned counsel for the complainant-opposite party no.1 was asked to produce the copy of such letter. The learned counsel produced the letter dated 10.05.2006 which indicates that it was addressed to M/s. Sahu Electrical Enterprises, Buxi Bazar, Cuttack relating to payment of bill no. SEE/137/2000-01 by Deputy General Manager (E) of the Orissa Agro Industries Corporation Ltd. and it is indicated therein that payment of the bill has been released to the Principal M/s. Usha International during the period from May 2001 to January 2002 in various cheques. The specific dates of release, cheque nos., amount involved in the cheques etc. have not been mentioned in the letter. Though the complainant cited the Deputy General Manager as a witness in the complaint petition but he has not been examined during inquiry under Section 202 Cr.P.C. Therefore, there is nothing in the letter dated 10.05.2006 that any payment towards the cost of diesel pump sets was made by Orissa Agro Industries Corporation to the petitioners nos.2 and 3 rather it is stated to have been made in favour of the company by way of cheques. Therefore, the allegations against the petitioners nos.2 and 3 appear to be baseless. Once there is no clear proof of payment to the company particularly to the petitioners nos.2 and 3 by Orissa Agro Industries Corporation Ltd. towards the cost of diesel pump sets received from the complainant as alleged by the complainant, the ingredients of the offences under Sections 406 and 420 of the Indian Penal Code are not attracted against the petitioners. It seems that after filing of the complaint petition against the complainant by the petitioner no.2 in I.C.C. Case No.152 of 2006 and taking of cognizance of offence under Section 138 of the N.I. Act and issuance of process against him and after receipt of the summons on 24.06.2006, the present complaint petition has been filed on 14.08.2006 with an ulterior motive. In case of State of Haryana -Vrs.- Bhajan Lal reported in A.I.R. 1992 S.C. 604, it is held, inter alia, that where a criminal proceeding is manifestly attended with malafide and maliciously instituted with ulterior motive for wreaking vengeance on the accused, the High Court can exercise its inherent power under Section 482 of Cr.P.C. to quash the same in order to prevent abuse of process of the Court or otherwise to secure the ends of justice. Since one part of the allegations made by the complainant is a case of purely civil liability and for the other part there are no prima facie materials to attract the ingredients of the offences, I am of the humble view that allowing the prosecution to continue would amount to an abuse of process of Court and to prevent the same, the proceedings in the Court below should be quashed. 7. In view of the foregoing discussions, the impugned order dated 11.09.2006 passed by the learned Sub-divisional Judicial Magistrate, Sadar, Cuttack in I.C.C. No.606 of 2006 in taking cognizance of offences under Sections 406, 420 read with Section 34 of the Indian Penal Code and issuance of process against the petitioners stands quashed. Accordingly, the CRLMC application is allowed. CRLMC allowed.