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2018 DIGILAW 895 (JK)

Sourav Kumar Aggarwal v. Shahid Butt

2018-11-22

SANJAY KUMAR GUPTA

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JUDGMENT : Sanjay Kumar Gupta, J. Through the instant petition filed under Section 561-A Cr.P.C., the petitioner inter alia seeks quashing of the criminal proceedings pending before the court of learned Munsiff, JMIC, Bhaderwah in a complaint titled “Shahid Butt vs. Sourav Aggarwal” under Section 420 RPC. 2. Brief facts of the case are that the petitioner’s concern namely M/s Uma Cement Industries, Udhampur, sold cement to the respondent worth Rs.2,65,000/-in the months of June & July, 2012. The respondent paid an amount of Rs.13,515/- in cash and undertook to pay the balance amount by 13th August, 2012. It is stated that the respondent, however, did not make the payment of the balance amount of Rs.2,51,685/-as promised by 13th of August 2012 where after, the petitioner requested the respondent repeatedly for making the payment of the abovementioned balance amount but the respondent kept on dilly dallying the matter on one pretext or the other. It is further stated that constrained by the non-payment of the balance amount by the petitioner to the respondent, the petitioner served the respondent with a legal notice dated 23.10.2012 demanding the payment of aforementioned balance amount. However, the respondent yet did not make the payment demanded vide the legal notice (supra). The petitioner left with no other option but to file a civil suit titled, “Sourav Kumar Aggarwal vs Shahid Ejaz” against the respondent before the court of learned District Judge, Udhampur on 17.01.2013 for the recovery of a sum of Rs.2,51,685/- due and payable by the respondent on account of the price of the goods sold and delivered to him by the petitioner along with pendent elite, future interest and costs. It is further contended that the respondent, after the receipt of the aforementioned legal notice followed by the filing of the civil suit by the petitioner against him on 17.01.2013 and having acquired the knowledge of the pendency thereof against him, has filed a totally false, flimsy & frivolous the criminal complaint under section 420 RPC against the petitioner as a counter blast wherein the court of learned Munsiff, JMIC, after recording the statement of the respondent and witness, took cognizance of the complaint and issued process against the petitioner. 3. 3. The petitioner feeling aggrieved of the same, has filed the present petition on the following grounds:- (i) That the learned trial court has proceeded in a mechanical manner in as much as the learned trial court has neither considered the complaint filed by the complainant nor his statement in a judicious manner while issuing the process against the petitioner in the said complaint filed by the respondent. The learned trial court’s order dated 19.08.2013 directing the issuance of process against the petitioner does not speak of the allegations leveled against the petitioner in the complaint. No such allegations have been summarized in the said order dated 19.08.2013. The learned trial court also failed to record its satisfaction warranting the issuance of the process against the petitioner or even give any reasons for entering any such satisfaction. No reference to the material on the record was made by the learned trial court. The said order dated 19. 08. 2013 has been passed by the learned trial court without any application of mind and the same is also not in consonance with the law laid down by this Hon’ble Court in catena of judgments postulating and mandating the trial court to properly apply is mind to the allegations, record briefly the allegations, give reasons for entering the satisfaction for warranting the issuance of process. The said order does not even say that there was sufficient material for proceedings against the petitioner. The order dated 19.08.2013 is contrary to the law & thus, the criminal proceedings initiated against the petitioner vide said order deserve to be quashed. (ii) That the learned trial court has taken the cognizance of the complaint filed by the respondent against the petitioner which does not disclose the commission of any alleged office by the petitioner. A perusal of the said complaint would show that the only grievance projected therein speaks of the alleged refusal of the petitioner to replace the so called defective cement allegedly purchased by the respondent from the petitioner. Assuming for the sake of arguments though denying vehemently that any defective cement was ever sold to the respondent meriting replacement yet the refusal to replace the same does not manifest into the commission of an offence punishable under section 420 RPC. Assuming for the sake of arguments though denying vehemently that any defective cement was ever sold to the respondent meriting replacement yet the refusal to replace the same does not manifest into the commission of an offence punishable under section 420 RPC. The allegations leveled in the complaint on the face value itself may at the best be construed to mean that there is a civil dispute between the parties. However, assuming that there exists a dispute regarding the quality of the cement though denying, yet the said civil dispute emanating out of an alleged breach of contract can be converted into a criminal offence committed by the petitioner. The complaint is aimed at embroiling petitioner in vexatious litigation based on falsity. The learned trial court has proceeded in a mechanical manner and taken the cognizance of that complaint of the respondent which fails to disclose commission of an alleged offence. And complaint being contrary to the law cannot be permitted to be prosecuted and the same requires to be quashed. (iii) That the complaint filed by the respondent even upon its whole reading does not project a case which satisfies the requirements of the ingredients of section 420 RPC. The complaint therefore, is ill-conceived and not tenable in the eyes of law, The present complaint and the proceedings as against the petitioner are nothing but abuse to the process of the court and the same deserve to be quashed. (iv) That the said complaint is malafide and vexatious in nature as having been filed by the respondent against the petitioner with the sole purpose of serving the same as a counter blast to the civil suit for recovery having been filed by the petitioner against the respondent. The said civil suit for recovery was filed on 17th January, 2013 whereas the aforementioned complaint has been filed by the respondent on 20.07.2013 after having acquired the knowledge the pendency of said civil suit against him. The averments made in the said complaint and the very institution thereof by the respondent against the petitioner clearly demonstrates the endeavor of the respondent in indulging in a counter blast of litigation by grossly abusing the process of law. The criminal proceedings, thus, initiated against the petitioner at the behest of the respondent on the basis of aforementioned ill-conceived and fabricated complaint deserves to be quashed. The criminal proceedings, thus, initiated against the petitioner at the behest of the respondent on the basis of aforementioned ill-conceived and fabricated complaint deserves to be quashed. (v) That the criminal complaint filed by the respondent is nothing but an endeavor on the part of the respondent to wriggle out of his liability to pay for the goods purchased by him by brow beating and embroiling the petitioner in a vexatious and malafide litigation. The said complaint having been occasioned out of the gross abuse of the process of the court with aim at scuttling the effort of the petitioner in recovering the price of goods sold by him through legal means deserves to be quashed. 4. Heard learned counsel for the parties and perused the record. 5. From bare perusal of impugned complaint, it is evident that complainant has asked the JMIC Bhaderwah to take cognizance under section 420 RPC, who after recording the statements of complainant and witnesses, took the same on 19.08.2013. The impugned complaint reads as under:- “1. That the complainant runs the business of selling cement at retail price at his shop near Jama Masjid Bhaderwah under the name and style of Rehan Traders Bhaderwah. 2. That the accused is the proprietor of Uma Cement Industries engaged in the manufacture of cement under the brand name “Bridge Cement” at his plant at Udhampåir and also supplies the manufactured cement to various private retail shopkeepers. 3. That the accused approached the complainant at Bhaderwah for the supply of cement to the complainant for retail business manufactured at his plant at Udhampur. The accused impressed upon the complainant that the cement manufactured at his plant at Udhampur is of very high quality. And at the same time assured the complainant that in case of any complaint about the cement supplied by him to Rehan Traders the accused shall replace the same immediately. 4. That on the faith of the above stated assurances given by the accused regarding the quality of cement and replacement of defective cement, the complainant agreed to purchase cement from the accused company worth Rs.5,04,751/- (Five Lac Four Thousand Seven Hundred And Fifty One Only) to be supplied in separate consignments from his plant at Udhampur to Rehan traders at Bhaderwah. 5. 5. That the consignments were dispatched by the accused as proprietor of Uma Cement Industries to Rehan Traders Bhaderwah under invoice numbers 0001225 dated 05-06-2012, 0001707 dated 05-07-2012, 0001708 dated 05-07-2012, 0001825 dated 13-07-2012, 0000037dated 02-04-2012, 0000201 dated 12.04.2012, 0000907 Dated19-05-2012, 0000908 dated 19-05-2012, 0001224 dated05-06-2012, 0001560 dated 25-06-2012 and 0001561 dated 25-06-2012. A total no. of 1990 bags amounting to Rs.5,04,751/- were delivered to the complainant at Bhaderwah. Copies of the same have been enclosed for kind perusal. 6. That the complainant deposited the payment of the cement bags in the account of Uma cements Udhampur from time to time whenever the payments were made to the Rehan traders by the customers who had purchased cement from Rehan traders at Bhaderwah. The complainant also made payments through cheques. 7. That within few days of the sale of the cement manufactured at UMA Cements Udhampur the customers of Rehan traders complained that the cement was defective and failed to set even when used in the ratio of 1:3 i.e. one part cement and two parts sand whereas other cement brands like Ambuja cement or ACC cement sets even when used in the ratio of 1:10. 8. That at this the customers who had purchased cement from Rehan traders for the price to be paid refused to pay for the defective cement and demanded immediate replacement of the defective cement. 9. That at this complainant contacted the accused and the accused assured the complainant that the defective cement will be replaced within 15 days. But the accused failed to replace the defective cement even after the expiry of 15 days. Thereafter the complainant again requested the accused to replace the defective cement but the accused adopted a dilly dally attitude and made false promises that the accused will replace the defective cement. 10. That at this kind of reluctance shown by the accused the complainant served a notice upon the accused to either replace the defective cement or to pay compensation to Rehan traders for the loss suffered by Rehan traders on account of the defective cement supplied by the accused. At this the accused sent his authorized agent to analyze the loss suffered by Rehan traders on account of defective cement. At this the accused sent his authorized agent to analyze the loss suffered by Rehan traders on account of defective cement. The agent of the accused assured that the company will provide new cement bags to Rehan traders free of cost so that Rehan traders could provide the new cement bags to their respective customers who had refused to pay for the defective cement. 11. That even after the elapse of so much of time the accused didn’t replace the defective bags of cement. At this the complainant once again requested the accused to get the defective cement replaced at the earliest. But the accused instead of replacing the defective cement refused to replace the same. Even after so many requests made by the complainant the accused time and again refused to replace the defective cement as the accused from the very beginning was having criminal intentions to cheat and defraud the complainant and thus is guilty of the commission of offence U/S 420 RPC.” 6. Section 420 of Ranbir Penal Court talks about the offence which is committed by the person who cheats another person and thereby induces the deceived to deliver any property. This provision provides punishment for the same. According to the RPC, Section 420 states 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. Essential elements of Section 420 RPC are (i) Cheating; (ii) Dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or is capable of being converted into a valuable security and (iii) Mens rea of the accused at the time of making the inducement. 7. Making of a false representation is one of the essential ingredients to institute the offence of cheating under Section 420 RPC. 7. Making of a false representation is one of the essential ingredients to institute the offence of cheating under Section 420 RPC. In order to bring a case for the offence of cheating, it is not merely satisfactory to prove that a false representation had been made, but it is further necessary to prove that the representation was false to the knowledge of the accused and was made in order to deceive the complainant. The term “cheating” has been defined under Section 415 of the Ranbir Penal Code. The element of cheating must be present in every offence under Section 420 of R.P.C. Section 415 of RPC states 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 is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”. Section 24 RPC defines that what is “acting dishonestly”. When the doing of any act or not doing of any act causes wrongful gain of property to one person or a wrongful loss of property to a person, the said act is done dishonestly. The word property may basically be defined as all things which can be measured in terms of money. The said thing should be capable of being possessed by a person for the exclusive use or enjoyment as owner of that thing. Section 25 RPC defines the term “Fraudulently”. It says that a person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise. Mens rea is a legal phrase which used to define the mental state of a person while committing a crime and that should be intentional. It can refer to a general intent to break the law or a specific prearranged plan to commit a particular offense. A criminal prosecutor must show beyond any reasonable doubt to convict an accused person that the suspect actively and knowingly contributed in a crime that affected another person or their property. 8. It can refer to a general intent to break the law or a specific prearranged plan to commit a particular offense. A criminal prosecutor must show beyond any reasonable doubt to convict an accused person that the suspect actively and knowingly contributed in a crime that affected another person or their property. 8. For proving cheating one has to prove that there was an intention to cheat at the time of making the misrepresentation; and this fact is to be proved on the basis of all the subsequent conduct as acts and omissions of the accused. Therefore, all the acts and omissions of the accused must be clearly and legibly set out right from the date of making of false representation, till the filing of the complaint. It must be shown that there is a failure of the promise which was made. It must be shown that there was no effort on the part of accused to perform his promise. The test of prudent man must be applied to appreciate the evidence on record. There is quite difference between mere ‘breach of contract’ and the ‘offence of cheating’; Distinction depends upon the intention of the accused at the time of inducement which must be judged by his subsequent act but of which the subsequent act is not the sole standard. 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 substance of the offence. It is necessary to show that he had fraudulent or dishonest intention at the time of making the promise to hold a person guilty for the offence of cheating. From his mere failure to keep up promise consequently such a culpable intention cannot be presume right at the beginning, that is when he made the promise. 9. Keeping in view above cardinal principles of law with regard to cheating, it is evident that complaint of respondent does not fall in any of elements of cheating. From his mere failure to keep up promise consequently such a culpable intention cannot be presume right at the beginning, that is when he made the promise. 9. Keeping in view above cardinal principles of law with regard to cheating, it is evident that complaint of respondent does not fall in any of elements of cheating. Because bald assertion has been made in complaint that customers complained with regard to poor quality of cements; no date, time and month has been given when customers made complaints; no name of customers has been given; a general assertion has been made that customers have refused to give money to respondent. Again general assertion has been made that petitioner had assured respondent that defective cement shall be replaced within 15 days; but no date, time and month has been given as to when complainant contacted the petitioner and when assurance was given. The alleged notice which was given by respondent to petitioner is not in file of trial court; again no date, time and month has been given as to when complainant had given notice to the petitioner. Complaint has been filed on 20.07.2013, whereas petitioner has already filed a recovery suit on 17.01.2013 before District Judge, Udhampur with regard to balance amount of cement which was purchased by respondent from petitioner. 10. In AIR 2009 SC 3250 in case titled Chunduru Siva Ram Krishna and Anr. vs. Peddi Ravindra Babu and Anr., it has been held as under:- “15. The above decision was followed by this Court in Pepsi Foods Ltd. vs. Special Judicial Magistrate [ 1998 (5) SCC 749 ]. In paragraph 28 of the said judgment this Court held thus: “28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.” 16. Further, this Court observed in S.W. Palanikar vs. State of Bihar [ 2002 (1) SCC 241 ] that every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. It observed as follows: “8. Before examining respective contentions on their relative merits, we think it is appropriate to notice the legal position. Every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil court but a breach of trust with mens rea gives rise to a criminal prosecution as well. 9. The ingredients in order to constitute a criminal breach of trust are: (i) entrusting a person with property or with any dominion over property, (ii) that person entrusted (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust. 10. 10. The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases covered by (ii)(b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property. 11. One of us (D.P. Mohapatra, J.), speaking for the Bench, in Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 on facts of that case, has expressed thus: (SCC p. 177, para 15): 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. 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.” (emphasis supplied) 17. The aforesaid discussion clearly pin-point the legal position on the subject which is by now well settled. The principle that could be culled out is that when at an initial stage a prosecution is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made in the complaint filed prima facie establish the offence. The principle that could be culled out is that when at an initial stage a prosecution is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made in the complaint filed prima facie establish the offence. It is also for the court to take into consideration any special feature that may appear in a particular case while considering whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose. The tests that are laid down in the case of Bhajan Lal (supra) are required to be applied very carefully and minutely when a prayer for quashing is laid before the court.” 11. In view of above, I am of the considered opinion that the criminal proceedings have been initiated with mala fide intention and has been instituted maliciously with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. Even otherwise allegations made in the 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. 12. Therefore, this petition is allowed and complaint titled “Shahid Butt vs. Sourav Aggarwal” under Section 420 RPC pending before Munsiff, JMIC, Bhaderwah, is quashed.