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2019 DIGILAW 640 (GUJ)

Banshilal Motilal Chandak v. State of Gujarat

2019-07-01

A.S.SUPEHIA

body2019
ORDER : 1. Rule. Learned Additional Public Prosecutor for the respondent-State and learned advocate Mr. N.K. Majmudar for the respondent No. 2 waive service of notice of Rule on behalf of the respective respondents. 2. The present application has been filed seeking quashing and setting aside the impugned F.I.R. being C.R. No. I-233 of 2016 registered at Salabatpura Police Station, Surat under Sections 406, 409, 420, 120-B and 114 of the Indian Penal Code, 1860 (for short "IPC"). 3. Learned advocate Mr. Ayan Bhattacherjee with learned advocate Mr. Shailendra Kumar Tiwari with learned advocate Mr. Devang Joshi appearing for the applicants have submitted that the impugned F.I.R. has been lodged with an oblique motive in order to extort money from the applicants. Learned advocate has further submitted that the applicants as well as the first informant have business relationship since last twelve (12) years and the F.I.R. has been filed with an oblique motive for recovering money from the applicants for a period ranging from 2009 to 2014. It is submitted that in fact the first informant has also instituted Special Civil Suit No. 29 of 2012, which is pending before Principal Civil Judge, Dist. Surat for recovery of the amount to the tune of Rs. 63,62,846/- along with interest. 3.1. It is further submitted by the learned advocate that no offence as alleged under Sections 406, 409 and 420 of the IPC said to have been established since the essential ingredients of the aforesaid enactment are not satisfied. He has further submitted that there is no false representation or dominion or delivery of the property, which would attract the provision of Section 420 of the IPC. It is further submitted that the transaction between the parties have been maintained since last twelve (12) years and regular payment was made till 2015. It is further submitted that there is no deceit, fraudulent, dishonest intention on the part of the applicants to cheat the first informant. It is further submitted that so far as the offence under Section 406 of the IPC is concerned, the same is misplaced inasmuch as there was no entrustment of the property to the applicants. 3.2. It is further asserted by the learned advocate that there is no criminal breach of trust and the civil dispute has been given a colour of criminal liabilities. 3.2. It is further asserted by the learned advocate that there is no criminal breach of trust and the civil dispute has been given a colour of criminal liabilities. Further, it is submitted that the allegations in the impugned F.I.R. do not reveal any criminal consequences under Section 120-B of the IPC, which provides for punishment for offence of criminal conspiracy as has been defined under Section 120-A of the IPC is not well-founded inasmuch as there is no allegation of meeting of mind, which is sine qua non for an offence of criminal breach of trust. 3.3. In support of his submissions, learned advocate for the applicants has placed reliance on the judgments rendered by the Apex Court in the case of Vinod Natesan vs. State of Kerala and Others, (2019) 2 SCC 401 : AIR 2019 SC 296 and in the case of Satishchandra Ratanlal Shah vs. State of Gujarat and Another, 2019 (3) SCALE 298 : AIR 2019 SC 1538 . Thus, he has submitted that the impugned F.I.R. is required to be quashed and set aside. 4. Learned advocate Mr. N.K. Majmudar for respondent No. 2 has submitted that at this stage, the impugned F.I.R. may not be quashed since prima facie the offences for which the impugned F.I.R. has been registered are clearly established in the present case. 5. Learned Additional Public Prosecutor Ms. Monali Bhatt has submitted that the investigation is under progress and the Investigating Officer has recorded the statement of the Transport Manager. It is submitted that at this stage, the impugned F.I.R. may not be quashed. 6. Heard the learned advocates for the respective parties and I have gone through the relevant documents as pointed out by the learned advocates. 7. In the present case, respondent No. 2 has lodged the F.I.R. against the applicants for the offence punishable under Sections 406, 409, 420, 120-B and 114 of the IPC. The first informant in the impugned F.I.R. has stated as follows: "At the above address, I have been doing my business of dress materials and scarves (dupatta) cloth in Shop Nos. 320 and 321 of Shree Ram Textile Market in various names of firms like (1) For Season Fashion, (2) India Fashion, (3) Japan Silk Mills and (4) Sankalp Creation since last 28 years. 320 and 321 of Shree Ram Textile Market in various names of firms like (1) For Season Fashion, (2) India Fashion, (3) Japan Silk Mills and (4) Sankalp Creation since last 28 years. And Broker/Trader (1) Bansilal Motilal Chandak and (2) Anant Bansilal Chandak, place of the business as above and (3) No knowledge of name and address of nephew of Bansilal Motilal Chandak all three persons were working as a Broker and Trader and sitting at the place of business at No. B-113, Room No. 401, Fourth Floor, Manohardas Market, Kolkata. I know them since last 12 years and they were approached at my shop and intimated to me that I know very good traders/parties in Kolkata, if you will give goods those traders and I will take the whole responsibilities of the payment. Commitment by them I was sending the goods to traders of the Kolkata through broker/trader namely Bansilal Motilal Chandak since last 12 years and also they had been given payment of the sent goods regularly as per the trader's customs." 7.1. Therefore, the first informant has given the names of 31 firms, for which the goods have been delivered for a period ranging from 2009 to 2014 and the total amount of Rs. 63,62,846/- remaining due. Further, the applicants have stated as follows: "I had already been delivered the goods of dress materials and scarves (dupatta) cloths as per the instructions of Broker/Trader (1) Bansilal Motilal Chandak and (2) Anant Motilal Chandak, place of the business as above and (3) No knowledge of name and address of nephew of Bansilal Motilal Chandak. I was contacted to the Broker/Trader (1) Bansilal Motilal Chandak and (2) Anant Bansilal Chandak and (3) No knowledge of name and address of nephew of Bansilal Motilal Chandak for the collection of the dues amount of the delivered goods, the full details of which are given above, they were given to me time limit, we will pay today, we will pay tomorrow and by this way they had been passing the time and thus, they were doing the false promises. Therefore, I was visited to the traders Kolkata directly, one day, to whom that I have delivered the goods, we have already paid your due amount in full to your Broker/Trader (1) Bansilal Motilal Chandak and (2) Anant Bansilal Chandak, place of the business as above and (3) No knowledge of name and address of nephew of Bansilal Motilal Chandak. They had told me like that and I was again contact to the above for collecting the pending due amount to Broker/Trader Bansilal Motilal Chandak and others. I am taking the responsibilities to pay your dues money of your goods materials. They have replied to me that we will pay your money in piecemeal. But they have not been paid your money of Rs. 63,62,846/- to me till today. And I had also been waited for my payment too much long time from them, but Broker/Trader (1) Bansilal Motilal Chandak and (2) Anant Bansilal Chandak (3) No knowledge of name and address of nephew of Bansilal Motilal Chandak have not paid my above said due amount and they have done with me treacherous and deception acts made offensive guilt. Therefore, Broker/Trader (1) Bansilal Motilal Chandak and (2) son of his Anant Bansilal Chandak, and (3) No knowledge of name and address of nephew of Bansilal Motilal Chandak had taken the responsibilities that they will have to be given payment to me of total Rs. 63,62,846/- of delivered the goods of dress materials and scarves of cloths of my above said four firms during the period from dated 02.05.2009 to dated 22.08.2014, but in collusion between each person made conspiracy criminally with me, nevertheless, they have already received the payment from the above mentioned traders from Kolkatta which were to be paid to me, they had consumed my above said payments for their purpose, and hence, they had acted of treacherous and deception and made criminally guilt with me, and hence, I had compelled to complaint against them for taking criminal actions. My witnesses are to be find during the police inquiry." 8. It is also not in dispute that the applicants have already instituted Special Civil Suit No. 29 of 2019, after filing the impugned F.I.R. before the Principal Civil Judge, Surat and the same is pending for adjudication. 9. My witnesses are to be find during the police inquiry." 8. It is also not in dispute that the applicants have already instituted Special Civil Suit No. 29 of 2019, after filing the impugned F.I.R. before the Principal Civil Judge, Surat and the same is pending for adjudication. 9. At this stage, it would be apposite to incorporate Section 405 of the IPC, which defines criminal breach of trust: "Section 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." 10. Cheating is defined under Section 415 of the IPC, which reads as under: "Section 415. Cheating - Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat. 11. In the case of Vinod Natesan (supra) the Apex Court, while examining the provision of Sections 406 and 420 of the IPC has observed thus: "7. The appellant, party in person has vehemently submitted that, in facts and circumstances of the case, the High Court has committed grave error in quashing the criminal proceedings. It is vehemently submitted by the appellant-party in person that as the accused did not act as per the agreement entered into between the parties and did not make the payment due and payable under the agreement and a sum of Rs. 3,00,000/- (Rupees three lakhs only) was due and payable and, therefore, the accused committed the offence of cheating. It is submitted that after availing his intellectual services the accused did not make the full payment including one month's notice before terminating the contract/agreement. 3,00,000/- (Rupees three lakhs only) was due and payable and, therefore, the accused committed the offence of cheating. It is submitted that after availing his intellectual services the accused did not make the full payment including one month's notice before terminating the contract/agreement. 8. An attempt was made by the appellant-party in person submitting that as such initially the learned Judge dismissed the application, which is evident from P-14. It is submitted that, however, when subsequently the order was declared, the learned Judge allowed the petition and quashed the criminal proceeding. It is submitted that, therefore; the impugned judgment and order passed by the learned single Judge deserves to be quashed and set aside. 9............ 10. Having heard the appellant as party in person and the learned advocates appearing on behalf of the original accused as well as the State of Kerala and considering the judgment and order passed by the High Court, we are of the opinion that the learned High Court has not committed ant error in quashing the criminal proceedings initiated by the complainant. Even considering the allegations and averments made in the FIR and the case on behalf of the appellant, it cannot be said that the ingredients of Sections 406 and 420 are at all satisfied. The dispute between the parties at the most can be said to be the civil dispute and it is tried to be converted into a criminal dispute. Therefore, we are also of the opinion that continuing the criminal proceedings against the accused will be an abuse of process of law and, therefore, the High Court has rightly quashed the criminal proceedings. Merely because the original accused might not have paid the amount due and payable under the agreement or might not have paid the amount in lieu of one month's notice before terminating the agreement by itself cannot be said to be a cheating and/or having committed offence under Sections 406 and 420, IPC as alleged. We are in complete agreement with the view taken by the High Court." 12. In the case of Satishchandra Ratanlal Shah (supra), the Apex Court has observed thus: "12. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with 406 of the IPC, we observed that the dispute arises out of a loan transaction between the parties. In the case of Satishchandra Ratanlal Shah (supra), the Apex Court has observed thus: "12. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with 406 of the IPC, we observed that the dispute arises out of a loan transaction between the parties. It falls from the record that the respondent No. 2 knew the appellant and the attendant circumstances before lending the loan. Further it is an admitted fact that in order to recover the aforesaid amount, the respondent No. 2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognizes a difference between simple payment/ investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being a clear case of entrustment. 12. In this context, we may note that there is nothing either in the complaint or in any material before under Section, pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of Section 405 punishable under Section 406 of IPC hence the learned Magistrate committed a serious error in issuing process against the appellants for the said offence. Unfortunately, the High Court also failed to correct this manifest error. 13. Now coming to the charge under Section 415 punishable under Section 420 of the IPC in the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. In the case before under Section, admittedly the appellant was trapped in economic crisis and therefore, he had approached the respondent No. 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the respondent No. 2 had instituted a summary civil suit seeking pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred." 13. Thus, in view of the law annunciated by the Apex Court in the aforementioned judgments, it appears that the first informant, though he was aware that the criminal proceedings are unwarranted and remedy lies only in the civil law, has filed the impugned F.I.R. only with a view to unnecessarily harass the applicants and compel them to part with money. The complainant has instituted the Civil Suit No. 29 of 2019 before the Principal Civil Judge, Surat for recovering the aforesaid amount. In the present case, the first informant has in the consolidated statement has alleged that the dues since 2009 are still pending and the applicants are deliberately not paying the same. Thus, it is apparent that though the dues of 2009 to 2010 are pending, no reason has been given by the first informant for delay in filing the complaint and the same is lodged by incorporating a consolidated statement of all the dues since 2009 till 2014. 14. It is not in dispute that the applicants as well as the first informant were in business relationship since last twelve (12) years. On plain and simple reading of the F.I.R. it is revealed that a civil dispute has been given the colour of criminal proceedings and hence, the same is required to be quashed. Continuation of the criminal prosecution would be undue harassment to the applicants as it is noticed that purely a civil dispute has been converted into a criminal offence by making allegations against the applicants that they have not paid the amount as mentioned in the impugned F.I.R. for the period ranging from 2009 to 2014. Even if all the facts of the F.I.R. are taken on their face value, no dishonest representation or inducement can be inferred. 15. Under the circumstances, the writ application stands allowed. Even if all the facts of the F.I.R. are taken on their face value, no dishonest representation or inducement can be inferred. 15. Under the circumstances, the writ application stands allowed. The impugned F.I.R. being C.R. No. I-233 of 2016 registered at Salabatpura Police Station, Surat along with all consequential proceedings arising out of the impugned order F.I.R. are hereby quashed and set aside. Rule is made absolute.