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2019 DIGILAW 67 (GAU)

Kevya Kanta Gogoi v. State of Assam

2019-01-21

AJIT BORTHAKUR

body2019
JUDGMENT : Ajit Borthakur, J. 1. Heard Mr. D. Das, learned Senior counsel for the petitioners and Mr. N.K. Kalita, learned Additional Public Prosecutor for State respondent No. 1. Also heard Mr. R. Sarma, learned counsel for respondent No. 2. 2. By this petition under Section 482 of the Code of Criminal Procedure, 1973, (for short 'Cr.P.C.'), the petitioners have prayed for quashing of the complaint case being C.R. Case No. 53c of 2015, under Sections 418/420 of the Indian Penal Code, (for short 'Cr.P.C.'), pending in the Court of learned Judicial Magistrate, 1st Class, Kamrup (M) at Guwahati and the order, dated 2.2.2016, passed in the said case, whereby, cognizance of the offences aforementioned is taken against the petitioners. 3. The petitioners' case, in a nutshell, is that the petitioner No. 1 is working as a Circle Head and petitioner No. 2 was the then Finance Head of Viom Networks Limited which is a registered company engaged in the business of providing infrastructure services to the Cellular Mobile Telephone operators. On 08.01.2015, the complainant/respondent No. 2 herein filed a complaint before the Court of learned Chief Judicial Magistrate, Kamrup (M) at Guwahati, alleging, inter-alia, that the accused/petitioners' company, approached the complainant firm namely, Ayush Enterprise in the month of May, 2012 and offered to engage the complainant firm as a service provider to supply diesel as well as maintenance of the various cell sites at different locations as specified by the company and on being approached, the complainant accepted the offer. Accordingly, an agreement was executed between the parties, on 20.05.2012. After execution of the agreement, the complainant started filling diesel and providing maintenance to all the sites shared by the company as per the terms and conditions of the said agreement. It has been further alleged that on 01.11.2012, when the representatives of the complainant firm went to fill diesel at the site, they came to know that another service provider namely, Moka Tower Power Systems Private Limited took over the responsibility of diesel filling contract from the company and had started filling diesel at various locations without serving any notice to the complainant in violation of Clause 14.1 of the agreement, dated 20.05.2016. Thereafter, the complainant firm requested the company to pay their outstanding bills for maintenance and not to give the contract to any other party during the continuation of the contract. Thereafter, the complainant firm requested the company to pay their outstanding bills for maintenance and not to give the contract to any other party during the continuation of the contract. Although, the company paid the bills for filling diesel upto 30.10.2012, the company, however, did not pay the outstanding bills on account of maintenance amounting to Rs. 3,14,046. Even, thereafter, the complainant firm continued their job of filling diesel upto January, 2013. The further allegation is that on request of the complainant firm, the company allowed the complainant firm to fill diesel and accordingly, continued their services from 21.11.2012 to 20.01.2013. Thus, total outstanding bill for providing service of maintenance from September, 2012 to January, 2013 came to Rs. 3,14,046, and accordingly, an amount of Rs. 19,00,736.74 was due to the complainant firm. It has been further alleged that the complainant on various occasions requested the company to pay the outstanding bills, but the representatives of the company did not respond to it. Thereafter, a legal notice was sent to the company on 04.12.2014, but despite receipt of the notice, the company failed to make any payment of the outstanding amount to the complainant firm/respondent No. 2 herein. 4. On receipt of the complaint to the above effect, the learned Chief Judicial Magistrate, Karmrup (M), vide order, dated 09.01.2015, transferred the case to the Court of learned Sub-Divisional Judicial Magistrate (S), Guwahati for disposal. After recording the statement of the complainant on 01.04.2015, the case was fixed for further inquiry under Section 202 Cr.P.C. and accordingly, two witnesses were examined. Thereafter, by an order dated 17.10.2015, the learned Judicial Magistrate, 1st Class, Karmrup (M) at Guwahati directed the Officer-in-Charge, Paltan Bazar P.S. to make a limited inquiry and submit a report under Section 202 Cr.P.C. stating whether there was any ground for proceeding against the accused persons under Sections 415/418/420 of the IPC or not. Accordingly, the report was submitted and on the basis of the inquiry report submitted by the police and on being satisfied, the learned Judicial Magistrate, 1st Class, Guwahati by an order, dated 02.02.2016, took cognizance of the offences under Sections 418/420 of the IPC against the accused/petitioner No. 1, Kevya Kanta Gogoi and issued summons directing his appearance on 11.04.2016. 5. Mr. 5. Mr. D. Das, learned Senior counsel appearing for the petitioners, submitted that the learned Magistrate having passed the impugned order taking cognizance of the offences aforementioned against the accused/petitioners, who were responsible for the affairs of the company, was an irregular order as it is no longer res-integra that an inquiry has to be conducted by the officer so designated in the order of the learned Magistrate, while directing an inquiry in terms of Section 202 Cr.P.C. Mr. Das further submitted that in absence of any power of delegation provided in the order of the learned Magistrate, such designated officer cannot re-delegate such inquiry under Section 202 Cr.P.C. to any other police officer, namely, Sub-Inspector Aminur Rahman, who was not the Officer-in-Charge of Paltan Bazar P.S. during the relevant period. According to Mr. Das, it is now well settled that where commission of offence is alleged against a company, its officers are not automatically impleaded as accused persons unless incriminating acts are specifically alleged against such officers of the company and as such, in absence of any specific allegation, no criminal prosecution lies against the accused/petitioners. 6. Mr. Das also submitted that there is an Arbitration Clause incorporated in Clause 16 of the agreement, dated 20.05.2012, which provides that all disputes and differences between the parties to the agreement arising out of the said agreement or in relation to the interpretation of effect of any of the terms and conditions contained in the agreement or in relation to an obligation of the parties shall be referred to mutually appointed arbitrators and if still not able to settle, then will go for arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996. 7. Mr. Das contended that in terms of the agreement, the complainant/respondent No. 2, herein, had drawn their bill amounts regularly from the company, but after a passage of time, the petitioners' company had to stop working at the various cell sites in Assam due to poor performance of supply of diesel by the complainant/respondent No. 2 and as a result, the company had engaged another service provider namely, Moka Tower Power Systems Pvt. Ltd. since 30.10.2013 and accordingly, the said company continued to supply diesel to various cell sites, but subsequently it engaged the services of the respondent No. 2 and left the State of Assam after misappropriating approximately Rs. 3 crores from the company and in that regard a criminal proceeding has been launched against the said company by filing CR Case No. 1847/2013 in the Court of learned Chief Judicial Magistrate, Kamrup (M), Guwahati, for which reason, the respondent No. 2 has filed the complaint case being CR Case No. 53c of 2015 against the petitioners to realize the amount illegally in spite of no amount is pending for payment by the company of the petitioners. Mr. Das, however, submitted that although the petitioners were ready and willing to pay the outstanding amount of Rs. 1,70,398 to the complainant/respondent No. 2 and for this purpose, they had made communications to the complainant/respondent No. 2, herein, but there was no response and instead of coming forward for an amicable settlement, the instant false complaint case has been filed against the petitioners. 8. In such facts and circumstances, Mr. D. Das, learned Senior counsel appearing for the petitioners vehemently submitted that the impugned complaint case being C.R. Case No. 53c of 2015 along with the impugned order, dated 02.02.2016, passed therein need to be quashed in exercise of the inherent jurisdiction of this Court. Mr. Das relied on the ratio of the judgments of the Apex Court delivered in Binod Kumar & Ors. Vs. State of Bihar & Anr., reported in : (2014) 10 SCC 663 ; Suryalashmi Cotton Mills Ltd. Vs. Rajvir Industries Ltd. & Ors., reported in (2008) 13 SCC 678 and All Cargo Movers (India) Pvt. Ltd. & Ors. Vs. Dhanesh Badarmal Jain & Am, reported in (2007) 14 SCC 776 and Hridaya Ranjan Prasad Verma & Ors. Vs. State of Bihar & Anr., reported in (2000) 4 SCC 168 . 9. Mr. R. Sarma, learned counsel for the complainant/respondent No. 2 submitted that the inquiry made by the learned Magistrate into the complaint was for limited purpose of finding out whether a prima facie case of cheating was made out for issuance of process on the materials placed by the complainant/respondent No. 2 herein under Sections 200/202 Cr.P.C. Mr. Sarma further submitted that there was element of deception at the time of execution of the agreement and the entire allegations of the complainant being rested on disputed facts, the complaint case in question cannot be quashed as prayed for. Sarma further submitted that there was element of deception at the time of execution of the agreement and the entire allegations of the complainant being rested on disputed facts, the complaint case in question cannot be quashed as prayed for. Referring to the ratio of the judgment delivered by the Supreme Court in Medchl Chemicals & Pharma (P) LTD. Vs. Biological E. Ltd. & Ors., reported in (2000) 3 SCC 269 and Nagpur Steel & Alloys Pvt. Ltd. Vs. P. Radhakrishna @ Rajan & Ors., reported in 1997 SCC (Cri) 1073, Mr. Sarma submitted that in the instant complaint case all the ingredients of the offence of cheating under Section 415 of the IPC are prima facie fulfilled and as such, the case cannot legally be quashed and the matter should be left to the discretion of the learned Trial Court on the basis of the evidence to be laid at the time of trial. 10. I have given due consideration to the arguments advanced by the learned counsel of both the sides and perused records including the affidavit-in-opposition filed by the complainant/respondent No. 2 and the case laws cited by both the sides. 11. A perusal of the record reveals that an agreement was entered into between Viom Networks Limited, that is the petitioners' company and the respondent No. 2 on 20.5.2012 for supply of diesel and maintenance of the various cell sites at different locations as specified by the company of the petitioners herein. Accordingly, in terms of the said agreement, the respondent No. 2 supplied diesel to and carried out maintenance work at various cell sites. Subsequently, however, another company, namely, Moka Tower Power Systems Pvt. Ltd. came in and allegedly took up the responsibility to supply diesel, allegedly without knowledge of the respondent No. 2, in contravention of Clause 14.1 of the said agreement. On the other hand, some outstanding bills remained unpaid to the respondent No. 2 on account of supply of diesel and maintenance of the cell sites. On the other hand, some outstanding bills remained unpaid to the respondent No. 2 on account of supply of diesel and maintenance of the cell sites. The respondent No. 2, therefore, filed the complaint case in the Court of learned Chief Judicial Magistrate, Kamrup (M) at Guwahati alleging cheating against the petitioners, who were responsible for the management and affairs of the company namely, Viom Networks Ltd. Being eventually made over the case for disposal, the learned Judicial Magistrate, 1st Class, Kamrup (M) at Guwahati made necessary inquiry under Sections 200/202 Cr.P.C. and upon having found prima facie sufficient materials, under Sections 418/420 of the IPC took cognizance of the aforesaid offences and directed to issue summons to the petitioners for their appearance vide order, dated 02.02.2016, passed in CR Case No. 53/2015. 12. The impugned order, dated 2.2.2016, passed in CR Case No. 53/2015 is extracted herein below:- "Complaint is absent with steps. Report is furnished from Paltan Bazar P.S. stating that Deepal Bargla left his service from the Viom Networks Ltd. Since the I/O submitted that there were sufficient materials found against Viom Networks Ltd. u/s. 418/420 of IPC. So considering the statement of the complainant and the report u/s. 202 Cr.P.C., I found that there is sufficient grounds for proceedings against the accused Viom Networks Ltd. represented by Sri Kevya Kanta Gogoi u/s. 418/420 of IPC. Issue summons to the accused. Fix 11-04-16 for S/R, appearance. Sd/- Magistrate" 13. In Suryalakshmi (supra), the Apex Court observed that the parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 Cr.P.C. is now well settled. Although it is of wide amplitude, a great deal of caution is also required in its exercise. What is required is application of well-known legal principles involved in the matter. It is neither feasible nor practicable to lay down exhaustively as to on what ground the jurisdiction of the High Court under Section 482 Cr.P.C. should be exercised. The Apex Court further observed that criminal proceedings should not be encouraged when it is found to be mala fide or otherwise abuse of the process of court. In Dhanesh Badarmal Jain (supra) held that a case may be quashed if the allegations made in the complaint petition, even, if, given in its face value and taken to be correct in its entirety, do not disclose an offence. In Dhanesh Badarmal Jain (supra) held that a case may be quashed if the allegations made in the complaint petition, even, if, given in its face value and taken to be correct in its entirety, do not disclose an offence. In Hridaya Ranjan Prasad Verma (supra), the Apex Court held that 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. In Binod Kumar (supra), the Apex Court held that a complaint, which apparently disclosed a Civil Liability cannot be converted to Criminal Liability, which is an abuse of process of the Court. 14. For the purpose of constituting an offence of 'cheating' defined in Section 415 of the IPC, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Section 418 of the IPC provides the punishment for an aggravated form of cheating, where the accused cheats with knowledge that wrongful loss may be caused to the person, whose interest the accused is bound to protect under law. Section 420 of the IPC, on the other hand, deals with cheating and dishonestly inducing delivery of property. The offence of cheating is made of two ingredients; deception of any person and fraudulently or dishonestly inducing that person to deliver any property to any person. To put it differently, the basic ingredient of the offence is the existence of fraudulent or dishonest intention at the time of making promise or representation to the person so deceived. The offence of cheating is made of two ingredients; deception of any person and fraudulently or dishonestly inducing that person to deliver any property to any person. To put it differently, the basic ingredient of the offence is the existence of fraudulent or dishonest intention at the time of making promise or representation to the person so deceived. The terms 'dishonestly' is defined in Section 24 and 'fraudulently' in Section 25 of the IPC. 15. In Uma Shanker Gopalkar Vs. State of Bihar, reported in (2006) 2 SCC (Cri) 49, the Apex Court held that every breach of 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. It is further pertinent to mention that in respect of offences committed by a company, there is no special provision in the Penal Code for applying the principles of vicarious liability so as to rope in any office bearer of the company for an offence committed by the company unless specific allegation is made against such office bearer, who is responsible for commission of the offence. 16. On perusal of the averments made in the complaint filed by the respondent No. 2, which is a proprietorship firm, it reveals that pursuant to an agreement executed on 20.5.2012, they supplied diesel in different cell sites specified by the Viom Networks Ltd., a registered company under the Companies Act, 1956, of which, the petitioner No. 1 is a Circle Head and the petitioner No. 2 was the then Finance Head. 17. Clause 16 of the said agreement reads as here-in-below extracted:- "16. All disputes and differences between the parties hereto arising out of this agreement or in relation to the interpretation or effect of any of the terms and conditions contained in this agreement or in relation to rights and obligations of the parties hereto shall be referred to mutually appointed arbitrator and if still not able to settle, then will go for arbitration in accordance with provisions of Arbitration and Conciliation Act 1996, or any statutory enactment thereof........" 18. On scrutiny of the documents annexed to the petition in support of the averments made therein and the statements recorded under section 200/202 Cr.P.C., it is crystal clear that there is dispute arising out of supply of diesel and maintenance of the cell sites between the parties and nonpayment of bills to the complainant/respondent No. 2 herein. It is noticed that pursuant to the said agreement, the terms of the agreement so entered into by the parties was allegedly partly performed and thus, disputes in question are apparently arising out of part performance of the terms of the contract giving rise to non-performance of the terms of the contract in their entirety, which is a dispute of civil nature, in absence of any specific allegations of commission of the alleged offences by the petitioners themselves in their individual capacity as Circle Head and Finance Head of Viom Networks Ltd., which is a company registered under the Companies Act, 1956. On examination of the allegations made in the complaint, on their face value, without critically examining the truth or falsity of the same, this Court without hesitation finds that there is no element of offence of cheating against the petitioners, who are mere Local Circle Heads of the company viz. Viom Networks Ltd. No mens rea on the part of the petitioners is also noticed in regard to commission of the alleged offences. It is further noticed that by the impugned order, dated 02.02.2016, the learned Magistrate took cognizance of the offences, aforementioned, only against the petitioner No. 1, herein, although the complaint was filed against both the petitioners. It needs to be mentioned that an inquiry by police officer, under Section 202 Cr.P.C. is to ascertain the truth of the allegations of the complaint, which the learned Magistrate had done in the case before cognizance of the offences was taken and acted upon it along with the inquiry made under Section 200 Cr.P.C. Considered thus, this Court is of the opinion that no criminal liability arises against the petitioners in personam. 19. Consequently, the petition stands allowed. 20. Accordingly, the impugned CR Case No. 53c of 2015 along with the order dated 2.2.2015, passed therein taking cognizance of the offences aforementioned against the petitioners stands set aside and quashed. 21. Petition stands disposed of accordingly.