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Jharkhand High Court · body

2019 DIGILAW 840 (JHR)

Puesh Kumar v. State of Jharkhand

2019-04-09

RAJESH SHANKAR

body2019
JUDGMENT : 1. The present criminal miscellaneous petition has been filed for quashing the first information report being Chas P.S Case No.203 of 2013 dated 02.07.2013, corresponding to G.R. No.1049 of 2013, registered under Sections 420, 406, 120B/34 of the Indian Penal Code, pending in the court of Additional Chief Judicial Magistrate, Bokaro. 2. The petitioners are Director, Executive Officer (Sales), General Manager and the employee of Dharampal Satyapal Ltd., (hereinafter referred as the ‘Company’), respectively. The said Company is carrying on business of manufacturing and supply of various kinds of mouth fresheners, spices, tobacco and non-tobacco based products in the name of various well-known brands. During the course of its business activities, the Company appointed the opposite party no. 2 as a dealer of the State of Jharkhand for sale and distribution of its product. In and around June, 2012, the opposite party no.2 requested the Company to terminate the dealership. Accordingly, the Company terminated the dealership of the opposite party no.2 and appointed another dealer, namely, M.R. Enterprises and drew an invoice for stock transfer, transferring the products held by the opposite party no.2 to said M. R. Enterprises. In accordance with the said settlement, all the stocks were transferred to the newly appointed agent comprising of approx. 25 boxes of tobacco product, namely, Tulsi, which the opposite party no.2 claimed that he would be able to dispose of the same, to which the company agreed. In accordance with the rules, the dealer was also required to submit a claim form of the goods which he had held and had expired. On discontinuance of the dealership, the opposite party no.2 vide letter dated 01.10.2012 claimed a sum of Rs.4,57,829.62 under different heads which were denied by the Company. The opposite party no.2 filed Complaint Case No.677 of 2013 agitating that he had not been paid the aforesaid dues. The said compliant was subsequently transferred to the concerned police station under section 156(3) of Cr.P.C. for investigation and as such the present first information report was lodged. In the meantime, the opposite party no.2 moved before the President, Bokaro Chamber of Commerce and Industries, Chas, Bokaro for settlement of his claim and finally both the parties agreed to settle the claim for a sum of Rs.3,34,826.62 against the alleged claim of Rs.4,57,829.62. Though the matter was agreed to be settled on the said amount, the petitioner no.4 was apprehended. Though the matter was agreed to be settled on the said amount, the petitioner no.4 was apprehended. 3. The learned counsel for the petitioners submits that the present matter involves civil dispute and no criminal offence is made out against the petitioners. The petitioners have no role to play with respect to the dispute between the Company and the opposite party no.2 and apparently no criminality has been attributed against any of the petitioners whether severally and jointly. Non-payment of the dues does not come under any criminal act as alleged by the opposite party no.2. It is further submitted that the criminal complaint and the FIR even otherwise have become infructuous and should have been withdrawn by opposite party no.2 on settlement having been arrived at between him and the Company. It is further submitted that the Company was always ready to pay the settled amount subject to fulfilment of the terms of settlement on the part of the opposite party no.2 by returning the stocks as also by filling up claim form of the goods and by furnishing the same in original, however, the dispute could not come to an end due to the procedural delay committed by the opposite party no.2 himself. 4. The learned counsel for the opposite party no.2 submits that the mere fact that the complaint relates to a commercial transaction or breach of contract for which a civil remedy is available or has been availed is not by itself a ground to quash the criminal proceeding. The test is whether the allegations in the complaint disclose a criminal offence or not. The criminal proceeding instituted against the petitioners may not be quashed at such an initial stage under section 482 Cr.P.C when the allegations made out in the complaint/first information report discloses the criminal offence. It is further submitted that there are sufficient materials against the petitioners to proceed with the present criminal case. 5. Heard the learned counsel for the parties and perused the materials available on record. It is an admitted fact that there was commercial transaction between the Company and the opposite party no.2. The dispute cropped up in the present case only after the cancellation of the dealership of the opposite party no.2. 5. Heard the learned counsel for the parties and perused the materials available on record. It is an admitted fact that there was commercial transaction between the Company and the opposite party no.2. The dispute cropped up in the present case only after the cancellation of the dealership of the opposite party no.2. The claim of the opposite party no.2 is that repeated requests were made to the Company for payment of dues for an amount of Rs.4,57,829.62 under different heads and for that a legal notice was also served upon the petitioners, however, they deliberately and intentionally retained the dues of the opposite party no.2. On the contrary, the petitioners have contended that on the application of the opposite party no.2, the Bokaro Chamber of Commerce and Industries, Chas Bokaro settled the dispute between the parties and it was agreed by the Company to pay the settled amount of Rs.3,34,826.62 to the opposite party no.2, however due to non-compliance of some formalities by the opposite party no.2, the said amount could not be released. 6. In the case of Joseph Salvaraj A. v. State of Gujarat, reported in (2011) 7 SCC 59 , the Hon’ble Supreme Court has held as under:- “15. Criminal breach of trust is defined under Section 405 IPC and Section 406 thereof deals with punishment to be awarded to the accused, if found guilty for commission of the said offence i.e. with imprisonment for a term which may extend to three years, or with fine, or with both. Section 420 IPC deals with cheating and dishonestly inducing delivery of property. Cheating has been defined under Section 415 IPC to constitute an offence. Under the aforesaid section, it is inbuilt that there has to be a dishonest intention from the very beginning, which is sine qua non to hold the accused guilty for commission of the said offence. Categorical and microscopic examination of the FIR certainly does not reflect any such dishonest intention ab initio on the part of the appellant. Section 506 IPC deals with punishment for criminal intimidation. Categorical and microscopic examination of the FIR certainly does not reflect any such dishonest intention ab initio on the part of the appellant. Section 506 IPC deals with punishment for criminal intimidation. Criminal intimidation, insult and annoyance have been defined in Section 503 IPC but the FIR lodged by the complainant does not show or reflect that any such threat to cause injury to person or of property was ever given by the appellant to the complainant.” In the case of Arun Bhandari v. State of U.P., reported in (2013) 2 SCC 801 , the Hon’ble Supreme Court has held as under:- “21. Before we proceed to scan and analyse the material brought on record in the case at hand, it is seemly to refer to certain authorities wherein the ingredients of cheating have been highlighted. In State of Kerala v. A. Pareed Pillai [ (1972) 3 SCC 661 : 1972 SCC (Cri) 705 : AIR 1973 SC 326 ] a two-Judge Bench ruled that: (SCC p. 667, para 16) “16. … To hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise [and] such a dishonest intention cannot be inferred from [a] mere fact that he could not subsequently fulfil the promise.” 22. In G.V. Rao v. L.H.V. Prasad [ (2000) 3 SCC 693 : 2000 SCC (Cri) 733] this Court has held thus: (SCC pp. 696-97, para 7) “7. As mentioned above, Section 415 has two parts. While in the first part, the person must ‘dishonestly’ or ‘fraudulently’ induce the complainant to deliver any property; in the second part, the person should intentionally induce the complainant to do or omit to do a thing. That is to say, in the first part, inducement must be dishonest or fraudulent. In the second part, the inducement should be intentional. As observed by this Court in Jaswantrai Manilal Akhaney v. State of Bombay [ AIR 1956 SC 575 : 1956 Cri LJ 1116] a guilty intention is an essential ingredient of the offence of cheating. In order, therefore, to secure conviction of a person for the offence of cheating, ‘mens rea’ on the part of that person, must be established. As observed by this Court in Jaswantrai Manilal Akhaney v. State of Bombay [ AIR 1956 SC 575 : 1956 Cri LJ 1116] a guilty intention is an essential ingredient of the offence of cheating. In order, therefore, to secure conviction of a person for the offence of cheating, ‘mens rea’ on the part of that person, must be established. It was also observed in Mahadeo Prasad v. State of W.B. [ AIR 1954 SC 724 : 1954 Cri LJ 1806] that in order to constitute the offence of cheating, the intention to deceive should be in existence at the time when the inducement was offered.” 23. In S.W. Palanitkar v. State of Bihar [ (2002) 1 SCC 241 : 2002 SCC (Cri) 129 : AIR 2001 SC 2960 ] it has been laid down that: (SCC p. 250, para 21) “21. … In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating.” 24. In the said case while dealing with the ingredients of criminal breach of trust and cheating, the Bench observed thus: (S.W. Palanitkar case [ (2002) 1 SCC 241 : 2002 SCC (Cri) 129 : AIR 2001 SC 2960 ] , SCC p. 246, paras 9-10) “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 willfully 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.” In both the aforesaid cases, the Hon’ble Supreme Court has held that the sine qua non for holding an accused guilty for the offences under Sections 420 and 406 of the Indian Penal Code, there has to be a dishonest intention from the very beginning. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating. 7. In the case of All Cargo Movers India (P) Ltd. v. Dhanesh Badarmal Jain, reported in (2007) 14 SCC 776 , the Hon’ble Supreme Court has held as under:- 16. [Ed.: Para 16 corrected vide Official Corrigendum No. F.3/Ed.B.J./86/2008 dated 18-10-2008.] We are of the opinion that the allegations made in the complaint petition, even if given face value and taken to be correct in its entirety, do not disclose an offence. For the said purpose, this Court may not only take into consideration the admitted facts but it is also permissible to look into the pleadings of Respondent 1-plaintiff in the suit. No allegation whatsoever was made against the appellants herein in the notice. What was contended was negligence and/or breach of contract on the part of the carriers and their agent. Breach of contract simpliciter does not constitute an offence. For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie correct, take into consideration the correspondences exchanged by the parties and other admitted documents. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie correct, take into consideration the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the court. Superior courts while exercising this power should also strive to serve the ends of justice. 19. In Anil Mahajan v. Bhor Industries Ltd. [ (2005) 10 SCC 228 : (2006) 1 SCC (Cri) 746] this Court held: (SCC p. 231, para 8) “8. The substance of the complaint is to be seen. Mere use of the expression ‘cheating’ in the complaint is of no consequence. Except mention of the words ‘deceive’ and ‘cheat’ in the complaint filed before the Magistrate and ‘cheating’ in the complaint filed before the police, there is no averment about the deceit, cheating or fraudulent intention of the accused at the time of entering into MoU wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay. According to the complainant, a sum of Rs 3,05,39,086 out of the total amount of Rs 3,38,62,860 was paid leaving balance of Rs 33,23,774. We need not go into the question of the difference of the amounts mentioned in the complaint which is much more than what is mentioned in the notice and also the defence of the accused and the stand taken in reply to notice because the complainant's own case is that over rupees three crores was paid and for balance, the accused was giving reasons as above-noticed. The additional reason for not going into these aspects is that a civil suit is pending inter se the parties for the amounts in question.” 8. In the case of Mohd. Ibrahim v. State of Bihar, reported in (2009) 8 SCC 751 , the Hon’ble Supreme Court has held as under:- “8. The additional reason for not going into these aspects is that a civil suit is pending inter se the parties for the amounts in question.” 8. In the case of Mohd. Ibrahim v. State of Bihar, reported in (2009) 8 SCC 751 , the Hon’ble Supreme Court has held as under:- “8. This Court has time and again drawn attention to the growing tendency of the complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurize parties to settle civil disputes. But at the same time, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes. (See G. Sagar Suri v. State of U.P. [ (2000) 2 SCC 636 : 2000 SCC (Cri) 513] and Indian Oil Corpn. v. NEPC India Ltd. [ (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] ) Let us examine the matter keeping the said principles in mind.” 9. I have also perused the judgment cited by the learned counsel for the opposite party no.2 rendered in the case of Indian Oil Corpn. NEPC India Ltd. and Others, reported in (2006) 6 SCC 736 . In Paragraph-12 of the said judgment, it has been held as under:- “12. (v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.” 10. The test is whether the allegations in the complaint disclose a criminal offence or not.” 10. Thus, when from the facts of the case both civil and criminal proceedings are attracted, the aggrieved party may avail both the recourses. The mere pendency of civil proceeding does not oust the jurisdiction of the criminal court to entertain the matter if the ingredients of the alleged offence are attracted from the first information report/complaint. However, the Hon’ble Supreme Court while taking into consideration the growing tendency of the aggrieved party to give the cloak of a criminal offence to such matters, which are essentially and purely civil in nature, held that before proceeding with the criminal prosecution, the criminal court should ensure that proceedings before it are not used for settling scores or to pressurize the other party to settle the civil dispute. Mere use of the expression ‘cheating’ in the complaint is of no consequence. When there is no averment about the deceit, cheating or fraudulent intention of the accused at the time of entering into the contract wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay, the complaint petition is liable to be quashed. 11. In the present case the dispute appears to be of civil nature. There is no cheating or a dishonest inducement for the delivery of property or breach of trust by the petitioners. The present first information report is, thus, an abuse of process of law. I am of the considered view that a dispute purely of civil nature has been given a colour of a criminal offence to wreak vengeance against the petitioners. It does not meet the strict standard of proof required to sustain a criminal accusation. 12. In the case of State of Haryana v. Bhajan Lal, reported in 1992 Supp (1) SCC 335, it has been held that the inherent power under Section 482 Cr.P.C. may be exercised in a case where even if the allegations made in the first information report or the complaint are taken to be true at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused. 13. 13. Under the aforesaid facts and circumstances, the first information report being Chas P.S Case No. 203 of 2013 dated 02.07.2013 instituted against the petitioners and the entire proceeding arising therefrom are hereby quashed. 14. The present petition is, accordingly, allowed. 15. However, the opposite party no.2 is at liberty to take appropriate recourse under civil law, if so advised.