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2020 DIGILAW 805 (GUJ)

Vaishali D/o Ramniklal Patel v. State of Gujarat

2020-09-24

GITA GOPI

body2020
JUDGMENT : 1. Rule. Mr. Pranav Trivedi, learned Additional Public Prosecutor and Mr. Panam Soni, learned advocate, waives service of note of rule on behalf of the respective respondents. With the consent of learned advocates on both the sides, the matter is heard today finally. 2. This application has been filed under section of the Criminal Procedure Code (hereinafter referred to as “the Code”) with the prayer to quash and set aside the impugned complaint being FIR No.11191042200020 of 2020 registered with Satellite Police Station for the offence punishable under sections 406, 420 and 114 of IPC. 3. The facts in brief are that on 11.01.2020, respondent No.2 herein, original complainant, filed a complaint being FIR No.11191042200020 of 2020 with Satellite Police Station inter alia alleging that original accused No.1 is a Partner of the partnership firm named M/s. Co-pack Laminators LLP, whereas original accused No.2, the applicant herein, is the wife of original accused No.1 and original accused No.3 is the father of original accused No.2. 3.1 It is the say of the original complainant in the impugned complaint that he had paid total amount of Rs.2,88,06,000/-, including gold ornaments, to the accused persons as his part of the investment in the business venture during the period between January 2017 to January 2018, which was deposited in the bank accounts of original accused No.1 and 2 respectively. Thereafter, on 30.09.2018 the accused persons, in connivance with each other, joined four other persons as partners in the partnership firm without the knowledge of the complainant. Therefore, the complainant questioned the accused as to why he was not joined as partner in the firm though he had made substantial investments. However, the complainant did not received any satisfactory reply from the original accused No.1. The complainant asked the accused persons to return the investments made by him in the firm. However, the complainant was not paid any amount nor the gold that was invested by him in the said firm despite repeated requests. Hence, the impugned complaint was filed against the accused persons. 4. Mr. B.B. Agrawal, learned advocate for the petitioner, submitted that the petitioner herein never played any role, much less any active role, in the establishment or managing the day-to-day affairs of the partnership firm. Hence, the impugned complaint was filed against the accused persons. 4. Mr. B.B. Agrawal, learned advocate for the petitioner, submitted that the petitioner herein never played any role, much less any active role, in the establishment or managing the day-to-day affairs of the partnership firm. The petitioner, who was the wife of original accused No.1 at the relevant point of time, was made a formal partner by original accused No.1 only to set up the partnership firm and the petitioner never played any role in the decision making process of the firm. The attention of the Court was drawn to the averments made in the impugned complaint to submit that even a bare perusal of the allegations made therein does not disclose the commission of any crime by the petitioner herein. At the most, the petitioner is alleged to be a witness in whose presence the complainant and original accused No.1 had entered into some business arrangements. Apart from that, there is no other direct allegation against the petitioner herein. 4.1 It was further submitted by learned advocate Mr. Agrawal that the petitioner had retired as Partner of the partnership firm, named M/s. Co-Pack Laminators LLP, vide supplement deed executed on 28.09.2018 and therefore, she could not be held liable for any of the acts of the partnership firm. The attention of the Court was invited to the Supplement Deed of partnership dated 28.09.2018 to submit that the petitioner held only 7.50% share in the firm and that after the execution of the supplement deed, the petitioner ceased to be a partner in the partnership firm. Further, there exists no marital relationship between the petitioner and original accused No.1 as they got legally separated vide divorce deed dated 29.02.2020. It was, therefore, prayed that the impugned complaint deserves to be quashed and set aside qua the petitioner herein. 4.2 In support of the submissions, reliance was placed upon an unreported decision of the coordinate Bench of this Court rendered in the case of Parthkumar Ramniklal Kalavadiya and others v. State of Gujarat passed in Criminal Misc. Application No.7630 of 2015 decided on 09.12.2016 and on a recent decision of the Apex Court rendered in the case of Sushil Sethi and another v. The State of Arunachal Pradesh and others passed in Criminal Appeal No.125 of 2020 dated 31.01.2020. Application No.7630 of 2015 decided on 09.12.2016 and on a recent decision of the Apex Court rendered in the case of Sushil Sethi and another v. The State of Arunachal Pradesh and others passed in Criminal Appeal No.125 of 2020 dated 31.01.2020. It was, accordingly, urged that the impugned complaint deserves to be quashed and set aside qua the petitioner herein. 5. Mr. Panam Soni, learned advocate appearing for respondent No.2, original complainant, submitted that the petitioner herein, in connivance with other accused persons, lured the original complainant to invest in the firm for 33% stake, wherein the petitioner was having 25% share. In good faith, the original complainant invested hefty sum of Rs.2.88 crores, which included gold during the period between January 2017 – January 2018. The deed of retirement would have no bearing in the facts and circumstances of the case since the same was executed in September 2018, whereas the original complainant had made hefty investments in the firm between January 2017 - January 2018, during which period, the petitioner herein was actively involved in the affairs of the firm. Further, the divorce deed between the petitioner and original accused No.1 is a private affair and does not have any bearing on the present complaint since both are totally different. The petitioner cannot be exonerated merely because she has taken divorce from the original accused No.1 and she would be liable for all the acts of the firm, during which period, she was a partner in the said firm. It was, accordingly, urged that the present petition may not be entertained and deserves to be rejected. 6. Mr. Pranav Trivedi, learned Additional Public Prosecutor, adopted the submissions advanced by learned advocate appearing for the respondent No.2. It was submitted that the petitioner herein was actively involved in the business affairs of the partnership firm, of which the petitioner was one of the partners. It was, accordingly, prayed that the present deserves to be dismissed. 7. Heard learned advocates on both the sides and perused the documents on record. In the impugned complaint, the offence alleged against the petitioner herein is under sections 406, 420 and 114 of IPC. It was, accordingly, prayed that the present deserves to be dismissed. 7. Heard learned advocates on both the sides and perused the documents on record. In the impugned complaint, the offence alleged against the petitioner herein is under sections 406, 420 and 114 of IPC. Thus, in order to exercise powers under section 482 of the Code, the Court has to examine whether on a bare reading of the allegations made in the impugned complaint, the offence alleged against the petitioner herein have been made out or not. 8. The essential ingredient for the offence under section 406 IPC is the entrustment of any property in relation to which criminal breach of trust has taken place. Even on a bare reading of the averments made in the impugned complaint, the petitioner does not appear to be a party to any of the alleged transactions mentioned therein. There appears to be no entrustment of any property to the petitioner by the respondent No.2. The events mentioned in the complaint, wherein it is shown that the petitioner was a witness to the handing over of cash/cheque by the original complainant to the original accused No.1 could not be considered as an event of entrustment of any property to the petitioner since the said events, as averred in the impugned complaint, had taken place at the residence of original accused No.1, during which time, the presence of the petitioner at the place would be natural as she happened to be the wife of original accused No.1 at the relevant time, though, with effect from February 2020, the petitioner and original accused No.1 have severed their relationship. Therefore, the presence of the petitioner at the said place at the relevant point of time could not be treated as a formal presence for the purpose of business. Except the averment that the petitioner was present at the time when the original complainant had handed over cash/cheque to original accused No.1, which was natural as the place was her matrimonial home at the relevant time, there is no other allegation against the petitioner. 9. It is true that the cheques handed over by the respondent No.2 to the original accused No.1 during the period between January 2017 – January 2018 were deposited by the original accused No.1 in the joint account held along with his wife, i.e. the petitioner herein. 9. It is true that the cheques handed over by the respondent No.2 to the original accused No.1 during the period between January 2017 – January 2018 were deposited by the original accused No.1 in the joint account held along with his wife, i.e. the petitioner herein. However, the same would not ascribe any knowledge on the petitioner that she was aware about the day-to- day affairs of the partnership firm. The fact that respondent No.2 has not made a single averment in the impugned complaint to the above effect shows that the petitioner was not having any knowledge about the day-to-day affairs of the business of the partnership firm. 10. Apart from that none of the ingredients of the offence punishable under section 420 IPC are made out against the petitioner. The essential ingredients to attract the provision of section 420 IPC are (i) cheating (ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or converted or is capable of being converted into a valuable security and (iii) mens rea of the accused at the time of making the inducement. To attract this provision, it is not merely sufficient 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 distinction between mere breach of contract and cheating would depend upon the intention of the accused at the time of the alleged inducement as per the terms and conditions of the agreement. In the present case, it does not appear from the impugned complaint that the petitioner had made any representation, much less any false representation, to the respondent No.2 with the intention to deceive him. Thus, in the opinion of this Court, none of the ingredients of the offence alleged against the petitioner herein have been made out. 11. In the present case, it does not appear from the impugned complaint that the petitioner had made any representation, much less any false representation, to the respondent No.2 with the intention to deceive him. Thus, in the opinion of this Court, none of the ingredients of the offence alleged against the petitioner herein have been made out. 11. It is well settled that to invoke the inherent jurisdiction under section 482 of the Code, the Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable and indubitable facts; the material produced is such, as would rule out and displace the assertions contained in the charges leveled against the accused; and the material produced is such, as would clearly reject and overrule the veracity of the allegations contained in the accusations leveled by the prosecution / complainant. It should be sufficient to rule out, reject and discard the accusations leveled by the prosecution / complainant, without the necessity of recording any evidence. For this, the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such, as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In the present case, the accused has produced certain material, particularly, the Supplement Deed of partnership dated 28.09.2018 for the invocation of the inherent jurisdiction of this Court under section 482 of the Code. Though the said deed was executed in September 2018 and the allegations in the impugned complaint relate to the period between January 2017 – January 2018, it can certainly be looked into as it has not been refuted by the other side. 11.1 It appears from the said deed that at the time of retiring from the partnership firm, the petitioner was holding 7.50% share. It also appears that original accused No.1, who was holding charge as “Designated Partner”, had changed his designation to “Normal Holding Partner” and it was provided that original accused No.1 will be held liable for all the debts and outstanding dues as may have arisen on account of his acts / conduct during his tenure as Designated Partner. It also appears that original accused No.1, who was holding charge as “Designated Partner”, had changed his designation to “Normal Holding Partner” and it was provided that original accused No.1 will be held liable for all the debts and outstanding dues as may have arisen on account of his acts / conduct during his tenure as Designated Partner. The partnership firm in question was set up under the provisions of the Limited Liability Partnership Act, 2008. Under the provisions of the said Act, “Limited liability partnership” means a partnership formed and registered under the said Act. “Limited liability partnership agreement” means any written agreement between the partners of the limited liability partnership or between the limited liability partnership and its partners, which determines the mutual rights and duties of the partners and their rights and duties in relation to that limited liability partnership. It is clear from the terms of the Supplement Deed dated 28.09.2018 that the petitioner was holding 7.50% share in the partnership firm and had retired from the partnership firm on the day when the deed was executed. At the time of retirement, if the petitioner would have had any outstanding debts / dues in her name, then the same would have definitely found mention in the deed dated 28.09.2018, as has been provided in case of original accused No.1. The absence of any such noting against the name of the petitioner shows that the petitioner was only a sleeping partner in the firm and all the decision / day-to-day affairs were managed by other partners. 11.2 This Court is mindful of the fact that the supplement deed was executed on 28.09.2018, whereas the allegations made in the impugned complaint are for the period prior thereto, i.e. between January 2017 to January 2018, during which time, the petitioner was a partner in the partnership firm. However, the said document can certainly be taken as a guiding factor for determining the role of the petitioner herein since the supplement deed came to be executed only six months after the period during which the alleged offence as per the say of the original complainant came to be committed. However, the said document can certainly be taken as a guiding factor for determining the role of the petitioner herein since the supplement deed came to be executed only six months after the period during which the alleged offence as per the say of the original complainant came to be committed. In the opinion of this Court, the defence put-forth by the petitioner by producing the Supplement Deed dated 28.09.2018 could not be refuted by the original complainant as the same is based on sound, reasonable and indubitable facts, which warrants invocation of the inherent powers under section 482 of the Code. 12. In the case of State of Haryana v. Bhajan Lal, 1992 Supp. (1) SCC 335, the Apex Court has categorised the cases, by way of illustration, wherein the powers under Article 226 or the inherent powers under section 482 Cr.P.C. could be exercised either to prevent the abuse of the process of any Court or otherwise to secure the ends of justice. In paragraph 102, it is observed and held as under: “102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise clearly defined and sufficiently channelised and inflexible guidelines or rigid formula and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or 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. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act. providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to Spite him due to private and personal grudge.” 13. In the case of Vesa Holdings Private Limited v. State of Kerala and others, (2015) 8 SCC 293 , the Apex Court has 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. In the case of Vesa Holdings Private Limited v. State of Kerala and others, (2015) 8 SCC 293 , the Apex Court has 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. It has been further held that for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. It is further held that even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under section 420 IPC can be said to have been made out. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. 14. Considering the facts and circumstances of the case and the principle laid down in the above decisions, this Court is of the view that this is a fit case wherein powers under section 482 of the Code could be exercised in favour of the applicant. 15. In the result, the application is allowed. The impugned complaint being FIR No.11191042200020 of 2020 registered with Satellite Police Station and the proceedings initiated pursuant thereto are quashed and set aside qua the petitioner herein. Rule is made absolute to the above extent.