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2022 DIGILAW 109 (JK)

Niru Mukhayam Shyam v. State of J&K

2022-03-15

SANJAY DHAR

body2022
JUDGMENT : Sanjay Dhar, J.-Petitioners, in this petition, have challenged FIR No.40/2018 for offences under Sections 409, 420, 506 read with Section 34 RPC registered with Police Post, Imam Sahib, Shopian. 2. Before coming to the grounds of challenge urged in the petition, it would be apt to refer to the contents of the impugned FIR. 3. Complainant-respondent No.2 has alleged in the impugned FIR that the petitioners, who happen to be the proprietors and partners of two business firms, namely, M/S Apachi Professional Services and M/S Himachal Fruit Company, approached the complainant in September, 2017, for doing transaction of purchase of apple fruit from him. It is alleged that the petitioners represented themselves to be honest businessmen and relying upon these representations, the complainant after purchasing fruit from apple growers, supplied the fruit costing an amount of Rs.2,52,80555/- to the petitioners. It is further averred in the FIR that during the continuance of the transaction, the petitioners made periodic payments to the tune of Rs.1.00 crore to the complainant as part consideration for the apple fruit supplied by him to the petitioners. It was promised by the petitioners to the complainant that balance amount of sale consideration i.e., Rs.1,52,80555/- would be paid to him within a few days but the petitioners left from the temporary residence in which they were putting up in Kashmir, which indicates their intention of breach of trust. According to the complainant, the petitioners, with premeditated conspiracy, made him to deliver the fruits to them, whereafter they fled from their temporary residence in Kashmir without paying the full amount to the petitioner thereby cheating him and causing wrongful loss to him. It is alleged that the complainant made demands of balance amount from the petitioners on telephone but they instead of making the payment of balance amount, extended threats to him. 4. It is contended by the petitioners that the contents of the impugned FIR do not disclose commission of any offence by the petitioners. It is further contended that the transaction between petitioners and the complainant-respondent No.2 is purely of civil nature and that respondent No.2, in order to pressurize the petitioners to settle the accounts, has lodged the impugned FIR with a malafide intention. It is further contended that the transaction between petitioners and the complainant-respondent No.2 is purely of civil nature and that respondent No.2, in order to pressurize the petitioners to settle the accounts, has lodged the impugned FIR with a malafide intention. It is also contended that respondent No.2 has implicated not only petitioners No.1 and 2 but has also implicated young sons of petitioner No.2 as accused in the impugned FIR without there being any role attributable to them. 5. Respondents have contested the petition by filing their responses. In the response filed by respondent No.1, it has been contended that the petitioners, who hail from Shimla, are habitual offenders and they purchase fruit from people at Shopian and other places and do not pay the dues to the fruit growers. It is further averred that petitioners had previously filed a similar petition challenging the impugned FIR which was dismissed as withdrawn and, as such, the instant petition is not maintainable. 6. Respondent No.2, in his reply, has reiterated the allegations made in the impugned FIR and has claimed that on a plain reading of the impugned FIR, offences are made out against the petitioners. 7. I have heard learned counsel for the parties and perused the pleadings of the parties. 8. Before coming to the merits of the case, it is necessary to deal with the preliminary objection raised by the respondents with regard to maintainability of the petition on the ground that earlier petition under Section 561-A of J&K Cr. P. C filed by the petitioners was dismissed as withdrawn. In this regard it is to be noted that principles of res judicata are not applicable to criminal proceedings. Even otherwise, the earlier petition filed by petitioners has not been dismissed on merits but the same has been dismissed as withdrawn. Therefore, bar to file second petition under Section 561-A Cr. P. C is not applicable to the case of the petitioners. The objection relating to maintainability of the petition raised by the respondents is, therefore, without any merit. 9. Therefore, bar to file second petition under Section 561-A Cr. P. C is not applicable to the case of the petitioners. The objection relating to maintainability of the petition raised by the respondents is, therefore, without any merit. 9. In the instant case, investigation of the impugned FIR has been stayed at the initial stage vide interim order dated 24.04.2018, so, it is only if the petitioners succeed in showing to this Court that the allegations made in the impugned FIR do not disclose commission of any cognizable offence against them that this Court would invoke its jurisdiction under Section 561-A Cr. P. C to quash the proceedings. 10. The Supreme Court in the case of Madhavrao Jiwaji Rao Scindia v. Sambhajirao Chandrojirao Angre [ (1988) 1 SCC 692 ], has laid down the law as regards quashment of proceedings under Section 482 Cr. P. C. Para 7 of the judgment is relevant to the context and the same is reproduced as under: “The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider 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 and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage.” 11. From the foregoing enunciation of law on the subject, it is clear that it is only if uncontroverted allegations made in the impugned FIR do not establish commission of any offence by the petitioners that the prosecution against them can be quashed. 12. From the foregoing enunciation of law on the subject, it is clear that it is only if uncontroverted allegations made in the impugned FIR do not establish commission of any offence by the petitioners that the prosecution against them can be quashed. 12. The primary contention of the petitioners is that contents of the impugned FIR do not disclose commission of any offence against them, inasmuch as the transaction between the petitioners and respondent No.2 is purely of civil nature which has been given a criminal flavour by respondent No.2 while lodging the impugned FIR. 13. On the other hand, learned counsel for the respondents has vehemently argued that the conduct of the petitioners has remained deceitful and fraudulent right from the inception, therefore, they are not only accountable under civil law but they are also criminally liable. 14. In order to test the merits of these contentions, the legal position on the subject needs to be noticed and appreciated. 15. Petitioners are alleged to have committed offences under Section 420, 409 and 506 of RPC. In order to attract the ingredients of Section 420, there has to an element of cheating on the part of the accused. Cheating has been defined in Section 415 RPC. To constitute offence under Section 420, there must be a fraudulent or dishonest inducement on the part of a person and thereby the other party must have parted with his property. To establish an offence under Section 420 RPC, it must be shown that there was a fraudulent and dishonest intention at the time of commission of the offence and that the person practising deceit had obtained the property by fraudulent inducement and willful representation. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction i.e., at the time when the offence is alleged to have been committed. 16. The Supreme Court in the case of Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 , has observed that it is the intention which is the gist of the offence and in order 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. 17. 17. Again, in Alpic Finance Ltd vs P. Sadasivan And Anr, (2001) 3 SCC 513 , the Supreme Court held that ‘an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception’. Thus, it is necessary to show that a person had fraudulent or dishonest intention at the time of making of promise, to say that he committed an act of cheating. 18. “Dishonestly” has been defined in Section 24 of RPC to mean deliberate intention to cause wrongful gain or wrongful loss and when, with such intention, deception is practised and delivery of property is induced, then the offence under Section 420 RPC can be said to have been committed. 19. So far as offence under Section 409 RPC is concerned, it provides punishment for criminal breach of trust committed by a public servant etc. Criminal breach of trust has been defined in Section 405 of RPC, which reads as under: “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”. 20. From a perusal of the aforesaid provision, it is clear that it entails misappropriation or conversion of another’s property for one’s own use with a dishonest intention. Cheating, as defined under Section 415 of the RPC, also involves the ingredient of having dishonest and fraudulent intention which is aimed at inducing the other party to deliver a property to a specific person. Thus, both the Sections postulate ‘dishonest intention’ as a pre-condition for even prima facie establishing the commission of said offences. It is only if ingredients postulated in Sections 405 and 415 of the RPC are made out from the contents of the impugned FIR that offences under Section 420 and 409 RPC can be said to have been disclosed. 21. Thus, both the Sections postulate ‘dishonest intention’ as a pre-condition for even prima facie establishing the commission of said offences. It is only if ingredients postulated in Sections 405 and 415 of the RPC are made out from the contents of the impugned FIR that offences under Section 420 and 409 RPC can be said to have been disclosed. 21. The Supreme Court in the case of M/S Indian Oil Corporation vs. M/S NEPC India Ltd. & Ors (2006) 6 SCC 736 , has laid down the principles which guide the Courts in ascertaining as to whether allegations regarding a commercial dispute would give rise to a criminal action apart from the civil remedy. These principles are reproduced as under: (i) A complaint can be quashed where the allegations made in 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 the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint. (ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with malafides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable. (iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution. (iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. (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. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. (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 proceedings 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. 22. From the foregoing enunciation of law on the subject, it is clear that the mere fact that complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available, is not by itself a ground to quash the criminal proceedings. It is only if it is shown that the complaint even if taken at its face value does not disclose commission of any offence or if it is found that criminal proceedings have been initiated with malafides/malice for wreaking vengeance that the same can be quashed. 23. In the light of the aforesaid legal position, let us now analyze the contents of the impugned FIR. The grouse of the complainant is that he had entered into a commercial transaction with petitioners who represented themselves to be honest businessmen, whereafter he delivered apple fruits to the petitioners valuing Rs.2,52,80,555/-. His further case is that the petitioners paid an amount of Rs.1.00 crore to him from time to time but failed to pay the balance amount despite demands. According to the complainant, the fact that petitioners left their temporary residence in Kashmir shows that they had a dishonest intention. This circumstance does not lead to the inference that the petitioners had a dishonest intention. This is so, because petitioners, admittedly, have their permanent residence in Himachal Pradesh and according to the complainant’s own case, they had come to Kashmir on temporary basis. This circumstance does not lead to the inference that the petitioners had a dishonest intention. This is so, because petitioners, admittedly, have their permanent residence in Himachal Pradesh and according to the complainant’s own case, they had come to Kashmir on temporary basis. It is not a case where the petitioners have fled from their permanent abode to evade the payment. They had come to Kashmir only to strike deals with the fruit growers and not to reside here permanently. Thus, it cannot be stated that the petitioners intended to defraud the complainant at the time of entering into the transaction with him, merely because they went back to Himachal Pradesh. 24. As already noticed, in order to commit an act of deception of fraud, which is gist of both the offences i.e., offence under Section 420 and 409 of the RPC, the complainant must have been dishonestly inducted to deliver the property. To deceive is to induce a man to believe that a thing is true which is false and which the person practicing the deceit knows or believes to be false. This intention of deception or fraud must be existent at the time of commission of the offence. The impugned FIR does not anywhere state that the petitioners had a dishonest intention from the very inception. Even according to the complainant, the petitioners made periodical payments to him, whereafter they defaulted, which clearly shows that petitioners at the inception were having the intention of honouring their commitments to respondent No.2. If a person fails to liquidate his liability, it does not necessarily mean that he has committed the offence of cheating or criminal breach of trust. I am supported in my aforesaid view by the judgment of the Supreme Court in Alpic Finance Ltd (supra). Para 10 of the aforesaid judgment is relevant to the context and the same is reproduced as under: “10. The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that the respondents committed the offence under Section 420 IPC and the case of the appellant is that the respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any willful misrepresentation. Even according to the appellant, the parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception.” 25. Relying upon the ratio laid down in Alpic Finance Ltd (supra), the Supreme Court in the case of Anil Mahajan vs. Bhor Industries Ltd. and another, (2005) 10 SCC 228 , has held that from a mere denial of a person to keep up promise subsequently, a culpable intention right at the beginning, that is, when he made the promises cannot be presumed. The Court went on to observe that a distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. The Supreme Court further observed that mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent dishonest intention is shown at the beginning of the transaction and that substance of complaint is to be seen. Mere use of the expression “cheating” in the complaint is of no consequence. 26. From the foregoing enunciation of law on the subject, it is clear that dishonest or fraudulent intention, which is gist of criminal breach of trust and cheating, has to be from the inception of the transaction, which in the instant case is missing. 27. It appears that respondent No.2 has filed the impugned FIR to pressurize the petitioners to settle the accounts and has given civil transaction between them a criminal colour. The Supreme Court in the case of M/S Indian Oil Corporation (supra), has, while deprecating the tendency of business circles to convert civil disputes in criminal cases, observed as under: “(13) While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged (14) While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law.” 28. Recently, the Supreme Court in the case of Mitesh Kumar J. Shah vs. The State of Karnataka & Ors. 2021 SCC Online SC 976, has expressed its disapproval for imparting criminal colour to a civil dispute merely to take advantage of a relatively quick relief granted in a criminal case in contrast to a civil dispute. The Court further went on to observe that such an exercise is nothing but an abuse of the process of law which must be discouraged in its entirety. 29. Coming to the offence under Section 506 of RPC i.e., criminal intimidation, it is to be noted here that in the impugned FIR, neither any specific allegations nor any details as regards threats alleged to have been extended by the petitioners to respondent No.2 have been made. On the basis of these vague allegations in the impugned FIR, it cannot be stated that the offence under Section 506 RPC is disclosed against the petitioners. 30. In view of the forgoing discussion, it is a fit case where this Court should exercise its powers under Section 561-A of J&K Cr. P. C to prevent the abuse of process of law and to secure the ends of justice. 31. Accordingly, the petition is allowed and the impugned FIR is quashed.