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Meghalaya High Court · body

2022 DIGILAW 198 (MEG)

Hussain Tapadar v. State of Meghalaya

2022-07-26

W.DIENGDOH

body2022
JUDGMENT 1. The respondent No. 2 has lodged an FIR on 27.03.2019 before the Officer-Incharge Jowai Police Station, West Jaintia Hills District stating that on the second day of November, 2016, he was approached by the petitioner herein with an offer for sub-contract work for laying of optical fibre cable for a stretch of 35 kms from Khliehriat to Lumshnong in the East Jaintia Hills District. Thereafter, the petitioner on behalf of Neon Mobicom and Tele Systems Pvt. Ltd and the respondent No. 2 executed an Agreement for the same. The respondent No. 2 then deposited the security deposit of Rs. 4,10,000/- (Rupees four lakhs ten thousand) only, which is supposed to be refunded on completion of the work. 2. The respondent No. 2 went on to state that after completion of about 26 kms of the work, he contacted the petitioner who did not respond to his calls, but had only send text messages that he is busy. Then the Company situated at Balaji Chamber, Wanawadi, Jambhulkar Chowk, Pune was contacted and they responded by assuring that the petitioner will come in the first week of December, 2018 to inspect the work done and to release the bill for the work done. On the failure of the petitioner to come and meet the respondent No. 2 and to pay the said dues, a pleader's notice was also served upon the Company and again on no response received from the petitioner, the respondent No. 2 then lodged the said FIR seeking legal relief. 3. On receipt of the said FIR, the Office-Incharge Jowai Police Station registered a case being Jowai P.S. Case No 54 (3) of 2019 under Section 420 IPC and an Investigating Officer was assigned to launch investigation. 4. The petitioner came to know of the said complaint only when the police came to the Corporate Office of the Neon Mobicom & Tele Systems Pvt Ltd. and the statement of the Commercial Manager, Shri Pravin T. Borawake was recorded. 5. Being highly aggrieved with the lodgement of the said FIR, the petitioner has accordingly approached this Court with this instant application with a prayer to set aside and quash the said FIR dated 27.03.2019 filed by the respondent No. 2. 6. Mr. 5. Being highly aggrieved with the lodgement of the said FIR, the petitioner has accordingly approached this Court with this instant application with a prayer to set aside and quash the said FIR dated 27.03.2019 filed by the respondent No. 2. 6. Mr. D. Sarmah, learned counsel for the petitioner has submitted that the respondent No. 2 was engaged by the petitioner as a sub-contractor in a project for Defence Network against package-G State of Meghalaya which project was undertaken by the BSNL through A2Z Infra Engineering Ltd. The work was then handed over to the petitioner's Company for installation of cable route from Khliehriat to Lumshnong in the State of Meghalaya, who as stated, entered into an agreement with the respondent No. 2 entrusting him to carry on the said work of laying the cable laying work. To expedite the work, the petitioner has also supplied about fifty lakhs worth of materials to the respondent No. 2. 7. The learned counsel also submits that the respondent No. 2 has accordingly started the work, but the same was not done as per the guidelines prescribed by the A2Z Infra Engineering Ltd and for the extent of the work done, the site engineer engaged by the A2Z Company found that a major portion of the work done was defective. The respondent No. 2 and the petitioner were directed to rectify the same. 8. The respondent No. 2 did not make the required rectification even after 9(nine) months and no claim was made against the work done since bills in this regard was not forwarded to the petitioner. 9. The learned counsel further submits that surprisingly, the respondent No. 2 has filed the said FIR dated 27.03.2019 only to avoid his responsibility and to pressurise the petitioner to release payment without the necessary approval for the work allegedly done. 10. Maintaining that the allegations in the said FIR does not disclose any ingredients for an offence of cheating, at best, the dispute can be looked at as a civil or contractual dispute, continuation of the proceedings in Jowai P.S. Case No 54 (3) of 2019 under Section 420 IPC against the petitioner is an abuse of the process of the court and the same is liable to be set aside and quashed, it is further submitted. 11. 11. In support of his case, the learned counsel for the petitioner has relied upon the following decisions: i. V.Y. Jose & Anr v. State of Gujarat & Anr: (2009) 3 SCC 78 , para 13, 14, 21, 25, 26 & 28. ii. Joseph Salvaraja v. State of Gujarat & Ors: (2011) 7 SCC 59 , para 17. iii. Inder Mohan Goswami & Anr v. State of Uttaranchal & Ors: (2007) 12 SCC 1 , para 24, 26, 28, 32, 37, 38, 42,& 46. iv. Vesa Holdings Private Limited & Anr v. State of Kerala & Ors: (2015) 8 SCC 293 , para 13. v. Sushil Sethi & Anr v. State of Arunachal Pradesh & Ors: (2020) 3 SCC 240 , para 6. vi. State of Haryana & Ors v. Bhajan Lal & Ors: 1992 Supp (1) SCC 335, para 102. 12. Mr. K. Khan, learned PP appearing for the State respondent No. 1 has, at the outset led this Court to the case of V.Y. Jose (supra) cited by the petitioner and has pointed out that at para 21 of the same, it was observed that there is a distinction between pure contractual dispute of a civil nature and an offence of cheating although breach of contract will not come in the way of initiation of a criminal proceedings. 13. The second limb of argument advanced by the learned PP is that it is a settled position of law that if the contents of the FIR discloses a commission of offence, then there is no bar for criminal proceedings to continue. In the case of the petitioner, paragraphs 2 and 3 of the FIR clearly discloses an offence of cheating and in course of evidence, some other related offence such as criminal breach of trust may also come up. The learned PP has placed reliance on para 102 of the Bhajan Lal case (supra) to impress this Court that the Apex Court has held that if the FIR discloses the commission of an offence, as is the case herein, then Section 482 Cr.P.C. may not be employed to set aside the proceedings. 14. Mr. K.S. Kynjing, learned Sr. The learned PP has placed reliance on para 102 of the Bhajan Lal case (supra) to impress this Court that the Apex Court has held that if the FIR discloses the commission of an offence, as is the case herein, then Section 482 Cr.P.C. may not be employed to set aside the proceedings. 14. Mr. K.S. Kynjing, learned Sr. counsel for the respondent No. 2, has endorsed the submission made by the learned PP and has further submitted that from the FIR, it is evident that the ingredients of Section 415 IPC related to cheating is very much present, inasmuch as, the respondent No. 2 has already deposited an amount of Rs. 4,10,000/- (Rupees four lakhs ten thousand) only which has not been refunded. The fact that the respondent No. 2 has also completed about 26 kms of the work assigned for which he is yet to be paid also indicate that there is an intention on the part of the petitioner to cheat. 15. It is also submitted that in the FIR, the respondent No. 2 has stated that the Company at Pune as well as the petitioner was contacted for payment for the work completed, but the petitioner never came. The conduct of the petitioner has clearly proved that there is an intention of cheating. 16. The case of Bhajan Lal (supra) at para 110 & 111 was cited to support the stand of the respondent No. 2. The case of Dilbag Rai v. State of Haryana & Ors: (2019) 8 SCC 736, para 6, 7 & 10 was also referred in this regard. 17. The facts noted above, in summary is that the petitioner and the respondent No. 2 are in an agreement for the work of laying of Optical fibre cable network for the stretch of 35 kms from Khliehriat to Lumshnong in the East Jaintia Hills District. 17. The facts noted above, in summary is that the petitioner and the respondent No. 2 are in an agreement for the work of laying of Optical fibre cable network for the stretch of 35 kms from Khliehriat to Lumshnong in the East Jaintia Hills District. The respondent No. 2 is actually the sub-contractor working under the petitioner who represents Neon Mobicom & Tele Systems Pvt. Ltd. To this effect, the respondent No. 2 has filed an affidavit bringing on record the Agreement dated 02.11.2016 wherein under the terms and conditions of the same, inter alia, the respondent No. 2 as the First Party was required to carry out the work of laying of the optical fibre cable for the said stretch of 35 kms and towards this end, the respondent No. 2 have deposited a sum of Rs. 4,10,000/- for raw materials and other expenditures. 18. In due course of work, the respondent No. 2 apparently having not received any money for the work done, which is about 26 Kms and also having tried to contact the petitioner to settle the same, but to no avail since the petitioner after promising to come to clear the bills did not come to meet him, has lodged the said FIR setting the ball rolling for a criminal case to be instituted. 19. The petitioner on coming to know of the said FIR has accordingly approached this Court seeking exercise of the inherent powers under Section 482 Cr.P.C. 20. On consideration of the argument of the parties herein, what is required to be examined and decided by this Court is firstly, whether the contents of the FIR discloses an offence as alleged, that is, one under Section 420 IPC and secondly, whether the respondent No. 2 has sought to prosecute the petitioner before the criminal court for an apparent breach of contract and which dispute arising out of the same ought to have been pursued before a civil court. 21. It will be useful to first look at the provision of Section 415 IPC which speaks about 'Cheating', while Section 420 is the penal provision for the same. 22. Section 415 of IPC reads as follows: '415. Cheating. 21. It will be useful to first look at the provision of Section 415 IPC which speaks about 'Cheating', while Section 420 is the penal provision for the same. 22. Section 415 of IPC reads as follows: '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". 23. In the case of V.Y. Jose (supra) it was observed at para 14 that an offence of cheating cannot be said to have been made out unless the following ingredients are satisfied: '(i) deception of a person either by making a false or misleading representation or by other action or omission; (ii) fraudulently or dishonestly inducing any person to deliver any property; or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. 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. 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 of the Penal Code can be said to have been made out.' 24. As indicated above, the petitioner has approached the respondent No. 2 with an offer to carry out the work of laying of the optical fibre cable for the said stretch of 35 kms from Khliehriat to Lumshnong. To this effect, the said agreement dated 02.11.2016 was executed between the parties. In the said agreement, one of the terms and condition is that the first party/respondent No. 2, is to expend an amount of about Rs. To this effect, the said agreement dated 02.11.2016 was executed between the parties. In the said agreement, one of the terms and condition is that the first party/respondent No. 2, is to expend an amount of about Rs. 56,00,000/- (Rupees fifty six lakhs) only for the completion of the entire work and the same to be obtained by him only after having satisfactorily completed the work. Another condition is that the respondent No. 2 has agreed towards a token advance of Rs. 4,10,000/- (Rupees four lakhs ten thousand) only, to be paid to the second party/petitioner for raw materials and other requirements. 25. The respondent No. 2 in the FIR has mentioned the sum of Rs. 4,10,000/- (Rupees four lakhs ten thousand) only which is the amount deposited as security deposit which shall be refunded on completion of the contract work along with his bill. In the same FIR, it is also admitted that only 26 kms of the work has been completed. The only grievance of respondent No. 2 is that neither the petitioner nor his Company had responded to the communication of the respondent No. 2 which, according to him constituted an act of cheating on the part of the petitioner for which he is to be prosecuted accordingly. 26. On appreciation of the above, this Court fails to see any intention on the part of the petitioner to deceive respondent No. 2 at the time of making the promise, that is, when the said agreement was executed which was a mutual agreement and apparently on the respondent No. 2 not having completed the whole work nor has he submitted any bills towards the work allegedly completed, he cannot accuse the petitioner for cheating since the action of the parties have been circumscribed within the terms and conditions of the said agreement. Therefore, no ingredients of cheating under Section 415 IPC can be found for an offence under Section 420 IPC to be attracted against the petitioner. 27. In the case of Sushil Sethi & Anr (supra), cited by the petitioner, almost all the other decisions relied upon by the petitioner has been taken note of. At para 7, 7.1, 7.2, 7.3, 7.4, 7.6. & 7.7, the Apex Court has observed thus: '7. 27. In the case of Sushil Sethi & Anr (supra), cited by the petitioner, almost all the other decisions relied upon by the petitioner has been taken note of. At para 7, 7.1, 7.2, 7.3, 7.4, 7.6. & 7.7, the Apex Court has observed thus: '7. While considering the prayer of the appellants to quash the impugned criminal proceedings against the appellants for the offence under Section 420 IPC, few decisions of this Court in exercise of powers under Section 482 CrPC are required to be referred to. 7.1. In Bhajan Lal, 1992 Supp (1) SCC 335 in para 102, this Court has categorised the cases by way of illustration wherein the powers under Article 226 or the inherent powers under Section 482 CrPC 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: (SCC pp. 378-79) '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 formulae 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. (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. (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 Act concerned (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 Act concerned, 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.' The aforesaid decision of this Court has been followed subsequently by this Court in catena of decisions. 7.2. In Vesa Holdings (P) Ltd. (2015) 8 SCC 293 , it is observed and held by this Court 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 is further observed and 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 observed and 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 observed and 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. It is further observed and held that the real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. 7.3. In Hira Lal Hari Lal Bhagwati, (2003) 5 SCC 257 in para 40, this Court has observed and held as under: (SCC p. 280) '40. It is settled law, by a catena of decisions, that for establishing the 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. From his making failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the exemption certificate contained necessary conditions which were required to be complied with after importation of the machine. Since the GCS could not comply with it, therefore, it rightly paid the necessary duties without taking advantage of the exemption certificate. The conduct of the GCS clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as office-bearers right at the time of making application for exemption. As there was absence of dishonest and fraudulent intention, the question of committing offence under Section 420 of the Penal Code, 1860 does not arise. We have read the charge-sheet as a whole. There is no allegation in the first information report or the charge-sheet indicating expressly or impliedly any intentional deception or fraudulent/dishonest intention on the part of the appellants right from the time of making the promise or misrepresentation. Nothing has been said on what those misrepresentations were and how the Ministry of Health was duped and what were the roles played by the appellants in the alleged offence. Nothing has been said on what those misrepresentations were and how the Ministry of Health was duped and what were the roles played by the appellants in the alleged offence. The appellants, in our view, could not be attributed any mens rea of evasion of customs duty or cheating the Government of India as the Cancer Society is a nonprofit organisation and, therefore, the allegations against the appellants levelled by the prosecution are unsustainable. The Kar Vivad Samadhan Scheme certificate along with Duncan (1996) 5 SCC 591 : 1996 SCC (Cri) 1045 and Sushila Rani (2002) 2 SCC 697 judgments clearly absolve the appellants herein from all charges and allegations under any other law once the duty so demanded has been paid and the alleged offence has been compounded. It is also settled law that once a civil case has been compromised and the alleged offence has been compounded, to continue the criminal proceedings thereafter would be an abuse of the judicial process.' (emphasis in original) It is further observed and held by this Court in the aforesaid decision that to bring home the charge of conspiracy within the ambit of Section 120-B IPC, it is necessary to establish that there was an agreement between the parties for doing an unlawful act. It is further observed and held that it is difficult to establish conspiracy by direct evidence. 7.4. In V.Y Jose, (2009) 3 SCC 78 , it is observed and held by this Court that one of the ingredients of cheating is the existence of fraudulent or dishonest intention of making initial promise or existence thereof, from the very beginning of formation of contract. It is further observed and held that it is one thing to say that a case has been made out for trial and as such criminal proceedings should not be quashed, but it is another thing to say that a person should undergo a criminal trial despite the fact that no case has been made out at all. 7.5. In Sharad Kumar Sanghi, (2015) 12 SCC 781 , this Court had an occasion to consider the initiation of criminal proceedings against the Managing Director or any officer of a company where company had not been arrayed as a party to the complaint. 7.5. In Sharad Kumar Sanghi, (2015) 12 SCC 781 , this Court had an occasion to consider the initiation of criminal proceedings against the Managing Director or any officer of a company where company had not been arrayed as a party to the complaint. In the aforesaid decision, it is observed and held by this Court that in the absence of specific allegation against the Managing Director of vicarious liability, in the absence of company being arrayed as a party, no proceedings can be initiated against such Managing Director or any officer of a company. It is further observed and held that when a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegation to constitute the vicarious liability. 7.6. In Joseph Salvaraja A. v. State of Gujarat, (2011) 7 SCC 59 , it is observed and held by this Court that when dispute between the parties constitute only a civil wrong and not a criminal wrong, the courts would not permit a person to be harassed although no case for taking cognizance of the offence has been made out. 7.7. In Inder Mohan Goswami v. State of Uttaranchal, (2007) 12 SCC 1 , it is observed and held by this Court that the Court must ensure that criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive to pressurise the accused. It is further observed and held by this Court that it is neither possible nor desirable to law down an inflexible rule that would govern the exercise of inherent jurisdiction. It is further observed and held that inherent jurisdiction of the High Courts under Section 482 CrPC though wide has to be exercised sparingly, carefully and with caution and only when it is justified by the tests specifically laid down in the statute itself.' 28. In view of the above, this Court deemed it not necessary to discuss all the other cases cited, including those cited by the respondent No. 2, since it is clear that the FIR does not disclosed any offence under Section 420 IPC attributable to the petitioner herein. 29. Accordingly, the said FIR dated 27.03.2019 and all related proceedings are hereby set aside and quashed. 30. Petition disposed of. No costs.