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2022 DIGILAW 2176 (RAJ)

Pawan Kumar Jain v. State Of Rajasthan

2022-08-02

BIRENDRA KUMAR

body2022
JUDGMENT 1. The petitioners have sought for quashing of FIR No. 0021/2022 registered at Kaladera Police Station, District Jaipur (Rural) for offences under Section 420, 406 and 120B IPC on the information of respondent No.2. 2. The challenge is on the ground that no ingredients of offences alleged are made out and a pure civil dispute is being given the cloak of a criminal case just to put undue pressure. 3. Undisputed facts of this case are that the petitioners are Directors of M/s. Kotsons Private Limited, Alwar whereas the respondent company is engaged in business of manufacturing and sale of transformers. The petitioners had approached to the complainant, the Managing Director of respondent Company, and the parties agreed that respondent company would supply transformers to the petitioners' company and after sale of the transformers to different customers, the petitioners company would make payment of the purchased transformers within a period of 30 days. The parties were smoothly engaged in the dealing since more than 30 years. 4. Allegation in the FIR is that initially payments were made by the petitioner company on time, however gradually, the petitioners company started making payment of lesser amount with promise to pay the remaining in future and they started putting orders for more supply of the transformers. The petitioners company lastly made payment in January 2020 and thereafter pretending the effect of COVID stopped payment on one pretext or the other, however continued placing orders for supply of transformers and getting the supply till the end of 2021 without payment made to the complainant company. The complainant gathered from the market that the petitioners company is heavily indebted to different banks and financial institutions as well as business dealers. In spite of the aforesaid situation, the petitioners suppressed the aforesaid fact to the complainant and continued placing orders for supply of transformers and getting the supply. As a result whereof the petitioners carry dues of Rs. 1,02,19,924/- of the complainant. The complainant asserts that if the petitioners would have disclosed his financial bankruptcy, the complainant would not have supplied more transformers, therefore, the complainant was misled by the petitioners company. 5. In Mohammed Ibrahim & ors. Vs. State of Bihar & Anr., (2009) 8 SCC 751 , the Hon'ble Supreme Court relied on earlier judgment in G. Sagar Suri Vs. The complainant asserts that if the petitioners would have disclosed his financial bankruptcy, the complainant would not have supplied more transformers, therefore, the complainant was misled by the petitioners company. 5. In Mohammed Ibrahim & ors. Vs. State of Bihar & Anr., (2009) 8 SCC 751 , the Hon'ble Supreme Court relied on earlier judgment in G. Sagar Suri Vs. State of U.P. (2000) 2 SCC 636 and stated in Para 8 of the judgment as follows: "7. This Court has time and again drawn attention to the growing tendency of 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 pressurise parties to settle civil disputes. But at the same, 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 ] and Indian Oil Corporation vs. NEPC India Ltd. [ 2006 (6) SCC 736 ]. Let us examine the matter keeping the said principles in mind." 6. Learned counsel for the petitioners submits that it is not disputed that the petitioner had sent a letter dated 18.1.2021 to the respondent informing therein about the financial constraint of the company. A copy of the letter at Annexure-3, the relevant portion is being reproduced below: "We would like to state that we have the payment due of Rs. 63000029.85 Rs. Sixty three lakh and twenty nine rupees point eighty five only. Outstanding in our books of accounts in our Kostons Private Limited Alwar Unit as date 18.01.2021 of your company. We would like to inform you that we are currently in financial trouble due to which we are not able to make out the above payment to you presently. We are hopeful of getting funds from our customers very shortly after which we aim to clear your due outstanding as well as post clearing your outstanding we aim to also give fresh orders. We are hopeful of getting funds from our customers very shortly after which we aim to clear your due outstanding as well as post clearing your outstanding we aim to also give fresh orders. We request your kind support in the above matter." Therefore, the petitioners were not dishonest in suppressing about his financial condition to the respondent. Moreover by Annexure-5, the petitioners ensured payment of Rs. 4,94,290/- on 19.01.2022 through purchaser of transformer from the petitioner named "Bee Pee Electricals". This fact is also not disputed. Therefore, even after institution of the FIR, the petitioners were ensuring payment of dues of the complainant. Moreover, the papers at Annexure R/1 produced by respondent No.2 along with the counter affidavit finds mention the terms and conditions of the business between the parties as follows: "1. All disputes are subject to Jaipur jurisdiction only. 2. Our responsibility ceases on delivery of goods. 3. Interest @ 24% per annum will be charged if Bill remains beyond due date, 4. Payment of this invoices should be through A/c Payee's Cheque or Demand draft or RTGS only." According to the learned counsel, if the petitioners could not make payment of dues of respondent, it was the financial constraints due to effect of COVID, and not dishonest intention. Moreover, civil remedy is only way for redressal of the grievance of respondent, if any. 7. Learned counsel for the petitioners has relied upon case of Binod Kumar & ors. Vs. State of Bihar & Anr., (2014) 10 SCC 663 for his submission that civil liability cannot be converted into a criminal liability. Learned counsel has further placed reliance on the judgment of Hon'ble Supreme Court in Prof. R.K. Vijayasarathy & Anr., Vs. Sudha Seetharam & Anr., (2019) 16 SCC 739 for his submission that if prima facie ingredients of offence are not there, the criminal prosecution would be an abuse of the process of court, as well as for his submission that an attempt to cloak a civil dispute with a criminal nature, despite absence of ingredients necessary to constitute a criminal offence, would amount to an abuse of the process of law. 8. Learned counsel for the respondent contends that if the petitioners having not suppressed the fact that they are defaulters of the bank and are indebted to other business concerns, then the informant would not have further supplied transformers to the petitioners. 8. Learned counsel for the respondent contends that if the petitioners having not suppressed the fact that they are defaulters of the bank and are indebted to other business concerns, then the informant would not have further supplied transformers to the petitioners. Therefore, there is clear case of inducement by suppression of material facts. Moreover, a civil remedy is no bar for criminal prosecution if the ingredients of criminal offences are made out as in the present case. 9. Learned counsel has placed reliance on the judgment of the Hon'ble Supreme Court in Vijayander Kumar & ors. Vs. State of Rajasthan & Anr., (2014) 3 SCC 389 to support his contention that, a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may also be available that itself would not be a ground to quash a criminal proceeding. Learned counsel for the respondent have relied on the judgment of the Hon'ble Supreme Court in Amit Kapoor Vs. Ramesh Chander & Anr., (2012) 9 SCC 460 . The case of Amit Kapoor (supra) was against the order of framing of the charge, hence not applicable in the facts and circumstances of the present case. Learned counsel also places reliance on Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra & ors., 2021 SCC OnLine SC 315 wherein the challenge was to an interlocutory order of grant of interim relief in a matter pertaining to quashing of the FIR under Section 482 Cr.P.C. 10. After hearing the learned counsel for the parties, the question that arises for consideration is whether the ingredients of offences alleged are made out. It is stated at the outset that the complainant has not pleaded any entrustment of property to the petitioners. An entrustment by necessary implication means that the property was handed over to someone with clear understanding that it has to be returned back as it is. It is not the case of the complainant that any property was entrusted to the petitioners for getting back, therefore, an important ingredient to prove an offence of criminal breach of trust as defined under Section 405 IPC "entrustment of property" is missing in this case, therefore, allegation under Section 406 IPC is not made out. 11. Section 415 IPC defines word 'cheating' as follows: "415. 11. Section 415 IPC defines word 'cheating' 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". 12. In Mohammed Ibrahim (supra), the Hon'ble Supreme Court stated essential ingredients of the offence of cheating as follows: "(i) deception of a person either by making a false or misleading representation or by dishonest concealment or by any other act or omission; (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) such act or omission causing or is likely to cause damage or harm to that person in body, mind, reputation or property." 13. As discussed above, the conduct of the petitioners in giving information to the complainant that the petitioners are facing financial hardship, however the petitioners would make payment of the dues amount soon after recovery, clearly depicts that the petitioners were not carrying any dishonest and fraudulent intention. Annexure-3 would further reveal that the petitioners had not suppressed any material fact from the complainant. The past conduct of 40 years of the petitioners cannot be overlooked while considering whether the petitioners had dishonest and fraudulent intention at the inception of entering into understanding with the complainant. Moreover, the act of making payment to the complainant of the due amount even after lodging of the FIR further fortifies the claim of the petitioners that at no point of time there was any false or misleading representation, or any dishonest concealment of fact. Therefore, this Court finds that the ingredients of offence of cheating is also not made out. 13. When the ingredients of main offences are not there, the allegation of conspiracy to commit those offences would automatically fail. Therefore, this Court finds that the ingredients of offence of cheating is also not made out. 13. When the ingredients of main offences are not there, the allegation of conspiracy to commit those offences would automatically fail. Evidently, the facts and circumstances of the case show that only pure civil dispute with stipulation of civil remedy was there and no ingredients of criminal offences alleged are established, hence the continuance of criminal proceedings in pursuance of the impugned FIR, as well as FIR would amount to an abuse of the process of the Court. 14. Accordingly, the impugned FIR as also subsequent proceedings arising out of the said FIR stands hereby quashed and this petition is allowed.