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2023 DIGILAW 1246 (JHR)

Dhanesh Kodi @ Dhanush Kori v. State of Jharkhand

2023-10-11

SANJAY KUMAR DWIVEDI

body2023
JUDGMENT : Heard Mr. Nitin Kumar Pasari, learned counsel for the petitioners, Mr. Ranjan Kumar, learned counsel for the State and Mr. Sumit Prakash, learned counsel for respondent no.2. 2. This petition has been filed for quashing of the entire criminal proceedings in connection with Bankmore (Bhuli-OP) P.S. Case No.308 of 2022 registered under Section 406, 420 and 120B of the Indian Penal Code, pending in the court of the learned Chief Judicial Magistrate, Dhanbad. 3. The FIR was lodged alleging therein that the informant is the owner of M/s M.A. Construction engaged in the construction work of Water Treatment Plant and related works. The construction work of the Water Treatment Plant at Jamadoba and Sindri, PHD Division-1, Dhanbad under INNURM Work of Government of Jharkhand was awarded to M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad which was initially off-loaded to M/s Patel Filters Infrastructure. M/s Patel Filters Infrastructure engaged M/s M.A. Construction for the said construction as a sub-contractor, the reason being that M/s Patel Filters Infrastructure was not being able to complete work within the schedule time. To that effect, Minutes of Meetings (referred to as MOU in the FIR) has been signed between the parties and all the signatories of the Minutes of Meetings agreed that the payment of retention amount and hydro-testing will be made by Larsen and Toubro Construction and Mining Machinery, Dhanbad, after completion of construction work. It was further alleged that the Project Manager of Larsen and Toubro Construction and Mining Machinery, Dhanbad, Mr. Dhanesh Kodi gave his assurance that as per the Minutes of Meetings agreement, payment of retention amount and hydro-testing shall be made to M/s M.A. Construction. But after completion of the construction work to the satisfaction, payment of the retention amount and hydro-testing to the tune of Rs.44,30,579/- which has to be paid after completion work was not paid to the informant, in spite of having made several requests by way of letters, e-mail, phone calls. Thereafter, the informant requested M/s Patel Filters Infrastructure for payment of the retention amount, but they denied and told that as per para 3 of Minutes of Meetings, it was agreed that the retention amount has to be paid by Larsen and Toubro Construction and Mining Machinery, Dhanbad. Thereafter, the informant requested M/s Patel Filters Infrastructure for payment of the retention amount, but they denied and told that as per para 3 of Minutes of Meetings, it was agreed that the retention amount has to be paid by Larsen and Toubro Construction and Mining Machinery, Dhanbad. Then, the informant sent a legal notice to M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad through his lawyer for payment of the amount, but instead of paying the money, M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad in its reply dated 13.06.2022 had denied the liability of Rs.44,30,579/- and stated that no such agreement has been made. On the contrary, M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad has threatened legal action against opposite party no.2 company. Again, a reminder notice dated 01.08.2022 was sent to M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad giving 7 days more time, but there was no reply. Based upon which allegation of commission of an offence under Section 406, 420 and 120B of the Indian Penal Code, Bankmore (Bhuli-OP) P.S. Case No.308 of 2022 was registered on 30.11.2022 against the petitioners. 4. Mr. Nitin Kumar Pasari, learned counsel for the petitioners submits that the petitioners are office bearers of M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad. He submits that the said company is engaged in the business of construction and mining, machinery, heavy engineering, hydraulic, hydro carbon, metallurgical and material handling, power, power development projects, rubber processing machinery, ship building and valves. He submits that the said company was awarded a contract for the construction of a Water Treatment Plant at Sindri and Jamadoba by the Government of Jharkhand. The said construction work was handed over to M/s. Patel Filter Infrastructure vide work order dated 16.12.2011, which was expected to complete the work by 31.05.2013. He submits that M/s Patel Filters Infrastructure was unable to complete the work within the time stipulated in the contract, however, direction was being made by M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad to complete the work at the earliest. He submits that M/s Patel Filters Infrastructure was unable to complete the work within the time stipulated in the contract, however, direction was being made by M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad to complete the work at the earliest. Since M/s Patel Filters Infrastructure failed to complete the commitment, it was agreed between M/s. Larsen and Toubro Construction and Mining Machinery and M/s Patel Filters Infrastructure that M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad may engage another contractor directly to complete the balance portion of work and for that, a Minutes of Meeting was entered into on 26.03.2015, contained in Annexure-3 of the petition and in view of that, work order was issued in favour of M/s M.A. Construction for balance portion of the work. He submits that M/s M.A. Construction carried out the works, however, certain articles for the proper execution of work DI Pipe was taken by the informant for executing Dhanbad Water Supply Scheme under JUDCO and, thereafter, the informant started seeking payment for works carried out by M/s Patel Filters Infrastructure on the pretext that M/s Patel Filters Infrastructure has not settled the bills of M/s M.A. Construction. When M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad refused to pay to the informant for works carried out by M/s Patel Filters Infrastructure, the informant seized the DI Pipe, which he had procured from Larsen and Toubro for the execution of the Dhanbad Water Supply Scheme. Thereafter on 06.06.2022, the informant issued legal notice for payment of dues, which was duly replied by the Larsen and Toubro Construction and Mining Machinery vide letter dated 13.06.2022 and on 27.08.2022, notice under Section 41-A Cr.P.C. was issued to the petitioners and the petitioner furnished their reply through the lawyer vide letter dated 19.09.2022. He submits that thereafter the present FIR has been registered. He also submits that for a commercial transaction, the case has been registered that too against the Larsen and Toubro where there is no direct contract with the informant. He further submits that for breach of contract, present FIR has been lodged that too for recovery of amount of the year 2015 and for every breach of contract, criminal liability cannot be fastened. He further submits that for breach of contract, present FIR has been lodged that too for recovery of amount of the year 2015 and for every breach of contract, criminal liability cannot be fastened. To buttress this argument, he relied upon the judgment passed by the Hon'ble Supreme Court in the case of M N G Bharateesh Reddy v. Ramesh Ranganathan and another, reported in (2022 SCC OnLine SC 1061). Paragraph 16 of the said judgment reads as under : “16. In Hridaya Ranjan Prasad Verma v. State of Bihar, a two-judge bench of this Court interpreted sections 415 and 420 of IPC to hold that fraudulent or dishonest intention is a precondition to constitute the offence of cheating. The relevant extract from the judgment reads thus: “14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest. 15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. 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. Therefore it is the intention which is the gist of the offence. 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. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed.” (emphasis supplied)” 5. Mr. Nitin Kumar Pasari, learned counsel for the petitioners further submits that the petitioners are office bearers of M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad and vicarious liability cannot be fastened upon them for a crime even if it is accepted to be committed by the company unless it is provided under the statute. To buttress this argument, he relied upon the judgment passed by the Hon'ble Supreme Court in the case of Sunil Bharti Mittal v. Central Bureau of Investigation, reported in [ (2015) 4 SCC 609 ]. Paragraph 24 of the said judgment reads as under : “24. Mr. K.K. Venugopal, learned Senior Counsel appearing for CBI, refuted the aforesaid submissions in strongest possible manner. He referred to the various portions of the charge-sheet where allegations against the accused persons are stated and outcome of the investigation revealed. His endeavour was to demonstrate the manner in which the decision was taken, resulting into huge loss to the government exchequer and, prima facie, it was established that such a decision was taken to help the accused telecom companies. He argued that once the companies are charged with mens rea offences, they require guilty mind as these are not strict liability offences. However, the companies would act through their Directors/officers only and the mens rea/guilty mind would be of those persons who are controlling the affairs of the companies. He referred to the counter-affidavit filed by CBI which, in summary form, mentions the role of different persons including the manner in which note was put up by Mr J.R. Gupta; the changes that were made by Mr Shyamal Ghosh to the said note allegedly to benefit the companies; and the manner in which it was approved by the Minister. This affidavit also mentions that there is evidence on record to show that the appellant Mr Sunil Mittal had met late Shri Pramod Mahajan during 2001-2002 for getting allocated additional spectrum beyond 6.2 MHz for teleservice area of his company. This affidavit also mentions that there is evidence on record to show that the appellant Mr Sunil Mittal had met late Shri Pramod Mahajan during 2001-2002 for getting allocated additional spectrum beyond 6.2 MHz for teleservice area of his company. There was also evidence of meetings between the appellant and Mr Shyamal Ghosh for the same purpose during the same period which would constitute the circumstantial evidence to implicate these persons. The thrust of his submission, thus, is that it is the “human agency” in the accused companies who was responsible as it was a mens rea offence and such an agency/person has to be the top person, going by the circumstantial evidence. Therefore, even if in the charge-sheet, names of these appellants were not included, the Special Judge was within his powers to look into the matter in its entirety as the charge-sheet along with documents spanning over 25,000 pages was submitted to him.” 6. Mr. Nitin Kumar Pasari, learned counsel for the petitioners further submits that in this background, the allegation is civil in nature and FIR itself is malicious in nature. He submits that the entire criminal proceeding is maliciously filed and the same may kindly be quashed. 7. Mr. Ranjan Kumar, learned counsel for the State submits that only FIR is registered and at this stage, this Court may not interfere. 8. Mr. Sumit Prakash, learned counsel for respondent no.2 submits that in the FIR, there are allegations of cheating against M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad along with the officers of the company. He further submits that not a single pie has been paid by M/s Patel Filters Infrastructure. He submits that in view of that, criminality against M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad and its officers are also made out. He relied upon the judgment passed by the Hon'ble Supreme Court in the case of Rajesh Bajaj v. State NCT of Delhi and others, reported in [ (1999) 1 S.C.R. 1012 ]. He refers Placitum E and F of the said judgment, which reads as under : “The facts narrated in the complaint would as well reveal a commercial transaction or money transaction but that is hardly a reason for holding that offence of cheating would elude from such transaction. He refers Placitum E and F of the said judgment, which reads as under : “The facts narrated in the complaint would as well reveal a commercial transaction or money transaction but that is hardly a reason for holding that offence of cheating would elude from such transaction. It is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive in discerning whether an offence was committed or not. The hyper-technical approach adopted by the High Court for testing ingredients under Section 415 IPC may be justified during trial but certainly not during the stage of investigation.” 9. Relying on this judgment, Mr. Sumit Prakash, learned counsel for respondent no.2 submits that in every cases where cheating is made out, there is commercial transaction and in view of that, at the initial stage the FIR is not required to be quashed. 10. Looking into the FIR, it is an admitted position that there is no agreement between M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad and M/s M.A. Construction. The said contract was between M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad and M/s Patel Filters Infrastructure and M/s Patel Filters Infrastructure has appointed M/s M.A. Construction and the informant is said to be proprietor of that firm. The Minutes of Meeting dated 26.03.2015 contained in Annexure-3 of the petition particularly Clause-3 thereof clearly speaks what was required to be done by M/s PFL and it is between M/s PFL and M/s M.A. Construction. The said Clause-3 reads as under : “(3). M/s. PFL has agreed for the deduction of retaintion payment of M/s MMI and M/s M.A. Const. from M/s. PFL retaintion payment & make the direct payment to the above agency in case of any discrepancies during the final bill settlement to M/s PFL.” 11. Thus even if the allegation is accepted to be true, there is no agreement between M/s Larsen and Toubro Construction and Mining Machinery, Dhanbad and M/s M.A. Construction. The allegation in the FIR is of not making payment w.e.f. 2015 to 2022. It appears that only to fix the score, the FIR has been registered and the informant failed to move before the appropriate Civil Court. 12. The allegation in the FIR is of not making payment w.e.f. 2015 to 2022. It appears that only to fix the score, the FIR has been registered and the informant failed to move before the appropriate Civil Court. 12. It is well settled law that criminal Courts are not meant to be used for settling scores or pressurise parties to settle civil disputes, however, a breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. A reference may be made to the judgment passed by the Hon'ble Supreme Court in the case of Sarabjit Kaur v. The State of Punjab and others, reported in [ (2023) 5 SCC 360 ]. Paragraph 13 of the said judgment reads as under : “13. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that Respondent 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property dealers which was in subsequent complaints that the name of the appellant was mentioned. On the first complaint, the only request was for return of the amount paid by Respondent 2. When the offence was made out on the basis of the first complaint, the second complaint was filed with improved version making allegations against the appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal courts are not meant to be used for settling scores or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which FIR was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the court.” 13. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which FIR was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the court.” 13. In frivolous or vexatious proceedings, the Court owes a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection, the jurisdiction under Section 482 Cr.P.C. or Article 226 of the Constitution of India can be exercised and the Court is required to look into the allegation by way of reading in between the lines. This aspect of the matter has been recently considered by the Hon'ble Supreme Court in the case of Haji Iqbal @ Bala through S.P.O.A. v. State of U.P. and others, reported in (2023 SCC OnLine SC 946). Paragraph 15 of the said judgment reads as under : “15. At this stage, we would like to observe something important. Whenever an accused comes before the Court invoking either the inherent powers under Section 482 of the Code of Criminal Procedure (CrPC) or extraordinary jurisdiction under Article 226 of the Constitution to get the FIR or the criminal proceedings quashed essentially on the ground that such proceedings are manifestly frivolous or vexatious or instituted with the ulterior motive for wreaking vengeance, then in such circumstances the Court owes a duty to look into the FIR with care and a little more closely. We say so because once the complainant decides to proceed against the accused with an ulterior motive for wreaking personal vengeance, etc., then he would ensure that the FIR/complaint is very well drafted with all the necessary pleadings. The complainant would ensure that the averments made in the FIR/complaint are such that they disclose the necessary ingredients to constitute the alleged offence. Therefore, it will not be just enough for the Court to look into the averments made in the FIR/complaint alone for the purpose of ascertaining whether the necessary ingredients to constitute the alleged offence are disclosed or not. Therefore, it will not be just enough for the Court to look into the averments made in the FIR/complaint alone for the purpose of ascertaining whether the necessary ingredients to constitute the alleged offence are disclosed or not. In frivolous or vexatious proceedings, the Court owes a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection try to read in between the lines. The Court while exercising its jurisdiction under Section 482 of the CrPC or Article 226 of the Constitution need not restrict itself only to the stage of a case but is empowered to take into account the overall circumstances leading to the initiation/registration of the case as well as the materials collected in the course of investigation. Take for instance the case on hand. Multiple FIRs have been registered over a period of time. It is in the background of such circumstances the registration of multiple FIRs assumes importance, thereby attracting the issue of wreaking vengeance out of private or personal grudge as alleged.” 14. Coming to the case in hand, it is crystal clear that the agreement was between M/s Patel Filters Infrastructure and the informant and M/s Larsen and Toubro Construction and Mining Machinery has got no role. The claim has been made for recovery of the amount w.e.f. 2015 to 2022. Clause-3 of the Minutes of Meeting, which has been quoted hereinabove clearly speaks that the understanding was between M/s PFL and M/s M.A. Construction. 15. There is no doubt that if criminality is made out, the criminal proceeding as well as civil proceeding can go simultaneously i.e. well settled. 16. The judgment relied by Mr. Sumit Prakash, learned counsel for respondent no.2 in the case of Rajesh Bajaj (supra), promise was made that after supply of goods in question within 15 days from the date of invoice of the goods, the complainant would despatch to Germany. The complainant of that case believed the said representation as true and on that belief, he has acted and despatched goods worth 4,46,597.25/-D.M. (Deutsch Marks) and in that background, the Hon'ble Supreme Court has passed that order since from the very inception the cheating was made out in that case. In the case in hand, the facts are otherwise. 17. The complainant of that case believed the said representation as true and on that belief, he has acted and despatched goods worth 4,46,597.25/-D.M. (Deutsch Marks) and in that background, the Hon'ble Supreme Court has passed that order since from the very inception the cheating was made out in that case. In the case in hand, the facts are otherwise. 17. In view of the above facts, reasons and analysis, so far as the present petitioners are concerned, the entire criminal proceedings in connection with Bankmore (Bhuli-OP) P.S. Case No.308 of 2022, pending in the Court of the learned Chief Judicial Magistrate, Dhanbad is quashed. 18. The Court has not interfered with the allegation with regard to the owner of M/s Patel Filters Infrastructure, who is one of the accused in the said FIR. 19. Accordingly, this petition is allowed in above terms and disposed of. 20. Interim order, if any granted by this Court, stands vacated.