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2023 DIGILAW 1926 (ALL)

Mallika Sriniwasan v. State of U. P.

2023-08-09

UMESH CHANDRA SHARMA

body2023
JUDGMENT Umesh Chandra Sharma, J. This application under Section 482 Cr.P.C. has been filed by the applicants with the prayer to quash the proceedings of Criminal Complaint Case No. 2154 of 2001 (Ram Saran Agarwal v. Smt. Srinivasan and Others) under Section 406/418 I.P.C. Police Station- Kotwali, District- Farrukhabad and summoning order dated 2.8.2001 passed by Chief Judicial Magistrate, Farrukhabad. 2. In brief, facts of the case are that, opposite party no.2 Ram Saran Agarwal filed a complaint dated 13.6.2001 against the applicants under Section 406/418 I.P.C. and got recorded his statement under Section 200 Cr.P.C. Ram Saran Agarwal and Ankush Goyal were examined as P.W.1 and P.W.2 under section 202 Cr.P.C. thereafter learned C.J.M. Passed the summoning order dated 2.8.2001. applicant no. 1 is the director of firm/company namely 'Tractor & Farm & Equipment Limited' (TAFE). The applicant No.2 was the Area Manager of the company and presently is not in the service of the company. Applicant no. 3 is a dealer of the company. 3. The opposite party no.2 alleged that he was given a dealership of the company for district Farrukhabad. Initially district Farrukhabad comprised of Tehsil Chhibra Mau and Kannauj. Later on Kannauj was declared as a different district by the Government, the applicants informed the opposite party no.2 that he may also open a branch in Kannauj for the products of the company. It is further alleged that the complainant after receiving the information from the applicants purchased a land for the same in Kannauj and informed the applicants. It is further alleged that the applicants knew that at the time of dealership agreement Tehsil Kannauj and Chhibra Mau were within the district Farrukhabad and with an intention to cheat and cause monitory loss violating the conditions of the dealership agreement appointed the applicant no. 3 as dealer for Tehsil Kannauj. 4. The applicants on being regularly contacted by the complainant on telephone, assured him that Kannauj and Chhibra Mau will fall within his territory. The firm of the opposite party no. 2 was appointed as MF-TAFE Dealer Franchise as probationary appointment for dealing with the products of the company. A probationary appointment agreement was entered into on 13.8.1993 between the complainant and the company. The dispute, if any, was between the complainant and the company regarding breach of conditions of contract. The firm of the opposite party no. 2 was appointed as MF-TAFE Dealer Franchise as probationary appointment for dealing with the products of the company. A probationary appointment agreement was entered into on 13.8.1993 between the complainant and the company. The dispute, if any, was between the complainant and the company regarding breach of conditions of contract. The company is at its own free will to appoint as many dealers/and/or/franchise in a territory as it likes. There is no evidence on record to show that the applicants ever requested the opposite party no.2 to open a franchise in Kannauj. 5. Contrary to the allegations as made by the complainant regarding the request by the applicants for setting up a dealership/franchise in Kannauj to him, the company had lost a good market in Farrukhabad due to continuous poor performance of the firm of the complainant since its opening in the said area. Therefore, his dealership was discontinued from 4.12.2003. Thus, the proceedings initiated against the applicants are clearly an abuse of process of court and deserves to be dismissed with exemplary costs. From the contents of the complaint, statements recorded under Section 200 and 202 Cr.P.C. no offence under Section 416/418 I.P.C. whatsoever is made out against the applicants. The complaint has been filed with malafide intention just in order to falsely implicate and harass the applicants. 6. As the Tehsil Chhibramau and Kannauj fell within the District Farrukhabad, the complainant was nominated as a dealer for Farrukhabad covering the said two Tehsils also. However, after the decision of the State Government whereby Tehsil Kannauj was declared to be a new and separate district by the name of Kannauj itself, the territory of the complainant could not have extended any how to the newly constructed district Kannauj. It is very much known that for working in a district, a firm has to get itself registered for that district in Sales Tax, Labour Department and other concerned department. 7. On the basis of above grounds the applicants have prayed that the impugned summoning order and entire criminal proceedings be quashed. 8. All the relevant papers/documents have been annexed by the applicants. 9. 7. On the basis of above grounds the applicants have prayed that the impugned summoning order and entire criminal proceedings be quashed. 8. All the relevant papers/documents have been annexed by the applicants. 9. The opposite party no.2/complainant appeared and filed a counter affidavit bearing No. 190130 of 2004 and averred that on the basis of statements under Section 200 and 202 Cr.P.C., a case under Section 406 and 418 I.P.C. is made out against the applicants. The impugned summoning order was challenged in Crl. Revision No. 99 of 2002 which was dismissed on 15.4.2004. 10. The applicants filed rejoinder affidavit denying the averments of the counter affidavit and stated that the applicant no. 1 & 2 have not committed any fault in the procedure and agreement of appointment of a dealer Sri Kuldeep Verma, applicant no.3, for Tehsil Chhibra Mau and has no concern whatsoever with district Farrukhabad. The statements under Section 200 and 202 Cr.P.C. was recorded against the procedure prescribed under law. As the dispute between the parties may be of breach of contract, hence no criminal case can be instituted. (i) The company is free to appoint dealer/franchise. Considering the continuous poor performance of the firm of opposite party no.2, the dealership of the firm was discontinued. The opposite party no.2 filed a Criminal Revision challenging the order dated 2.8.2001 before the District & Sessions Judge, Farrukhabad, with ulterior motives in the name of Kuldeep Verma along with application under Section 5 of the Limitation Act. (ii) In Krishnan v. Krishnaveni report in (1997) 4 SCC 241 and in Prasanta Kumar Dey v. State of W.B. And Another, (2002) 9 SCC 630 , it has been held that a petition under Section 482 Cr.P.C. is maintainable after filing of revision also. The said criminal revision was dismissed by the concerned Court on 16.4.2004 on the ground that the same was beyond limitation and no plausible explanation by the revisionist was given. Since the opposite party no. 2 had obtained the ex-parte summoning order in order to blackmail and harass the applicants. Thus, the application is maintainable and the proceeding of the impugned summoning order be quashed. 11. Heard Sri G.S.Chaturvedi, learned Senior Advocate assisted by Sri Anuj Srivastava, learned A.G.A. for the State and perused the record. 12. At the time of arguments, none appeared for the opposite party no.2. Thus, the application is maintainable and the proceeding of the impugned summoning order be quashed. 11. Heard Sri G.S.Chaturvedi, learned Senior Advocate assisted by Sri Anuj Srivastava, learned A.G.A. for the State and perused the record. 12. At the time of arguments, none appeared for the opposite party no.2. From the perusal of order-sheet, it transpires that none has appeared for opposite party no.2 for long. 13. In this case it transpired that an agreement between both the parties had taken place for the district Farrukhabad and district Kannauj has been formed which was part of district Farrukhabad. It is nowhere mentioned that if the district Farrukhabad is separated and a new district is formed, this agreement would automatically apply on the area of newly formed district. There is no evidence that the complainant was instigated or persuaded for purchasing land or was given assurance but it was duty and common practice that if any person wants to be dealer of the company, he would manage resources such as land, building and workers etc. According to this Court, if such agreement had taken place between the parties and applicants were not agreed to comply with the terms and conditions of the agreement, a civil suit for specific performance was ought to have been filed. In this regard section 56 of the Contract Act is relevant which reads as :- section 56 in The Indian Contract Act, 1872 56. Agreement to do impossible act.-An agreement to do an act impossible in itself is void. In this regard section 56 of the Contract Act is relevant which reads as :- section 56 in The Indian Contract Act, 1872 56. Agreement to do impossible act.-An agreement to do an act impossible in itself is void. -An agreement to do an act impossible in itself is void." Contract to do act afterwards becoming impossible or unlawful.-A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.1 -A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.2" Compensation for loss through non-performance of act known to be impossible or unlawful.-Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise. -Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise." 14. According to section 56 of the Contract Act, in the changed circumstances, if a previous agreement/contract becomes redundant the terms and conditions such an agreement has not to be complied with. 15. In this case, the alleged agreement was with regard to district Farrukhabad wherefrom a new district namely Kannauj, comprised of teshil Chhibra Mau and Kannauj, was formed. Certainly for a dealership, in a new district, a new sales tax and other concerned department's clearance is required. According to this Court, the matter between the complainant and the applicants, proposed accused, is civil in nature for which adequate relief could have been obtained under the Civil Laws and not in the Criminal Laws. 16. It transpires that without noticing the ingredients of Section 406 and 418 I.P.C., the impugned summoning order has been passed. According to this Court, the matter between the complainant and the applicants, proposed accused, is civil in nature for which adequate relief could have been obtained under the Civil Laws and not in the Criminal Laws. 16. It transpires that without noticing the ingredients of Section 406 and 418 I.P.C., the impugned summoning order has been passed. From the evidence on record, it could not have been established that the applicants have committed an offence of criminal breach of trust as no property was entrusted to them and there is no example of dishonest misappropriation of the property by or on behalf of the applicants. 17. From the evidence on record, it is not established that any cheating with knowledge had been committed by the applicants as on account of act of the State a new district had been formed for which the applicants were entitled to appoint their dealership of their own choice. 18. Though if on the basis of averments and evidence, if liability in both civil and criminal side arise, a criminal complaint or F.I.R. may be lodged but if facts of the case are limited to the civil remedy, no such criminal complaint or F.I.R. can be lodged. In Para 28 of Pepsi Foods Ltd. v. Special Judicial Magistrate 1998 SC 128, it has been held that: "Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course it is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinize the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused." b) Dr. B. K. Agarwal & others v. State of UP. and another ACC 2010 Page 202 in this case High Court held that if a petition for quashing the summoning order of Magistrate is moved then, test to be applied by the Court is as to whether the controverted allegations which have been made, prima facie of the case is established or not. Summoning order must reflect that the Magistrate has applied his mind. c) Dr. Sandip Kumar Mukhopadhyay v. State of U.P. and another 2013 (9) ADJ 258 , in this case High Court found that a criminal complaint was filed in which accused/appellant was summoned. Magistrate passed the order under section 202(2) Cr.P.C. for inquiry by the police but without waiting the result of inquiry, summoned the applicant. Magistrate not put the question to witness. Evidence was recorded in mechanical way. Therefore, High Court found that the order is not sustainable and set-aside and allowed the revision. d) Aaisha Bano @ Mahzabi v. State of U.P. and another 2014 (6) ADJ 774 , in this case High Court quashed summoning order proceeding under sections 323, 504, 506 I.P.C. after concluding that it was frivolous, malicious and motivated prosecution and it was only a counter blast to the case of opposite party. e) Rajendra Singh v. State of U.P. and another 2015 (8) ADJ 380 , in this case High Court relying on M/s Pepsi Foods Ltd. v. Special Judicial Magistrate 1998 SC 128 (SC) held that summoning of an accused in a criminal case is a serious matter. Hence, summoning order cannot be passed summarily and without applying judicial mind. f) Sughar Singh v. State of U.P. and others, 2016 ADJ Online 0030 in this case High Court has held that Magistrate cannot become a silent spectator at the time of recording preliminary evidence. Hence, summoning order cannot be passed summarily and without applying judicial mind. f) Sughar Singh v. State of U.P. and others, 2016 ADJ Online 0030 in this case High Court has held that Magistrate cannot become a silent spectator at the time of recording preliminary evidence. In this case, special Judge (DAA) Hamirpur rejected the complainant complaint under section 203 Cr.P.C. against which revision had been preferred before the High Court. Thus, the above judicial precedents apply in favor of the applicants. 19. Section 482 in The Code Of Criminal Procedure, 1973 482. Saving of inherent powers of High Court. Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. 20. In para 16 and para 41 to 49 of Mitesh Kumar v. State of Karnataka and Others, 2021 SCC Online SC 976, the apex court has held that if High Court finds abuse of process of court or a dispute entirely of civil nature but converted into criminal case would be liable to be quashed under the inherent power of High Court under section 482 Cr.P.C. 16. The Appellants placed reliance on the judgment of this Court in case of Prof. R.K. Vijayasarathy v. Sudha Seetharam 2019 SCC Online SC 208, to substantiate the above stated argument. The relevant paras referred are as hereunder:- "23. The jurisdiction under Section 482 of the Code of Criminal Procedure has to be exercised with care. In the exercise of its jurisdiction, a High Court can examine whether a matter which is essentially of a civil nature has been given a cloak of a criminal offence. Where the ingredients required to constitute a criminal offence are not made out from a bare reading of the complaint, the continuation of the criminal proceeding will constitute an abuse of the process of the court. 24. In the present case, the son of the appellants has instituted a civil suit for the recovery of money against the first respondent. The suit is pending. The first respondent has filed the complaint against the appellants six years after the date of the alleged transaction and nearly three years from the filing of the suit. 24. In the present case, the son of the appellants has instituted a civil suit for the recovery of money against the first respondent. The suit is pending. The first respondent has filed the complaint against the appellants six years after the date of the alleged transaction and nearly three years from the filing of the suit. The averments in the complaint, read on its face, do not disclose the ingredients necessary to constitute offences under the Penal Code. An attempt has been made by the first respondent to cloak a civil dispute with a criminal nature despite the absence of the ingredients necessary to constitute a criminal offence. The complaint filed by the first respondent against the appellants constitutes an abuse of process of court and is liable to be quashed." 41. Having considered the relevant arguments of the parties and decisions of this court we are of the considered view that existence of dishonest or fraudulent intention has not been made out against the Appellants. Though the instant dispute certainly involves determination of issues which are of civil nature, pursuant to which Respondent No. 2 has even instituted multiple civil suits, one can by no means stretch the dispute to an extent, so as to impart it a criminal colour. As has been rightly emphasised upon by this court, by way of an observation rendered in the case of M/s Indian Oil Corporation v. M/s. NEPC India Ltd & Ors. 2006 (6) SCC 736 , as under :- "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." 42. It was also observed:- "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.....There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. 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.....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." 43. On an earlier occasion, in case of G. Sagar Suri and Anr. v. State of UP and Ors. 2000 (2) SCC 636 , Court has also observed:- "8. Jurisdiction under Section 482 of the Code has to be exercised with a great care. In exercise of its jurisdiction High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice." 44. Furthermore, in the landmark judgment of State of Haryana & Ors. v. Ch. Bhajan Lal and Ors., 1992 SCC (Cri) 426, regarding exercise of inherent powers under section 482 of CrPC, this Court has laid down following categories of instances wherein inherent powers of the can be exercised in order to secure the ends of justice. Furthermore, in the landmark judgment of State of Haryana & Ors. v. Ch. Bhajan Lal and Ors., 1992 SCC (Cri) 426, regarding exercise of inherent powers under section 482 of CrPC, this Court has laid down following categories of instances wherein inherent powers of the can be exercised in order to secure the ends of justice. These are:- "(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 F.I.R. 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." 45. Applying this dictum to the instant factual matrix, it can be safely concluded that the present case clearly falls within the ambit of first, third and fifth category of the seven categories enlisted in the above said judgment. The case therefore warrants intervention by this Court, and the High Court has erred in dismissing the petition filed by the Appellants under section 482 CrPC. We find that there has been attempt to stretch the contours of a civil dispute and thereby essentially impart a criminal color to it. 46. Recently, this Court in case of Randheer Singh v. The State of U.P. & Ors, Criminal Appeal No. 932 of 2021 (decided on 02.09.2021), has again reiterated the long standing principle that criminal proceedings must not be used as instruments of harassment. The court observed as under:- "33. .....There can be no doubt that jurisdiction under Section 482 of the Cr.P.C. should be used sparingly for the purpose of preventing abuse of the process of any court or otherwise to secure the ends of justice. Whether a complaint Criminal Appeal No. 932 of 2021 (decided on 02.09.2021) discloses criminal offence or not depends on the nature of the allegation and whether the essential ingredients of a criminal offence are present or not has to be judged by the High Court. There can be no doubt that a complaint disclosing civil transactions may also have a criminal texture. The High Court has, however, to see whether the dispute of a civil nature has been given colour of criminal offence. In such a situation, the High Court should not hesitate to quash the criminal proceedings as held by this Court in Paramjeet Batra (supra) extracted above." 47. Moreover, this Court has at innumerable instances expressed its disapproval for imparting criminal color to a civil dispute, made merely to take advantage of a relatively quick relief granted in a criminal case in contrast to a civil dispute. Such an exercise is nothing but an abuse of the process of law which must be discouraged in its entirety. 48. In view of the above facts and discussions, the impugned order dated 13.08.2019 passed by the High Court of Karnataka is set aside. Such an exercise is nothing but an abuse of the process of law which must be discouraged in its entirety. 48. In view of the above facts and discussions, the impugned order dated 13.08.2019 passed by the High Court of Karnataka is set aside. The impugned F.I.R. No. 185 of 2016 dated 29.03.2016 and proceedings in C.C.No. 20609 of 2017 on the file of VI Additional CMM, Bengaluru, in pursuance of charge sheet dated 29.03.2017 against the appellants for offences under Sections 406, 419, 420 read with Section 34 IPC stands quashed. 49. As a result, appeal stands allowed." 21. From the perusal of this Section, it is crystal clear that the High Court is empowered to exercise its inherent power to give effect to any order under this Code or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. Since this Court has come to the conclusion that the impugned order is bad in law and is not liable to be sustained, hence, the petition deserves to be allowed. ORDER 22. The application under section 482 Cr.P.C. is allowed and the impugned summoning order dated 2.8.2001 passed by Chief Judicial Magistrate, Farrukhabad in Criminal Complaint Case No. 2154 of 2001 (Ram Saran Agarwal v. Smt. Srinivasan and Others) under Sections 406/418 I.P.C. Police Station - Kotwali, District - Farrukhabad and the entire proceeding of the aforesaid criminal complaint is quashed and set aside.