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2023 DIGILAW 769 (GUJ)

Harsh Mahendrabhai Dhir v. State Of Gujarat

2023-06-30

SANDEEP N.BHATT

body2023
JUDGMENT : 1. This application is filed under Section 482 of the Code of Criminal Procedure, 1973 (`the Code’ for short) for quashing the FIR being C.R.No.I-164 of 2016 registered with Puna Police Station, Surat city for the offences punishable under Sections 420, 406, 384, 504, 506(2), 120B and 114 of the Indian Penal Code (`IPC’ for short). 2. The brief facts leading to filing of this application are such that the applicant is director of a registered company M/s Dhir International Pvt.Ltd., which is doing business in manufacturing garments. The complainant-Gulmohar Fashions and the company of the applicant had entered into commercial transaction and the applicant raised some orders from the complainant company to supply the said materials on various occasions. However, the complainant company, on various occasions, has sent the goods much later than what was promised and also on various occasions the goods were defective. The company of the applicant has faced a lot of difficulties with regard to the goods supplied by the complainant-company. Therefore, the company of the applicant had returned the delayed/rejected goods back to the complainant-company along with a debit note of the said amount, which was received by the complainant-company. 2.1 It is averred that as soon as the company of the applicant sent the goods back to the complainant-company, the complainant-company made a false representation to the concerned police and thereafter the company sent legal notice dated 12.8.2016 to the complainant-company asking them to refrain from making such false complaints. Thereafter, reply was given by the complainant-company and the rejoinder was also given by the applicant-company. Thereafter, the complainant-complaint filed the impugned FIR on 18.11.2016, whereas the applicant company has filed a civil suit before the learned Senior Civil Judge, Delhi for settlement of the accounts/rendition of the account. It is this FIR which is sought to be quashed in this application. 3. Heard learned advocates for the parties. 3.1 Learned advocate Mr.Thacker for the applicant submitted that the impugned FIR is filed only to exert pressure and harass the present applicant. It is submitted that the applicant-company has sent back all the goods and the debit notes to the complainant-company which are duly received by them and also made the payment of the remaining goods and therefore there is no ingredients of the sections invoked in the impugned FIR. It is submitted that the applicant-company has sent back all the goods and the debit notes to the complainant-company which are duly received by them and also made the payment of the remaining goods and therefore there is no ingredients of the sections invoked in the impugned FIR. It is submitted that even from the allegations levelled in the present FIR, they are merely of civil in nature and therefore there is no criminality involved in the present offence. It is submitted that there were commercial transactions between the applicant-company and complainant-company. It is submitted that the dispute mentioned in the FIR is purely of civil nature for which instead of resorting to civil remedy, the complainant has filed the present FIR only with a view to harass the present applicant. He, therefore, prayed that as the impugned FIR is nothing but abuse of process of law, it is required to be quashed by allowing this application. 3.2 In support of his submissions, learned advocate Mr.Thacker has relied on the following decisions: (1) Paramjeet Batra V/s State of Uttarakhand and Others reported in (2013)11 SCC 673 . (2) Binod Kumar and Others V/s State of Bihar and Another, reported in (2014) 10 SCC 663 . (3) Anand Kumar Mohatta V/s State (Govt. of NCT of Delhi) reported in 2018 SCC Onlne SC 2447. 4. Per contra, learned advocate Mr.Dave for the respondent no.2-complainant has submitted that the present application is required to be dismissed as no case is made out for interference under Section 482 of the Code and on bare reading of the FIR, the ingredients of sections invoked are made out. He further submitted that the applicant company has never complained about the delay in delivering the goods and suddenly returned the goods and debt note. He, therefore, submitted that this application be dismissed. 5. Learned APP Mr.Joshi for respondent no.1 and learned advocate Mr.Dave for the respondent no.2 have submitted that prima facie ingredients of Sections 406 and 420 of IPC are made out and this Court may not allow this application and quash the FIR in question as the same may be subjected to trial and evidence. 6. I have considered the rival submissions of the parties, perused the material placed on record and the contents of the FIR. 6. I have considered the rival submissions of the parties, perused the material placed on record and the contents of the FIR. It transpires that the applicant and the complainant were having commercial transactions since long; that the applicant company was having complaints regarding the services of the complainant company; that the applicant company has made payments to the complainant company and has returned the remaining goods along with the debit notes; that the dispute mentioned in the impugned FIR is of civil nature; that no ingredients of Sections 406 and 420 of the IPC are made out prima facie from the contents of the impugned FIR; that the applicant company had filed a civil suit before the learned Senior Civil Judge, Delhi praying for settlement of accounts/rendition of the accounts, which is decreed in favour of the applicant company ex-parte as the complainant-company did not appear in the said suit. 7. In view of the above factual background, if the settled legal position of law is seen, then in the case of Paramjeet Batra (supra), it is held that “pending civil suit will take care of all those issues including alleged use to forged and fabricated documents, in such a situation, held, continuation of pending criminal proceedings would be abuse of the process of law.” 8. In the case of Binod Kumar and others (supra), it is held that “even if all the allegations in complaint taken at the face value are true, basic essential ingredients of dishonest misappropriation and cheating are missing, criminal proceedings are not a shortcut for other remedies, since no case of criminal breach of trust or dishonest intention of inducement is made out and essential ingredients of Ss. 405/420 IPC are missing, prosecution of appellants Ss. 406/120-B IPC, liable to be quashed.” In the present case, essentially the dispute is arising from delivery of defective goods and issuance of debit note which is dispute of civil nature and the complainant has not filed any civil proceedings for recovery of such outstanding amount. 9. It is also relevant to refer to paragraphs 11 to 14 of the judgment of the Hon’ble Apex Court in the case of Satischandra Ratilal Shah V/s State of Gujarat and Another reported in (2019)9 SCC 148 , which read as under: “11. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. It is also relevant to refer to paragraphs 11 to 14 of the judgment of the Hon’ble Apex Court in the case of Satischandra Ratilal Shah V/s State of Gujarat and Another reported in (2019)9 SCC 148 , which read as under: “11. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with 406 of IPC, we observe that the dispute arises out of a loan transaction between the parties. It falls from the record that the respondent No.2 knew the appellant and the attendant circumstances before lending the loan. Further it is an admitted fact that in order to recover the aforesaid amount, the respondent No. 2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognizes a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being a clear case of entrustment. 12. In this context, we may note that there is nothing either in the complaint or in any material before us, pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of Section 405 punishable under Section 406 of IPC. Hence the learned Magistrate committed a serious error in issuing process against the appellants for the said offence. Unfortunately, the High Court also failed to correct this manifest error. 13. Now coming to the charge under Section 415 punishable under Section 420 of IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 ) : ( AIR 2000 SC 2341 ). In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached the respondent No. 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the respondent No. 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached the respondent No. 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the respondent No. 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred. 14. Moreover, this Court in a number of cases has usually cautioned against criminalizing civil disputes, such as breach of contractual obligations [refer to Gian Singh v. State of Punjab, (2012) 10 SCC 303 ] : (2012 AIR SCW 5333). The legislature intended to criminalize only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements, which resulted in involuntary and inefficient transfers, under Section 415 of IPC.” 10. In view of the above, this FIR is nothing but an abuse of process of law and even on bare reading the contents of the FIR, the ingredients of Sections 406 and 420 of the Indian Penal Code are not satisfied and dispute is regarding defective goods and debit note which is essentially of civil nature and element of criminality is missing in the transaction and, therefore, the same deserves to be quashed. 11. 11. Further, it will also be fruitful to mention the judgment of Hon’ble Supreme Court in the case of State of Haryana V/s Bhajan Lal reported in AIR 1992 SC 604 , wherein the Hon’ble Supreme Court has observed thus – “In the backdrop of the interpretation of the various relevant provisions of the Code under Ch.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 Art.226 or the inherent powers under sec.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 sec.156(1) of the Code except under an order of a Magistrate within the purview of sec.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 sec.156(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. (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.” 12. It is also relevant to refer to the judgment of the Hon’ble Apex Court in the case of Inder Mohan Goswami and Another versus State of Uttaranchal reported in (2007) 12 SCC 1 , more particularly para : 23 & 24 thereof, which read as under : “23. This Court in a number of cases has laid down the scope and ambit of courts' powers under Sec. 482 CrPC. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under Sec. 482 CrPC can be exercised: [(i) to give effect to an order under the Code;] [(ii) to prevent abuse of the process of court, and] [(iii) to otherwise secure the ends of justice.] 24. Inherent powers under Sec. 482 CrPC though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself'. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the statute. Discussion of decided cases.” 13. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the statute. Discussion of decided cases.” 13. In view of above settled position of law and after considering the facts as alleged in the FIR and circumstances of the present case, it transpires that continuation of further proceedings pursuant to the said FIR will cause greater hardships to the petitioners and no fruitful purpose would be served if such further proceedings are allowed to be continued. The Court must ensure that criminal prosecution is not used as instrument of harassment or for seeking private vendetta or with ulterior motive to pressurise accused or to settle the score. 14. Resultantly, this application is allowed. The impugned FIR being C.R.No.I-164 of 2016 registered with Puna Police Station, Surat city and all the consequential proceedings arising therefrom are hereby quashed qua the present applicants. Rule is made absolute. Direct service is permitted.