Research › Search › Judgment

Calcutta High Court · body

2025 DIGILAW 130 (CAL)

Blue Star limited v. State of West Bengal

2025-01-27

SUBHENDU SAMANTA

body2025
JUDGMENT : Subhendu Samanta, J. 1. This is an application u/s 482 of the Code of Criminal Procedure for quashing of a complaint case being CS No. 63855/2017 pending before the Learned 3rd Metropolitan Magistrate, Calcutta alleging offence u/s 415/418/420 IPC. 2. The brief fact of the matter is that the petitioner No. 1 is a Company and other petitioners are directors of petitioner No. 1. O.P. No. 2 is a proprietorship concerned who lodged the instant complaint before the Learned Metropolitan Magistrate. 3. The complaint contained that the OP No. 2 had a long business transaction with the petitioner No. 1 in respect of various contracts and projects since last 10 years and more. It is averted in the petition of complaint that time to time the complainant has been awarded with numerous contract for supply installation testing and commissioning for the petitioners. 4. It is further averted in the petition of complaint that all such contracts have been successfully performed by the complainant/ Opposite Party No. 2 and accordingly he raised his bills/invoices to the accused. It has also been averted in the petition of complaint that petitioners/accused persons for paid bills/ vouchers of the complainant. As per agreement of the terms. It is the case of the petitioner that since last few years the irregular in making timely payments to the complainants on various false pretext and for which the complainant suffers huge loss. 5. It is the case of the petitioner that as on 5th October 2017 a sum of Rs 30,47,471/-is due and payable from the accused. It is the case of the complainant that for the completion of an approach of some clients, the complaint was any requirement of three No. of air cool screw chillers and so long after for the same in the market. Accused No. 4 and 5 repaying accused No… petitioner No. 1 approached the complainants to purchase the same machine from the petitioner company. It is the further case of the petitioner that the accused persons/Opposite Parties assured the complainant of timely payments of his previous due, the accused also assured the complainant to avail to just the amount payable of purchased value to with the amount receivable. Believing upon the said assurances of the petitioner the complainant agreed and placed order for purchase of the said machines i.e. three nos. Believing upon the said assurances of the petitioner the complainant agreed and placed order for purchase of the said machines i.e. three nos. of Air Cool Screw Chillers from the accused persons vide purchase order dated 27th September, 2016. The value of the three machines was Rs. 35,40,000.78/- only. At the time of purchase of the aforesaid machines accused No. 4 and 5 induced the complainant to initially pay a sum of Rs. 7,08,000/- as advance against the same purchase order so that they can execute the order had one can with an assurance that entire payment would be adjusted later. On that the complainant paid the sum of Rs. 7,08,000/- to the accused persons. However, before delivery of the said item it has been demonstrated by the petitioner that they need the complainant to sign indemnity bond and they also requires three post dated blank cheques. The accused assured the complainant the cheque will not be presented to the bank and will be returned to the compliant after adjustment of the account. By doing so the accused induced the complainant to sign indemnity bond taken three post dated cheques. It is the further allegation of the complainant that despite repeated reminders, phone calls, meetings, representations regarding adjustment of account and for paying of balance money, the accused failed financial display and repay under aforesaid projects. 6. It is the case of the complainant that value of the three machines projects of the complainants from the accused as sum of Rs 35,40,000.78/- out which the petitioner/complainant paid Rs 12,40,001/-. Hence the balance payable for the cost of machines is Rs. 22,99,999.78/- according to the complaint the final amount would be Rs. 7,47,472.78/-(Rs. 30,47,471/- -- Rs. 22,99,999.78/-) receivable from the accused to the complainant. 7. It is the further case in the petition of complaint that accused persons had committed a deep rooted conspiracy only to cheat the complaint and commit criminal breach of trust. Thus the complaint prayed for initiation of proceeding against the present petitioner u/s 418/420 of IPC read with Section 120B of the said court. 8. The petitioner submits that the petition of complaint before the Learned Chief Judicial Magistrate, Calcutta. Wherein the Learned Magistrate has everywhere taken the cognizance and the matter was present before the Learned 3rd Court Metropolitan Magistrate Calcutta. 8. The petitioner submits that the petition of complaint before the Learned Chief Judicial Magistrate, Calcutta. Wherein the Learned Magistrate has everywhere taken the cognizance and the matter was present before the Learned 3rd Court Metropolitan Magistrate Calcutta. The Learned 3rd MM Calcutta purportedly examined one witness on solemn affirmation in mechanical manner and issued the process against the petitioner., 9. It is the case of the petitioner that the instant criminal complaint as per under the provision of Section 202 of the Code of Criminal Procedure. Few accused persons including the company are situated outside the territorial jurisdiction of the Learned Metropolitan Magistrate. Thus according to the provision of Section 202 of the Cr.P.C. the Learned Magistrate may have postponed of used process against the accused persons either quashed into the case himself or direct to investigation to be made by Police or by such other person as he thinks fit for the purpose of deciding whether or not there is sufficient ground for proceeding. 10. It is the further case of the petitioner that sometimes in November 16 the complainant approached the petitioner company for approaches three Nos. air cool, screw chillers unit. After considering the order and also considering business relationship between the parties. The petitioner company duly accept order and agreed to make supply. Upon receipt of the purchase order, petitioner company duly made the supplies which were received without admiring or products to the satisfaction. The complainant also raised various invoices and sold delivery to the accused and three invoices dated June 30, 2017. The petitioner further submits that as against the liability of total payable, the complainant had made part payment a sum of Rs. 28,32,001/- remaining is due and payable to the petitioner company by the complainant. To discharge the liability the complainant issued three cheques by executing and indemnity bond dated 28th June, 2017. 11. It is the further case of the petitioner that the complainant undertook that the cheque will be honoured in presentation. The description of cheques are as follows:- Cheque no. Cheque date Drawn on Amount (Rs.) 808649 04.07.2017 Punjab National Bank, Salt Lake Sector V Branch , Kolkata 91 5,32,001.00 808650 07.07.2017 Punjab National Bank, Salt Lake Sector V Branch , Kolkata 91 10,00,000.00 808651 10.07.2017 Punjab National Bank, Salt Lake Sector V Branch , Kolkata 91 Total 28,32,001.00 12. The description of cheques are as follows:- Cheque no. Cheque date Drawn on Amount (Rs.) 808649 04.07.2017 Punjab National Bank, Salt Lake Sector V Branch , Kolkata 91 5,32,001.00 808650 07.07.2017 Punjab National Bank, Salt Lake Sector V Branch , Kolkata 91 10,00,000.00 808651 10.07.2017 Punjab National Bank, Salt Lake Sector V Branch , Kolkata 91 Total 28,32,001.00 12. It is the further case of the petitioner that the petitioner company deposited three cheques for encashment with its banker and upon presentation two cheques bearing No. 808650 and 808651 were dishonoured unpaid vide cheque return memos dated 30th August 2017 with the endorsement that “payment stopped by banker”. It is the further case of the petitioner that they intimated the complainant regarding the dishonoured of two cheques and also asked the complaint to pay the amount but the said amount was never paid. Thus, the petitioner finding no other alternative had issued a demand notice for making payment of the above mentioned two cheques. The complainant received the demand notice but not complied with the same. Accordingly Petitioner Company has initiated a complaint u/s 138 of Negotiable Instrument Act before the Jurisdictional Magistrate being CRR No. 66021 of 2017. Learned Magistrate upon perusal of the records has pleased to take cognizance of the offence and transfer the record before the Learned Metropolitan Magistrate 20th Court for trial and disposal. 13. It is the case of the petitioner that the instant complaint filed u/s 415/418/420B IPC is an override attempt to stall the proceeding u/s 138 of NI Act and to harass the petitioner company. 14. It is the further case of the petitioner that the instant proceeding is malicious and if allowed to be continued, it would be an abuse of process of court. It is the further case of the petitioner that the petitioner No. 1 is a company and other petitioners are the directors of the company and they are not vicariously liable on the act of the company itself. 15. It is the further case vicarious liability is a misnomer in IPC thus issuance of process in a sheer illegality per-se in the eye of law. 15. It is the further case vicarious liability is a misnomer in IPC thus issuance of process in a sheer illegality per-se in the eye of law. It is the further case of the petitioner that complainant has admitted in the petition of complaint that there are long standing business transaction between the complainant and the petitioner, so it cannot be proved that there are elements of cheating at the initiation of the alleged transaction. It is the further case of the petitioner that in case of commercial transaction, the complaint under the IPC u/s 120 of IPC is not at all maintainable. It is the further case of the petitioner that no case is made out u/s 420 of IPC against the present petitioner thus, the instant criminal proceedings pending before the Learned Metropolitan Magistrate is liable to be quashed. 16. Learned Counsel for the opposite party during the course of argument, has admitted the business transaction between the complainant and present petitioner. It is the argument on behalf of the respondent no. 2 that there were admitted due to be paid by the petitioner to the complainant during such business transactions. He argued that by different pretext the petitioners are delaying payments by which business of the complainant became stalled. 17. He further argument of the Learned Counsel for the complainant that, three screw chillers machines was urgently required by the complaint for performance of his job with other clients. Accused No. 4 and 5 has induced complainant by visiting his office to sign over an indemnity bond with three blank post-dated cheques showing the company’s rules. The complainant has no other option as the job was getting delayed and clients are pressing hard for completion of the job to avoid black listing and penalty the complainant had to abide by the to act on the basis of the inducement by the accused persons. 18. It is the further case of the complainant that three cheques were assured to be not deposited and complainant has said that he will pay the amounts mentioned in the cheque itself. 19. Learned Counsel for the complainant argued that amongst the three cheques the complainant has deposited the value of one cheque bearing No. 808649 dated 04.07.2017 amounting to Rs. 5,32,001/- and requested to return the cheque but till today, it was not returned. 19. Learned Counsel for the complainant argued that amongst the three cheques the complainant has deposited the value of one cheque bearing No. 808649 dated 04.07.2017 amounting to Rs. 5,32,001/- and requested to return the cheque but till today, it was not returned. Learned Counsel for the OP submits that the conducts of the petitioner/ accused persons are proved cheating and inducement from the inception of the transaction. There are materials to proceed against the present petitioner. Thus, he argued the complaint case is not liable to be quashed. 20. Having heard the Learned Counsel for the parties also considering the materials on record it appears to me that as business transaction was going on between the parties for quite long period of time. There may have some dues on the account of present petitioner in dealing with a business transactions. 21. Let me consider whether in case of breach of agreement in commercial transaction if any criminal liability can arise, further it is also to look into, whether breach of contract between two business houses can automatically called for a criminal liability. 22. One significant factor has to be looked into this matter whether a complaint lodged as a counter blast of proceeding u/s 138 of Negotiable Instrument Act can be maintained. In Anil Mahajon Vs. Bhor Industries Limited (2005) 10 SCC 228 the Hon’ble Supreme Court has elaborately discussed about the merit of breach of contract and how far it is applicable to raise a criminal liability against a person who breaches the contract. In Anil (Supra) the Hon’ble Supreme Court has held that – [8] The substance of the complaint is to be seen. Mere use of the expression "cheating" in the complaint is of no consequence. Except mention of the words "deceive" and "cheat" in the complaint filed before the Magistrate and "cheating" in the complaint filed before the police, there is no averment about the deceit, 'cheating or fraudulent intention of the accused at the time of entering into MOU wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay. According to the complainant, a sum of Rs. 3,05,39,086.00 out of the total amount of Rs. 3,38,62,860.00 was paid leaving balance of Rs. 33,23,774.00. According to the complainant, a sum of Rs. 3,05,39,086.00 out of the total amount of Rs. 3,38,62,860.00 was paid leaving balance of Rs. 33,23,774.00. We need not go into the question of the difference of the amounts mentioned in the complaint which is much more than what is mentioned in the notice and also the defence of the accused and the stand taken in reply to notice because the complainant's own case is that over rupees three crores was paid and for balance, the accused was giving reasons as above-noticed. The additional reason for not going into these aspects is that a civil suit is pending inter se the parties for the amounts in question. [9] In Alpic Finance Ltd. V/s. P. Sadasivan this Court was considering a case where the complainant had alleged that the accused was not regular in making payment and committed default in payment of instalments and the bank had dishonoured certain cheques issued by him. Further allegation of the complainant was that on physical verification certain chairs were found missing from the premises of the accused and thus it was alleged that the accused committed cheating and caused misappropriation of the property belonging to the complainant. Noticing the decision in the case of Nagawwa V/s. Veeranna Shivalingappa Konjalgi wherein it was held that the Magistrate while issuing process should satisfy himself as to, whether the allegations in the complaint, if proved, would ultimately end in the conviction of the accused, and the circumstances under which the process issued by the Magistrate could be quashed, the contours of the powers of the High Court u/s. 482 of the Criminal Procedure Code were laid down and it was held: "10. The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that the respondents committed the offence u/s. 420 of the Indian Penal Code and the case of the appellant is that the respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any wilful misrepresentation. Even according to the appellant, the parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception. 23. In Veer prakash Vs. Anil Kumar (2007) 7 SCC 373 the Hon’ble Supreme Court has held that 7. The principle underlying exercise of jurisdiction by the High Court under Section 482 of the Code of Criminal Procedure is now well settled viz. that the allegations contained in the complaint petition even if given face value and taken to be correct in its entirety do not disclose an offence or not is the question. 8. The principle underlying exercise of jurisdiction by the High Court under Section 482 of the Code of Criminal Procedure is now well settled viz. that the allegations contained in the complaint petition even if given face value and taken to be correct in its entirety do not disclose an offence or not is the question. 8. The dispute between the parties herein is essentially a civil dispute, Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust Contained in Section 405 of the Penal Code can be said to have been made out in the instant case. Section 405 of the Penal Code reads, thus: "405. Criminal breach of trust. Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust'." Neither any allegation has been made to show existence of the ingredients of the aforementioned provision nor any statement in that behalf has been made. 9. Ordinarily, bouncing of a cheque constitutes an offence under Section 138 of the Negotiable Instruments Act. No complaint thereunder had been taken. 24. In following the Hon’ble Supreme Court in Hriday Ranjan Prasad Verma Vs. State of Bihar it can be safely hold that - “In determining the question it has to be kept in mind that distinction between the mere breach of contract and the offence of cheating is fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent company but for this subsequent conduct it is not the sole taste. Mere breach of contract cannot come rise to criminal prosecution for cheating unless fraudulent or business intention is shown right at beginning of the presumption, i.e. The time when the offence is said to have been committed. Therefore, it is the intention which is the choose of the offence. Mere breach of contract cannot come rise to criminal prosecution for cheating unless fraudulent or business intention is shown right at beginning of the presumption, i.e. The time when the offence is said to have been committed. Therefore, it is the intention which is the choose of the offence. To hold a person guilty of cheating it is necessary to show that the fraudulent or dishonest intention at the time of making the promise. Mere failure to keep up problems subsequently such applicable intention right at the beginning that when he made the problems cannot be presumed” (emphasise supplied). 25. From the above observation of the Hon’ble Supreme Court in this particular case the business transaction between the parties was admitted. The complainant itself stated in the petition of complaint that he was in a dier need of three Air Cooled Screw Chillersmachines. It is also evident from the petition of complaint that the petitioners were actually supplied the machines to the complainant. The complainant has failed to demonstrate any dishonest intention of the petitioner to forwarding/ supplying those three machines according to the order of the complainant. Thus the breach of contract, as alleged by the present complainant in the petition of complaint does not make out a case u/s 420 of IPC. The petitioner has failed to demonstrate any reason where from it can be presumed that the petitioners had any fraudulent or dishonest intention right from the beginning i.e. at the time of supplying the three machines according to the order of the complainant. 26. Under the above observation I am of a view that the criminal complaint filed against the present petitioner does not fulfil the ingredients u/s 415 of IPC. Thus no case is made out u/s 420 of IPC. 27. In deciding the issues whether a criminal complaint is maintainable against a complaint u/s 138 of NI Act, the Hon’ble Supreme Court in Sunik Kr. Escorts Yamaha Motor Limited (1999) 8 SCC 468 , has observed that 4. Thus no case is made out u/s 420 of IPC. 27. In deciding the issues whether a criminal complaint is maintainable against a complaint u/s 138 of NI Act, the Hon’ble Supreme Court in Sunik Kr. Escorts Yamaha Motor Limited (1999) 8 SCC 468 , has observed that 4. Mr H.N. Salve and Mr Arun Jaitley, learned Senior Counsel appearing a for different accused persons on the other hand contended that the assertions made in the FIR even taken on face value do not satisfy the ingredients of the offence alleged to have been made and on the other hand it manifestly indicates that the complainant has instituted the criminal proceedings with an ulterior motive for wreaking vengeance and to pre-empt the filing of the criminal complaint against him under Section 138 of the Negotiable Instruments Act and, therefore, the High Court rightly came to the conclusion that allowing the criminal proceedings to continue would result in manifest injustice and as such quashed the FIR, and this Court, therefore, would not be justified in interfering with the same in exercise of power under Article 136 of the Constitution. According to the learned counsel, issuance of process should not be allowed to be an instrument of oppression or needless c harassment. Responsibilities and duties on the magistracy lie in finding out whether the alleged accused would be legally responsible for the offence charged for. The court at that stage could be circumspect and judicious in exercising discretion and should take all the relevant facts and circumstances into consideration lest it would be an instrument in the hands of the private complaint as vendetta to harass the person needlessly. The learned counsel d relied upon the decision of this Court in Punjab National Bank v. Surendra Prasad Sinha³. 5. The learned counsel d relied upon the decision of this Court in Punjab National Bank v. Surendra Prasad Sinha³. 5. Bearing in mind the law laid down by this Court in the cases referred to earlier and the contentions raised by the learned counsel appearing for the parties and on examining the allegations made in the FIR, we are persuaded to accept the submission of Mr H.N. Salve and Mr Arun Jaitley, appearing.e for the respondents that the necessary ingredients of the offence of cheating or criminal breach of trust have not been made out and on the other hand the attendant circumstances indicate that the FIR was lodged to pre-empt the filing of the criminal complaint against the informant under Section 138 of the Negotiable Instruments Act. The High Court, therefore, was well within its power in quashing the FIR as otherwise it would tantamount to an abuse of the process of court. We, therefore, see no justification for our interference with the impugned decision of the High Court in exercise of power under Article 136 of the Constitution. 28. In Mahindra and Mahindra Finance Service Limited and Anr. Vs. Rajib Dube The Hon’ble Supreme Court has held that 17. It is not in dispute that the proceedings under Section 138 are Pending. That being so, the question of proceeding for alleged breach of trust does not arise. 18. It is interesting to note that the respondent does not dispute issuance of cheques. Even a casual reading of the complaint does not show that the ingredients of Section 406 IPC are in any event made out. It is also not understandable as to how Section 294 has any application to the facts of the case much less Section 506 IPC. In addition to this, perusal of the complaint apparently shows the ulterior motive. It is clear that the proceeding initiated by the respondent clearly amounted to abuse of process of law. 29. Following the observation of the Hon’ble Supreme Court as made above it appears to me the instant criminal complaint filed by the complainant is a counter blust to the complaint u/s 138 NI Act filed by the present petitioner. In Hariyana Vs Bhajanlal (1992) SCC (Cri) 426 the Hon’ble Supreme Court has set some illustrative factors whenever frivolous complaint can be quashed by the High Court in exercising power u/s 482 of the Code of Criminal Procedure. In Hariyana Vs Bhajanlal (1992) SCC (Cri) 426 the Hon’ble Supreme Court has set some illustrative factors whenever frivolous complaint can be quashed by the High Court in exercising power u/s 482 of the Code of Criminal Procedure. They are as follows-- 102(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. (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.' 30. (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.' 30. Considering the entire situation, and the facts and circumstances of this case, it appears to this Court, rather it has been proved by the argument advanced by the Learned Counsel for the Opposite Party, that the instant criminal complaint was preferred against the present petitioner after filing of a complaint u/s 138 of NI Act. If the containt of the petition of complaint is taken to be correct then also the allegation u/s 420 IPC is not made out. According to the view of the Hon’ble Apex Court in Bhajanlal (supra) if the allegations in the petition of complaint are taken to be true at their face value, then also it do not prima facie, constitute any offence against the present petitioner/accused persons. 31. Considering the entire circumstances according to the view of the Hon’ble Supreme Court as discussed above, I am of a view that proceeding of the criminal complaint being a complaint case No. CS 63855 of 2017 pending before the Learned Metropolitan Magistrate, 3rd Court, Calcutta, u/s 415/418/420 of IPC. If allowed to be continued, will be a sheer abuse of process of court. 32. At this juncture, I think it necessary to invoke the inherent power of this Court to quash the criminal proceeding. Accordingly, the Instant CRR, being meritorious, is allowed on contest. 33. The criminal proceedings being complaint case No. CS 63855 of 2017 pending before the Learned 3rd Court Metropolitan Magistrate, Calcutta against the present petitioners are hereby quashed. 34. CRR disposed of. Connected application if pending, are also disposed of. 35. Parties to act upon the server copy and urgent certified copy of the judgment be received from the concerned Dept. on usual terms and conditions.