Allahabad High Court
Atul Saxena vs State Of U.P. And Another on 8 September, 2022
Author: Saurabh Shyam Shamshery
Bench: Saurabh Shyam Shamshery
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Reserved on 31.08.2022 Delivered on 08.09.2022 Court No. - 82 1. Case :- APPLICATION U/S 482 No. - 40942 of 2017 Applicant :- Atul Saxena Opposite Party :- State of U.P. and Another Counsel for Applicant :- A.K. Mishra, Pankaj Sharma, Sati Shanker Tripathi Counsel for Opposite Party :- G.A., Brijesh Sahai, Pankaj Govil, Praveen Kumar Singh, Syed Imran Ibrahim 2. Case :- APPLICATION U/S 482 No. - 40821 of 2017 Applicant :- Jasbeer Singh And 4 Others Opposite Party :- State of U.P. and Another Counsel for Applicant :- A.K. Mishra, Sati Shanker Tripathi, Vineet Pandey Counsel for Opposite Party :- G.A., Brijesh Sahai, Pankaj Kumar Govil, Praveen Kumar Singh, Syed Imran Ibrahim Hon'ble Saurabh Shyam Shamshery,J.
1. The facts, in brief, as evident from material on record as well as from submissions raised on behalf of rival parties are that, the Complainant and his wife have commercial relationship with accused persons so much that the Complainant was appointed as a Legal Advisor of the Company, namely, Culture Home Developer Pvt. Ltd., on remuneration. Further, wife of Complainant has entered a Memorandum of Understanding/ Agreement (hereinafter referred to as "MOU/Agreement") for adjusting the amount paid by Complainant and his wife towards allotment of flats as well as share.
2. It appears that relationship between parties became soar and a dispute arose to the extent that payment of remuneration of Complainant was discontinued as well as condition of MOU/Agreement were allegedly not complied with and this led to appointment of an Arbitrator in terms of aforesaid agreement wherein an interim order was also passed and recently the Arbitrator has pronounced award dated 27.11.2021 in favour of Complainant and his wife. The said award is challenged by accused persons under the provisions of Section 34 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996").
3. During pendency of arbitration proceedings the Complainant filed a First Information Report against accused persons (applicants herein in both applications), for allegedly committing offences under Sections 420, 467, 468, 471, 506 IPC.
4. The contents of First Information Report are very lengthy, however, crux is that, very initiation of relationship between parties was based on dishonesty and accused persons allegedly, in order to deceive the Complainant and his wife, induces them to invest money and it was part of cheating that Complainant was appointed as a Legal Advisor to the Company as well as a MOU/Agreement was executed to show that all the transactions were bona fide. In the First Information Report there are further allegations that accused persons have committed forgery of valuable security, forgery for the purpose of cheating and forgery for using a genuine document, which has reason to believe to be forged.
5. Sri Sujit Kumar, learned counsel for applicants in both the applications, has vehemently argued that Complainant and his wife has already taken appropriate remedy under Act, 1996 and an award has been passed in their favour, though challenged under Section 34 of Act, 1996. The document of retainership as well as MOU/Agreement are not in dispute. The allegations of cheating or forgery are not based on any evidence. The Complainant side, with their open eyes, have entered not only into an agreement but also acted as a Legal Advisor of Company for which Complainant was paid also. Only in order to put pressure on accused/ applicants the criminal proceedings were initiated and First Information Report was lodged wherein after investigation charge sheet has been filed and cognizance has also been taken. The investigation was not fair and in absence of ingredients of aforesaid offences charge sheet was filed and without applying judicial mind, the Trial Court has taken cognizance for all the above referred alleged offences. It is a purely civil dispute which has been given criminal colour and criminal proceedings are initiated only after the proceedings initiated by Complainant under Act, 1996, therefore, the criminal proceedings as well as cognizance order are liable to be set aside.
6. The above submissions are vehemently opposed by Sri Paritosh Malviya, learned A.G.A. and Sri Syed Imran Ibrahim, Advocate for Opposite Party No. 2. They submitted that there might be some overlapping of facts but only on the ground that Complainant had availed remedy under Act, 1996 the First Information Report lodged for committing offences under Sections 420, 467, 468, 471, 506 IPC cannot be quashed, as there is no bar for lodging FIR for cognizable offence. In the criminal proceedings offences are to be proved by prosecution and it was a case of Complainant that since inception, in the relationship between parties, element to deceive and to induce the Complainant and his wife, was present which remained continued when Complainant was appointed as Legal Advisor and further entering into MOU/Agreement with the wife of Complainant.
7. Heard learned counsel for parties and perused the material available on record.
8. Before adverting to the rival submissions it would be apposite to refer a recent judgment of Supreme Court passed in Mitesh Kumar J. Sha vs. State of Karnataka and others, AIR 2021 SC 5298:2021 SCC OnLine SC 976, wherein somewhat similar controversy was involved. Considering various judgments passed by Court it was held that, "Although, there is perhaps not even an iota of doubt that a singular factual premise can give rise to a dispute which is both, of a civil as well as criminal nature, each of which could be pursued regardless of the other." Court further held that only on the ground that complainant instituted multiple civil suit, it is not necessary that it was only to import it a criminal colour and ultimately the Court has to scrutinize, whether the relevant ingredients for a criminal case are even prima facie made out or not. The Court has also taken note that the criminal proceedings cannot be quashed solely because the dispute was referred to arbitration and arbitration proceedings had taken place thereafter.
9. Inherent Power of the High Court under Section 482 Criminal Procedure Code 1973 :-
(I) "Inherent Power" of the High Court under Section 482 Cr.P.C., an extraordinary power is with purpose and object of advancement of justice, which is to be exercised "to give effect to any order under the Cr.P.C.", or "to prevent abuse of process of any Court", or "to secure ends of justice", making arena of the power very wide, yet it is to be exercised sparingly, with great care and with circumspection, that too in the rarest of rare case.
(II) It is no more res integra that exercise of inherent power could be invoked to even quash a criminal proceeding/First Information Report/complaint /chargesheet, but only when allegation made therein does not constitute ingredients of the offence/offences and /or are frivolous and vexatious on their face, without looking into defence evidence, however such power should not be exercised to stifle or cause sudden death of any legitimate prosecution. Inherent power does not empower the High Court to assume role of a trial court and to embark upon an enquiry as to reliability of evidence and sustainability of accusation, specifically in a case where the entire facts are incomplete and hazy. Similarly quashing of criminal proceedings by assessing the statements under section 161 Cr.P.C. at initial stage is nothing but scuttling a full fledged trial.
(III) There can not be any straight jacket formula for regulating the inherent power of this Court, however the Supreme Court has summarised and illustrated some categories in which this power could be exercised in catena of judgments. Some of them are State of Haryana Vs Bhajan Lal : 1992 Supp (1) SCC 335, Zandu Pharmaceutical Works Ltd Vs Mohd Sharaful Haque: (2005) 1 SCC 122, Ahmed Ali Quarashi and Anr Versus The State of Uttar Pradesh : 2020 SCC Online SC 107, Joseph Salvaraja A v. State of Gujarat (2011) 7 SCC 59, Sushil Sethi and another Vs The State of Arunachal Pradesh and others (2020) 3 SCC, 240, Priti Saraf and Anr Vs State of NCT of Delhi and Anr : 2021 SCC Online SC 206. Some categories/ circumstances as illustrations but not exhaustive are : allegations made in FIR / complaint, if are taken at their face value and accepted do not prima facie constitute any offence or are so absurd and inherently improbable to make out any case or no cognizable offence is disclosed against the accused, criminal proceedings is maliciously instituted with an ulterior motive and with a view to spite the accused due to private and personal grudge, or where there is a specific legal bar engrafted in any of the provisions of the Code or in the concerned Act to the institution and continuance of the proceedings or when dispute between the parties constitute only a civil wrong and not a criminal wrong, further Courts would not permit a person to be harassed although no case for taking cognizance of the offence has been made out.
(IV) In Sau. Kamal Shivaji Pokarnekar v. The State of Maharashtra : (2019) 14 SCC 350, the Apex Court has laid emphasis on the principles laid down in two of its previous judgements namely, State of Karnataka v. M. Devendrappa : 2015 (3) SCC 424 and Indian Oil Corporation v. NEPC India Ltd. & Ors.: (2006)6 SCC 736 and held that quashing of criminal proceedings is called for only when the complaint does not disclose any offence, or the complaint is frivolous, vexatious, or oppressive and further clarified that defences available during a trial and facts/aspects whose establishment during the trial may lead to acquittal cannot form the basis of quashing a criminal complaint. The criminal complaints cannot be quashed only on the ground that the allegations made therein appear to be of a civil nature, if the ingredients of the alleged offence are prima facie made out in the complaint.
(V) The Supreme Court in M/s Neeharika Infrastructure Pvt. Ltd Versus State of Maharashtra and Others : (2020) 10 SCC 118, has categorically held that High Court is not justified in passing the order of not to arrest and or no coercive steps either during the investigation or till the final report/ charge sheet is filed under Section 173 Cr.P.C., while dismissing/disposing petition under Section 482Cr.P.C. and/or under Article 226 of the Constitution and even in exceptional cases where High Court is of the opinion that a prima facie case is made out for stay of further investigation,such order has to be with brief reasons, though such orders should not be passed routinely, casually and/or mechanically.
(VI) Whether the allegations are true or untrue, would have to be decided in the trial. In exercise of power under Section 482 of the Cr.P.C., the Court does not examine the correctness of the allegations in a complaint except in exceptionally rare cases where it is patently clear that the allegations are frivolous or do not disclose any offence. (see Ramveer Upadhyay & Anr. versus State of U.P. & Anr. 2022 SCC Online SC 484) (VII) "A careful reading of the complaint, the gist of which we have extracted above would show that none of the ingredients of any of the offences complained against the appellants are made out. Even if all the averments contained in the complaint are taken to be true, they do not make out any of the offences alleged against the appellants. Therefore, we do not know how an FIR was registered and a charge-sheet was also filed.....It is too late in the day to seek support from any precedents, for the proposition that if no offence is made out by a careful reading of the complaint, the complaint deserves to be quashed." (See, Wyeth Limited & others vs, State of Bihar & another, Criminal Appeal No.1224 of 2022 (Special Leave Petition (Crl.) No.10730 OF 2018), decided on 11th August, 2022).
10. Now the Court proceed to scrutinize, whether the relevant ingredients for a criminal case are prima facie made out or not. Sections 420, 467, 468, 471 and 506 IPC are mentioned hereinafter:
"420. Cheating and dishonestly inducing delivery of property.--Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
"467. Forgery of valuable security, will, etc.--Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine."
"468. Forgery for purpose of cheating.--Whoever commits forgery, intending that the document or electronic record forged shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
"471. Using as genuine a forged document or electronic record.--Whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe to be a forged document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record."
"506. Punishment for criminal intimidation.--Whoever commits, the offence of criminal intimidation shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both; If threat be to cause death or grievous hurt, etc.--And if the threat be to cause death or grievous hurt, or to cause the destruction of any property by fire, or to cause an offence punishable with death or imprisonment for life, or with imprisonment for a term which may extend to seven years, or to impute, unchastity to a woman, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both."
11. In order to find out, whether there are prima facie case made out for committing offence of cheating and dishonestly inducing delivery of property as well as forgery of valuable security for the purpose of cheating and using as genuine any document believed to be forged with dishonest intention, the element of dishonesty and intent to commit fraud by cheating or forgery is necessary. However, the facts are different so much as the Complainant has not only paid amount for the purpose of flats but became Legal Advisor of the Company of accused also on retainer basis and for that he was paid on month-to-month basis. Further, his wife has entered into the MOU/Agreement with accused person duly signed by both parties. Therefore, the parties have entered into a business transaction after understanding the terms of MOU/Agreement with expectation of profit of amount deposited in terms of flats and share and since the conditions were not followed and there was a breach of conditions, the Complainant has taken remedy available under Act, 1996 and recently an award has been passed in their favour, therefore, the element of inducement on the basis of fraudulent and dishonest act by accused persons is missing as well as the allegation of forgery is also not prima facie made out as there is no allegation that MOU/Agreement made was a forged document. The allegations of forgery as made in the complaint were in anticipation as well as no evidence was collected, whether any forged documents were prepared. For reference the relevant part of complaint is reproduced hereinafter:
"Inke Dwara Comapny Me Jhuthe Dastavej/ Khata/ Vivran Patra Vouchers Aadi Nuksan Pahunchane Ki Niyat Se Taiyar Kiye Gaye Hai Aut Taiyar Kiye Ja Rahe Hai Jisse Hamare Alawa Anya Niveshakon Ko Bhi Dhanrashi Ka Nuksan Ho."
12. Therefore, there was no material on record that any offence of forgery was prima faice committed.
13. Considering the above analysis, this Court come to definite conclusion that ingredients of offences of committing cheating and forgery are not satisfied since there is no element of dishonesty from inception specifically when parties have entered into MOU/Agreement duly signed and without any allegation of forgery in the said document. The essential ingredients of forgery, i.e., to make any false document with intent to commit fraud is also absent as the allegation in complaint was only in anticipation without any evidence in this regard. Accordingly, this Court finds it to be a fit case where the inherent power under Section 482 Cr.P.C. can be exercised that no offence is made out on the basis of complaint and material on record and thus the facts of present case falls under the category of exceptionally rare case where it is patently clear that allegations do not disclose any offence. It would be beneficial to extract relevant part of para 15 of Hridaya Ranjan Prasad Verma and others vs. State of Bihar and another, (2000) 4 SCC 168 and para 6 and 7 of Uma Shankar Gopalika vs. State of Bihar and another, (2005) 10 SCC 336:
Hridaya Ranjan Prasad Verma (supra) "15. ....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 to 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..."
Uma Shankar Gopalika (supra) "6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of complaint any criminal offence whatsoever is made out much less offences under Sections 420/120-B IPC. The only allegation in the complaint petition against the accused persons is that they assured the complainant that when they receive the insurance claim amounting to Rs 4,20,000, they would pay a sum of Rs 2,60,000 to the complainant out of that but the same has never been paid. Apart from that there is no other allegation in the petition of complaint. It was pointed out on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the Consumer Forum in relation to the claim of Rs 4,20,000. It is well settled that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating, hi the present case it has nowhere been stated that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC.
7. In our view petition of complaint does not disclose any criminal offence at all much less any offence either under Section 420 or Section 120-B IPC and the present case is a case of purely civil dispute between the parties for which remedy lies before a civil court by filing a properly constituted suit. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and to prevent the same it was just and expedient for the High Court to quash the same by exercising the powers under Section 482 CrPC which it has erroneously refused."
14. In the result, both the applications are allowed. Entire criminal proceedings in Criminal Case No. 2317 of 2017 (State vs. Atul Saxena and others), arising out of Case Crime No. 0726 of 2016, under Sections 420, 467, 468, 471, 506 IPC, Police Station Vrindaban, District Mathura as well as the charge sheet dated 19.01.2017 and cognizance order dated 20.04.2017, are hereby quashed.
15. There shall be no order as to costs.
Order Date :- 08.09.2022 AK