Patna High Court
G.K. Agrawal vs The State Of Bihar And Anr. on 25 September, 2006
Author: Sadanand Mukherjee
Bench: Sadanand Mukherjee
JUDGMENT Sadanand Mukherjee, J.
Page 2368
1. Heard the parties.
2. This is an application for quashing the entire criminal proceeding initiated against the petitioner under Sections- 406, 420 and 120(B) of the I.P.C. on the following factual profile:
3. The petitioner was Managing Director of the Firm M/S Shreeji Analytical Lab Ltd. at Mumbai and the complaint was lodged by one Deb Chandra Thakur. Proprietor, S.M. Enterprises of B-136, P.C. Colony, Lohiaya Nagar, Kankarbagh, Patna. In the complaint petition it was stated that accused No. 2, Shri Dharmendra Nath Thakur, who is Regional sales Manager of M/S Shreeji Analytical Lab.Ltd. who happens to be co-villager of the complainant induced the complainant to work as clearing and forwarding agent on commission basis. The complainant arranged a ware house for storing of Ayurvedic products of the Company. Remuneration was payable at different rates considering length of time.
4. There was an agreement between the complainant and the petitioner that clearing and forwarding agent was to deposit Rs. 2.5 lac towards security to the petitioner which was compiled with in three instalments which carried interest at the rate of 14%. The complainant opposite party No. 2 relying on the representative of Regional Sales Manager, accused No. 2 in the complaint case agreed to work as clearing and forwarding agent for the said firm. Petitioner is the Managing Director. Opposite party No. 2 in this complaint after afferampngnp a ware house also obtained sale Tax mumber in the name of company. Correspondences were made by opposite party No. 2 as per agreement for payment of commission which was not done by the Page 2369 petitioner of this case who is accused No. 1 in the complaint case. The complainant in his complaint has stated about unilateral decision of accused No. 1 (petitioner) in converting him as consignee agent. Representative of accused No. 1 being accused No. 2 the Regional Sales Manager was authorised absolute power to deal with the business. The accused No. 2 visited the complainant's firm and agreed that the security amount of the petitioner of Rs. 2 lac 50 thousand and commission dues Rs. 50,000/-be paid to the opposite party No. 2 in this application within a period of four months which was not paid to the complainant. Evil intention has been attributed against the petitioner stating in the complaint petition that the petitioner (accused No. 1 in the complaint case) and others had appointed another firm Sonu Enterprises as their C & F agent and severed all connection with the complainant company. The petitioner in this case (accused No. 1 in the complaint petition) communicated to the complainant vide letter dated-17.9.1998 and mentioned therein that he is ready to settle the account of the complainant within 15 days after completion of the instruction mentioned in the said letter, but despite assaurance they did not depute any authorised person to check the stock and also failed to clear the dues of commission and security amount alongwith interest. Despite assaurance of accused No. 1 (petitioner) dues were not cleared by the representative of petitioner-accused No. 2. Accused No. 2 met the complainant and told to keep ready things, as stock, Form IXC, stationary etc. and the complainant communicated the facts to accused No. 1 but there was no response. The complaint case has been lodged with the allegation that the petitioner and others had made false promises but cheated the complainant by in dncip the Cemplanat agreeing to deposit Rs. 2.50 lac in cash and has put the complainant to a loss of Rs. 3.66 lac including security with interest and commission.
5. The petitioner being accused No. 1 in the said complaint case seeks to quash the criminal proceeding in complaint case No. 413(C) of 1999 on the following terms:
I. The entire grievance/dispute/allegation raised in the complaint case for violation of terms of agreement, if any, is purely of civil nature under purview of Civil liability:
II. The petitioner filed Anticipatory Bail Application No. 19561/2003 which was disposed of on 18.8.2003 By Hon'ble Mr. Justice Shiva Kirti Singh with an observation that the claim and counter-claim being raised by both the parties in respect of controversy relating to accounts between the parties should be referred to the Chartered Accountant and accordingly the dispute was referred to the Chartered Accountant who submitted report stating that it is difficult to/disbelieve the claim of either parties;
III. Since this Court referred the matter to an alternative Disputes Settlement Machinery for arbitration of the Claim of the parties who could not disbelieve the claims of both the parties;
here is no dishonest intention of committing any offence, much less the offence of cheating or broach of trust is lacking in the present case, IV. Both the parties entered into business relationship which continued for sometime, and thereafter, accounting dispute arose between both the parties as both the parties had claims against each other. Both the parties suffered business losses, thus the petitioner was acting bonafids, whereas the complainant in order to pressurise the petitioner filed the present criminal case with the allegation of cheating or breach of trust;
Page 2370 V. In the agreement it was agreed that the business arrangement shall be subject to decisions of courts of complaint jurisdiction of Bombay alone to entertain and try all disputes of whatsoever nature between the parties;
and VI. The disputes were not settled and instead of complying the obligation and instead of settling the account the complainant started asking that since he had deposited the security amount that should be refunded completely ignoring the fact that the whole purpose of the deposit of security was that it could enable the settlement of account;
VII. Neither the petitioner for company has caused any wrongful loss to the complainant. The complainant himself alongwith accused No. 2, both are admittedly relatives and co-villagers, in collussion with each other, jointly caused wrongful loss to the company and cheated the company and the petitioner by collecting huge amount of outstanding dues from stockiast in cash as also in demand draft without depositing money there of with the company and grabbed the sama in violation of terms and conditions of the agreement and there are no outstanding dues against the petitioner and company;
VIII. Since the complainant himself discontinue the business with the petitioner and since in course of arbitration among the parties both the parties had full opportunity to produce their books of accounts and materials before the Arbitrator under the order of this Hon'ble Court, there is no want of bonafide on the part of the petitioner;
6. Opposite party No. 2 (Complainant) has relied upon a decision of this Court in the case of Medchl Chemicals v. Biological E.Ltd. and Ors. reported in P.L.J.R. 2000 (3) page 56 (S.C.), in which it was held that the complaint cannot be quashed merely on the ground that the civil remedy is available Simply because there is a remedy provided for breach of contract, that doss not by itself clothe the Court to inter that the civil remedy is the sole course. It was held therein that both criminal law and civil law remedy can be pursued in diverse situations. As a matter of fact, they are not mutually exclusive. In the aforesaid decision the Hon'ble Supreme Court relied upon the case of Pratibha Rani v. Suraj Kumar reported in 1985 SCC (Cri.) page-180, in which the Hon'ble Court observed that the High Court should very sparingly exercise its discretion under Section 482 Cr.P.C.
7. In the aforesaid decision relied upon by the respondent No. 2, the Hon'bls Supreme Court also held as follows:
Para-12 while Section 415 is an offence or cheating, Section 418 deals with cheating with knowledge that wrongful lose may ensue to a parson whose interest the offender is bound to protect and Section 420 is cheating and dishonestly inducing delivery of property. In order to attract the provisions of Sections 418 and 420 the guilty intent, at the time of making the promise is a requirement and an essential ingredient thereto and subsequent failure to fulfil the promise by itself would not attract the provisions of Sections 418 or 420. Mensrea is one of the essential ingredients of the offence of cheating under Section 420. As a matter of fact illustration (g) to Section 415 makes the position clear enough to indicate that mere failure to deliver in breach of an agreement would not amount to cheating but is liable only to a civil action for breach of contract and it is this concept which obviously has weighed with the learned Single Judge But can the factual situations as narrated above in the Page 2371 longish reproduction of the complaint lend support to the observations of the learned Judge, the answer is pivotal one but before so doing one other aspect as regards the powers under Section 482 Cr.P.C. dught to be noticed. As noted herein-before this power is to be exercised with care and caution and rather sparingly and has been so held on more occasions than one.
8. In the aforesaid decision while elaborating the scope of Section 482 Cr.P.C. it was also held that while exorcising inherent powers, the only requirement for High Court is to sea whether continuance of proceeding would be an abuse of judicial process for which the complaint in its entirety is to be examined and the High Court at that stage has no authority or jurisdiction to go into the matter and examine its correctness.
9. A careful reading of the aforesaid decision prompts this Court to record the following observation that after recording the evidence before charge if the court below comas to a conclusion that there was no guilty intent, at the time of making the promise, there was only subsequent failure to fulfil the promise, the lattes by itself would not attract the provisions of Sections 406, 420 and 120 of the I.P.C.
10. Hence, the court below shall proceed with the evidence before charge adduced on behalf of the parties and pass an order according to law as laid down above by the Hon'ble Supreme Court with special reference to para-12 of the aforesaid decision which is quoted above
11. With the aforesaid observation, this application stands disposed of.