Madras High Court
Dinu K.Vijayan @ Dinu Karamayil Vijayan vs State Represented By on 25 March, 2021
Author: N.Sathish Kumar
Bench: N.Sathish Kumar
Crl.O.P.No.5267 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 26.08.2022
DELIVERED ON : 30.08.2022
CORAM:
THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR
Crl.O.P.No.5267 of 2022
and Crl.M.P.No.2839 of 2022
Dinu K.Vijayan @ Dinu Karamayil Vijayan .. Petitioner/A1
Vs.
1. State Represented by
The Sub Inspector of Police,
EDF-I Wing, Team-1,
Central Crime Branch,
Vepery, Chennai - 600 007.
2. Dr.Janani Murali
3. R.Bharath Singh
4. Dr.Muralimani .. Respondents
Prayer: Criminal Original Petition filed under Section 482 of Cr.P.C.,
seeking to call for the records in Crime No.102 of 2021 pending on the file
of the first respondent police and to quash the same.
For Petitioner : Mr.Bobby Mathew Koothattukulam
and Mr.Ratheesh K.Mohan
for Mr.A.K.Rajaraman
https://www.mhc.tn.gov.in/judis
1/24
Crl.O.P.No.5267 of 2022
For Respondent 1 : Mr.E.Raj Thilak
Additional Public Prosecutor
For Respondents 2 to 4 : Mr.T.I.Ramanathan
-----
ORDER
This petition has been filed seeking to quash the FIR in Crime No.102 of 2021, on the file of the first respondent police, for the offences punishable under Sections 406, 420 and 120(B) of IPC.
2. The crux of the allegations in the FIR is as follows:
(i) The second respondent / first defacto complainant is a doctor by profession, the third respondent / second defacto complainant is a social activist and the fourth respondent / third defacto complainant is a dentist by profession.
(ii) According to the defacto complainants, one Mr.Suresh Murthy from Hyderabad and the petitioner/A1 were known to the defacto complainants 1 and 3 for two years. They approached the defacto complainants and stated that they are going to start a business project of https://www.mhc.tn.gov.in/judis 2/24 Crl.O.P.No.5267 of 2022 USA billing companies in Dubai and induced the defacto complaints to become partners of the said company at Dubai.
(iii) According to them, the billing company means every person or employee living in Duabi shall get a medical insurance from any of the UAE medical insurance company and the employee need not pay any amount to the particular doctor. After taking treatment from the concerned doctor, the doctor shall send a bill to the insurance company and in turn, the insurance company will reimburse or pay the bill amount to the concerned doctor.
Thus, they represented that if the defacto complainants start the medical billing business in Dubai, they will get huge profit from the billing company.
(iv) The petitioner/A1 represented that he along with one Dr.Pooja and his friend Safana will look after the business in Dubai as they have lot of experience in UAE health care and the Petitioner/A1 will be the working partner in the medical billing company in Dubai and they will arrange for the office space, bank accounts, U.A.E coders and do all project work for running the company and that they have also accepted that they will carefully look after the medical billing company at Dubai. Thus, they induced the defacto complainants to invest in the above company. https://www.mhc.tn.gov.in/judis 3/24 Crl.O.P.No.5267 of 2022
(v) According to them, the investment share of the 1st and 3rd defacto complainant will be 50% and the 2nd defacto complainant will be 50% and the profit sharing percentage will be 40% to the 1st and 3rd defacto complainant, 40% to the 2nd defacto complainant and 20% to the petitioner/A1 as working partner.
(vi) Accordingly, the accused has also made a representation to start the company on 18.04.2019 and accordingly contract was entered with the petitioner/A1 on 04.07.2019. At the time of entering into the contract a sum of Rs.20,00,000/- was paid by way of account transfer to the petitioner/A1. Finally, the defacto complainant decided to invest in the project and share the profits as stated above.
(vii) Whenever the defacto complainants contacted the petitioner/A1, he assured that business is going on the right way. However, he did not allow the defacto complainants to see the project accounts. The defacto complainants invested Rs.60,00,000/- and Rs.25,00,000/- were spent towards expenses. Thus, totally they have invested Rs.85,00,000/- towards https://www.mhc.tn.gov.in/judis 4/24 Crl.O.P.No.5267 of 2022 the project, but according to them, the project has not commenced and thereby alleging that they have been cheated, a complaint has been filed for the offences punishable under Sections 406, 420 and 120(b) of IPC.
3. It is relevant to note that prior to the application filed under Section 156(3) of Cr.P.C., a complaint was lodged before the first respondent police. However, the police after enquiry closed the complaint as the dispute is Civil in nature. Thereafter, an application under Section 156(3) of Cr.P.C. has been filed before the learned Metropolitan Magistrate, CCB & CBCID Court, Egmore, Chennai and the learned Magistrate by order dated 25.03.2021, directed the first respondent police to register the FIR .
4. In the complaint originally given before the police, there is no allegation that the present petitioner/A1 has influenced and induced the defacto complainants to part with their money. It is stated that in the complaint one Suresh Murthy from Hyderabad contacted the defacto complainants and had discussion with them about the project. Whereas, in the complaint under Section 156(3) of Cr.P.C. the allegation has been pressed into service as if all the accused approached the defacto complainants for starting the company and induced them. https://www.mhc.tn.gov.in/judis 5/24 Crl.O.P.No.5267 of 2022
5. Be that as it may, based on the order of the learned Magistrate, FIR has been registered in Crime No.102 of 2021 for the offences punishable under Sections 406, 420 and 120(B) of IPC.
6. The learned counsel appearing for the petitioner/A1 would submit that the FIR is nothing but an abuse of process of law. In fact all together have jointly formed the company known as "Lumiere Medical Billing Services", where the present petitioner/A1 was made as the working partner and an agreement has also been executed in this regard between the parties and the entire management of the company shall be vested with the second defacto complainant as per Article 11 and the Managing Director has the power to singly to conduct the business of the company including to appoint and remove employees and consultants etc., The petitioner/A1 has been made one of the co-partner and he has to organise the setting up of the office including appointment of employees etc., on the basis of the contract entered into between the parties.
7. Further according to the learned counsel appearing for the petitioner/A1, the office space has also been acquired and employees were also appointed and the company was in existence for some time in Dubai. https://www.mhc.tn.gov.in/judis 6/24 Crl.O.P.No.5267 of 2022 The amount invested was also spent towards the office as well as the employees. Therefore, merely because the company could not make any profits and later on no trading took place, at any stretch of imagination, such act would not amount to breach of trust or cheating. Even the contract entered into between the parties clearly shows that office space has also been acquired for the purpose of conduct of business and rents have also been regularly paid and rental agreement has also been duly executed. Therefore, merely because the company business has not kick started and no trading has happened in the meanwhile, it cannot be said that the alleged offence has been committed by one of the working partner.
8. Further according to the learned counsel for the petitioner/A1, earlier similar type of complaint has been given before the first respondent police and the same was closed as a civil dispute, whereas, now it is alleged that this petitioner/A1 has approached the defacto complaints and induced them to invest in the company and the application under Section 156(3) of Cr.P.C. has been filed without any affidavit in support of the same. Despite the counter of the police that it is only a civil dispute, the learned Magistrate has directed the police to register the FIR, hence the learned counsel submitted that the learned Magistrate has not applied his mind. https://www.mhc.tn.gov.in/judis 7/24 Crl.O.P.No.5267 of 2022
9. Further, it is contended by the learned counsel appearing for the petitioner that the entire allegations in the FIR indicated that the alleged offence took place in Dubai, therefore, without the previous sanction of the Central Government, even investigation cannot be proceeded by the police as per Section 188 of Cr.P.C. Hence it is submitted that if the allegations are taken in its entirety admittedly it is only a dispute with regard to the accounts between the partners and therefore the complaint is nothing but an abuse of process of law and therefore seek to quash the same. In support of his above submissions, the learned counsel appearing for the petitioner/A1 relied upon the following judgments:
(i) R.P.Kapur Vs. State of Punjab (1960 KHC 689)
(ii) State of Haryana Vs. Ch.Bhajan Lal (1992 KHC 600)
(iii) Neeharika Infrastructure Pvt. Ltd., Vs. State of Maharashtra (2021 (3) KHC 25)
(iv) State of W.B. Vs. Swapan Kumar Guha (1982 KHC 419)
(v) Chandran Ratnaswami Vs. K.C.Palanisamy (2013 KHC 4403)
(vi) S.N.Sharma Vs. Bipen Kumar Tiwari (1970 KHC 436)
(vii) Priyanka Srivastava Vs. State of U.P. (2015) KHC 4242
(viii) Anil Kumar Vs. M.K.Aiyappa (2013 KHC 4790) https://www.mhc.tn.gov.in/judis 8/24 Crl.O.P.No.5267 of 2022
(ix) Rao Vs. Prasad (2000 KHC 476)
(x) Jaswantrai Manilai Akhaney Vs. State of Bombay (1956 KHC 450)
(xi) Hridaya Ranjan Prasad Verma Vs. State of Bihar (2000 KHC 1121)
(xii) Alpic Finance Ltd Vs. P.Sadasivan (2001 KHC 1063)
(xiii) Palanitkar Vs. State of Bihar (2001 KHC 966)
(xiv) Uma Shankar Gopalika Vs. State of Bihar (2005 KHC 1713)
(xv) Jose V.Y. Vs. State of Gujarat (2009 KHC 72) (xvi) Hira Lal Hari Lal Bhagwati Vs. CBI (2003 KHC 1022) (xvii) Murari Lal Gupta Vs. Gopi Singh (2005 KHC 2286) (xviii)Superintendent and Remembrancer of Legal Affairs, W.B. Vs. S.K.Roy (1974 KHC 650) (xix) Madhavrao Jiwaji Rao Scindia Vs. Sambhajirao Chadrojirao Angre (1988 KHC 914) (xx) State of Karnataka Vs. L.Muniswamy (1997 KHC 581) (xxi) Kehar Singh Vs. The State (Delhi Administration) (1988 KHC 1020) (xxii) State of A.P.Vs. Golconda Linga Swamy (2004 KHC 1342) (xxiii) Zandu Pharmaceutical Works Vs. Sharaful Haque (2004 KHC 1204) https://www.mhc.tn.gov.in/judis 9/24 Crl.O.P.No.5267 of 2022 (xxiv) Rajiv Thapar Vs. Madan Lal Kapoor (2013 KHC 4066) (xxv) G.Sagar Suri Vs. State of U.P. (2000 KHC 1004) (xxvi) Inder Mohan Goswami Vs. State of Uttaranchal (2007 (4) KHC
360) (xxvii) Surya Pratap Singh Vs. State of U.P. (2016 KHC 2474) (xxviii) Neelu Chopra Vs. Bharti (2009 (10) SCC 184) (xxix) Nagawwa Vs. Veeranna Shivalingappa Konjalgi (1976 KHC
894) (xxx) Babu Venkatesh Vs. State of Karnataka (Crl.A.No.252 of 2022 dated 18.02.2022)
10. The learned counsel appearing for the respondents 2 to 4 / defacto complainants would submit that the allegations in the FIR clearly shows that how the defacto complainants have been induced to invest the amount in Dubai. According to the learned counsel, all the money has been transferred from Chennai and through ATM also some amount has been received in Dubai. Therefore, it cannot be said that the entire occurrence took place outside the territory of India. Hence, the learned counsel submitted that the sanction required for prosecution or investigation under Section 188 of Cr.P.C. will not apply to the present case. Therefore, for investigation, there is no bar under law.
https://www.mhc.tn.gov.in/judis 10/24 Crl.O.P.No.5267 of 2022
11. The learned counsel further submitted that the allegations in the FIR clearly shows the nature of inducement and promise made from the very inception and the amount of Rs.60,00,000/- has been paid through bank transfer. Therefore, the offences under Sections 406, 420 and 120(B) of IPC is clearly attracted. Therefore, according to the learned counsel the FIR cannot be quashed at this stage.
12. The learned Additional Public Prosecutor appearing for the first respondent police submitted that based on the order passed by the learned Magistrate, FIR has been registered and now the investigation is going on and therefore oppose the quashing of the FIR, at this stage.
13. Heard the learned counsel on either side and also perused the materials available on record.
14. Normally when the FIR discloses a cognizable offence, the Court will not interfere with the same at the investigation stage but at the same time when a civil dispute is converted into a criminal case, the Court will certainly interfere with such FIR even during the investigation stage. https://www.mhc.tn.gov.in/judis 11/24 Crl.O.P.No.5267 of 2022
15. The very allegation in the FIR shows as if the petitioner/A1 induced the defacto complainants to invest in the medical billing company and thereby they have been induced to part with huge amount of Rs.60,00,000/- and spent Rs.25,00,000/- as expenses. The entire allegation however indicate that based on the contract entered into between the parties, the company has been started and the present petitioner has been inducted as working partner in the company and that he did not conduct any trading activities.
16. It is relevant to note that the very FIR indicate that Mr.Suresh Murthy is a common friend of the defacto complainants had discussion with them about the business of medical billing in Dubai and on such discussions, the present petitioner/A1 was introduced since he was stationed in Dubai and has some knowledge about the medical field in Dubai and he has been made as the working partner.
17. The entire allegation in the FIR clearly indicate that all of them jointly decided to open a company in Dubai. The allegation of deception or fraud at the inception stage is never found, though it is stated that they https://www.mhc.tn.gov.in/judis 12/24 Crl.O.P.No.5267 of 2022 desired to start the business which is a profitable one and investment of 50% has been made by the defacto complaints 1 and 3 and the other 50% was made by the second defacto complainant. It is also agreed to share the profit at the rate of 40% to the defacto complainants 1 and 3 and another 40% to the second defacto complainant and 20% to the working partner namely the present petitioner/A1.
18. Though all entered into an agreement in this regard on 30.06.2019, the very allegation in the FIR shows that after mutual discussion they have taken a conscious decision to open a company at Dubai and enter into the said agreement. The said agreement is also placed on record and it is not disputed by the other side also. As per the said agreement a company has been incorporated in the name "Lumiere Medical Billing Services". Article 11 of the said agreement makes it very clear that the management of the company shall be vested with Mr.Bharath Singh Rajendran, the second defacto complainant. Similarly, the Managing Director shall have the powers singly to conduct the business of the company including the following:
"The Managing Director shall SINGLY sign on behalf of the Company on all related to in the https://www.mhc.tn.gov.in/judis 13/24 Crl.O.P.No.5267 of 2022 framework of the company's objective and at all levels including Federal and Local Government departments, police, Courts, Airports, Sea Ports, Municipalities, Department of Economic Development and Chamber of Commerce, Labour and immigration Departments and other official or non-official organizations.
To represent, negotiate and sign SINGLY on behalf of the company before all official, federal and local departments, Ministry of Labor and Immigration, to appoint advocates, lawyers and to file or defent/compromise and suite before all UAE Courts at all levels including Courts of Appeals, High Court, Court of Cassation and Supreme Court, to appoint and remove employees and consultants and fix their duties and remunerations, to represent the company before all the Ministries and local authorities for establishing and smooth running of this company and do any other work in the connection therewith, to sign all tenders, contracts, documents of receipts of a financial and commercial nature on behalf of the company, to authorize and sanction all vouchers for books of accounts."
Thereafter, it appears that the present petitioner/A1 has also entered into a https://www.mhc.tn.gov.in/judis 14/24 Crl.O.P.No.5267 of 2022 lease agreement on behalf of the company for office space and employment contract was also entered on behalf of the company later and employees have also been appointed. On 22.12.2019, employment contract has also been entered for the company as per the records filed in the typed set of papers.
19. Further the other allegations pressed into service in the petition and the FIR is that the signature of the defacto complainants were forged by the petitioner/A1 herein. It is also relevant to note that the so called forgery according to the defacto complainants happened in Dubai.
20. Be that as it may, the crux of the allegation in the complaint indicate that the company did not derive any profit as desired by the parties, dispute arose and the complaint came to be filed before the first respondent police. However, the police has closed it as civil transaction and thereafter, an application under Section 156(3) of Cr.P.C. has been filed. Amount was invested into the business and the business did not kick started as desired by the parties for various other reasons, therefore, it cannot be said that the offence under Section 406 of IPC has been made out.
21. Admittedly, the amount has been invested into the company expecting profits, however it has not been fructified, therefore it cannot be https://www.mhc.tn.gov.in/judis 15/24 Crl.O.P.No.5267 of 2022 stated that the amount invested in the company has been dishonestly misappropriated by the other partner or swindled the amount for their own purpose to attract criminal breach of trust.
22. It is relevant to note that the agreement entered into between the parties and rental agreement and employment agreement which have been placed on record clearly shows that in fact sufficient amount has been spent for identifying the office space and engagement of staff etc., Therefore, merely because the business did not get profit, offence of criminal breach of trust will not be attracted. At the most, if at all any dispute arises with regard to the sharing of the profit or amounts, the parties can resort to recovery of money only.
23. Similarly it is not the case of the defacto complainants that the petitioner/A1 induced them to invest in the business, when the element of deception is absent from the beginning and even assuming that inducement is made to invest the amount in the business to get the profits, in the absence of any deception or dishonest intention from the beginning, offence under Section 420 of I.P.C. will not get attracted.
https://www.mhc.tn.gov.in/judis 16/24 Crl.O.P.No.5267 of 2022
24. The entire allegation is of civil in nature and it is given the colour of a criminal case. Therefore, it is a fit case where this Court can exercise its power under Section 482 of Cr.P.C.
25. Further, merely because the business has not started as desired by the defacto complainants and profit has not resulted due to various other circumstances, the alleged conspiracy under Section 120(B) of IPC cannot be inferred.
26. Further, according to the learned counsel appearing for the petitioner/A1, as per the FIR the entire offence of cheating, misappropriation and breach of trust with regard to the money invested took place in Dubai i.e., outside the country, the investigation by the police cannot be made without the previous sanction of the Central Government as per Section 188 of Cr.P.C. Section 188 of Cr.P.C. reads as follows:
"188. Offence committed outside India When an offence is committed outside India—
(a) by a citizen of India, whether on the high seas or elsewhere; or
(b) by a person, not being such citizen, on any ship or aircraft registered in India, https://www.mhc.tn.gov.in/judis 17/24 Crl.O.P.No.5267 of 2022 he may be dealt with in respect of such offence as if it had been committed at any place within India at which he may be found:
Provided that, notwithstanding anything in any of the preceding sections of this Chapter, no such offence shall be inquired into or tried in India except with the previous sanction of the Central Government."
27. On a perusal of the above Section, it can be seen that as per proviso to Section 188, the requirement of sanction can be only in relation to conduct of inquiry and trial before the learned Magistrate and the said proviso did not impose any restriction on the powers of the police to the conduct of investigation into such offences committed outside India. The bar, if any, will operate for the enquiry before the learned Magistrate after the police laid down the chargesheet for the offence. Thus, investigation is kept outside the requirement of sanction of the Central Government under the proviso to Section 188 Cr.P.C. Therefore, the contention of the learned counsel for the petitioner that the police cannot register the crime and investigate the offence said to have been committed outside the territory of India, cannot be countenanced.
https://www.mhc.tn.gov.in/judis 18/24 Crl.O.P.No.5267 of 2022
28. Further considering the entire gamut of allegations, it is only an ordinary business transaction and no element of dishonest inducement found and for mere loss in the business, breach of trust also cannot be inferred.
29. Further, the contention that an affidavit has not been filed while filing the complaint under Section 156(3) of Cr.P.C., in this regard after analysing the law as to how the power under Section 156(3) of Cr.P.C. has to be exercised, the Hon'ble Supreme Court in Priyanka Srivastava and another Vs. State of Uttar Pradesh reported in (2015) 6 SCC 287 has held in paragraphs 30 & 31 as follows:
"30. In our considered opinion, a stage has come in this country where Section 156(3)(2) Cr.P.C. applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also can verify the veracity of the allegations. This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That https://www.mhc.tn.gov.in/judis 19/24 Crl.O.P.No.5267 of 2022 apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of the said Act or under Article 226 of the Constitution of India. But it cannot be done to take undue advantage in a criminal court as if somebody is determined to settle the scores.
31. We have already indicated that there has to be prior applications under Sections 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an application under Section 156(3) be supported by an affidavit is so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already stated that the veracity of the same can also be verified by the learned Magistrate, regard being https://www.mhc.tn.gov.in/judis 20/24 Crl.O.P.No.5267 of 2022 had to the nature of allegations of the case. We are compelled to say so as a number of cases pertaining to fiscal sphere, matrimonial dispute/family disputes, commercial offences, medical negligence cases, corruption cases and the cases where there is abnormal delay/laches in initiating criminal prosecution, as are illustrated in Lalita Kumari [(2014) 2 SCC 1 : (2014) 1 SCC (Cri) 524] are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR.”"
30. Considering the above judgment in Babu Venkatesh Vs. State of Karnataka, in Crl.A.No.252 of 2022, dated 18.02.2022, the Hon'ble Supreme Court in paragraph 29 has held as follows:
"29. From the perusal of the complaint it can be seen that, the complainant/respondent No. 2 himself has made averments with regard to the filing of the Original Suit. In any case, when the complaint was not supported by an affidavit, the Magistrate ought not to have entertained the application under Section 156(3) of the Cr.P.C. The High Court has also failed to take into consideration the legal position as has been enunciated by this court https://www.mhc.tn.gov.in/judis 21/24 Crl.O.P.No.5267 of 2022 in the case of Priyanka Srivastava V. State of U.P. (supra), and has dismissed the petitions by merely observing that serious allegations are made in the complaint."
31. Thus, no affidavit has been filed along with the complaint filed under Section 156(3) of Cr.P.C. and the entire allegations have arisen out of civil transactions, one cannot be permitted to give such civil transactions a criminal colour to harass one of the partners as per their agreement to recover the invested amount. Accordingly, this Court holds that continuing of the FIR is nothing but an abuse of process of law.
32. Such view of the matter, the Criminal Original Petition is allowed and the FIR in Crime No.102 of 2021, pending on the file of the first respondent police stands quashed. Consequently, the connected miscellaneous petition is closed.
30.08.2022 Index : Yes / No kk To
1. The Sub Inspector of Police, EDF-I Wing, Team-1, https://www.mhc.tn.gov.in/judis 22/24 Crl.O.P.No.5267 of 2022 Central Crime Branch, Vepery, Chennai - 600 007.
2. The Public Prosecutor, Madras High Court.
https://www.mhc.tn.gov.in/judis 23/24 Crl.O.P.No.5267 of 2022 N.SATHISH KUMAR, J.
kk PRE DELIVERY ORDER in Crl.O.P.No.5267 of 2022 and Crl.M.P.No.2839 of 2022 RESERVED ON : 26.08.2022 DELIVERED ON : 30.08.2022 https://www.mhc.tn.gov.in/judis 24/24