Karnataka High Court
Dr Yuvaraj Singh Ghelot vs State Of Karnataka on 24 August, 2022
Author: M. Nagaprasanna
Bench: M. Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF AUGUST, 2022
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.8142 OF 2020
BETWEEN:
1. DR. YUVARAJ SINGH GHELOT
M.S., F.I.A.G.E.S., F.I.S.C.P.
COLORECTAL SURGEON AND PROCTOLOGIST
S/O PRAHALAD SINGH GHELOT
AGED ABOUT 44 YEARS
R/AT NO.1193, PHOENIX ONE
DR RAJKUMAR ROAD
BENGALURU - 560 010.
2. SRI BALAJI DUGGAPPAIAH NADIG
S/O LATE DUPPAIAH BAGOOR
AGED ABOUT 60 YEARS
RESIDING AT NO.E-138
RAMAPRIYA BRUNDAVAN
GARDENIA, 4TH MAIN, AREHALLI,
4th CROSS, SUBRAMANYAPURAM,
BENGALURU - 560 061.
... PETITIONERS
(BY SRI D.L.N.RAO, SR.ADVOCATE A/W
SRI RAGHAVENDRA S., ADVOCATE)
AND:
1. STATE OF KARNATAKA
YESHWANTHPUR POLICE STATION
BENGALURU
REPRESENTED BY
2
THE PUBLIC PROSECUTOR
HIGH COURT OF KARNATAKA
BENGALURU - 560 001.
2. DR.PARAMESHWARA C.M.,
S/O K.H.MUNIKRISHNA
AGED ABOUT 48 YEARS
R/AT 423/2, 60FT ROAD
1ST STAGE, 1ST PHASE
BEHIND SBI BANK
MATHIKERE
BENGALURU - 560 022.
... RESPONDENTS
(BY SRI K.S.ABHIJITH, HCGP FOR R1;
SRI MANMOHAN P.N., ADVOCATE FOR R2)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO QUASH THE REGISTRATION OF FIR VIDE
CR.NO.237/2020 FOR THE OFFENCE P/U/S 403, 405, 406, 408,
409, 415, 416, 418, 420 R/W 34 OF IPC PENDING ON THE FILE OF
THE IV ACMM, BANGALORE AS FAR AS PETITIONERS ARE
CONCERNED (ACCUSED NO.4 AND 5 RESPECTIVELY).
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 01.06.2022, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The petitioners are before this Court calling in question registration of crime in Crime No.237 of 2020 registered for offences punishable under Sections 403, 405, 406, 408, 409, 415, 3 416, 418 and 420 read with 34 of the IPC. The petitioners are accused Nos. 4 and 5 in the said crime.
2. Heard Sri D.L.N.Rao, learned senior counsel appearing for the petitioners, Sri K.S.Abhijith, learned High Court Government Pleader appearing for respondent No.1 and Sri P.N. Manmohan, learned counsel appearing for respondent No.2.
3. Brief facts that lead the petitioners to this Court, as borne out from the pleadings, are as follows:-
The petitioners are claiming to be well known doctors in the field of Coloproctology and having rich experience in performing laser Coloprocto surgeries and providing non-invasive treatment.
Prior to establishing their profession at Bangalore, petitioner No.1 practicing at Jalna, Maharashtra had owned a hospital there. In the year 2016, the 1st petitioner decided to set up his practice at Bangalore and relocate himself from Maharashtra and accordingly floated his own Company in the name of M/s World Coloproctology Private Limited. In order to commence medical practice in the field of Coloproctology a certificate of incorporation was also taken from 4 the Registrar of Companies along with necessary requisites/permissions.
4. It is the case of the 1st petitioner that the complainant Dr. C.M. Parameshwar gets acquainted with the 1st petitioner in one of the conferences and a proposal was given by him to the 1st petitioner that he would help him in the setting up his complete base in Bangalore. The complainant informed the 1st petitioner that he was a faculty in the Mandya Institute of Medical Sciences and he has a hospital in Bangalore in the name and style of 'The Family Hospital'. Due to his engagement as a faculty and as a Government servant, he is not able to devote time in the activities of the private hospital which is being managed by his friends, but it is not a financially viable venture. Looking the high credentials of the 1st petitioner, the 2nd respondent/complainant offered him to utilize the hospital and its facilities with an agreement to receive 20% revenue generated by the 1st petitioner Company with his hospital.
5. The petitioners set up their Company's business in the premises 'Family Hospital' of the 2nd respondent in terms of what is 5 agreed upon under a new brand and logo "Bengaluru Smiles'. The 1st petitioner even gets a trade mark registered and the logo "Bengaluru Smiles" and the trade mark registration was in the name of the 1st petitioner Company M/s World Coloproctology Private Limited. The 1st petitioner also launches a website of the newly commenced venture www.bengalurusmiles.com. It is the further case of the 1st petitioner that he has spent about a crore in modernization and upgrading the equipments at the Family Hospital and also attracted patients in large numbers. Looking at the success of the 1st petitioner, it appears that the complainant offered that the Family Hospital should be exclusively used for Coloproctology and all other treatments should cease to operate in the said hospital. In furtherance of the said proposal a new Company was incorporated in the name and style of M/s Smiles International Institute of Colo Proctology Private Limited in which the 1st petitioner and the wife of the 2nd respondent were Directors. The practice in the said field of medicine went on well and the 1st petitioner continued to practice under the aegis of newly formed Company.
6
6. Things standing thus, between August 2017 and December 2017 the 1st petitioner purchased a website www.siicp.com for the purpose of his business. Therefore, there were two websites one 'bengalurusmiles.com' and the other 'siicp.com' which are claimed to be owned by the 1st petitioner. In the month of January 2018 the father of the 1st petitioner passed away, due to which, the 1st petitioner had to travel to Maharashtra to take care of his family and since he could not return and attend to the medical practice at Bangalore immediately, he had entrusted the work to the Chief Executive Officer and his medical team to carry on. By the time, the petitioner resumed normal duties in the hospital in the month of April, 2018, the averment is that he was shocked to learn that the Chief Executive Officer had resigned because of the 2nd respondent/complainant interfering in the working of the Company and when the 1st petitioner confronted the complainant about the situation, the complainant informed the 1st petitioner that his services were no longer required and he need not come to the hospital, from thereon and he was restrained from entering the hospital even. Being shocked of this treatment, the 1st petitioner digs into the matter and comes to know that during his absence the 7 2nd respondent/complainant and his wife systematically ensured that the revenue earned from the account of Smiles International Institute of Colo Proctology Private Limited had been transferred to the account of Family Hospital which was in the name of the wife of the complainant and several other documents were created which also depicted resignation of the 1st petitioner from the Company. The said resignation was also uploaded on the website of the Ministry of Company Affairs.
7. The further allegation is that the complainant along with his wife who was the Director of the newly formed company 'Smiles International Institute of Colo Proctology Private Limited' had illegally taken control of the website and domain name www.bengalurusmiles.com and www.siicp.com and had redirected all the leads generated to www.bengalurusmiles.com to go into the website www.siicp.com and a trade mark similar to 'Bengaluru Smiles' was created deceptively and were using that for the trade purposes. Being aggrieved by all these acts of the 2nd respondent and his wife and also infringing the 1st petitioner's registered trade mark and illegally taking control of both the websites, the petitioner 8 filed O.S.No.8925 of 2018 before the City Civil Court at Bangalore on 12-12-2018 seeking an order of restraint against the complainant and his wife and also seeking the relief of declaration against infringing the said registered trade mark as also using both the websites. It appears that the civil Court granted a temporary injunction and the said suit is pending adjudication before the competent civil Court. The pleading in the said suit filed by the 1st petitioner is to the effect that how both the websites were owned and managed by the 1st petitioner and how they had been clandestinely taken control by the complainant and his wife.
8. After filing of the civil suit and grant of temporary injunction of restraint, the 1st petitioner filed a private complaint in P.C.R.No.5582 of 2019 before the VII Additional Chief Metropolitan Magistrate, Bengaluru against the 2nd respondent and his wife. The matter having been referred to investigation, it becomes a crime in Crime No.73 of 2019 for offences punishable under Sections 406, 420, 468, 120B r/w 34 of the IPC. In the meantime, the civil suit was in progress and statement of objections was also filed by the complainant and his wife in the aforesaid suit O.S.No.8925 of 2018. 9 It is the case of the 1st petitioner that in order to get the interim order vacated lot of concocted backdated documents were placed before the Court against which a miscellaneous first appeal is preferred by the 1st petitioner in M.F.A.No.685 of 2020 and the matter is said to be pending consideration at the hands of this Court.
9. During the pendency of all these proceedings, one Rajesh Reddy who claims himself to be a whistleblower exposes all the alleged concocted documents, allegedly created by the 2nd respondent and filed an application in the civil suit by producing all the details of alleged fabrication of 66 documents that were produced including exchange of WhatsApp communications between the Advocate who appeared for the 2nd respondent/complainant and his wife and the other counsel.
10. Things standing thus, again, after all the aforesaid proceedings and the application filed by Mr. Rajesh Reddy, a complaint is registered by the 2nd respondent/complainant which the petitioner claims to be a counterblast and it becomes a crime in 10 Crime No.237 of 2020 for offences punishable under Sections 403, 405, 406, 408, 409, 415, 416, 418 and 420 read with 34 of the IPC. It is here the petitioners are arrayed as accused 4 and 5. The registration of crime in Crime No.237 of 2020 is what drives the petitioners to this Court in the subject petition. The petition having been entertained, this Court by an order dated 6-01-2021 grants an interim order of stay insofar as it concerns the petitioners/accused 4 and 5 and the said interim order is in subsistence even as on date. Therefore, the investigation into the crime in Crime No.237 of 2020 has not gone on.
11. The learned senior counsel Sri D.L.N.Rao representing the petitioners would contend with vehemence that it is the 1st petitioner who has registered all the cases against the complainant and his wife, be it civil proceedings or criminal proceedings. As a counterblast against one Rajesh Reddy, the petitioners are also included as accused 4 and 5 without there being any rhyme or reason. The issue being purely civil in nature and the civil Court being seized of the matter, crime could not have been registered against the petitioners in particular. He would contend that the 11 petitioners who gave life to an ailing hospital of the 2nd respondent/complainant and looking at the success in their business and during their absence for three months, all documents are generated and the 1st petitioner himself was thrown out of the Hospital. The dispute now with regard to the usage of the website between the 1st petitioner and the complainant or his wife is pending adjudication before the civil Court. To wreck vengeance against Sri Rajesh Reddy, supposedly whistleblower who filed I.A. No. VIII before the civil Court and produced all the concocted documents, the impugned complaint is registered arraying the petitioners also as accused in the impugned complaint.
12. On the other hand, the learned counsel representing the 2nd respondent/complainant Sri P.N.Manmohan producing the transcript of the conversation between the 1st petitioner and the patients would contend that the patients who wanted to meet the doctors at the clinic owned by the complainant, the petitioners had hatched a controversy to divert them by stealing the money. It is his case that the trial Court after vacating the temporary injunction earlier granted, the petitioners could not have taken the phone 12 numbers on the website clandestinely and took away the patients of the 2nd respondent. The matter is still at the stage of investigation and, therefore, this Court should not entertain the petition at this stage and it is for petitioners to come out clean in a full blown trial. He would seek dismissal of the petition.
13. Learned High Court Government Pleader would toe the lines of the learned counsel for the 2nd respondent to contend that the matter is yet to be investigated into.
14. I have given my anxious consideration to the submissions made by the respective learned counsel and perused the material on record.
15. The afore-narrated facts which are akin to a soap opera are not in dispute. The link in the chain of events is also not in dispute. After the 1st petitioner comes to know that his position has changed completely to the extent he was thrown out from the hospital, he registers a civil suit alleging infringement of trade mark, usage of mail ID and also claims relief of declaration that the mail IDs belong to him. Noticing the alleged creation of false 13 documents which led to the entire episode of the 1st petitioner losing his practice, he registers a private complaint on 03-01-2019 itself and the same is pending investigation. It is not in dispute that the civil Court had granted an injunction in favour of the 1st petitioner in O.S.No.8925 of 2018 which was filed against the complainant for infringement of the registered trade mark and declaration that he is the owner of the website www.bengalurusmiles.com and also restraining the 2nd respondent from using both the websites www.bengalurusmiles. com and www.siicp.com.
16. It is alleged that the complainant produced certain concocted documents, due to which, the interim order came to be vacated, against which, a miscellaneous first appeal in M.F.A.No.685 of 2020 is preferred and the matter is pending consideration at the hands of this Court. Objections were filed way back in the month of February 2019. The complainant did not register a complaint immediately after the registration of complaint against him by the 1st petitioner. The 1st petitioner instituted a civil suit in O.S.No.8925 of 2018. A private complaint filed by the 1st 14 petitioner becomes a crime in Crime No.73 of 2019. The incident that triggers registration of complaint against the petitioners, in terms of what could be gathered from the pleadings and the objections is that one Rajesh Reddy who is accused No.1 in the impugned complaint filed application before the civil Court in O.S.No.8925 of 2018 bringing it to the notice of the civil Court or rather exposing the documents that were placed by the complainant for change of trade mark. If this could have triggered registration of impugned crime as a counterblast, it cannot but be held that it is an offshoot of the civil proceedings which are at large before the civil Court and an unmistakable inference to be drawn that the entire issue against the petitioners now alleged, is purely civil in nature. The offences that are alleged in the impugned complaint against the petitioners are the ones punishable under Sections 403, 405, 406, 408 and 409 of the IPC which deal with criminal breach of trust and Sections 415, 416, 418 and 420 of the IPC deal with cheating. No other allegation is made in the impugned complaint.
17. For criminal breach of trust to be alleged against the petitioners there should have been entrustment of property which is 15 dishonestly misappropriated by the petitioners. The allegation against the complainant is the same that he has committed acts of breach of trust which is covered with criminality in the crime registered by the 1st petitioner against the complainant. Forgery and cheating are also the allegations in the crime registered by the 1st petitioner against the complainant. The issue is, who is using the website; and the website belongs to whom, this is at large before the competent civil Court, as the 1st petitioner has claimed domain over both the websites www.bengalurusmiles.com and www.siicp.com and the proceedings are pending before the competent civil court and in a miscellaneous first appeal against the interim order before this Court. The squabble with regard to usage of website or a trade mark is sought to be given a colour of crime notwithstanding the appropriate remedy pending consideration before the competent civil Court. In the considered view of this Court, only because customers are being taken away by each other in their squabble cannot result in setting the criminal law in motion that too against the petitioners for the acts of one Mr. Rajesh Reddy who is accused No.1 in the impugned crime. There are several acts alleged in the impugned complaint which depict that the 16 complainant seems to have an axe to grind against the petitioners. All these factors would not lead to permitting further proceedings to continue, particularly against the petitioners who are accused 4 and
5.
18. The issue which is before the civil Court has to be thrashed out in the civil proceedings, as it is a matter which is purely civil in nature. There are no facts that would lead to the allegation of either criminal breach of trust or cheating that can be laid against the petitioners. The view of mine, in this regard, is fortified by the judgments rendered by the Apex Court right from G.SAGAR SURI AND ANOTHER v. STATE OF U.P. AND OTHERS
- (2000)2 SCC 636. The Apex Court in the case of R.K. VIJAYASARATHY V. SUDHA SEETHARAM1 has held as follows:
"28. The jurisdiction under Section 482 of the Code of Criminal Procedure has to be exercised with care. In the exercise of its jurisdiction, a High Court can examine whether a matter which is essentially of a civil nature has been given a cloak of a criminal offence. Where the ingredients required to constitute a criminal offence are not made out from a bare reading of the complaint, the continuation of the criminal proceeding will constitute an abuse of the process of the court.1
(2019)16 SCC 739 17
29. In the present case, the son of the appellants has instituted a civil suit for the recovery of money against the first respondent. The suit is pending. The first respondent has filed the complaint against the appellants six years after the date of the alleged transaction and nearly three years from the filing of the suit. The averments in the complaint, read on its face, do not disclose the ingredients necessary to constitute offences under the Penal Code. An attempt has been made by the first respondent to cloak a civil dispute with a criminal nature despite the absence of the ingredients necessary to constitute a criminal offence. The complaint filed by the first respondent against the appellants constitutes an abuse of process of court and is liable to be quashed."
Again, a Three Judge Bench of the Apex Court in the case of COMMISSIONER OF POLICE AND OTHERS v. DEVENDER ANAND AND OTHERS2 has held as follows:
2. That respondent No. 1 herein - original complainant entered into an agreement to sell in respect of house situated at WZ-1179, Plot No. 11, Rani Bagh, Shakur Basti, Delhi with respondent Nos. 2 to 3 herein for a consideration of Rs. 54 lakhs.
That the agreement to sell, general power of attorney etc. were executed and the entire amount of consideration of Rs. 54 lakhs was paid to the agreement sellers. According to respondent No. 1 - original complainant, subsequently on 31.07.2013, he learnt that the said property had been mortgaged to Andhra Bank when a notice by the said bank was affixed on the property. According to respondent No. 1 - original complainant, thereafter he was compelled to settle the claim of Andhra Bank to the tune of Rs. 16,93,059/- for release of the mortgaged documents. Respondent No. 1 - original complainant also paid the registration charges of Rs,7,81,941/- for registration of the sale deed in his favour. That, thereafter he lodged a complaint with the Karol Bagh police station against respondent Nos. 2 and 3 herein for the offence under Section 420/34 of the Penal Code, 1860 alleging, inter alia, that though the property was put as a mortgage with the Andhra Bank, 2 2019 SCC OnLine SC 996 18 the same was not disclosed to him and without disclosing the same the property in question was sold. Therefore, it was the case of respondent No. 1 - original complaint that he was cheated by respondent Nos. 2 and 3 herein. That a preliminary inquiry was conducted on the said complaint by the Sub-Inspector of the Police posted at the Karol Bagh police station. According to the complainant, on 20.05.2015, the Sub-Inspector submitted his report that a prima facie offence under Section 420/34 IPC is made out. He sought permission to register a case under Section 420/34 IPC for further investigation. According to the complainant, the SHO concurred with the aforesaid conclusion in his noting dated 21.05.2015 and put up the matter before the ACP concerned. According to the complainant, the ACP also concurred with the said conclusion in his noting dated 25.05.2015. According to the complainant, despite the above, the FIR was not registered and the same Sub-Inspector Yogender Kumar of Karol Bagh police station started a fresh process of preliminary inquiry on the same set of facts. He concluded that since the complainant had given his consent to the registration of the sale deed and discharge of the liability of the bank, even though the said mortgage as revealed to him on 31.07.2013, therefore, no police action is required. The said file noting was concurred by the SHO with the diametrically opposite view taken by the Sub-Inspector Yogender Kumar earlier. The ACP also concurred with the view that only a dispute of civil nature has arisen and that a complaint be filed. It appears that thereafter the matter was placed before the Additional DCP who also concurred with the subsequent view that no case is made out against the accused, vide his noting dated 07.08.2015. That the said view was carried by the DCP/C and JCP/CR as well.
3. As the FIR was not registered against the accused for the offence under Section 420/34 IPC as alleged, respondent No. 1 herein approached the High Court by way of writ petition and prayed for the following reliefs:
"1. Pass appropriate writ/order/direction thereby ordering appropriate action to be taken against the erring police officers, including but not limited respondents No. 2 to 5, who are responsible for non-registration of the FIR in spite of a preliminary enquiry dated 20.5.2015 clearly submitting a finding that a cognizable offence under Section 420/34 of IPC was made out against respondents no. 6 and 7.19
2. Pass appropriate writ/order/direction thereby quashing and declaring to be null and void the so-called second/subsequent undated report of preliminary enquiry, and the subsequent endorsements of the SHO, PS Karol Bagh dated 16 July 2015, the undated endorsement of the ACP (Karol Bagh Sub-Division) and the endorsement of DCP (Central) dated 7 August 2015 as the same are without any legal sanctity and have been created and brought into existence against the settled provisions of law and without following due process of law and without following due process of law and in contravention of the procedure laid down by the Hon'ble Supreme Court in its judgment 'Lalita Kumari v. Government of U.P.
3. xxx xxx xxx
4. Pass appropriate writ/order/direction thereby calling upon the office of the Commissioner of Police, New Delhi, to submit a report with respect to the relevant provisions of law under which his office has empowered the area ACP and DCP to approve registration of FIR, and upon submission of such a report, the vires and legality of the same be scrutinised as the same is in violation of the provisions of the Code of Criminal Procedure and the procedural guidelines laid down by the Hon'ble Supreme Court in the case 'Lalita Kumar v. Government of U.P.
5. Pass appropriate writ/order/direction thereby directing the respondent no. 1 to hold an appropriate enquiry/investigation into the said circumstances under which the illegal and uncalled for second line of preliminary enquiry was initiated and carried out by the same officers, on the same facts and he may further be directed to submit a report of the said enquiry before this Hon'ble Court and take appropriate action by way of registration of cases, if required, and take all other necessary and proper actions in the mater against the officials found guilty in the matter."
4. That the aforesaid prayers/reliefs were opposed by the appellants herein and respondent Nos. 2 and 3 herein. It was submitted that the original complainant had earlier preferred an application under Section 156(3) of the Cr.P.C. which came to be rejected by the learned Magistrate, vide order dated 27.03.2015 and that the said order was not assailed by the complainant and 20 thereafter a fresh private complaint under Section 200 Cr.P.C. has been preferred which is pending before the learned Magistrate. It was also submitted on behalf of the original accused that the dispute is of a civil nature which is tried to be converted into criminal, which is nothing but an abuse of the process of law. It was submitted that despite having the knowledge of the mortgage of the property with the Andhra Bank, thereafter the complainant himself had paid the mortgage money to the Andhra Bank and even got the sale deed executed in his favour. It was submitted that if the complainant was aggrieved, in that case, he would not have got the sale deed executed in his favour.
... ... ...
8. Even considering the nature of allegations in the complaint, we are of the firm opinion that no case is made out for taking cognizance of the offence under Section 420/34 IPC. The case involves a civil dispute and for settling a civil dispute, the criminal complaint has been filed, which is nothing but an abuse of the process of law."
Later, the Apex Court in the case of ANAND KUMAR MOHATTA AND ANOTHER v. STATE (NCT OF DELHI) AND ANOTHER3 delineates the principle further at paragraphs 19 to 30, which read as follows:
"19. It is necessary to refer to Sections 405 and 406 IPC in order to ascertain, whether in the facts and circumstances of the present case, an offence under Section 406 is made out against the appellants.
20. Sections 405 and 406 IPC read as follows:
"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 3 (2019) 11 SCC 706 21 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".
Explanation 1.--A person, being an employer of an establishment whether exempted under Section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), or not who deducts the employee's contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
Explanation 2.--A person, being an employer, who deducts the employees' contribution from the wages payable to the employee for credit to the Employees' State Insurance Fund held and administered by the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
406. Punishment for criminal breach of trust.-- Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both."
21. The essence of the offence lies in the use of the property entrusted to a person by that person, in violation of any direction of law or any legal contract which he has made during the discharge of such trust. In the present case, the amount of rupees one crore was paid by the respondent 22 complainant to the appellants as an interest-free deposit on the signing of the agreement. It was liable to be refunded to the complainant simultaneously on handing over of possession of the area of the owner's share to the owner in the group housing complex vide Clause 30(b) of the agreement dated 3-6-1993.
22. Two things are significant in the transaction between the parties. Firstly, that the occasion for returning the amount i.e. the developer handing over the possession of the area of the owner's share to the owner in the group housing complex, has not occurred. According to the appellants, the contract stands frustrated because no group housing can be legally built on 20, Feroz Shah Road, New Delhi since it falls in the Lutyens Bungalow Zone. Appellant 1 has therefore, terminated the contract. Further, the amount has been retained by him as a security because not only is there any handing over of constructed portion, the complainant has also got into part-possession of the property and has not handed it back. Also, the complainant has failed to get the property vacated from the tenant's possession.
23. We, thus find that it is not possible to hold that the amount of rupees one crore which was paid along with the development agreement as a deposit can be said to have been entrustment of property which has been dishonestly converted to his own use or disposed of in violation of any direction of law or contract by the appellant. The appellants have not used the amount nor misappropriated it contrary to any direction of law or contract which prescribes how the amount has to be dealt with. Going by the agreement dated 3-6-1993, the amount has to be returned upon the handing over of the constructed area to the owner which admittedly has not been done. Most significantly Respondent 2 has not demanded the return of the amount at any point of time. In fact, it is the specific contention of Respondent 2 that he has not demanded the amount because the agreement is still in subsistence.
24. We do not see how it can be contended by any stretch of imagination that the appellants have 23 misappropriated the amount or dishonestly used the amount contrary to any law or contract. In any case, we find that the dispute has the contours of a dispute of civil nature and does not constitute a criminal offence.
25. Having given our anxious consideration, we are of the view that assuming that there is a security deposit of rupees one crore and that he has misappropriated the dispute between the two parties can only be a civil dispute.
26. In Indian Oil Corpn. v. NEPC (India) Ltd. [Indian Oil Corpn. v. NEPC (India) Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] , this Court observed as follows : (SCC p. 749, para 13) "13. ... Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged."
The Court noticed a growing trend in business circles to convert purely civil dispute into criminal cases.
27. We find it strange that the complainant has not made any attempt for the recovery of the money of rupees one crore except by filing this criminal complaint. This action appears to be mala fide and unsustainable.
28. In State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , this Court has set out the categories of cases in which the inherent power under Section 482 CrPC can be exercised. Para 102 of the judgment reads as follows : (SCC pp. 378-79) "102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter 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 Article 226 or the inherent powers under Section 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 24 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 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, 25 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."
29. We are of the opinion that the present case falls under the 1st, 3rd and 5th category set out in para 102 of the judgment in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] . In such a situation, the High Court erred in dismissing the petition of the appellants filed under Section 482 CrPC. This was a fit case for the High Court to exercise its inherent power under Section 482 CrPC to quash the FIR.
30. It is necessary here to remember the words of this Court in State of Karnataka v. L. Muniswamy [State of Karnataka v. L. Muniswamy, (1977) 2 SCC 699 : 1977 SCC (Cri) 404] which read as follows : (SCC p. 703, para 7) "7. ... In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters, is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice."
(Emphasis supplied) 26 In a subsequent judgment in the case of AHMAD ALI QURAISHI AND ANOTHER v. STATE OF UTTAR PRADESH AND ANOTHER4 the Apex Court has held as follows:
"10. Before we enter into facts of the present case and submissions made by the learned counsel for the parties, it is necessary to look into the scope and ambit of inherent jurisdiction which is exercised by the High Court under Section 482 CrPC. This Court had the occasion to consider the scope and jurisdiction of Section 482 CrPC. This Court in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335: 1992 SCC (Cri) 426] , had elaborately considered the scope and ambit of Section 482 CrPC/Article 226 of the Constitution in the context of quashing the criminal proceedings. In para 102, this Court enumerated seven categories of cases where power can be exercised under Article 226 of the Constitution/Section 482 CrPC by the High Court for quashing the criminal proceedings. Para 102 is as follows : (SCC pp. 378-79) "102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter 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 Article 226 or the inherent powers under Section 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 4 (2020) 13 SCC 435 27 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."28
11. This Court in Vineet Kumar v. State of U.P. [Vineet Kumar v. State of U.P., (2017) 13 SCC 369 : (2017) 4 SCC (Cri) 633] , had considered the jurisdiction of the High Court under Section 482 CrPC. In the above case also, the Additional Civil Judicial Magistrate had summoned the accused for offences under Sections 452, 376 and 323 IPC and the criminal revision against the said order was dismissed by the District Judge.
12. This Court time and again has examined the scope of jurisdiction of the High Court under Section 482 CrPC and laid down several principles which govern the exercise of jurisdiction of the High Court under Section 482 CrPC. A three-Judge Bench of this Court in State of Karnataka v. L. Muniswamy [State of Karnataka v. L. Muniswamy, (1977) 2 SCC 699: 1977 SCC (Cri) 404], held that the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the court or that the ends of justice require that the proceeding ought to be quashed. In para 7 of the judgment, the following has been stated: (SCC p. 703) "7. ... In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters, is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the legislature. The compelling necessity for making these observations is that without a proper realisation of the object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice, between the State and its subjects, it would be impossible to appreciate the width and contours of that salient jurisdiction."
29
(emphasis supplied)
13. A three-Judge Bench in State of Karnataka v. M. Devendrappa [State of Karnataka v. M. Devendrappa, (2002) 3 SCC 89 : 2002 SCC (Cri) 539] , had the occasion to consider the ambit of Section 482 CrPC. By analysing the scope of Section 482 CrPC, this Court laid down that authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent abuse. It further held that court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. The following was laid down in para 6 : (SCC p. 94) "6. ... All courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the section, the court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts exist. Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has 30 alleged and whether any offence is made out even if the allegations are accepted in toto."
14. Further in para 8 the following was stated :
(Devendrappa case [State of Karnataka v. M. Devendrappa, (2002) 3 SCC 89 : 2002 SCC (Cri) 539] , SCC p. 95) "8. ... Judicial process should not be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of a private complainant to unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short-circuit a prosecution and bring about its sudden death. The scope of exercise of power under Section 482 of the Code and the categories of cases where the High Court may exercise its power under it relating to cognizable offences to prevent abuse of process of any court or otherwise to secure the ends of justice were set out in some detail by this Court in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335: 1992 SCC (Cri) 426] ."
15. In Sunder Babu v. State of T.N. [Sunder Babu v. State of T.N., (2009) 14 SCC 244: (2010) 1 SCC (Cri) 1349] , this Court was considering the challenge to the order of the Madras High Court where application was under Section 482 CrPC to quash criminal proceedings under Section 498-A IPC and Section 4 of the Dowry Prohibition Act, 1961. It was contended before this Court that the complaint filed was nothing but an abuse of the process of law and allegations were unfounded. The prosecuting agency contested the petition filed under Section 482 CrPC taking the stand that a bare perusal of the complaint discloses commission of alleged offences and, therefore, it is not a case which needed to be allowed. The High Court accepted the case of the prosecution and dismissed the application. This Court referred to the judgment in Bhajan Lal case [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] and held that the case fell within Category 7. The Supreme Court relying on Category 7 has held that 31 the application under Section 482 deserved to be allowed and it quashed the proceedings.
16. After considering the earlier several judgments of this Court including the case of State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 :
1992 SCC (Cri) 426] , in Vineet Kumar [Vineet Kumar v. State of U.P., (2017) 13 SCC 369 : (2017) 4 SCC (Cri) 633] , this Court laid down following in para 41 :
(Vineet Kumar case [Vineet Kumar v. State of U.P., (2017) 13 SCC 369 : (2017) 4 SCC (Cri) 633] , SCC p. 387) "41. Inherent power given to the High Court under Section 482 CrPC is with the purpose and object of advancement of justice. In case solemn process of Court is sought to be abused by a person with some oblique motive, the Court has to thwart the attempt at the very threshold. The Court cannot permit a prosecution to go on if the case falls in one of the categories as illustratively enumerated by this Court in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] . Judicial process is a solemn proceeding which cannot be allowed to be converted into an instrument of operation or harassment. When there are materials to indicate that a criminal proceeding is manifestly attended with mala fide and proceeding is maliciously instituted with an ulterior motive, the High Court will not hesitate in exercise of its jurisdiction under Section 482 CrPC to quash the proceeding under Category 7 as enumerated in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , which is to the following effect : (SCC p. 379, para
102) '102. ... (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.' 32 Above Category 7 is clearly attracted in the facts of the present case. Although, the High Court [Vineet Kumar v. State of U.P., 2016 SCC OnLine All 1445] has noted the judgment of State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , but did not advert to the relevant facts of the present case, materials on which final report was submitted by the IO. We, thus, are fully satisfied that the present is a fit case where the High Court ought to have exercised its jurisdiction under Section 482 CrPC and quashed the criminal proceedings."
... ... ...
23. In the facts of present case, we are fully satisfied that present is a case where criminal proceedings have been initiated by the complainant with an ulterior motive due to private and personal grudge. The High Court although noticed the judgment of this Court in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] in the impugned judgment but did not examine the facts of the case as to whether present is a case which falls in any of the category as enumerated in Bhajan Lal case [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] . The present case clearly falls in Category (7) of Bhajan Lal case [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] and the High Court failed to exercise jurisdiction under Section 482 CrPC in quashing the criminal proceeding initiated by the complaint.
24. In view of the foregoing discussions, we are of the view that in permitting criminal proceedings against the appellant shall be permitting a criminal proceeding which has been maliciously instituted with ulterior motives, permitting such criminal proceeding to go on is nothing but the abuse of the process of the court which needs to be interfered by this Court."
(Emphasis supplied) 33 On a coalesce of the judgments quoted hereinabove, what would unmistakably emerge is, a civil dispute which is dressed with the colour of crime should not be permitted to continue despite it being at the stage of investigation. For the act of the complainant, setting the criminal law in motion either as a counterblast or to wreck vengeance or giving a civil dispute a colour of crime against the accused, they cannot be directed to undergo the rigmarole of criminal procedure.
19. Insofar as the judgment relied on by the learned counsel appearing for the 2nd respondent in the case of MOHD. ALLUDDIN KHAN v. STATE OF BIHAR - (2019) 6 SCC 107 is concerned, there can be no qualm about the principle laid down in the said judgment. The offences so alleged there, were theft and assault. On that score, the Apex Court holds that merely because civil suits are pending before the authorities, with the allegation of thieving or assaulting, it should not be interfered with. The same goes with the judgment in the case of PRITI SARAF AND ANOTHER v. STATE OF NCT OF DELHI AND ANOTHER - Criminal Appeal No.296 of 2021 decided on 10.03.2021 where there was serious disputed 34 question of fact. The Apex Court has held that such quashment of proceedings had not yet arrived. In the case of KAMAL SHIVAJIPOKARNEKAR v. STATE OF MAHARASHTRA AND OTEHRS - (2019) 14 SCC 350, the Apex Court holds that when offence of forgery was writ large in the complaint and the allegation was usage of forged documents by the accused, criminal complaint should not be quashed. As observed hereinabove, there is qualm about the principles laid down by the Apex Court, but they are all distinguishable on facts obtaining in the case at hand without much ado.
20. Judgments relied on in support of quashment of proceedings are more appropriate qua the facts in the case at hand and not the ones relied on by the learned counsel appearing for the 2nd respondent. In the teeth of aforesaid facts and the civil suit pending between the parties on the same cause of action, permitting further proceedings to continue, more so, in the light of no ingredients, in the allegations, being present, that would touch upon any of the offences alleged against the petitioners, permitting 35 further proceedings to continue would become an abuse of the process of law and result in miscarriage of justice.
21. For the aforesaid reasons, I pass the following:
ORDER
(i) Criminal Petition is allowed.
(ii) FIR in Crime No.237 of 2020 pending before the IV Additional Chief Metropolitan Magistrate, Bengaluru City stands quashed qua the petitioners.
(iii) It is made clear that the observations made in the course of the order are only for the purpose of consideration of the case of petitioners under Section 482 of Cr.P.C. and the same shall not bind or influence the proceedings against any other accused pending before any other fora.
Sd/-
JUDGE bkp CT:MJ