Madras High Court
S. Chokalingam And Ors. vs The State, Rep. By Inspector Of Police, ... on 20 March, 2006
ORDER M. Jeyapaul, J.
1. The petition is filed seeking quashment of the First Information Report registered in Crime No. 54 of 2005 on the file of the first respondent. The petitioners have been arraigned as accused 2 to 13 in Crime No. 54 of 2005 on the file of the first respondent for the offences under Sections 420, 409 and 34 of the Indian Penal Code.
2. The allegation found in the complaint is that the accused purchased cotton lint weighing about 47,164 kgs which is worth Rs. 26,93,289/- on credit basis. The remaining cotton lint weighing about 61,756 kgs worth Rs. 35,26,561.69 had been entrusted to the accused for conversion into yarn. The further allegation is that the first accused Mill did not take any steps for converting the cotton lint into yarn despite the repeated request made by the complainant. The serious allegation made in the complaint is that all the accused with the common intention jointly sold away the total cotton lint weighing about 1,08,920/- kgs worth Rs. 62,19,850.69 to a third party. Having thus sold the cotton lint without converting the same into yarn as agreed, the accused have committed criminal breach of trust and also cheated by selling away the goods of the complainant. The sale proceeds of the cotton lint were used for personal purpose by the accused.
3. The accused 2 to 13 have contended in the petition seeking quashment of the first information report that there was no prima facie case made out in the complaint. A civil commercial transaction has been given criminal colour, it is submitted. Suppressing the earlier complaint which was withdrawn by the complainant and the pendency of C.C. No. 1082 of 2004 on the file of the learned Judicial Magistrate No. 3, Salem, launched by the accused as against the complainant for offence under Section 138 of the Negotiable Instruments Act, the present complaint has been given.
4. The sixth accused had resigned and retired from the accused Mill long back. On the aforesaid grounds, the accused seeks to quash the first information report registered in Crime No. 54 of 2005.
5. The Court heard the submissions made on either side.
6. The second respondent, who is the complainant herein, is the proprietor of M/s. Saravana Yarn Traders. The petitioners who have been arraigned as accused 2 to 13 are the Managing Director and the officials of M/s. Sree Rajendra Mills Limited.
7. In the first complaint which was given by the complainant as early as on 20.5.2004, the complainant has specifically stated that there was an oral agreement between the complainant and the first accused that when the complainant supplied cotton lint to the first accused company, the first accused company was bound to pay back either in cash or in yarn on conversion. A memorandum of undertaking had been entered into between the said parties on 31.1.2002 where-under the first accused had undertaken to convert cotton lint into yarn and send the same to the complainant and the complainant was bound to pay charges for conversion to the first accused company.
8. It is alleged in the present complaint dated 22.6.2005 that the complainant supplied nearly 1,08,920 kgs of cotton lint to the accused Mill for the purpose of conversion into yarn. Out of the said quantity of cotton lint 47,164 kgs of cotton lint worth Rs. 26,93,289/- was supplied on credit basis and the remaining cotton lint weighing about 61,756 kgs worth Rs. 35,26,561.69 was entrusted to the accused for the purpose of conversion into yarn. In spite of the repeated request, the cotton lint was not converted into yarn, but the accused chose to sell away the entire cotton lint without either paying the cash or supplying the converted yarn to the complainant.
9. In the earlier complaint dated 20.5.2004, the complainant has specifically stated that the yarn weighing 14,500 kgs after conversion was supplied by the first accused Mill to the accused and the remaining 31,817 kgs of yarn alone was not supplied. It has been further stated that the action of the first accused Company is against the terms and conditions of the contract entered into between the parties.
10. The first accused Company had issued statutory notice on 12.5.2004 under Section 138(b) of the Negotiable Instruments Act, calling upon the complainant herein to discharge the liability under two cheques bearing Nos. 028927 and 028928 drawn for a sum of Rs. 1,50,000/- and Rs. 1,00,000/- respectively in favour of the first accused company, as the said cheques were returned as "account closed on presentation" on 27.4.2004.
11. The complainant herein lodged a complaint on 20.5.2004 only against three persons viz., the second petitioner S. Sundaram, the fourth petitioner SP. Meyyappan and the sixth petitioner RM. Viswanathan, alleging that they had committed criminal breach of trust and cheating.
12. In fact, the complainant filed a writ petition in W.P. No. 15343 of 2004 seeking immediate action on his complaint dated 20.5.2004. In the meantime on 24.6.2004, the first accused company had launched prosecution against the complainant herein under Section 138 of the Negotiable Instruments Act and the same was taken on file by the learned Judicial Magistrate No. 3, Salem in C.C. No. 1082 of 2004. It is found on record that the complainant herein had chosen to withdraw his earlier complaint dated 20.5.2004 given against the aforesaid three persons. Consequently, the said Writ Petition No. 15343 of 2004 was dismissed as the complaint dated 20.5.2004 was withdrawn by the complainant herein.
13. There is no whisper about the earlier complaint which was withdrawn by the complainant herein in the present complaint. The three persons shown in the earlier complaint had to obtain anticipatory bail as they anticipated arrest at the hands of the police and all the accused in this complaint also had to approach the Court to obtain anticipatory bail.
14. The Hon'ble Supreme Court in Jatinder Singh v. Ranjit Kaur has observed that there is no provision in the Code or in any other statute which debars a complainant from preferring a second complaint on the same allegations if the first case did not result in a conviction or acquittal or even discharge. Even if the first complaint ended in dismissal for default and not on merit, the second complaint is maintainable.
15. Here in this case, it is found that the complainant without assigning any reason withdrew the earlier complaint and launched prosecution again by filing a fresh complaint which has really worked hardship for the accused party inasmuch as they had to approach the Court twice to obtain anticipatory bail firstly in respect of the first complaint and secondly in respect of the second complaint.
16. Learned senior counsel for the complainant would submit that the complainant made only a representation on 20.5.2004 to the Assistant Commissioner of Police, Economic Offences Wing, Salem and it cannot be construed as a complaint. On a perusal of the earlier complaint dated 20.5.2004, it is found that having alleged criminal breach of trust, misappropriation and cheating for the very same occurrence, he has sought necessary action as against the accused. The complainant had gone a step further to expedite the process of investigation by filing a writ petition. Therefore, the Court finds that the submission made by the learned senior counsel for the complainant has no legs to stand upon.
17. This Court in Ramasubbu, K. v. State, through The Inspector of Police 1987 L.W. (Crl.) 79 and also in A. Krishna Rao v. L.S. Kumar has held that subsequent complaint in respect of the very same occurrence is not maintainable and the second complaint cannot be taken cognizance of after the previous complaint was referred as mistake of fact.
18. For special reasons to be recorded in writing for non-prosecution of the earlier complaint, the Court can entertain the second complaint. But here is a case where the complainant without referring to the first complaint and in fact, suppressing the same, has launched prosecution again on the very same set of facts. If such second complaint at the will and pleasure of the complainant is entertained by the Court of law, the counter parties will be terrorised and they will have to resort to the Court of law, seeking suitable remedies again and again as it had happened in this case. Therefore, it is held that the second complaint, when the first complaint which was not dismissed on merit or for default, but was withdrawn for reasons best known to the complainant, is not at all maintainable.
19. In the first complaint, the complainant has categorically admitted the supply of 14,500 kgs of yarn on conversion by the first accused to the complainant. Further, it has been stated therein that there was an oral agreement at the very inception to pay cash for the cotton lint supplied by the complainant to the first accused Mill. The first complaint has been filed only against the three persons as stated supra, but the present complaint suppressing all the above material facts for reasons best known has been filed against all the 13 persons who are connected with the first accused company.
20. It has been held in the authority in M/S. Medchl Chemicals and Pharma Pvt. Ltd. v. M/S. Biological E. Ltd. AIR 2000 SC 1869 as follows:-
In the matter of exercise of High Court's inherent power, the only requirement is to see whether continuance of the proceeding would be a total abuse of the process of Court. The Criminal Procedure Code contains a detailed procedure for investigation, charge and trial and in the event the High Court is desirous of putting a stop to the known procedure of law, the High Court must use a proper circumspection and as noticed above, very great care and caution to quash the complaint in exercise of its inherent jurisdiction.
21. In case the Court comes to a conclusion that the continuance of the criminal proceedings would be a total abuse and misuse of process of Court, this Court is empowered to intervene and stop the whole process of investigation. If the earlier complaint and the present complaint are read conjointly, it will disclose without any pale of doubt that only breach of contractual obligation was the sum and substance of the grievance of the complainant.
22. This Court has observed in Pasumai Irrigation Limited v. Mansi Finance (Chennai) Limited III (2003) BC 86 that purely money transaction entered into between two companies and the breach of terms and conditions, will not give rise to any criminal action, but will give rise only to civil action.
23. Again this Court in Y.S. Shah v. G. Srinivasan has held that mere breach of contract does not fasten persons with criminal liability and the same cannot be construed as cheating.
24. The aforesaid authorities would clearly show that for a breach of contract, the parties will have to approach only Civil Forum and not the Criminal Court. Approaching the Criminal Court for such breach of contract will amount to abuse and misuse of the process of Court.
25. The Hon'ble Supreme Court in Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168 has held that the criminal complaint given for cheating when there was no intentional deception on the part of the accused right from the beginning of the business transaction, more especially when the accused had already taken steps to proceed against the counter-party for offence under Section 138 of the Negotiable Instruments Act, is liable to be quashed. Continuance of such criminal proceedings against the accused would amount to abuse of process of Court, it has been held therein. The above decision squarely applies to the instant case.
26. In the first complaint, it has been specifically stated that part of the yarn on conversion was returned to the complainant by the first accused company. Such an averment is wantonly suppressed in the present complaint. Therefore, the Court holds that there could not have been any intention on the part of the accused to cheat at the very inception.
27. It has been ruled in the authority in E.S. Mills Shri Virendra Kumar v. Rajiv Poddar that the High Court in an exceptional case, where non-interference would result in miscarriage of justice, can interfere even at the stage of investigation.
28. The same has been reiterated in M/S. Jayant Vitamins Ltd. v. Chaitanyakumar , It has been ruled therein that the Court is not justified without any compelling justifiable reasons to interfere with the investigation.
29. When the first information report discloses commission of cognizable offence, inherent power under Section 482 of the Code of Criminal Procedure, cannot be invoked at the stage of investigation, it has been authoritatively held in Union of India v. B.R. Bajaj . Even in a case where one or two ingredients of the offence have not been stated in detail, the complaint cannot be quashed at the stage of investigation, it has been held in the authority in Rajesh Bajaj v. State NCT of Delhi 1999 SCC (Cri) 401.
30. In this case, it is found that there had been a commercial transaction between the parties. Admittedly, certain quantity of cotton lint was supplied on credit basis. Certain other quantity of cotton lint was supplied with an understanding to convert the same and return it in the form of yarn. There had been return of yarn on conversion by the accused to the complainant as admitted in the first complaint. The cotton lint purchased by the accused from the complainant might have been sold by the accused. There is no contract that the goods purchased on credit basis should be sold by the accused only with the consent of the complainant. It is only a question of paying cash for the goods purchased on credit basis. Such a non-payment of dues in a commercial transaction will not amount to cheating.
31. With all seriousness, the accused had converted certain quantity of cotton lint into yarn and the converted yarn had been supplied to the complainant as admitted in the first complaint. When such is the case, the question of criminal breach of trust does not arise at all.
32. The Hon'ble Supreme Court in State of Punjab v. Subhash Kumar (2004) 13 SCC 437 has observed that it is not permissible to quash the first information report by entering into the factual arena of the case. The High Court is not supposed to act as an Investigating Agency at a stage when the first information report was under investigation.
33. A similar view has been taken by the Hon'ble Supreme Court in Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque wherein the High Court has been advised not to assume the role of a trial Court and embark upon an enquiry as to the reliability of evidence and sustainability of accusation on a reasonable appreciation of such evidence.
34. The whole case has arisen out of the commercial transaction. The complainant, having been slapped with a statutory notice for offence under Section 138 of the Negotiable Instruments Act by the first accused herein, has lodged the first information report twice arraigning all the persons connected with the accused company in order to counter-blast the initiation of the proceedings under Section 138 of the Negotiable Instruments Act as against the complainant. The fair analysis of the above facts and circumstances which led to the lodging of the first complaint and the second complaint will not amount to critical analysis of the evidence collected by the Investigating Agency.
35. The learned Government Advocate (Criminal Side) would submit that some documents are found to have been fabricated. It is to be remembered that it is nobody's case that some documents were fabricated by the accused herein. The Investigating Agency has invented a new theory in order to give a corroborative texture to the gravamen of the first information report.
36. The complainant has adopted a hide and seek method in lodging the first information report twice to wreak vengeance against the first accused who initiated the criminal proceedings under Section 138 of the Negotiable Instruments Act against the complainant having withdrawn the first complaint. The second complaint has been lodged with all vehemence by the complainant as against all the persons connected with the first accused company. Further, the complainant will have to approach the Civil Court, if at all, there was any dues from the commercial transaction, the complainant had with the first accused. Such bullying tactics to browbeat an adversary in the business venture, cannot be permitted. In the above facts and circumstances, it is found that the complaint lodged against the first accused and the petitioners herein for the offences under Sections 420, 409 and 34 of the Indian Penal Code, is not at all sustainable.
37. In the interest of justice, though the first accused company is not before this Court, as the complaint is found to have been lodged only to counter-blast the criminal proceedings under Section 138 of the Negotiable Instruments Act, launched by the first accused and also to humiliate the company and its partners and associates, the criminal proceedings as against the first accused and also as against the petitioners herein will have to be quashed.
38. In the result, the criminal proceedings in Crime No. 54 of 2005 on the file of the first respondent, not only as against the petitioners herein but also as against the first accused company, who is not before this Court, stands quashed. Consequently, the criminal original petition stands allowed. The connected criminal miscellaneous petition stands closed.