Allahabad High Court
Kapur Chand Gupta vs State Of U.P. & Others on 15 May, 2014
Author: Vinod Prasad
Bench: Vinod Prasad
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. 53 A.F.R. Cri. Misc. Application No. 5304 OF 2002 Kapur Chand Gupta ............... Applicant Vs. State of U.P. and others ....... Respondents Hon'ble Vinod Prasad, J.
Through this Application u/s 482 Cr.P.C. sole applicant Kapur Chand, Proprietor of M/s Durga Traders, Mohan Road, district Deoria, has invoked inherent jurisdiction of this court hankered by the prayer to quash entire proceedings of complaint case no.534 of 1998, C.R. Foods (India) Pvt. Ltd. Vs. Kapur Chand Gupta, under sections 406, 420 IPC, P.S. Chhata, District Agra pending before Xth A.C.J.M., Deoria.
Since twelve years have gone by and this Application could not have been kept pending final adjudication of the lis because of non co-operative attitude of the counsel for the applicant, that this Application is being disposed off finally with the help of learned AGA Sri Chandrajit Yadav. A glimpse of the record further revealed that albeit Sri Dinesh Tiwari, learned advocate has filed a counter affidavit along with stay vacation application but,even in the revised call, he too is absent, to assist the court. I have perused and vetted through the entire record critically, have summated factual aspects and have analytically cogitated over the involved issues.
On the factual aspects it is discernible from the facts slated in the affidavit filed alongwith this Application and counter affidavit thereto, that an application,annexure no.1, was moved by respondent no.3 C.R. Foods (India) Pvt. Ltd. before S.S.P., Agra, against the applicant and other persons, leveling allegations that respondent no.3 is a Firm of which Bhagwandas Gupta is the Managing Director. Firm is engaged in manufacturing and sale of flour, fine flour(maida), rava(Suji), etc. having it's registered office at 6/16, Gali Barah, Bhai Wetanganj, P.S. Chhata, District Agra and production unit/ factory of the aforesaid victuals is situated at Agra -Mathura Road P.S.Sikandara, District Agra. On 1.2.1992, Dinesh Chand Jaiswal s/o Prem Chanda Jaiswal r/o 113 Lukarganj, district Allahabad,owner of M/S Samrat Agency, accompanied with his nephew Atul Kumar, Applicant Kapur Chand Gupta s/o Ramdhari Gupta, r/o Hata taxi Stand, Station Road, district Deoria, owner of M/S Durga Traders,Mohan Road, district Deoria and Thakur Ramjit Singh, s/o Thakur Ranjit Singh r/o Kujadabag, district Sultanpur, owner of M/S Singh Trading Company, Khoamandi Shahganj, Sultanpur, came to the office of the Firm at Barah Bhai Gali, Belanganj,Agra, and assured that respondent no.3 should deliver them aforesaid goods and they will remit him the payment and so long as payment is not remitted the goods will remain under joint security between them. At that moment Ashok Kapur, Bhagwan Das, Devendra Kumar Sharma were present inside the office. Trusting and relying upon the assurances given by aforesaid persons including the applicant, respondent no.3 company C.R. Foods (India) Pvt. Ltd. vide bill nos.901/902 dated 2.2.1992, bill no.923 dated 8.2.1992, sold goods worth Rs. 1,30,054/- to M/S Durga Traders, Deoria, and vide bill no.921 dated 6.2.1992 and bill no.1022 dated 10.3.1992, sold goods worth Rs.77,050/- to M/s Singh Trading Co. and through various bills, in the years 1991-92, sold goods to M/S Samrat Agency and till 8.4.92 Rs. 1,08,826/- were balance on the said company. On Durga Traders Deoria, till 1.5.92, Rs.45045/= and on M/s Singh Traders Sultanpur, till 11.6.92, Rs. 24050/= were balance. (So far as present applicant Kapur Chand Gupta is concerned, he was sold with goods worth Rs.1,08,826/-). Applicant accused however did not remit the payment of the purchased articles. Further allegations by respondent no.3 are that inspite of various communications demanding remittance of sale prices and sending of representatives Bhagwan Das Gupta and Devendra Kumar Sharma to collect the payments, no payment was received and subsequently when Shyam Lal Jain went to demand balance amount who also told the applicant that he should return the goods if the payment is not to be made, that he was informed that payments have already been made to Dinesh Chand and Atul Kumar and they will remit the payment to respondent no.3. When Dinesh Chand and Atul Kumar were contacted they refused having received any payments from Kaupr Chand (applicant) and Ranjit Singh and they informed respondent no.3 that he can realise his payment by any means. Respondent no.3 therefore became confident that all the three persons in conspiracy with each other had cheated him of the various amounts mentioned above and therefore approached the police to proceed against the culprits.
The police on aforesaid allegations, however, prima facie concluded that the allegations only discloses civil dispute and it does not disclose any offence and therefore it refused to act on annexure no.1. Resultantly, left with no other option, respondent no.3 with the aforesaid allegations filed a complaint, Annexure no.2, in the Court of X ACJM, Agra on 16.1.1993. Observing complaint case procedure statement of complainant Bhagwandas Gupta, u/s 200 Cr.P.C. is Annexure no.3, was recorded, in which complainant supported his complaint allegations. U/s 202 Cr.P.C. statements of Shyam Babu Jain, and Devendra Kumar Sharma, PW1&2, vide annexures no.4&5, were penned down who both corroborated complaint allegations. Learned trial Magistrate/X ACJM, Agra, vide summoning order dated 30.4.2002, summoned the applicant to stand trial fro offence u/s 406 and 420 IPC. It seems that since applicant did not appear in pursuance of the summoning order, that NBW against him was issued on 30.4.2002 vide annnexure no.6 to the affidavit filed alongwith this 482 Cr.P.C. Application, fixing 18.6.2002 for further orders.
It is in the above backdrop that the applicant has prayed this above prosecution to be quashed through this Application by invoking inherent power of this Court under section 482 Cr.P.C.
Admittedly, according to complainant's version itself, various business transactions took place between complainant respondent no.3 and accused applicant on various dates through various bills. In para 3 of the complaint it is averred that the applicant had received goods worth Rs. 130054/= and had paid rest of the sale price but with Rs.45045/= remaining balance for which the complaint has been filed by respondent no.3. Thus it is evident that the applicant had already paid Rs.85009/= to the complainant Firm and thus major part of the price of the sold goods was paid to respondent no.3 and only some part of the payment remained as balance. It is alleged that inspite of various demands for payment of balance amount through various letters and sending three emissaries no payment was made. The mooted question which therefore arises is as to whether non payment of balance amount of sale proceeds on credit sale whether will discloses any criminal liability and offence or will be only be a civil liability with no element of criminality. To adjudicate that firstly both sections, 406 & 420 I.P.C. are reproduced below:-
"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."
420. Cheating and dishonestly inducing delivery of property.- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
Criminal Breach of Trust is defined u/s 405 I.P.C. Which is reproduced herein below:-
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 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".
The definition as aforesaid envisages inter alia that who ever dishonestly misappropriates or converts to his own use any entrusted property or any domain over the property in violation of any legal contract, express or implied, commits breach of trust. Here in the present case no such breach has been alleged. What has been alleged is that sale price was not paid in part. Thus, firstly there was no disposal of property in violation of any contract nor the property was converted to own use by the applicant accused against the implied contract stipulations. Had there been no payment at all then it could have been successfully urged that the property was dishonestly misappropriated or converted to own use. After complainant had received major part of sale price it can very well be assumed that contract of sale was in fact given effect to albeit partially. This brings the case within the ambit of civil dispute of pure breach of contract and does not disclose any criminal liability/offence. The whole tenure of the complaint and inquiry statements brings forth that the complainant desired only payment of residue of amount of sale price and nothing more and since that was not being paid that he has resorted to criminal court's power to realise it. Mens rea is a significant element for disclosing any offence. It must exist from the very inception of the transaction to anoint criminal liability on any person, which is a strict liability. All the ingredients of the offence must be satisfied before it can be said that prima facie offence is disclosed. It is for the complainant/ informant to establish by cogent and reliable evidence those ingredients to make out any offence on the stated factual matrix. Once the complainant fails to do so his lis has to be relegated to the appropriate forum to seek redressal of his grievances but he can not be permitted to wield criminal court's power for ulterior motives. This becomes all the more apparent as what is conspicuous is that infact present is a case of credit sale transaction with part payment remaining balance.
Coming to offence u/s 420 I.P.C.,for making out that offence sine quo non ingredient is possessing of an intention to cheat from the very inception. If at the very initial stage of the transaction, there was no intention to cheat no offence under section 420 I.P.C. can be said to be made out against any accused. In that eventuality, it will only to be a civil liability having a civil textures and that is the case herein in this present 482 Cr.P.C. Application. Instead of approaching the Civil Court for reimbursement of the balance amount of the sale price, the complainant respondent no.3 wielded the power of criminal court and has lodged the complaint with the above allegations just as arm twisting device. The complaint is absolutely silent whether the applicant had an intention to cheat from the very beginning or not? which is sine quo non ingredient of an offence under section420 I.P.C. Section 420 IPC itself reads that "whoever cheats and thereby dishonestly induces the person deceive to deliver any propriety to any person, or to make alter or destroy the whole or any part of a valuable security .......". In the present case, there was no illegal or dishonest intention present at the time when the applicant had approached respondent no.3 and entered into business transactions. Subsequently, because of undisclosed and unknown reasons if the entire price could not be paid, it can be said that by dishonest inducement complainant was deceived to deliver property to the applicant and thereby committed offence u/s 406/420 I.P.C.
On an over all analysis it emerges that the complaint does not discloses commission of any offence whatsoever against the applicant and whatever has been alleged discloses only a civil liability and applicant's prosecution is wholly undesirable and illegal and it is nothing but his harassment and, therefore, is liable to be quashed.
In my above view I draw support from following decisions:-
In Joseph Salvaraj A . v. State of Gujarat and Ors:AIR 2011 SC 2258 it has been held as under:-
"25.In our opinion, the matter appears to be purely civil in nature. There appears to be no cheating or a dishonest inducement for the delivery of property or breach of trust by the Appellant. The present FIR is an abuse of process of law. The purely civil dispute, is sought to be given a colour of a criminal offence to wreak vengeance against the Appellant. It does not meet the strict standard of proof required to sustain a criminal accusation.
26. In such type of cases, it is necessary to draw a distinction between civil wrong and criminal wrong as has been succinctly held by this Court in Devendra v. State of U.P., 2009 (7) SCC 495, relevant part thereof is reproduced hereinbelow:
"A distinction must be made between a civil wrong and a criminal wrong. When dispute between the parties constitute only a civil wrong and not a criminal wrong, the courts would not permit a person to be harassed although no case for taking cognizance of the offence has been made out."
27. In fact, all these questions have been elaborately discussed by this Court in the most oft-quoted judgment reported in 1992 (Suppl) 1 SCC 335 : (AIR 1992 SC 604 : 1992 AIR SCW 237) State of Haryana v. Bhajan Lal, where seven cardinal principles have been carved out before cognizance of offences, said to have been committed, by the accused is taken. The case in hand unfortunately does not fall in that category where cognizance of the offence could have been taken by the court, at least after having gone through the F.I.R., which discloses only a civil dispute."
In Rama Devi v. State of Bihar and Ors.:AIR 2010 SC (Suppl) 83 it has been held as under:-
"11.If the Respondent No.2 has been prejudiced by the fact that the Appellant had executed a sale deed in his favour in respect of a plot of land which had already been the subject matter of a previous transfer, he can at best question such transfer and claim damages in respect thereof from the vendor of the Appellant by way of appropriate damages, but an action in the Criminal Court would not lie in the absence of any intention to cheat and/or defraud the Respondent No.2."
In Dalip Kaur and Ors. v. Jagnar Singh and Anr.:AIR 2009 SC 3191 it has been laid down by the apex court as under:-
"12.The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non-refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Indian Penal Code."
In Ramdeo Singh v. State of Bihar and Ors.:2013 Cr.L.J.891 it has been laid down as under:-
"6. The offence of cheating has been defined under Section 415 of the Indian Penal Code.The distinction between the mere breach of contract and the offence of cheating is fine one. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating, it is necessary to show that he had fraudulent or dishonest intention, at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed.
7. Thus, in my view, in the present case, when there was a long standing business relationship between the parties, the ingredients of the offence of cheating were completely missing.Similarly, to constitute the offence of criminal breach of trust punishable under Section 406 of the Indian Penal Code, there must be dishonest misappropriation by a person in whom confidence is placed as to the custody or management of the property in respect of which the breach of trust is charged. The misappropriation or conversion or disposal must be with a dishonest intention. Every breach of trust gives rise to a suit for damages, but it is only when there is evidence of a mental act of fraudulent misappropriation that the commission of embezzlement of any sum of money becomes a penal offence punishable as criminal breach of trust. It is this mental act of fraudulent misappropriation that clearly demarcates an act of embezzlement which is a civil wrong or tort, from the offence of criminal breach of trust.
8.In the present case, apparently the prosecution has failed to establish the offence of cheating and criminal breach of trust in the absence of mens rea."
Wrapping up the discussion, this 482 Cr.P.C. Application is allowed and prosecution of the appellant through aforementioned complaint case no.534 of 1998, C.R. Foods (India) Pvt. Ltd. Vs. Kapur Chand Gupta, under sections 406, 420 IPC, P.S. Chhata, District Agra, pending before Xth A.C.J.M., Deoria is hereby quashed.
Order Date :- 15.5.2014 Tamang