Karnataka High Court
Sri. Govindaraja vs State Of Karnataka on 21 February, 2022
Author: M. Nagaprasanna
Bench: M. Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT
DHARWAD BENCH R
DATED THIS THE 21ST DAY OF FEBRUARY, 2022
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.101203 OF 2021 (GM-RES)
BETWEEN:
SRI GOVINDARAJA
AGED ABOUT 44 YEARS
S/O LAKSHMINARAYANA ACHAR
RESIDING AT NO.A-503
"JHAROKA APARTMENT"
BEHIND HAL AIRPORT
YEMALUR
BENGALURU - 560 037.
... PETITIONER
(BY SRI C.V.NAGESH, SR.COUNSEL FOR
SRI MRUTHYUNJAYA S. HALLIKERI, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY THE STATION HOUSE OFFICER
MARIAMMANA POLICE STATION,
BELLARI DISTRICT
BELLARI - 583 101.
2. SRI MAHENDRA PRATAP SINGH
AGED ABOUT 49 YEARS
ADDL. DEPUTY GENERAL MANAGER
M/S BMM ISPAT LTD.,
2
NO.144, DANAPUR VILLAGE,
HOSPET - 583 222.
3. M/S BMM ISPAT LTD.,
NO.114, DANAPUR VILLAGE
HOSPET - 583 222
REPRESENTED BY
AUTHORISED SIGNATORY.
... RESPONDENTS
(BY SRI RAMESH CHIGARI, HCGP FOR R1;
SRI UDAYA HOLLA, SR.COUNSEL FOR
SRI R.M.KULKARNI, ADVOCATE FOR R2 AND R3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF
THE CODE OF CRIMINAL PROCEDURE, PRAYING TO ISSUE AN
APPROPRIATE WRIT OR ORDER OR DIRECTION QUASHING THE FIR
IN CRIME NO.1/2021 REGISTERED BY THE FIRST RESPONDENT -
POLICE AS AGAINST THE PETITIONER BY ARRANGING HIM AS
ACCUSED NO.1 FOR OFFENCES WHICH ARE MADE PENAL UNDER
SECTIONS 420, 467, 468, 472 AND 34 OF THE INDIAN PENAL CODE
PRODUCED AT ANNEXURE -A.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 27.01.2022, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The petitioner is before this Court calling in question proceedings in Crime No.1 of 2021 registered against the petitioner for offences punishable under Sections 420, 467, 468, 464, 472 and Section 34 of the Indian Penal Code.
32. Adumbrated in brief, the factual background as projected by the petitioner is as follows:
There are three protagonists in the alleged episode of crime
- the 2nd respondent/complainant-representative of the 3rd respondent; accused No.2 Nikat Capital, and the petitioner.
According to the 2nd respondent who is the Additional Deputy General Manager of the 3rd respondent, the story twined unfolds this way. One Nikat Capital, a company based in the United Kingdom having its office in London was introduced by the petitioner to the complainant through his Director Saimak Vatanabadi. It appears that certain transactions took place between the complainant and Nikat Capital. An international sales contract was executed between Nikat Capital and the 3rd respondent for shipping of 6000 metric tons of Heavy Melting Scrap (HMS) and an amount of 7,35,000 US dollars was transferred from the account of 3rd respondent to Nikat Capital despite the fact there was short supply and was not supplied to the place where it ought to have been supplied.4
3. The International Sales Contract provided for arbitration as a dispute resolution mechanism between Nikat Capital and the 3rd respondent. Accordingly, arbitration proceedings were invoked in terms of the arbitration clause. Due to impending transfer of funds, a petition was filed before this Court invoking Section 9 of the Arbitration and Conciliation Act in AP(IM)100001 of 2020 alleging that the company/Nikat Capital had played fraud with the 3rd respondent and sought a restraint order at the hands of this Court directing the State Bank of India not to transfer the sum of 7,70,770 US dollars which was the consideration in the transaction. This Court by order dated 27-11-2020 accepted the case in the petition and passed an interim order of restraint restraining State Bank of India from transferring the amount. It appears, by the time the interim order was passed, the amount had already been transferred to Nikat Capital by the State Bank of India.
4. After the aforesaid proceedings a complaint is registered before the jurisdictional Police by the 2nd respondent against the 5 petitioner and Nikat Capital. Pursuant to the said complaint an FIR is registered arraigning the petitioner as accused No.1 and Nikat Capital as accused No.2 for offences punishable under Sections 420, 467, 468, 464, 472 r/w Section 34 of the IPC. The moment the crime gets registered against the petitioner, the petitioner has knocked the doors of this Court, in the subject writ petition.
5. Heard learned senior counsel Sri C.V.Nagesh representing the petitioner, learned High Court Government Pleader representing respondent No.1 and learned senior counsel Sri Udaya Holla representing the respondents 2 and 3.
Submissions of the petitioner:
6. The learned senior counsel Sri C.V.Nagesh would vehemently argue and contend that the crime registered against the petitioner is, on the face of it, an abuse of the process of law;
he would take this Court through the complaint registered maligning the name of the petitioner and laying the entire blame 6 for the transaction on the petitioner, notwithstanding the fact that the petitioner is nowhere in the picture. The petitioner is not a party to the contract entered into between Nikat Capital and the 2nd or the 3rd respondents; the petitioner is not a recipient of any commission/consideration whatsoever in the transaction between the parties; if the transaction between the parties has gone wrong the petitioner cannot be hauled into, by registration of a criminal case against him for the aforesaid offences, as he is completely innocent; it is his submission that no doubt, he has introduced Nikat Capital to the 3rd respondent and at best he can be termed as an intermediary between the two; having received no consideration and not being a party to any of the transactions or agreements between Nikat Capital and the 2nd and 3rd respondents, the petitioner cannot be dragged into criminal proceedings.
6.1. He would place reliance upon judgments in the cases of ALL CARGO MOVERS (INDIA) PVT. LTD AND OTHERS v.
DHANESH BADRAMAL JAIN AND ANOTHER - (2007) 14 SCC 7 776; RUKMINI NARVEKAR v. VIJAYA SATARDEKAR AND OTHERS - AIR 2009 SC 1013; MEDMEME, LLC AND OTHERS v. IHORSE BPO SOLUTIONS PRIVATE LIMITED - (2018) 13 SCC 374 and the latest judgments in the cases of A.P.MAHESH CO-OP. URBAN BANK SHAREHOLDERS WELFARE ASSN. V. RAMESH KUMAR BUNG reported in (2021) 9 SCC 152, STATE OF ORISSA V. DEBENDRA NATH PADHI reported in (2005)1 SCC 568 and NITYA DHARMANANDA V. GOPAL SHEELUM REDDY reported in (2018)2 SCC 93 in support of his contentions.
Submissions of the private respondents:
7. The learned senior counsel Sri Udaya Holla representing the respondents would vehemently refute the submissions and contend that the petitioner is the face of Nikat Capital. The complainant company had never even seen Nikat Capital. The entire transaction was at the behest of the petitioner; plethora of mails were corresponded between the petitioner, Nikat Capital and the complainant company; the petitioner and Nikat Capital 8 have conspired together to defraud the complainant company and as such, the allegation of cheating or criminal breach of trust and forgery is made out in the case at hand. The matter is only at the stage of investigation and at the stage of investigation this Court should not interfere and if at all the petitioner is clean, that has to be determined in a full-fledged trial.
7.1. He would place reliance on the judgments of the Apex Court in the cases of KAMAL SHIVAJI POKARNEKAR v. STATE OF MAHARASHTRA & OTHERS - (2019)14 SCC 350; YOGESH AGARWAL & OTHERS v. STATE OF KARNATAKA - (2020) SCC OnLine KAR 1857 and SABRE TRAVEL TECHNOLOGIES PRIVATE LIMITED v. STATE OF KARNATAKA - (2021) SCC OnLine KAR 2611. By placing reliance on the aforesaid judgments the learned senior counsel Sri Udaya Holla would contend that this Court in the case of YOGESH AGARWAL and SABRE TRAVEL TECHNOLOGIES has declined to accept the very contentions advanced by the very same learned senior 9 counsel for the petitioner and it would not lie with the said learned senior counsel to again reiterate those very submissions.
The learned senior counsel would further take this Court through the additional documents that are filed which are electronic-mail correspondences between the petitioner, Nikat Capital and the complainant company, to buttress his contention that the petitioner was the face of the entire transaction.
Reply of the petitioner:
8. The learned senior counsel for petitioner Sri C.V.Nagesh would contend insofar as it pertains to the judgment of YOGESH AGARWAL, taking this Court through a subsequent judgment passed by the very same Judge who had rendered YOGESH AGARWAL in Criminal Petition No.824/2019 disposed on 03.02.2020 wherein the criminal petition is allowed on the very same grounds relying on subsequent judgments of the Apex Court. He would also place reliance upon additional documents that are filed which are e-mail correspondences between the 10 parties, which according to the learned senior counsel would clear the cloud that has masked the petitioner. It is his submission that truncated mails are produced by the respondents and to set the record straight he has placed on record entire e-mail correspondences between the parties.
9. I have given my anxious consideration to the submissions made by the respective learned senior counsel and have perused the material on record. In furtherance whereof, the issue that falls for my consideration is, 'Whether the petitioner being an intermediary or a facilitator for the transaction between the complainant-
company and Nikat Capital can be hauled into by setting the criminal law in motion owing to the peculiar facts of the case at hand?' Consideration:
10. It is not in dispute that the role of the petitioner is an intermediary or facilitator between Nikat Capital and the complainant-company. Before noticing the complaint that is 11 registered between the parties, it is germane to notice certain electronic-mail correspondences between the three protagonists in the entire episode of the subject transaction. The torrent and trail are as follows:
"Re: LOI for the supply of Scrap grade HMS 1 & 2 Govvind Raja <[email protected]> Sun:9/6/2020 9:14 AM To: Mahendra Pratap Singh<[email protected]> CC:Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]> Dear Sir, Good Morning.
Thank you very much for your confirmation.
We will start the process from tomorrow.
Look forward for a long term association.
Regards Govvind On 5 Sep 2020, at 9:53 PM, Mahendra Pratap Singh <[email protected]>wrote:
Dear Sir, As discussed we are pleased to issue this LOI for the supply of MMS 1 & 2 as per terms and conditions mentioned below.
1. Material description HMS 1 & 2.
2. Purchase Order will be issued for 5,000 MT 12
3. Supply frequency - 1000 MT/Shipment.
4. Price - 245 per MT - CIF Chennai Seaport.
5. Payment Terms.
10% advance for 1000 MT of Scrap (i.e.USD 24500, which will be adjusted in the last shipment) shall be released against a Sale Purchase Agreement (between BMMIL and abroad supplier) covered under International Chamber of Commerce (ICC), instead of a Bank Guarantee.
Further, for the balance payment, as per our Bankers, instead of revolving L/C we may establish 2/3 irrevocable sight L/Cs covering total Qty of 5000 MT and we will confirm about the value of each L/C on September 7th 2020.
In the mean time we request you to book our order, provide the draft agreement along with Company name, address, beneficiary name, account No and swift code per return mail for speedy action.
Pls do further proceedings on the base of this LOI.
Our formal order follows.
Best regards, M.P.Singh.
"Re: Supply of Scrap HMS 1 & 2 Govvind Raja <[email protected]> Thu 9/10/2020 5:24 PM To: Mahendra Pratap Singh <[email protected]> Cc:Manoj K Agrawal <[email protected]>; Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]>; Yaseen.Md <[email protected]> 1 attachments (224 KB) 13 FCO:BMM INDIA.pdf;
Dear Sir
1. Please find attached the FCO. Kindly sign it from your end and send it to me to get the seller signature. Since the terms will have to be first okeyed by the Buyer, they have requested you to sign it first.
2. Vendor registration form is awaited & LC draft is under review.
Regards Govvind On 10 Sep 2020, at 6:42 AM, Mahendra Pratap Singh <[email protected]> wrote:
Dear Sir, As discussed pls submit the following documents.
1. FCO with complete details.
2. Vendor registration form (duly filled) in attached format.
Pls also find copy of draft LC and give your comments/acceptance.
Pls revert per rtn mail Best regards, M.P.Singh Addl GM Purchase BMM Ispat Ltd 114, Danapura Village Taluk Hospet Dist Bellary Karnataka Mob-9686552487."
14"Re: Contract - BMM 140920 (2) 1 Govvind Raja <[email protected]> Tue 9/15/2020 10:25 AM To: Mahendra Pratap Singh <[email protected]> Cc:Manoj K Agrawal <[email protected]>; Yaseen.Md <[email protected]>;
Vijay Govinda D <[email protected]>; Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]>; Shreevats RT <shreevatsrt @Bmm.in> 1 attachments (544 KB) CONTRACT WITH TRACK CHANGES.docx;
Dear Sir Please find attached the document from the supplier. As you can see, they have accepted the changes and suggested few cosmetic changes.
Kindly confirm the changes & if you are fine, send us the signed copy.
Regards Govvind On 14 Sep 2020, at 1:57 PM, Mahendra Pratap Singh <[email protected]>wrote:
Dear Sir We thankfully acknowledge the receipt of draft contract.
Further, pls find enclosed herewith modified draft contract and give your views / acceptance to proceed further 15 Best regards M.P.Singh"
"Re: Signed Contract Govvind Raja <[email protected]> Wed 9/16/2020 2.31 PM To : Mahendra Pratap Singh <[email protected]> Cc: Anil Kumar S <[email protected]> 2 attachments (3 MB) PO IMP 00032 NIKAT CAPITAL Signed.pdf; PI INDIA-BMM SIGNED.pdf;
Dear Sir Please find attached the Signed agreement as well as the Proforma Invoice.
Regards Govvind On 16 Sep 2020, at 9:36 AM, Mahendra Pratap Singh <[email protected]> wrote:
Dear Sir, Pls find enclosed herewith duly signed (with company seal) contract for the supply of HMS 1 & 2. Pls get it signed by Supplier and send the same for further process.
Pls also submit the Performa Invoice for 1st Lot of 3000 MT to establish the LC.
We are also awaiting for supplier acceptance on draft LC already sent.16
Pls revert per rtn mail.
Best regards, M.P.Singh"
"Govvind Raja <[email protected]> Thu 9/17/2020 12.16 AM To : Mahendra Pratap Singh <[email protected]> Cc:Manoj K Agrawal <[email protected]>; Yaseen.Md <[email protected]>; Vijay Govinda D <[email protected]>;
Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]>; Shreevats RT <shreevatsrt @Bmm.in> 1 attachments (3 MB) PO IMP 00032 NIKAT CAPITAL Signed.pdf;
Dear Sir, Please find attached the Contract signed by the supplier. I shall send the Proforma as soon as I get it.
Regards Govvind On 16 Sep 2020, at 8:00 PM, Mahendra Pratap Singh <[email protected]> wrote:
Dear Sir, In reference to your trailing mail, Pls find enclosed herewith duly signed contract for the supply of HMS 1 & 2.
Pls get it signed by supplier and send the same for further process.
Pls also submit the Proforma Invoice for 1st Lot of 3000 MT to establish the LC.17
Further, we are still awaiting for acceptance on draft LC already sent through mail.
Pls revert per rtn mail.
Best regards, M.P.Singh Govvind Raja <[email protected]> Tuesday, September 15, 2020 10.25 AM To : Mahendra Pratap Singh <[email protected]> Cc:Manoj K Agrawal <[email protected]>; Yaseen.Md <[email protected]>; Vijay Govinda D <[email protected]>;
Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]>; Shreevats RT <shreevatsrt @Bmm.in> Subject:Re:Contract - BMM 140920 (2)1 Dear Sir Please find attached the document from the supplier. As you can see, they have accepted the changes and suggested few cosmetic changes.
Kindly confirm the changes & if you are fine, send us the signed copy.
Regards"
"Re: Contract BMM 140920 (2) 1 Govvind Raja <[email protected]> Thu 9/17/2020 9.04 AM To : Mahendra Pratap Singh <[email protected]> Cc:Manoj K Agrawal <[email protected]>; Yaseen.Md <[email protected]>; Vijay Govinda D <[email protected]>;18
Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]>; Shreevats RT <shreevatsrt @Bmm.in> 1 attachments (357 MB) PI INDIA-BMM SIGNED.pdf;
Good Morning Sir I am attaching herewith the Proforma Invoice for your further action.
Regarding the LC, kindly send me the draft once it is reviewed by your Bank in the prescribed format & send it to me for Seller's review.
Regards Govvind On 16 Sep 2020, at 10:46 PM, Govvind Raja <[email protected]>wrote:
Dear Sir Please find attached the Contract signed by the supplier. I shall send the Proforma as soon as I get it.
Regards Govvind <PO IMP 00032 NIKAT CAPITAL Signed.pdf> On 16 Sep 2020, at 8:00 PM, Mahendra Pratap Singh <[email protected]> wrote:
Dear Sir, In reference to your trailing mail, Pls find enclosed herewith duly signed contract for the supply of HMS 1 & 2. Pls get it signed by supplier and send the same for further process.19
Pls also submit the Proforma Invoice for 1st Lot of 3000 MT to establish the LC.
Further, we are still awaiting for acceptance on draft LC already sent through mail.
Pls revert per rtn mail."
"Govvind Raja <[email protected]> Sat, 9/26/2020, 10.38 AM To : Mahendra Pratap Singh <[email protected]> Cc:Manoj K Agrawal <[email protected]>; Yaseen.Md Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]>;
Dear Sir I have got the application reviewed by the supplier. They replied that the LC application is fine with them. The Latest Date of Shipment can be mentioned as 30th October 2020.
Regards Govvind On 25 Sep 2020, at 1:39 PM, Mahendra Pratap Singh <[email protected]> wrote:
Dear Sir, Pls find enclosed here with LC draft and get acceptance from the supplier to proceed further.
Best regards, M.P.Singh"
"Fwd: LC Copy - M/s. Nikat Capital Limited Mahendra Pratap Singh <[email protected] Sat 10/3/2020 12:13 PM 20 To: Govvindraja kpur <[email protected]> 1 attachments (2 MB) LC Copy-Nikat Capital USD 735,000.pdf Dear Sir Pls find enclosed herewith copy of LC of Nikat Capital Ltd towards supply of HMS.
Pls expedite shipment s soon as possible Best regards M P Singh"
"Govvind Raja <[email protected]> Tue 10/6/2020, 12.57 PM To : Mahendra Pratap Singh <[email protected]> Dear Sir, Please note that the Proforma Invoice from the supplier was sent on 17th Sept. The LC was issued from your Bank on 1st October. Then there was an amendment required by the beneficiary Bank which was supposed to be rectified by your Bank today. I got the message from Mr.Srinivas that the officer is on leave due to Covid & it will be issued tomorrow. Considering that your Bank will send the amendment tomorrow (Wednesday), the client might get it only on 9th Oct. For them the work will begin from 12th Oct. Please talk to the Bank and see if it is possible to get it done today.
We are already under the pressure from the supplier since its been almost 3 weeks & the LC is not issued. This obviously will have the impact on the shipment.
Kindly sort out the matter quickly.
Regards 21 Govvind"
"Re: Shipment Status of HMS Mahendra Pratap Singh <[email protected]> Tue 10/27/2020 3:28 PM To : Govvind Raja <[email protected]> Cc:Sadanand Kochunni <[email protected]>; Manoj K Agrawal <[email protected]>; Anil Kumar S <[email protected]>;
Panna Lal Sethia <[email protected]>;
Dear Sir, In reference to your trailing mail, we request you to update about the shipment of first lot of 3000 Tons of HMS per rtn mail.
Expecting your prompt response in this regard.
Best regards M.P.Singh From: Govvind Raja <[email protected]> Sent: Wednesday, October 21, 2020 11:35 PM To: Mahendra Pratap Singh <[email protected]> Cc: Anil Kumar S <[email protected]>; Panna Lal Sethia <[email protected]>; Sadanand Kochunni <[email protected]>;
Subject: Shipment Status of HMS Dear Sir ! Greetings !!! Please find attached the photos of the scrap. The supplier is expecting to ship the goods on 27th October. The delay is because of the LC amendments between SBI & Barclays Bank. As your finance people are aware that there was an amendment requested from Barclays on 16th Oct 22 which was done by SBI yesterday (20th Oct). The amendment is expected is expected to reach Barclays tomorrow. Supplier is waiting for the amendment receipt to give you the confirmed date of Shipment. Further supplier is already appointed SGS for pre-shipment inspection.
We will provide you inspection report as soon as possible.
Regards Govvind"
Further trail reads as follows:
From: Mahendra Pratap Singh [email protected] Subject: Fw: Requirement of Scrap Date: 11 January 2020 at 10.48 AM To : Govvindraja Kpur [email protected] Cc : Anil Kumar S [email protected], Shreevats RT [email protected], Manoj K Agrawal [email protected] Dear Mr.Govindraj, As discussed pls find enclosed here with our firm enquiry for the procurement of Heavy melting Scrap and used Rail cut pieces.
To see the our Company profile you may visit our website www.bmm.in.
We will prefer the payment term as 100% on CAD basis. Supply frequency shall be 1000-1500 MT / shipment. Pls give your best offer on CIF Chennai Sea port basis.
Best regards, M.P.Singh Dear Mr.Govind Raj 23 As discussed pls submit offer (on CIF Chennai Sea port basis) along with photographs for Steel Scrap (IIMS I-IRSI Code 20I) Qty - 3000 Tons Best regards, M.P.Singh Addl G.M.Purchase BMM Ispat Ltd 114-Danapur Village Taluk-Hospet Dist Bellary Karnataka MOB - 9686552487"
"From: Mahendra Pratap Singh [email protected] Subject: Requirement of Scrap HMS 1 & 2 Date: 18 January 2020 at 3.43 PM To : nusrat [email protected], [email protected] Cc : Govvindraja Kpur [email protected], Manoj K Agrawal [email protected], Panna Lal Sethia [email protected] Anil Kumar S [email protected], Dear Sirs, In reference to discussion we had with Mr.Govindaraja pls find enclosed here with our firm enquiry for the procurement of Heavy melting Steel Scrap.
Kindly submit your best offer by return mail Best Regards, M.P.Singh Addl G.M.Purchase BMM Ispat Ltd 114-Danapur Village Taluk-Hospet Dist Bellary Karnataka, India MOB - 0091 09686552487"24
"From: Mahendra Pratap Singh [email protected] Subject:Re: Requirement of Scrap HMS 1 & 2 Date: 21 January 2020 at 6.29 AM To : Nusrat Khannusrat [email protected], Cc [email protected], Govvindraja Kpur [email protected], Manoj K Agrawal [email protected], Panna Lal Sethia [email protected] Anil Kumar S [email protected], We thank you very much for your response below, We have the following observations to make.
We are dealing with so many Chinese and European Companies where in our payment term is on CAD basis. Hence, we request you to consider the payment term as 100% on CAD basis.
We are very keen to to establish you as our sole supplier for the Scrap and we may provide you good volume business on regular basis, so considering the same we request you to confirm the price below USD 270 CIF Chennai as well as well as Krishnapatnam Sea Port.
We eagerly look forward to your reply and feel that this is a good opportunity and together we can achieve the success.
Kindly revert by return mail to proceed further.
Best regards, M.P.Singh From: Nusrat Khan <nusrat [email protected]> Sent : Saturday, January 188, 2020 8.41PM To : Mahendra Pratap Singh <[email protected]> Cc : [email protected], < [email protected]>; Govvindraja Kpur <[email protected]>; Manoj K Agrawal 25 <[email protected]>; Panna Lal Sethia <[email protected]>; Anil Kumar S <[email protected]> Subject:Re: Requirement of Scrap HMS 1 & 2 Dear Mr.M.P.Singh, Thank you very much for your interest, we can offer you our best price CIF and Ex-warehouse as followings, CIF to Krishnan sea port/chennai port 300 USD per metrict ton, Payment terms: 15% advance and 85% LC at Sight on loading port.
Ex-warehouse:275 USD per metric ton Payment terms:15% Advance and 85% TT, swift transfer on loading before leaving the vessel/cargo Hope this offer suit your requirement.
Thanks and Best regards, M.Nusrat Ali Khan Managing Director +971 566504069 Carter Brown Global General Trading LLC P.O.Box:5586 4001-10, 40th Floor, Savvy Zone, Citadel Tower, Al-Abraj Street, Business Bay, Dubai: United Arab Emirates "www.ebtt.com on Sat, 18 Jan 2020 at 14:43, Mahendra Pratap Singh <[email protected]> wrote:
Dear Sirs, In reference to discussion we had with Mr.Govindaraja pls find enclosed here with our firm enquiry for the procurement of Heavy melting Steel Scrap.26
Kindly submit your best offer by return mail Best Regards, M.P.Singh Addl G.M.Purchase BMM Ispat Ltd 114-Danapur Village Taluk-Hospet Dist Bellary Karnataka, India MOB - 0091 0 9686552487"
"www.ebtt.com on Sat, 18 Jan 2020 at 14:43, Mahendra Pratap Singh <[email protected]> wrote:
Dear Sirs, In reference to discussion we had with Mr.Govindaraja pls find enclosed here with our firm enquiry for the procurement of Heavy melting Steel Scrap.
Kindly submit your best offer by return mail Best Regards, M.P.Singh Addl G.M.Purchase BMM Ispat Ltd 114-Danapur Village Taluk-Hospet Dist Bellary Karnataka, India MOB - 0091 0 9686552487"
From: Nusrat Khan <nusrat [email protected]> 27 Subject:Re: Supplier Registration Form - reg Date : 15 February 2020 at 5:45PM To : Mahendra Pratap Singh [email protected] Cc : Govvindraja Kpur [email protected]; Anil Kumar S [email protected], Panna Lal Sethia [email protected] Dear Sir, Please find enclosed vendor registration form duly filled signed and stamped, along with FCO., Thanks and Best regards, M.Nusrat Ali Khan Managing Director +971 566504069 Carter Brown Global General Trading LLC P.O.Box:5586 4001-10, 40th Floor, Savvy Zone, Citadel Tower, Al-Abraj Street, Business Bay, Dubai: United Arab Emirates www.cbggt.com on Sat, Feb 2020 a 07:45, Govvindraja kpur < [email protected]> wrote:
sent from my iPhone Begin forwarded message:
From:Mahendra Pratap Singh <[email protected]> Date: 15 February 2020 at 8:36:23 AM GMT+4 To : Govvindraja Kpur <[email protected]> Cc: Anil Kumar S <[email protected]>, Panna Lal Sethia <[email protected]> Subject:Supplier Registration Form - reg 28 Dear Sir, Pls find enclosed herewith our Vendor registration form. Pls fill-up the same and send along with Signature and Company Stamp. Pls also submit formal offer on your company letter head.
Best regards, M.P.Singh BMM ISPAT LTD [04/11/20, 2:18:19 PM] Michael Scrap: We will provide update as soon as possible.
[05/11/20, 9:16:20 AM] M. P. Singh: Dear all I humbly request all of you to share the relevant documents on priority.
Pls look in this and provide the details today itself. Expecting your prompt responses and cooperation in this regard.
Best regards M.P.Singh [05/11/20, 1:25:30 PM] Michael Scrap: Good morning Mr.Singh, Many thanks for contacting us. We're in touch with the shipping team. Please inform us what documents you need and we will provide them to you.
In the meantime I appreciate our patient and cooperation in this matter .
Kind regards [05/11/20, 1:44:46 PM] M.P.Singh: Dear Mr.Kevin, 29 Thanks for your prompt response, we need scanned copy of following documents.
1. Bill of lading
2. commercial Invoice.
3. SGS inspection report along with photographs.
4. Certificate of origin.
5. Insurance certificate.
Pls help us un this regard.
Best regards M P Singh [05/11/20, 2:53:21 PM] Michael Scrap: hello, This is Philip (Shipping Team), Please note that the Vessel had been loaded with 173 Containers 40" on 27 October. Inspection company did a very good job to spend time during loading of each container and took pictures on each stage. We prepared and sent all documents to the bank as of Letter of Credit. In the documents we could not show more than 3000 MT as the LC did not allow us to show the real extra weight on each container. LC only allowed us to have %5 tolerance on the invoice value. Therefore Invoice calculated on that base sent to the bank already and they will be forwarded to the customer in few days time. The final Vessel (TOKYO BAY) will arrive to port of Chennai by 24 November. Please let the customer know that according to the LC terms, they should only receive the documents from their own bank in India few days after the advising bank in the UK considers them and forward them to India by DHL. All the best."
"[20/11/20, 9:41:56 PM] Sadanand - UAE: Not every one has leisure time like you all 20/11/20, 10:15:15 PM] M.P.Singh: Dear Mr.Kevin We appreciate your claims of being an enterprise with very good technical know how and the market leadership position claimed thereof.30
The above is all the more reason to expect a more pro customer approach while handling the complaints and issues.
We hope that you do understand that we shall be running our Steel plant for many years to come and you also will be hopefully in market for long.
We wish to have you as our continued supplier. We request you to send a mail confirmation to BMM to resolve these issues.
You could use this opportunity of customer problem solving to hold us as your customer for long. Pls take up the issue on top most priority and revert by mail Best regards M P Singh [20/11/20, 10:21:53 PM} M P Singh Dear Mr Kevin As briefed you earlier we want to establish you as our sole supplier for Scrap material as our yearly requirement is 50000-60000 Tons but its subject to your quality product, commitment and of course customer oriented service. Pls try to understand our pain as we are a long term customer.
[20/11/20, 10:23:59 PM] Sadanand-UAE: Hi Mr.Michel seems it is not in ur control."
"From: Govvindraja Kpur [email protected] Subject: SGS Certificate & Payment stopping Date:24 November 2020 at 9:33 AM To : [email protected], Mahendra Pratap Singh [email protected], Manoj K Agrawal [email protected], Parandhaman [email protected], Anil Kumar S [email protected], D srinivasa [email protected], [email protected], [email protected], [email protected] Cc: Sadanand Kochunni [email protected] Dear Sirs 31 Since the mail sent by Sadanand bounced, am forwarding it to you, Further to our call with Kevin on Friday night & their reluctance to send a mail, we started doing documents verifications from our end.
We also checked from our sources about the information given by the supplier & below are the updates:
1. Our person in UK tried calling on the numbers.
They are available on Whatsapp but not on the regular line. Either they don't connect or the message goes to voice mail.
2. Today our person will visit their office.
3. Most important factor is, we contacted SGS with the certificate Fintiv sent it to you. We have the official mail fro them that the certificate is fake. I am attaching the mail herewith.
4. We had a call with our LC expert, Mr.Mandan and Mr.Yaseen in the morning. Further to the call, the documents received from Mr.Yaseen has been sent to Mr.Madan. Upon the preliminary verification his message is "My suggesting is to give a letter IMMDIATELY to SBI (referring to the LC No. & Docs Received) stating that we verified that the SGS Report and verified it is not genuine attaching the proofs also request them not to make payment."
In view of these points, we request you to talk to your Bank and request for stop payment at the earliest.
We are on standby for the call along with our LC expert."
(Emphasis added) 32 The electronic mail correspondences between the parties would indicate the role of the petitioner being limited to that of a facilitator being in the loop of electronic-mail. The result of e-
mail correspondences between the parties was registration of an International Sales Contract on 16.09.2020. The salient features of the sales contract is germane to be noticed in the case at hand, particularly at this juncture. Clause 16 of the said contract deals with arbitration clause. Clause 16 reads as follows:
"16. ARBITRATION CLAUSE a. All disputes, if any, arising from the execution of or in connection with this Contract shall be settled amicably through friendly negotiation and in good faith by both parties. In case no settlement can be reached through negotiation, either Party may invoke arbitration proceedings within 30 days of the failure to settle the differences amicably. The arbitration shall be conducted under the rules of conciliation and arbitration of International Chamber of Commerce by a sole Arbitrator in accordance with its provisional rules of procedures promulgated by the aforesaid Arbitration Commission. The arbitrator shall neither be a citizen of India nor of UK shall. The decision made by the Arbitration Organization be taken as final and binding upon both parties.
b. The arbitration expenses shall be borne by the losing party. The award of the arbitrator shall be final and binding upon the Parties and the Parties agree to 33 be bound by the same. The successful Party may seek to enforce the award in an appropriate jurisdiction."
The other relevant clause is clause 18 which deals with other terms. It reads as follows:
"18. OTHER TERMS a. Any amendments to this contract are valid only if they are in writing and signed by the both parties.
b. All prior communications and negotiations, written or verbal, between the parties concerning the given contract are to be considered null and void from the moment the contract comes into force.
c. Neither of the Parties is entitled to transfer to the third party their rights and obligations under the present contract without a written consent of the other party.
d. The title & risk of the goods would be transferred to Buyer after the goods to get to Chennai port as per the CIF terms (with Incoterms 2010).
e. The Contract is valid till fulfillment of obligations by both parties. Time is the essence of this contract. Termination of the contract shall not cause termination of the parties' obligations on settlements and imposing penalties in accordance with the present contract.
f. The Present Contract comes into force from the date of it is signed and issue of he at Sight LC."
In terms of arbitration clause available as a dispute resolution mechanism between Nikat Capital and the complainant-
34company, it appears that the arbitration exercise has been initiated. Apprehending transfer of money held in the account of State Bank of India, the complainant-company files a petition invoking Section 9 of the Arbitration and Conciliation Act, 1996 before this Court. It is imperative to notice the averments made in the arbitration petition that was filed before this Court. The relevant paragraphs that are germane for the purpose of present lis are extracted hereunder for the purpose of quick reference:
"1. The petitioner is involved in the manufacture of Iron Ore pellets, sponge iron billets, rolled bars and other such iron and steel products. The Petitioner is in need of scrap metal for the purposes of manufacturing the products as listed above. The Respondent No.1 is in the business of selling scrap metal. The Petitioner and Respondent No.1 hence entered into an International Sales Contract dated 16.09.2020 ("the Contract") for the purchase of 600 MTs of scrap metal, to be supplied by the Respondent No.1 in two shipments of 3000 MTs each. The Petitioner also placed a purchase order bearing PO No.PO-IMP-TY21-00032 on the same day, 16.09.2020. A copy of the International Sales Contract dated 16.09.2020 and purchase order bearing PO No. PO-IMP-TY21-00032 dated 16.09.2020 are produced as per Annexures - A & B respectively.
2. The Contract contains the following clauses with respect to Arbitration and governing law:35
"16. Arbitration Clause a. All disputes, if any, arising from the execution of or in connection with this Contract shall be settled amicable through friendly negotiation and in good faith by both parties. In case no settlement can be reached through negotiation, either party may invoke arbitration proceedings within 30 days of the failure to settle the differences amicable. The arbitration shall be conducted under the rules of conciliation and arbitration of International Chamber of Commerce by a sole Arbitrator in accordance with its provisional rules of procedures promulgated by the aforesaid Arbitration Commission. The Arbitrator shall neither be a citizen of India or of UK shall. The decision made by the Arbitration Organization be taken as final and binding upon both parties.
b. The arbitration expenses shall be borne by the losing party. The award of the arbitrator shall be final and binding upon the parties and the parties agree to be bound by the same. The successful party may seek to enforce the award in an appropriate jurisdiction.
17. Language and Governing Law.
a. The Contract is governed by the Laws in India.
b. The interpretation and Construction of this Contract and all the amendments hereof and waivers and consents hereunder should be in accordance with Laws in India.
c. All notices, communications, statements and amendments as well as other technical and commercial documentation to be presented 36 under the Contract shall be made in English language."
3. xxxx
4. xxxx
5. The Respondent No.2 is an integral part of the transaction between the Petitioner and the Respondent No.1. The Letter of Credit being ancillary to the Contract will form a part of the same transaction. The Contract being the principal agreement, the Respondent No.2 will be bound by the Arbitration clause contained therein. Furthermore, the Respondent No.2 has issued the Letter of Credit at the instructions of the Petitioner and is the agent of the Petitioner.
6. xxx
7. The Respondent No.1 claimed to have submitted the required original documents to the Negotiating Bank. The said documents were presented by the negotiating bank to the Respondent No.2 on 17.11.2020 and the very same day, the Respondent No.2 issued an advise of import bills received letter with respect to the Letter of Credit, enclosing the documents presented by the Negotiating Bank. However, on the verification of the documents, the Petitioner found various discrepancies in the said documents. Copy of the advice of import bills is produced as per Annexure-D.
8. xxx
9. On becoming suspicious of the conduct of the Respondent No.1, the Petitioner further verified the genuineness of the Bill of Lading from the carrier, M/s Yang Ming Marine 37 Transport Corpn. ("the Carrier") who was engaged to ship the scrap metal to the Petitioner's required destination at Chennai through the vessel 'YM Wisdom'. The Carrier confirmed vide email dated 24.11.2020 that the said Bill of Lading was not a part of the present voyage and the container numbers do not match with their records. The Carrier further stated that the Bill of Lading pertains to shipments that were not consigned to Chennai Sea Port. A copy of the email communication dated 24.11.2020 from the Carrier is produced as per Annexure - H.
10. The petitioner tracked the containers as listed in the Bill of Lading, on the website of the Carrier and found that the Port of Loading and Port of Discharge with respect to the said containers was not at all UK or Chennai Sea Port respectively. In fact, the tracking details revealed that he port of discharge of the shipment that the Respondent No.1 claimed to have sent were in China and Vietname and not Chennai Sea Port as per the Contract. That is to say, the Respondent No.1 never intended to ship the scrap metal to India as per the contract and the consignment is thus never reaching India to the Petitioner. Some of the tracking screen shots are produced as Annexure - J.
11. xxxx
12. As per the terms of the Contract, the Respondent No.1 was required to obtain a Pre-shipment inspection test certificate (PSIC) for quantity and quality obtained from inspection agency approved by DGFT, Government of India. The Respondent No.1, claiming to have obtained the PSIC, had submitted the same issued by SGS United Kingdom Limited 38 before the Negotiating Bank. Due to the discrepancies in the documents, the Petitioner also verified the Pre-shipment Inspection Certificate with SGS United Kingdom Limited and found that the Certificate was not original and was in fact forged. A Copy of the mail dated 24.11.2020 from SGS is produced as per Annexure - M and the Information Request Form, evidencing that the PSIC was fraudulently created by the Respondent No.1 is produced as per Annexure N.
13. xxx
14. As per the Contract and as per the terms of Letter of Credit, the details of the shipment (viz., quantity, quality, container details, shipment details, vessel name, itinerary etc) was to be provided to the Petitioner on the agreed email ID being '[email protected]'. It is submitted that the Petitioner has not received any such communication from the Respondent No.1 and it is seen that the Respondent No.1 claims to have issued such an email to the Petitioner and it is submitted that the Respondent No.1 has fabricated the purported email issued by it to the email id [email protected].
15. xxx
16. xxx
17. xxxx
18. The fact that the Respondent No.1 never intended to ship the consignment to India to the Petitioner makes it amply clear that the Respondent No.1 intended to defraud the Petitioner since the beginning of the Contract and the Respondent No.1 was acting in 39 furtherance of such an intention all along. The shipment tracking details evidence that the shipment were never sent to Chennai Sea Port a per the Contract. The Respondent No.1 never intended to export the scrap metal to the Petitioner and the Respondent No.1 played fraud on the Petitioner and induced the Petitioner into entering into Contract with it and fraudulently induced the Petitioner into opening the Letter of Credit in favour of the Respondent No.1 through Respondent No.2.
19. xxx
20. xxx
21. xxx
22. xxx
23. The Contract and the Letter of Credit were induced on the basis of active misrepresentations made by the Respondent No.1 that it intended to supply scrap metal, whereas the intention of the Respondent No.1 from the very beginning was to not to do so and was to defraud the Petitioner. The Respondent No.1 was aware of its fraudulent intentions of not supplying the scrap metal from the beginning of the transaction. Therefore, it is submitted that the Contract and the Letter of Credit are an object of fraud and would be void ab-initio. However, the Arbitration Clause under the Contract would still survive in light of the decision of the hon'ble Supreme Court in Avital Post Studioz Limited V.HSBC P1 Holdings (Mauritius) Limited [2020 SCC Online SC 656]. Hence this Hon'ble Court has the jurisdiction to pass an order under Section 9 of the 40 Arbitration and Conciliation Act, 1996. Hence this Petition.
24. xxx
25. The dispute between the Petitioner and the Respondents is within the scope of the Arbitration clause as extracted in the paragraphs above. The petitioner intends to initiate arbitration under the Contract. An arbitral tribunal has not yet been constituted and grave prejudice would be caused to the Petitioner if it were to wait for the arbitral tribunal to be constituted, given that the Respondent No.2 has already indicated its intention to remit the Invoice Amount to the Respondent No.1."
"PRAYER Wherefore it is most humbly prayed that pending adjudication of the present dispute in arbitration, this Hon'ble Court be pleased to pass an order:
A. Restraining the Respondent No.2 from remitting the sum of USD 7,70,770 or any other sum to the Respondent No.1 under the Letter of Credit dated 01.10.2020 bearing No.1134720IM0000005 vide Annexure - C;
B. Restraining the Respondent No.1 from receiving the sum of USD 7,70,770 or any other sum from the Respondent No.2 under the Letter of Credit dated 01.10.2020 bearing No.1134720IM0000005 vide, Annexure - C;
C. Grant costs of these proceedings;41
D. Pass any other such order as may be deemed fit and proper."
(Emphasis added) The entire proceedings, as afore-extracted if noticed, it becomes unmistakably clear that the contract was between the complainant-company and Nikat Capital and the petitioner was nowhere in the picture and rightly so, the pleading did not contain even the name of the petitioner. This Court granted an interim order on 27-11-2020 reading:
"OPERATIVE PORTION OF THE ORDER ON I.A. NO.3/2020 In that view of the matter and in the light of provisions of Sections 2(1)(e)(ii) and 2(1)(f) read with Sections 9(1)(b), 9(1)(c) and 9(1)(e) of the Arbitration and Conciliation Act, 1996, we are of the considered opinion that the petitioner has made out a case for allowing the application in I.A. No.3/2020 and grant of interim relief in terms of Sections 9(1)(b), 9(1)(c) and 9(1)(e) of the Arbitration and Conciliation Act, 1996.
Accordingly, there shall be an ad-interim order as follows:
"An Ad-Interim exparte injunction order thereby attaching the Bank Account of the respondent No.1 to the extent of USD 7,70,967.74, details of which are given below, and consequently restrained the respondent No.1 herein, from receiving the sum of USD 7,70,967.74 or any other sum under the Letter of Credit dated 01.10.2020 bearing No.1134720IM0000005 (@Annexure-C) from its Bank account during the pendency of the petition.42
The details of the Bank Account of the respondent No.1 are as follows:
Bank Name: Barclays Bank Account Name: Nikat Capital Ltd., Bank Address: Whetstone, Leicesershire, LE87 2BB, United Kingdom IBAN No.: GB47 BUKB 2095 6113 8792 24 Account No.13879224 Sort Code: 20-95-61 SWIFT/BIC Code: BARCGB22XXX The second respondent be advised forthwith to initiate steps to recover the sums released under the letter of credit in favour of the first respondent."
It appears that by the time the interim order was granted the amount that the complainant-company had sought restraint had already been transferred. At that juncture, the complainant-
company registers a complaint before the jurisdictional police. In the teeth of the aforesaid averments in the arbitration petition, the contents of the complaint are now germane to be noticed and are accordingly extracted hereunder for the purpose of quick reference:
"To The Police Sub-inspector Police Station Mariyammana Halli. 7th Jan 2021 43 Respected Sir, I Mr.Mahendra Pratap Singh S/o, Age:59 Years, Occ: Addl. Deputy General Manager, M/s. BMM Ispat Ltd., having its registered office 114, Danapur Village, Mariyammanahalli Hobli, Hosapete - 583 222 am the authorized signatory of the Complainant Company M/s. BMM Ispat Limited ("Company/BMM"). I have been duly authorized by the Company to represent it and sign on its behalf.
1. The Complainant is filing this Complaint against one Mr. Govindaraja, S/o Lakshminarayan Achar Hallurr, who claims to be the General Manager of Global Vision Advisors FZ LLE, which is an investment banking advisory entity. The address of the Acused Mr.Govindaraja is No.-A-503, Rohan Jharoka Apartments, Behind HAL Airport, Yemalur, Bangaluru
- 560 037.
2. The Complainant was looking to purchase 6000 MT of Heavy Melting Scrap (HMS) and since the desired quantity of HMS are sold by overseas suppliers, the Accused had approached the Complainant to provide his services to obtain the supply of the HMS by identifying the prospective supplier. The Accused, who claims to an investment banker, had assured the Complainant that he and his Company Global Vision Advisors FZ LLE would ensure supply of this requirement by identifying prospective suppliers and assisting the Complainant in entering into contracts with such suppliers.
3. Accordingly, the Accused introduced the Complainant to one Nikat Capital Limited, a company based in the United Kingdom, having office at Kemp House, 152, City Road, London ("Nikat") represented by its Director Saimak Vatanabadi through which Accused intended to complete the transaction. Nikat appears to be a private Limited Company incorporated in the 44 United Kingdom that is involved in "Non-specialized Wholesale Trade and Investment" according to public records accessible from government portals in the United Kingdom.
4. The Accused personally assured the Complainant that he knew this Nikat personally and that he would ensure supply of the requisite amount of HMS to the Complainant by shipping the same from London through Nikat. The Accused had promised the Complainant that he would personally oversee the entire transaction and that he would ensure that the HMS supply would reach BMM.
5. The Accused thus induced BMM into entering into an International Sales Contract dated 16/09/2020 ("Contract") with Nikat wherein it was stipulated that 6000 MTs of HMS would be shipped by Nikat to BMM at Chennai Sea Port. The Accused further induced the Complainant into believing that Nikat was a well reputed supplier from London and further induced the Complainant into believing that Nikat would first ship 3000 MT of HMS to Chennai Sea Port and thereafter the remaining 300 MT (sic) of HMS would be shipped. The Accused had arranged for this supply between Nikat and the Complainant and the communications exchanged between BMM and Nikat were all through the Accused.
6. Accordingly, the Accuse induced the Complainant into opening a Letter of Credit ("LC") with State Bank of India, College Road Branch, Hosapete. The Accused informed the Complainant that the negotiating Bank was Barclays Bank PLC, Birmingham, UK ("Barclays") which is Nikat's Bank in London. Induced by the representations of the Accused, the Complainant opened the LC for a sum of USD 735000.45
7. It is pertinent to mention here that the Accused was the point of contact between Complainant and Nikat and in fact, the chain of emails exchanged between Complainant and Accused would demonstrate that the Accused played an important role in inducing the Complainant into the executing the International Sales Contract. Moreover, it was the Accused who was instrumental in inducing the Complainant into opening an LC in favour of Nikat.
8. The Accused, set up the entire transaction as can be seen through the email exchanges between the Complainant and Accused. The Accused No.1 was in fact prompted several times by the Complainant to show whether he could guarantee the delivery of the HMS. The Accused had promised the Complainant that he will through Nikat ship 3000 MT of HMS to Chennai Sea Port.
9. However, to its shock and surprise, the Complainant learnt that after the LC amount was debited from Complainant's account and after the amount was transferred from SBI, Hosapete to Barclays, the 3000 MTs which were claimed to have been sent by Nikat is totally and completely fraudulent since the consignment never reached Chennai Sea Port.
10. When the consignments were tracked it was revealed that the Accused and Nikat had conspired with each other and had sent the shipment to China, Vietnam and other destinations and not to Chennai Sea Port, as was promised by the Accused and Nikat. Moreover, Accused and Nikat had fabricated and forged documents in order to invoke the LC.
11. Nikat, in conspiracy with the Accused, invoked the LC and received the LC amount of USD 770,967.74. Despite not even having shipped the HMS to Chennai Sea Port, the Accused the Nikat have illegally received amounts from the Complainant, causing wrongful loss 46 to Complainant by inducing the Complainant to part with payments for the goods which were never intended to reach to the Complainant. The Complainant's account has been debited of the said amount of USD 770.967.74 and the Complainant has not received any shipment of HMS from Nikat, as was promised by the Accused.
12. The Complainant has put Nikat on notice of all the fraudulent actions that were committed by it and has initiated appropriate action available in law for the recovery of the said amount. This Complaint is against the Accused who acted as the intermediary in the present transaction. The Accused was primarily responsible for the facilitation of the transaction so that it would see its logical end. To this end, all communications made by the Complainant were made to the Accused and he was the sole point of contact between Complainant and Nikat and was in charge of supplying the material through Nikat as can be seen from the email chains and coordinating communication.
13. On the basis of the trust and confidence that was placed on the Accused and believing the representations of the Accused to be true, the Complainant had entered in the International Sales Contract for the delivery of HMS and parted with payments through LC, as a result of which such substantial losses were caused to the Complainant up to the extent of USD 770,967.74 (INR 5,70,59,332/-) by the Accused.
14. Pertinently, just before the delivery, the Complainant raised several queries in relation to the false weights in the shipment and incorrect details in the Bill of Lading. However, the Accused continued to assure the Complainant that these were typographical errors and that the shipment would be arriving in full and 47 that the entire 3000 MT were present. The Accused with an intention to defraud continued to make false assurances despite the Complainant asking for clarifications on important but simple details regarding the shipment.
15. The Accused has conspired with the personnel of Nikat to play fraud on the Complainant as they had no intention of honoring the terms of the Contract and only sought to illegally enrich themselves. If not for the representations and assurances of the Accused, the Complainant would not have entered into this International Sales Contract with Nikat.
16. It has now become clear that the entire Contract was a sham from the start the Accused and Nikat have conspired knowing fully well that Nikat would not be able to hold on to its end of the bargain and has strung the Complainant along solely with an intention to cause undue losses to the Complainant and to gain illegal profits at the cost of the Complainant.
17. It was on the basis of the representations and assurances of the Accused and the trust that the Complainant had reposed on the Accused, the Complainant was induced into entering into the Contract and was induced into opening an LC in favour of Nikat. In conspiring with Nikat to cause losses to the Complainant and to induced the Complainant into entering into the Contract, knowing fully well that Nikat would not supply HMS and in causing Nikat to invoke the LC without even sending the shipment to Chennai Sea Port, the Accused has breached the trust that the Complainant had reposed on him and has cheated and defrauded the Complainant and has caused undue losses to the Complainant.48
Under the circumstances, the Accused committed the aforesaid offences and are liable for punishment for the offences.
18. Therefore, it is requested that your good office may kindly receive the instant Complaint and register a First Information Report and investigate into the matter and bring the Accused and all others persons involved in the matter to justice."
(Emphasis added) It is for the first time in the complaint registered seeking to set the criminal law in motion the name of the petitioner is brought out. Till registration of the complaint on 07-01-2021, the petitioner was nowhere in the picture in any of the proceedings.
The contents of the complaint (supra) would clearly indicate, with particular reference to paragraph 12, the role of the petitioner is that of an intermediary and the complainant wants to take the complaint or the transaction to its logical end. These two are the primary reasons for registering a complaint against the petitioner. The offences alleged for registration of an FIR in terms of the said complaint is as afore-extracted. Cheating and Forgery are the primary sections that are invoked in the case against the petitioner. Therefore, can an intermediary be dragged into the criminal proceedings, notwithstanding the fact that he 49 had no role to play in the transaction or contract entered into between two parties whom he had introduced, the answer is an unequivocal and an emphatic "no" for the reasons recorded hereafter.
11. It cannot be alleged by the complainant-company, that it is the petitioner who had induced the complainant for entering into a contract with the company at United Kingdom. It was a conscious call, with eyes wide open, taken by the complainant-
company for entering into an international sales contract. For the contract having gone wrong between the complainant-
company and Nikat Capital, the petitioner cannot be held responsible.
12. It would have been altogether different circumstance if the allegation was that of conspiracy. If the petitioner had conspired with Nikat Capital against the alleged victim and had induced the alleged victim to enter into a contract, perhaps the allegation would at least be prima facie sustainable. As a matter of fact, the petitioner in one of the mails has clearly indicated to 50 the complainant-company that Nikat Capital is not receiving his calls and, therefore, requested to not release any amount that is due to it. Despite this warning, the amount is released. If the petitioner was the face of everything, there could not have been a mail correspondence of warning in favour of the complainant-
company. Dragging an intermediary or a facilitator into these proceedings is unavailable to the complainant-company.
13. It is now germane in the journey of the order to notice authorities relied on by the respective learned counsel. In my considered view, the armory in the arsenal of the learned senior counsel for the petitioner would sound acceptance for the reason that the facts and the law that is laid down by the Apex Court or this Court are identical to the present transaction. The Apex Court in the case of ALL CARGO MOVERS (INDIA) PVT. LTD1 (supra) has held as follows:
"16. [Ed. : Para 16 corrected vide Official Corrigendum No. F.3/Ed.B.J./86/2008 dated 18-10- 2008.] * We are of the opinion that the allegations made in the complaint petition, even if given face 1 (2007) 14 SCC 776 51 value and taken to be correct in its entirety, do not disclose an offence. For the said purpose, this Court may not only take into consideration the admitted facts but it is also permissible to look into the pleadings of Respondent 1-plaintiff in the suit. No allegation whatsoever was made against the appellants herein in the notice. What was contended was negligence and/or breach of contract on the part of the carriers and their agent. Breach of contract simpliciter does not constitute an offence. For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie correct, take into consideration the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the court. Superior courts while exercising this power should also strive to serve the ends of justice."
(Emphasis supplied) The Apex Court in its latest judgment in the case of MEDMEME LLC V. IHORSE BPO SOLUTIONS2 (supra) has held as follows:
"9. Coming to the case at hand, a perusal of the judgment of the High Court would show that the High Court formulated the following three questions for determination: (MedMeme case [MedMeme LLC v. iHorse 2 (2018) 13 SCC 374 52 BPO Solutions (P) Ltd., 2014 SCC OnLine Mad 12832 :
(2015) 2 MWN (Cri) 97] , SCC OnLine Mad para 16) "(i) Whether the complaint is liable to be quashed on the ground that the allegations made in the complaint do not constitute any offence under Section 420 IPC?
(ii) Whether the criminal law can be set in motion in this case, since the agreement comprises a provision for arbitration?
(iii) Whether the Magistrate has conducted the enquiry under Section 202 CrPC, since the petitioners are residing outside the jurisdiction of the Court?"
10. The High Court was of the view that the allegations contained in the complaint filed by the respondent, particularly in para 7 thereto, satisfy the ingredients of the offences for which the appellants are implicated. But the High Court further observed that merely because arbitration proceedings were pending between the parties, it would not preclude the respondent from launching criminal prosecution when prima facie criminal case was also made out against the appellants. In the three questions formulated, the High Court took the view that the Magistrate had conducted a proper inquiry under Section 202 of the Code of Criminal Procedure before proceeding against the appellants.
11. The moot question before us revolves around Question 1 which was formulated by the High Court and it is to be seen as to whether dispute between the parties is essentially of a civil nature or any case is made out against the appellants for launching criminal prosecution under the aforesaid sections.
5312. After going through the allegations contained in the complaint and the material on record, we are of firm conclusion that the matter entirely pertains to civil jurisdiction and not even a prima facie case is made out for the offences under Sections 420, 406 and 409 read with Section 120-B IPC even if the allegations contained in the complaint are to be taken on their face value. The complaint gives a clear impression that it was primarily a case where the respondent had alleged breach of contract on the part of the appellants in not making the entire payments for the services rendered to the appellants. On the other hand, it is not in dispute that substantial amounts have been paid by the appellants to the respondent company for the services rendered.
13. Reason for non-payment of the balance amount as given by the appellants is that the services rendered by the respondent company were not in terms of the agreement entered into between the parties and were deficient in nature. For this reason, even the appellants have filed claims against the respondent company alleging that the appellant suffered losses because of the defective services provided by the respondent.
14. On the basis of it, we find that it cannot be said that at the time of entering into the agreement, either the first agreement or even the second agreement, there was any intention on the part of the appellants to cheat the respondent. No suspicion of any nature was shown or even alleged. It is also not the allegation of the respondent in the complaint that the agreement was entered into with fraudulent or dishonest intention on the part of the appellants in inducing the respondent to enter into such a contract. At best, the dispute between the parties is of a civil 54 nature, proceedings in respect of which are pending before the learned arbitrator.
15. We, thus, allow this appeal, set aside the judgment [MedMeme LLC v. iHorse BPO Solutions (P) Ltd., 2014 SCC OnLine Mad 12832 : (2015) 2 MWN (Cri) 97] of the High Court and thereby allow the petition filed by the appellants in the High Court under Section 482 of Code of Criminal Procedure. The result whereof would be quashing of the proceedings arising out of Complaint No. 142 of 2012 pending in the Court of Judicial Magistrate-II, Puducherry."
(Emphasis supplied)
14. The judgments relied on by the learned senior counsel Sri Uday Holla in the case of KAMAL SHIVAJI POKARNEKAR or YOGESH AGARWAL or SABRE TRAVEL TECHNOLOGIES PRIVATE LIMITED (supra) were rendered in the facts of those cases. The Apex Court in the case of KAMAL SHIVAJI POKARNEKAR3 has held as follows:
"5. Quashing the criminal proceedings is called for only in a case where the complaint does not disclose any offence, or is frivolous, vexatious, or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same. It is not necessary that a meticulous analysis of the case should be done before the trial to find out whether the case would end in conviction or acquittal. If it appears on a reading of the complaint and consideration of the allegations therein, in the light of the statement made 3 (2019)14 SCC 350 55 on oath that the ingredients of the offence are disclosed, there would be no justification for the High Court to interfere [State of Karnataka v. M. Devendrappa, (2002) 3 SCC 89 : 2002 SCC (Cri) 539] .
... ... ...
9. Having heard the learned Senior Counsel and examined the material on record, we are of the considered view that the High Court ought not to have set aside the order passed by the trial court issuing summons to the respondents. A perusal of the complaint discloses prima facie, offences that are alleged against the respondents. The correctness or otherwise of the said allegations has to be decided only in the trial. At the initial stage of issuance of process it is not open to the courts to stifle the proceedings by entering into the merits of the contentions made on behalf of the accused.
Criminal complaints cannot be quashed only on the ground that the allegations made therein appear to be of a civil nature. If the ingredients of the offence alleged against the accused are prima facie made out in the complaint, the criminal proceeding shall not be interdicted."
(Emphasis supplied) This Court in the case of YOGESH AGARWAL4 has held as follows:
"19. It is the submission of the learned Senior Counsel for respondent No. 2 - complainant that when the material produced is of both civil remedy as well as the remedy under criminal law, then under such circumstances, on the basis of the allegation of criminality the criminal proceedings can also be initiated. It is his further submission that while exercising the power under Section 482, the Court has to be satisfied 4 (2020) SCC OnLine KAR 1857 56 prima facie about the existence of sufficient ground for proceeding against accused and detailed enquiry is not necessary. In this regard, he relied upon the decision in the case of Chilkamarthi Venkateshwarlu v. State of Andhra Pradesh (cited supra), wherein at paragraphs-14 to 16 it has been observed as under:--
"14. For interference under Section 482, three conditions are to be fulfilled. The injustice which comes to light should be of a grave, and not of a trivial character; it should be palpable and clear and not doubtful and there should exist no other provision of law by which the party aggrieved could have sought relief
15. In exercising jurisdiction under Section 482 it is not permissible for the Court to act as if it were a trial Court. The Court is only to be prima facie satisfied about existence of sufficient ground for proceeding against the accused. For that limited purpose, the Court can evaluate materials and documents on record, but it cannot appreciate the evidence to conclude whether the materials produced are sufficient or not for convicting the accused.
16. The High Court should not, in exercise of jurisdiction under Section 482, embark upon an enquiry into whether the evidence is reliable or not, or whether on a reasonable appreciation of the evidence the allegations are not sustainable, for this is the function of the trial Judge. This proposition finds support from the judgment of this Court in Zandu Pharmaceutical Works Ltd. v. Mohd. Sharful Haque1."
20. It is his further submission that after perusal of the prima facie material if the offence is going to be constituted, the correctness or otherwise has to be decided only during the course of trial and not at this premature stage. In that light, he relied upon the decision in the case of Kamal Shivaji 57 Pokarnekar v. State of Maharashtra, (cited supra), wherein at paragraph-9 it has been observed as under:--
"9. Having heard the learned Senior Counsel and examined the material on record, we are of the considered view that the High Court ought not to have set aside the order passed by the trial court issuing summons to the respondents. A perusal of the complaint discloses prima facie, offences that are alleged against the respondents. The correctness or otherwise of the said allegations has to be decided only in the trial. At the initial stage of issuance of process it is not open to the courts to stifle the proceedings by entering into the merits of the contentions made on behalf of the accused. Criminal complaints cannot be quashed only on the ground that the allegations made therein appear to be of a civil nature. If the ingredients of the offence alleged against the accused are prima facie made out in the complaint, the criminal proceeding shall not be interdicted.
21. It is the submission of the learned HCGP that if there is concurrent civil and criminal liability, it is not a bar to the criminal proceedings and the Court can proceed with the said aspect. In that light, he relied upon the decision in the case of Arun Bhandari v. State of U.P. (cited supra), wherein at paragraphs-25 to 35 it has been observed as under:--
"25. Coming to the facts of the present case, it is luminescent from the FIR that the allegations against Respondent 2 do not only pertain to her presence but also about her total silence and connivance with her husband and transfer of property using power of attorney in favour of Monika Goel. It is also graphically clear that the complainant had made allegations that Raghuvendra Singh and his wife Savita Singh, had met him at the site, showed the registered agreement and the cash and cheque were given to them at that time. It is also 58 mentioned in the FIR that on 28-7-2008, Savita Singh had received the possession of the said plot and on the same day it was transferred in the name of Monika Goel. It is also reflectible that on 28-2- 2007 Raghuvendra Singh and Savita Singh had got prepared and registered two documents in the office of the Sub-Registrar consisting one agreement to sell in favour of Raghuvendra Singh and another general power of attorney in favour of the wife. The allegation of collusion by the husband and wife has clearly been stated. During the investigation, as has been stated earlier, many a fact emerged but the same were ignored and a final report was submitted. In the protest petition the complainant had asseverated everything in detail about what emerged during the course of investigation. The learned Chief Judicial Magistrate after perusal of the case diary and the FIR has expressed the view that a case under Sections 406 and 420 IPC had been made out against both the accused persons. The learned Sessions Judge, after referring to the ingredients and the role ascribed, concurred with the same. The High Court declined to accept the said analysis on the ground that it was mere presence and further there was no privity of contract between the complainant and Respondent 2.
26. At this stage, we may usefully note that sometimes a case may apparently look to be of civil nature or may involve a commercial transaction but such civil disputes or commercial disputes in certain circumstances may also contain ingredients of criminal offences and such disputes have to be entertained notwithstanding they are also civil disputes. In this context, we may reproduce a passage from Mohd. Ibrahim v. State of Bihar [(2009) 8 SCC 751 : (2009) 3 SCC (Cri) 929] : (SCC p. 754, para 8) 59 "8. This Court has time and again drawn attention to the growing tendency of the complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurise parties to settle civil disputes. But at the same time, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes. (See G. Sagar Suri v. State of U.P. [(2000) 2 SCC 636 : 2000 SCC (Cri) 513] and Indian Oil Corpn. v. NEPC India Ltd. [(2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188])"
27. In this context we may also usefully refer to a paragraph from All Cargo Movers (India) (P) Ltd. v. Dhanesh Badarmal Jain [(2007) 14 SCC 776 :
(2009) 1 SCC (Cri) 947 : AIR 2008 SC 247] : (SCC pp.
781-82, para 16) "16, ... Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie correct, take into consideration the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings 60 should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the court. Superior courts while exercising this power should also strive to serve the ends of justice."
28. In Rajesh Bajaj v. State (NCT of Delhi) [(1999) 3 SCC 259 : 1999 SCC (Cri) 401 : AIR 1999 SC 1216], while dealing with a case where the High Court had quashed an FIR, this Court opined that the facts narrated in the complaint petition may reveal a commercial transaction or a money transaction, but that is hardly a reason for holding that the offence of cheating would elude from such a transaction. Proceeding further, the Bench observed thus : (SCC p. 263, para 11) "11. The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive in discerning whether there was commission of offence or not. The complainant has stated in the body of the complaint that he was induced to believe that the respondent would honour payment on receipt of invoices, and that the complainant realised later that the intentions of the respondent were not clear. He also mentioned that the respondent after receiving the goods had sold them to others and still he did not pay the money. Such averments would prima facie make out a case for investigation by the authorities."
29. We have referred to the aforesaid decisions in the field to highlight about the role of the court while dealing with such issues. In our considered opinion the present case falls in the category which cannot be stated at this stage to be purely civil in nature on the basis of the admitted 61 documents or the allegations made in the FIR or what has come out in the investigation or for that matter what has been stated in the protest petition. We are disposed to think that prima facie there is an allegation that there was a guilty intention to induce the complainant to part with money. We may hasten to clarify that it is not a case where a promise initially made could not be lived up to subsequently. It is not a case where it could be said that even if the allegations in entirety are accepted, no case is made out. Needless to emphasise, the High Court, while exercising power under Article 226 of the Constitution or Section 482 CrPC, has to adopt a very cautious approach,
30. In CBI v. Ravi Shankar Srivastava [(2006) 7 SCC 188 : (2006) 3 SCC (Cri) 233] the Court, after referring to Janata Dal v. H.S. Chowdhary [(1992) 4 SCC 305 : 1993 SCC (Cri) 36] and Raghubir Saran v. State of Bihar [AIR 1964 SC 1 : (1964) 1 Cri LJ 1], has observed that the powers possessed by the High Court under Section 482 CrPC are very wide and the very plenitude of the power requires great caution in its exercise. The Court must be careful to see that its decision in exercise of this power is based on sound principles and such inherent powers should not be exercised to stifle a legitimate prosecution. This Court has further stated that it is not proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It has been further pronounced that it would be erroneous to assess the material before it and conclude that the complaint could not be proceeded with. The Bench has opined that the meticulous analysis of the case is not necessary and the complaint has to be read as a whole and if it appears that on consideration of the allegations in the light of the statement made on oath 62 of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court.
31. In R. Kalyani v. Janak C. Mehta [(2009) 1 SCC 516 : (2009) 1 SCC (Cri) 567], after referring to the decisions in Hamida v. Rashid [(2008) 1 SCC 474 (2008) 1 SCC (Cri) 234] and State of Orissa v. Saroj Kumar Sahoo [(2005) 13 SCC 540 : (2006) 2 SCC (Cri) 272], this Court eventually culled out the following propositions: (R. Kalyani case [(2009) 1 SCC 516 : (2009) 1 SCC (Cri) 567], p. 523, para 15) "15. Propositions of law which emerge from the said decisions are:
(1) The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizable offence.
(2) For the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence.
(3) Such a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the Court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus.
(4) If the allegation discloses a civil dispute, the same by itself mey not be a ground to hold 63 that the criminal proceedings should not be allowed to continue."
It is worth noting that it was observed therein that one of the paramount duties of the superior court is to see that a person who is absolutely innocent is not subjected to prosecution and humiliation on the basis of a false and wholly untenable complaint.
32. Recently in Gian Singh v. State of Punjab [(2012) 10 SCC 303 : (2012) 4 SCC (Civ) 1188 :
(2013) 1 SCC (Cri) 160 : (2012) 2 SCC (L&S) 988] a three-Judge Bench has observed that : (SCC pp. 339-
40, para 55) "55. In the very nature of its constitution, it is the judicial obligation of the High Court to undo a wrong in course of administration of justice or to prevent continuation of unnecessary judicial process. This is founded on the legal maxim quando lex aliquid alicui concedit, conceditur et id sine qua res ipsa esse non potest. The full import of which is whenever anything is authorised, and especially if, as a matter of duty, required to be done by law, it is found impossible to do that thing unless something else not authorised in express terms be also done, may also be done, then that something else will be supplied by necessary intendment. Ex debito justitiae is inbuilt in such exercise; the whole idea is to do real, complete and substantial justice for which it exists. The power possessed by the High Court under Section 482 of the Code is of wide amplitude but requires exercise with great caution and circumspection."
6433. Applying the aforesaid parameters we have no hesitation in coming to hold that neither the FIR nor the protest petition was mala fide, frivolous or vexatious. It is also not a case where there is no substance in the complaint. The manner in which the investigation was conducted by the officer who eventually filed the final report and the transfer of the investigation earlier to another officer who had almost completed the investigation and the entire case diary which has been adverted to in detail in the protest petition prima facie makes out a case against the husband and the wife regarding collusion and the intention to cheat from the very beginning, inducing the appellant to hand over a huge sum of money to both of them. Their conduct of not stating so many aspects, namely, the power of attorney executed by the original owner, the will and also the sale effected by the wife in the name of Monika Singh on 28-7-2008 cannot be brushed aside at this stage.
34. Therefore, we are disposed to think that the High Court, while exercising the extraordinary jurisdiction, had not proceeded on the sound principles of law for quashment of order taking cognizance. The High Court has been guided by the non-existence of privity of contract and without appreciating the factual scenario has observed that the wife was merely present. Be it noted, if the wife had nothing to do with any of the transactions with the original owner and was not aware of the things, possibly the view of the High Court could have gained acceptation, but when the wife had the power of attorney in her favour and was aware of execution of the will, had accepted the money along with her husband from the complainant, it is extremely difficult to say that an innocent person is dragged to face a vexatious litigation or humiliation. The entire conduct of Respondents 2 and 3 would show that a prima facie case is made out and 65 allegations are there on record in this regard that they had the intention to cheat from the stage of negotiation. That being the position, the decision in Hridaya Ranjan Prasad Verma [(2000) 4 SCC 168 :
2000 SCC (Cri) 786 : AIR 2000 SC 2341] which is commended to us by Mr. Sharma, learned Senior Counsel, to which we have adverted to earlier, does not really assist the respondents and we say so after making the factual analysis in detail.
35. In view of our aforesaid analysis we allow the appeal, set aside the order [Criminal Miscellaneous WP No. 69 of 2011, order dated 29-1- 2011 (All)] passed by the High Court and direct the Magistrate to proceed in accordance with law. However, we may clarify that we may not be understood to have expressed any opinion on the merits of the case one way or the other and our observations must be construed as limited to the order taking cognizance and nothing more than that. The learned Magistrate shall decide the case on its own merits without being influenced by any of our observations as the same have been made only for the purpose of holding that the order of cognizance is prima facie valid and did not warrant interference by the High Court."
22. It is trite law that in exercise of the power by the High Court under Section 482 of Cr.P.C, it cannot undertake a detailed examination of the facts contained in FIR by acting as an appellate Court and draw its conclusion. It is only when no prima facie cognizable case is made out on its mere reading, then under such circumstances, it can exercise its power, otherwise it cannot quash the proceedings. In that light, I want to rely upon the decision in the case of Chirag M. Pathak v. Dollyben Kantilal patel, reported in (2018) 1 SCC 330, wherein at paragraphs-23, 24 and 31 it has been observed as under:--
66"23. The High Court, in exercise of its powers under Section 482 of the Code, cannot undertake a detailed examination of the facts contained in the FIRs by acting as an appellate court and draw its own conclusion. It is more so when investigation in other societies is not yet complete.
24. In our considered opinion, it is only when on reading the FIR, a sheer absurdity in the allegations is noticed and when no prima facie cognizable case is made out on its mere reading due to absurdity in the allegations or when facts disclose prima facie cognizable case and also disclose remarkable identity between the two FIRs as if the first FIR is filed second time with no change in allegations then the court may, in appropriate case, consider it proper to quash the second FIR. Such is not the case here.
25. xxx xxx xxx
26. xxx xxx xxx
27. xxx xxx xxx
28. xxx xxx xxx
29. xxx xxx xxx
30. xxx xxx xxx
31. In view of the foregoing discussion, we cannot concur with the reasoning and the conclusion arrived at by the High Court in the impugned judgment [Kantilal Ambalal Patel v. State of Gujarat, 2013 SCC OnLine Guj 8799]. The appeals thus succeed and are allowed. The impugned judgment [Kantilal Ambalal Patel v. State of Gujarat, 2013 SCC OnLine Guj 8799] is set aside."
6723. It is also trite law that if there are serious triable allegations in the complaint, it is a matter to be investigated into. Under such circumstances, the Court cannot exercise its extraordinary jurisdiction for quashing the proceedings. In that light, I want to rely upon the decision in the case of Pramod Suryabhan Pawar v. State of Maharashtra, reported in (2019) 9 SCC 608, wherein at paragraphs-6 to 8 it has been observed as under:--
"6. Section 482 is an overriding section which saves the inherent powers of the court to advance the cause of justice. Under Section 482 the inherent jurisdiction of the court can be exercised (i) to give effect to an order under CrPC; (ii) to prevent the abuse of the process of the court; and (iii) to otherwise secure the ends of justice. The powers of the court under Section 482 are wide and the court is vested with a significant amount of discretion to decide whether or not to exercise them. The court should be guarded in the use of its extraordinary jurisdiction to quash an FIR or criminal proceeding as it denies the prosecution the opportunity to establish its case through investigation and evidence. These principles have been consistently followed and reiterated by this Court In Inder Mohan Goswami v. State of Uttaranchal [Inder Mohan Goswami v. State of Uttaranchal, (2007) 12 SCC 1 : (2008) 1 SCC (Cri) 259], this Court observed : (SCC p. 10, paras 23-24) "23. This Court in a number of cases has laid down the scope and ambit of courts' powers under Section 482 CrPC. Every High Court has inherent powers to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or 68 to prevent abuse of the process of the court.
Inherent power under Section 482 CrPC can be exercised:
(i) to give effect to an order under the Code;
(ii) to prevent abuse of the process of the court, and
(iii) to otherwise secure the ends of justice.
24. Inherent powers under Section 482 CrPC though wide have to be exercised sparingly, carefully and with great caution and only when exercise is justified by the tests specifically laid down in this section itself. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the statute."
7. Given the varied nature of cases that come before the High Courts, any strict test as to when the court's extraordinary powers can be exercised is likely to tie the court's hands in the face of future injustices. This Court in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] conducted a detailed study of the situations where the court may exercise its extraordinary jurisdiction and laid down a list of illustrative examples of where quashing may be appropriate. It is not necessary to discuss all the examples, but a few bear relevance to the present case. The Court in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] 69 noted that quashing may be appropriate where : (SCC pp. 378-79, para 102) "102. ... (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).
*** (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."
8. In deciding whether to exercise its jurisdiction under Section 482, the Court does not adjudicate upon the veracity of the facts alleged or enter into an appreciation of competing evidence presented. The limited question is whether on the face of the FIR, the allegations constitute a cognizable offence. As this Court noted in Dhruvaram Murlidhar Sonar v. State of Maharashtra [Dhruvaram Murlidhar Sonar v. State of Maharashtra, (2019) 18 SCC 191 : 2018 SCC OnLine SC 3100], (Dhruvaram Sonar) : (SCC para 13) 70 "13. It is clear that for quashing the proceedings, meticulous analysis of factum of taking cognizance of an offence by the Magistrate is not called for. Appreciation of evidence is also not permissible in exercise of inherent powers. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken, it is open to the High Court to quash the same in exercise of its inherent powers."
Further in the case of SABRE TRAVEL TECHNOLOGIES5 this Court has held as follows:
"27. Having heard the learned counsel for the petitioners and learned counsel appearing for respondent No. 2, this Court has to examine as to whether it is a fit case to exercise the powers under Section 482 of Cr.P.C. for quashing the FIR. Having perused the principles laid down in the judgments referred supra, no doubt, it is settled law that when the civil remedy is available and the contractual liability is violated, the party can opt the remedy of civil remedy. It is also settled law that if the criminal culpability is found in the allegations made in the complaint, there is no bar to prosecute the same and simultaneously, the same can be proceeded as held by the Apex Court. This Court has to examine whether the criminal culpability is found in the case on hand or not. Before analyzing the same this Court would like to refer to the judgment of the Apex Court in the case of Dineshbhai Chandubhai Patel v. The State of Gujarat reported in (2018) 3 SCC 104, wherein the Apex Court has summarized the 5 (2021) SCC OnLine KAR 2611 71 principles as to how to deal with regard to the context of challenge to FIR. In this judgment the Apex Court has held that in order to examine as to whether factual contents of FIR disclose any prima facie cognizable offence or not, High Court cannot act like an investigating agency and nor can exercise powers like an Appellate Court. The question is required to be examined, keeping in view, contents of FIR and prima facie material, if any, requiring no proof. At such stage, High Court cannot appreciate evidence nor can it draw its own inferences from contents of FIR and material relied on. It is more so, when the material relied on is disputed. In such a situation, it becomes the job of investigating authority, at such stage, to probe and then of the Court to examine questions once the charge-sheet is filed along with such material as to how far and to what extent reliance can be placed on such material.
Once the Court finds that FIR does disclose prima facie commission of any cognizable offence, it should stay its hand and allow the investigating machinery to step in to initiate the probe to unearth the crime in accordance with the procedure prescribed in the Cr.P.C.
... ... ...
32. This Court also in the judgment in Criminal Petition No. 3197/2020 between Yogesh Agarwal v. State of Karnataka vide order dated 24.9.2020 referred several judgments of the Apex Court and held that when both the remedies are available, one under the civil and another under the criminal law and allegations constitute an offence, then under such circumstances, it is not a case to quash the proceedings. It is trite law that on plain reading of the contents of the complaint, if no case is made out and the investigation and trial are not going to serve any purpose, then under such circumstances, the Court can quash the proceedings.
(Emphasis supplied) 72 On a coalesce of the judgments relied on by the respective learned counsel what would unmistakably emerge is that criminal proceedings cannot be interjected merely because the issue involved is civil in nature; no fetters can be placed on Section 482 of the Cr.P.C. for considering the documents that are placed before the Court which would go to the root of the matter; Section 482 of the Cr.P.C. should be used to advance the cause of preventing miscarriage of justice. There can be no qualm about the principles enunciated in all these cases.
15. The Apex Court in the case of MEDMEME (supra) was considering an identical issue and the paragraphs quoted would clearly indicate that the offences under Sections 420, 406 or 409 and even Section 120B cannot be alleged against the petitioner.
The subsequent judgment in the case of JAKKUR PROMOTERS considers MEDMEME judgment of the Apex Court and holds that if the issue is purely civil in nature and remedy of arbitration 73 being available, criminal proceedings should not be permitted to continue.
16. All these judgments were rendered in cases where the accused was a party to the contract. The petitioner, in the case at hand, is not a party to any of the transaction, he may be privy but not a party. Criminal proceedings cannot be initiated against a person who is not even a party to the entire transaction. The role of an intermediary has been the subject matter of cases being registered in several High Courts of the country. The High Court of Bombay in the case of AMAZON INDIA, THROUGH ITS INDIA HEAD, MR. AMIT AGRAWAL V. STATE OF MAHARASHTRA, THROUGH ULHASNAGAR POLICE STATION AND ANOTHER6 has held as follows:
"14. I have carefully considered the submission of learned Counsel for the Petitioner and Mr. Amritpal Khalsa and also perused the complaint and the reply filed by the Complainant. Admittedly, herein the transaction is not between two natural persons. Petitioner operates e-commerce entity to provide information on digital network and acts as a facilitator 6 2021 SCC OnLine Bom 3631 74 between buyer and seller. Petitioner does not own the product and sell the goods to the customer directly. Since Petitioner is not following inventory based model, it has no control over the transaction between two parties i.e. buyer and seller. Petitioner simply, receives and stores the information on behalf of the seller and buyer and acts as a facilitator. In the order issuing process, the learned Magistrate has clearly understood that it was not conventional transaction and human contact is minimal. In spite of clear understanding, the learned Magistrate prima-facie held, that "it could be gathered from over all circumstances, that Petitioner never intended to complete the transaction, but since initial stage, intention was to deceive the Complainant from the facts of the case." It is not in dispute that Petitioner being facilitator, had no control over the delivery of the product and further herein, the product in question was dispatched through independent service provider, but due to technical defect, it could not be delivered. The allegations in the complaint have not disclosed role of Petitioner - Mr. Amit Agrawal in commission of crime in question and this fact has been admitted by the learned Magistrate in the impugned order by observing that, "the human contact is nowhere and is minimal to the extent of customer care or grievance Redressal."
(emphasis supplied)
15. As such the Petitioner is neither owner, nor seller, nor supplier of product in question, but he facilitated the Complainant to purchase this product by following a marketplace based model of e-commerce. Admittedly, Petitioner does not follow inventory based model of e-commerce. The Petitioner simply provides a neutral platform which allows sellers to interact with the buyers.
16. In consideration of these admitted facts, the allegations do not constitute an offence of cheating, nor the allegations disclosed the 75 fraudulent intention of the Petitioner, when Complainant placed an order of the product in question. The Petitioner being a mere facilitator, Complainants' allegations that he was induced to buy a product with intention to cheat him, is wholly absent. There is no material on record to even suggest that the Petitioner had a direct involvement and inducing the Complainant to place an order with intention, not to deliver it, even after receiving the consideration for the same. Thus, neither the complaint, nor inquiry report submitted by the Investigating Officer constitute the offence of cheating against the Petitioner.
17. As to constitute offence under Section 420 of IPC, it must be shown that Complainant parted with his property, acting on a representation, which was false to the knowledge of the accused; AND the persons so deceived should be induced to deliver any property to any person or the person so deceived should be intentionally induced to do anything which he would not do if he was not so do AND the act done pursuant to inducement should be one are caused or likely to cause damage or harm to the person induced in body, mind, reputation or property.
18. In the case in hand, the allegations do not imply or suggest that any point of time, the Petitioner induced the Complainant to part with property (consideration for a product) with a dishonest intention, not to deliver the same. On the contrary, facts of the case show that the Complainant volunteered to purchase the product through the e-commerce market platform of the Petitioner from the seller. Thus, the ingredients to constitute offence of the cheating are wholly absent. The learned Magistrate failed in appreciating the facts of the case and thereby committed an error in concluding that prima-facie case of cheating has been made out.
7619. For the reasons stated, Petition is allowed. As a result, Complaint No. 193/2020, pending before the learned Judicial Magistrate, First Class, Ulhasnagar and order dated 16th August, 2021 passed therein, qua Petitioner, is quashed. Rule is made absolute in the aforesaid terms."
(Emphasis added) The High Court of Gujarat as in the case of PURAV ATULBHAI SHAH V. STATE OF GUJARAT AND OTHERS7 has held as follows:
3. Learned advocate Mr. C.B. Upadhyaya appearing for the applicants submitted that the applicants are Brokers engaged in the business of dealing in scraps arising out of the breaking of ships at Alang Shipbreaking yard. It was submitted that accused Kartik Salot (viz. applicant in Cri. Misc.
Application No.2793 of 2012) had purchased certain quantity of goods from the respondent complainants on behalf of the concerned purchasers, who are also coaccused in the FIRs. On receipt of payment from the concerned purchasers, the co-accused made payment towards said goods to the respondent complainant. In respect of the transaction in question, the goods were supplied by the concerned complainant through the applicants and they were received by the concerned purchasers. Similarly, insofar as accused Purav Shah (viz. Applicant in Cri. Misc. Application No.2787 of 2012) is concerned, he worked as the main Broker. The applicant accused purchased the goods and delivered it to the concerned purchaser. The concerned purchasers issued cheques of the requisite amount in favour of the concerned complainant, however, the same was dishonored. It was submitted that even as per the 7 Crl.Misc.Application No.2787/2012 & connected cases 77 allegations made in the impugned FIRs, the applicants were the purchasers of the goods in question and that the cheques were issued by the concerned purchasers and the applicants. Therefore, the applicants cannot be held guilty of committing the offence in question. It was, therefore, prayed that the impugned FIRs be quashed and set aside.
3.1 Learned advocate Mr. Upadhyaya, thereafter, submitted that even as per the allegations made in the impugned FIRs, the concerned purchaser informed the complainant that he had received the goods sent by the complainant and that he had sold said goods to some other party. However, the amount received by him has been paid to a third party. Thus, even as per the allegations made in the FIRs, the co-accused admitted that he had sold the goods received from the complainant to a third party and that the amount received by him from such sale has been paid to some other party. Hence, the applicants cannot be held liable for the act of the co-accused persons. It was, therefore, submitted that the impugned FIR deserves to be quashed and set aside.
3.2 Learned advocate submitted that even if it is presumed that the complainant had sold the goods in question to the applicants and that the applicants had made payment towards such goods, then also the applicants could be held guilty for the alleged offence since the dispute is of a civil nature and the complainant has to take recourse under the civil law. It was, therefore, requested that the impugned FIRs deserves to be quashed and set aside.
3.3 Learned advocate lastly submitted that a plain reading of the impugned FIRs do disclose the existence of the ingredients of the alleged offence. Therefore, the present proceedings are nothing but, a clear abuse of the process of Court. Hence, the impugned FIRs deserves to be quashed and set aside.
783.4 Learned advocate placed reliance upon a decision of the Apex Court in the case of V.Y. Jose and another v. State of Gujarat and another reported in (2009) 3 SCC 78.
... ... ...
12. If the facts of the present case are examined in light of the aforesaid decision, this Court is of the view that the applicants had played the role of Brokers only in the entire transaction. It is not in dispute that the goods supplied by the Complainant was delivered to the concerned purchasers and that when the concerned purchasers issued the cheques in favour of the Complainant, such cheques got dishonored. Under no circumstances, the applicants could be held responsible for the act of the concerned purchasers."
(Emphasis added) Both the afore-extracted judgments were concerning a facilitator or an intermediary. The facilitator or intermediary cannot be permitted to be proceeded against in a criminal trial is what is held by the Courts. Reference being made to judgments of the Apex Court with regard to interference at the threshold of criminal proceedings under Section 482 of the Cr.P.C., in the cases of STATE OF ORISSA V. DEBENDRA NATH PADHI and NITYA DHARMANANDA V. GOPAL SHEELUM REDDY (supra) in 79 the circumstances is apposite. The Apex Court in the case of DEBENDRA NATH PADHI8 holds as follows:
"21. It is evident from the above that this Court was considering the rare and exceptional cases where the High Court may consider unimpeachable evidence while exercising jurisdiction for quashing under Section 482 of the Code. In the present case, however, the question involved is not about the exercise of jurisdiction under Section 482 of the Code where along with the petition the accused may file unimpeachable evidence of sterling quality and on that basis seek quashing, but is about the right claimed by the accused to produce material at the stage of framing of charge.
... ... ...
29. Regarding the argument of the accused having to face the trial despite being in a position to produce material of unimpeachable character of sterling quality, the width of the powers of the High Court under Section 482 of the Code and Article 226 of the Constitution is unlimited whereunder in the interests of justice the High Court can make such orders as may be necessary to prevent abuse of the process of any court or otherwise to secure the ends of justice within the parameters laid down in Bhajan Lal case [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] .
(Emphasis supplied) Later the Apex Court following DEBENDRA NATH PADHI, in the case of NITYA DHARMANANDA9 has held as follows:8
(2005) 1 SCC 568 80 "8. Thus, it is clear that while ordinarily the Court has to proceed on the basis of material produced with the charge-sheet for dealing with the issue of charge but if the court is satisfied that there is material of sterling quality which has been withheld by the investigator/prosecutor, the court is not debarred from summoning or relying upon the same even if such document is not a part of the charge-sheet. It does not mean that the defence has a right to invoke Section 91 CrPC dehors the satisfaction of the court, at the stage of charge."
(Emphasis supplied)
17. In view of the preceding analysis and the afore-
extracted judgments of the Apex Court on all the issues, it would be highly unjust to permit the prosecution to continue with the proceedings against the petitioner and if so permitted, it would without doubt lead to miscarriage of justice and become an abuse of the process of law. This view of mine draws support from the latest judgment of the Apex Court in the case of SHAFIYA KHAN ALIAS SHAKUNTALA PRAJAPATI V. STATE 9 (2018) 2 SCC 93 81 OF U.P.10 wherein the Apex Court has followed the earlier judgment in the case of BHAJANLAL and has held as follows:
"15. The exposition of law on the subject relating to the exercise of the extra-ordinary power under Article 226 of the Constitution or the inherent power under Section 482 Cr.PC are well settled and to the possible extent, this Court has defined sufficiently channelized guidelines, to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. This Court has held in para 102 in State of Haryana v. Bhajan Lal (supra) as under:
"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 constitute any offence or make out a case against the accused.10
2022 SCC OnLine SC 167 82 (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 noncognizable 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 concerned Act (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 concerned Act, 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 83 with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
16. The principles laid down by this Court have consistently been followed, as well as in the recent judgment of three Judge judgment of this Court in Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra2.
(Emphasis supplied) It is also germane to notice the judgment in the case of MANOJ MAHAVIR PRASAD KHAITAN V. RAM GOPAL PODDAR11wherein, the Apex Court delineates the necessity to look into the allegation with openness and pass any order in the interest of justice. The Apex Court has held as follows:
"12. We reiterate that when the criminal court looks into the complaint, it has to do so with an open mind. True it is that that is not the stage for finding out the truth or otherwise in the allegations; but where the allegations themselves are so absurd that no reasonable man would accept the same, the High Court could not have thrown its arms in the air and expressed its inability to do anything in the matter. Section 482 CrPC is a guarantee against injustice. The High Court is invested with the tremendous powers thereunder to pass any order in the interests of justice. Therefore, this would have been a proper case for the High Court to look into the allegations with the openness and then to decide whether to pass any order in the interests of justice.11
(2010)10 SCC 673 84 In our opinion, this was a case where the High Court ought to have used its powers under Section 482 CrPC."
(Emphasis supplied) In the light of the judgments of the Apex Court afore-
quoted, this is a fit case for this Court to exercise its jurisdiction under Section 482 of the Cr.P.C. and obliterate all further proceedings against the petitioner.
18. For the aforesaid reasons, I pass the following:
ORDER
(i) Writ Petition is allowed.
(ii) Registration of crime against the petitioner in Crime No.1 of 2021 stands quashed.
(iii) All subsequent actions taken pursuant to registration of the said crime also stand quashed.
(iv) It is made clear that observations made in the course of this order are only for the purpose of considering the case of the petitioner under Section 482 of the Cr.P.C. This would not bind or influence further proceedings in any other case in the matter or any 85 civil proceedings pending or to be initiated thereto concerning the very transaction.
Sd/-
JUDGE bkp CT:MJ