Andhra Pradesh High Court - Amravati
Buddam Jagadeepak Reddy vs The State Of Andhra Pradesh on 9 September, 2020
Author: M. Ganga Rao
Bench: M.Ganga Rao
HONOURABALE SRI JUSTICE M. GANGA RAO
Criminal Petition No.7562 of 2018
ORDER:
The petitioner is the sole accused in Crime No.12 of 2018 registered for the offences punishable under Section 420 of the Indian Penal Code, 1860 by the Station House Officer, Nandyal III Town Police Station, filed this Criminal Petition under Section 482 of the Code of Criminal Procedure, 1973, for quashing the proceedings in Crime No.12 of 2018.
The brief facts of the case are that the 2nd respondent, Sajjala Sujala, W/o Sridhar Reddy, resident of Nandyal Town made a written complaint on 06-02-2018 to the Station House Officer, Nandyal III Town Police Station, Kurnool District, stating that she is the Managing Director of Sajjala Finance Private Limited and the Director of Spy Agro Industries as such she is personally looking after the affairs of the said companies. In the month of September 2015, one Sri Buddam Jagadeepak Reddy of Hyderabad, had met her in the company premises and told her that he is doing maize corn business and he would supply maize corn to Spy Agro Industries. When she had asked him how much stock is available, he told her that about two crores worth stock is available and he would supply the same to her company and asked her to give him of Rs.50.00 lakhs as advance. She had believed his words and on 07-10-2015, she asked her company's net banking employee G. Manikumar, to transfer Rs.50.00 lakhs to the account of Sri Buddam Jagadeepak Reddy of Hyderabad, accordingly, through RTGS he transferred Rs.50.00 lakhs to the account of Buddam Jagadeepak Reddy, bearing A/c.No.34130200000084 of Bank of 2 MGR, J CRL.P.No.7562 of 2018 Baroda, Begumpet, Hyderabad Branch from A/c.No.10840118900 of State Bank of India, SME Branch, Nandyal. The said amount of Rs.50.00 lakhs was accounted in B. Jagadeepak Reddy's account. He told that he would supply maize corn immediately to her company as he had received advance money. But the said Buddam Jagadeepak Reddy postponed the supply of maize corn stating that he would supply maize corn this month or next month. She waited for months together for supply of maize corn by him. In spite of receipt of advance money, he did not supply maize corn to her company. On her suspicion, when she got enquired by sending company employee China Subbanna to Hyderabad, he informed her that the said Buddam Jagadeepak Reddy had been cheating several persons by not supplying maize corn even after receipt of advances to supply maize corn and thereby cheated her and her company. Buddam Jagadeepak Reddy, maize corn business, with an intention to cheat her company received Rs.50.00 lakhs from her and cheated them and her company, by not supplying maize corn, with dishonest intention to misappropriate the money, he induced her to deliver money thereby cheated her and her company. She prayed to take appropriate action against him as per law. The police registered a case in Crime No.12 of 2019 for the offence punishable under Section 420 IPC against the sole accused and the investigation is started under Section 156 (1) Cr.P.C. against which the present Criminal Petition is filed for quashing the proceedings.
Sri Vedula Venkata Ramana, learned senior counsel appearing for the petitioner would contend that the 2nd respondent 3 MGR, J CRL.P.No.7562 of 2018 has given a complaint to the police on 06-02-2018 alleging that on 07.10.2015, she had transferred an amount of Rs.50.00 lakhs to the petitioner towards advance for supply of maize corn and despite the advance payment, the petitioner has failed to supply the goods. A reading of the complaint would show that the petitioner has not committed any criminal offence at all let alone an offence under Section 420 IPC. What all the complaint states is that certain money has been paid on 07-10-2015 for purchase of goods and that there was no sale or delivery of the goods and at best, the said complaint can constitute basis for a recovery suit and thus the complaint as such is not disclosing any criminal offence. He would further contend that the alleged act of receiving advance amount of Rs.50.00 lakhs by the petitioner and non- supply of maize corn itself does not satisfy the essential ingredients required for constitution of offence of cheating under Section 420 IPC and to punish the petitioner under Section 420 IPC. At best it amounts to breach of contract, for which civil remedy is available to the 2nd respondent de facto complainant. In support of his contention, he placed his reliance on the decision of the Apex Court, in the case of Indian Oil Corporation Limited v. NEPC India Limited1, wherein the Apex Court, after considering the catena of its judgments, observed in paras 25 and 26, which reads as under:
"25. The essential ingredients of the offence of 'cheating' are : (i) deception of a person either by making a false or misleading representation or by other action or omission (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person to do or omit to do anything which he would not do or omit if he were 1 (2006 (6) SCC 736) 4 MGR, J CRL.P.No.7562 of 2018 not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.
26. The High Court has held that mere breach of a contractual terms would not amount to cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction and in the absence of an allegation that the accused had a fraudulent or dishonest intention while making a promise, there is no 'cheating'. The High Court has relied on several decisions of this Court wherein this Court has held that dishonest intent at the time of making the promise/inducement is necessary, in addition to the subsequent failure to fulfil the promise. Illustrations (f) and (g) to section 415 makes this position clear:
"(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats."
"(g). A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contact and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract."
Learned senior counsel would further contend that the alleged act of transfer of money to the petitioner's account had happened on 07.10.2015 and complaint is made on 06.02.2018, when the complaint discloses that the petitioner had failed to supply the maize corn as per the contract and when the complainant had got transferred money to the petitioner's account, the same cannot be agitated in the form of criminal nature, as it is purely a civil dispute. There is huge delay in giving a report and in order to avoid the period of limitation, it cannot be resorted to as a criminal proceedings. He would further contend that when the complaint failed to disclose the fraudulent or dishonest intention on the part of the petitioner right from the beginning of the transaction, non supply of maize corn as per the contract, only amounts to breach of contract for which the remedy is filing a civil suit. In support of his contention, learned senior counsel placed 5 MGR, J CRL.P.No.7562 of 2018 reliance on the decision of the Apex Court in Thermax Limited and others v. K.M. Johny and others2. Learned senior counsel would strenuously contend that even if entire averments of the complaint is taken to be true, it did not disclose prima facie case to establish the offence under Section 420 IPC as it does not disclose fraudulent and dishonest intention at the very beginning of the transaction and subsequent breach of contract would not meet the essential ingredients required to constitute offence under Section 420 IPC. Hence, the very registration of Crime No.12 of 2018 under Section 420 IPC and the registration of the crime and its investigation is an abuse of process of law. The crime is registered only to put the petitioner under fear of punishment to settle the civil dispute out of court settlement, which should not be allowed to stand contrary to law. Learned senior counsel also placed reliance on Anil Mahajan v. Bhor Industries Ltd., and another3. He would vehemently contend that the complaint against the petitioner does not disclose offence under Section 420 IPC. Hence, the FIR is liable to be quashed and prayed this court to quash the FIR.
Per contra, Sri O. Manohar Reddy, learned counsel appearing for the 2nd respondent would contend that a reading of complaint in Telugu version and as the English version filed along with the petition is not true translation of the complaint and its essence is not reflected in English version and he would further contend that the very approach of the petitioner to the 2nd 2 (2011) 13 SCC 412 3 (2005) 10 SCC 228 6 MGR, J CRL.P.No.7562 of 2018 respondent, stating that he is doing maize corn supply business and he has stock worth of Rs.2.00 crores, if Rs.50.00 lakhs amount is paid as advance, he will supply maize corn to the SPY Agro Industries without having any stock of the maize corn, itself is sufficient to draw inference that the petitioner from the beginning of the transaction he has fraudulent and dishonest intention to induce the 2nd respondent to transfer the amount of Rs.50.00 lakhs to his account. The very approach of the petitioner to induce to the 2nd respondent to part with the amount of Rs.50.00 lakhs as advanced money to supply maize corn amounts to cheating. The business wheel moves on the faith and trust, but not on suspicion, life starts with mutual trust only. Because of fraudsters, the people lost faith in each other, most of the people thought of better not to do business. He would further contend that a reading of the complaint clearly made out a prima facie offence under Section 420 IPC, there are no justifiable reasons for quashing the FIR at the initial stage of investigation. Unless trial is conducted by the Magistrate, it is erroneous to come to conclusion that no offence under Section 420 IPC is made out at the stage of investigation when the petitioner/accused with dishonest intention induced the complainant to part with huge amount of Rs.50.00 lakhs towards advance for supply of maize corn to the SPY Agro Industries for which the 2nd respondent is the Director and looking after the affairs of the company. There are no justifiable reasons for quashment of FIR at the threshold of investigation of the case, when the complaint reveals that the petitioner falsely stated to the 2nd respondent that he is doing maize corn business and is having 7 MGR, J CRL.P.No.7562 of 2018 stock of maize corn worth Rs.2.00 crores for which he asked the 2nd respondent to give Rs.50.00 lakhs towards advance for supply of the maize corn, and accordingly, the 2nd respondent got transferred the amount of Rs.50.00 lakhs to the bank account of the petitioner towards advance, but he failed to supply any stock which fact, prima facie, satisfies the ingredients required for the constitution of an offence under Section 420 IPC. In support of his contention, he placed reliance on State of West Bengal and others v. Swapan Kumar Guha and others (1982) 1 SCC 561, wherein it is held that when the complaint disclosed an offence, the court will normally not interfere with the investigation into the offence and will generously allow the investigation into the offence to be completed by collecting material for proving the offence. He would further contends that this court, should exercise the power under Section 482 Cr.P.C., very sparingly, with circumspection to prevent the abuse of process of court and to meet the ends of justice, for which the Apex Court laid down guidelines in the case of State of Haryana and others v. Ch. Bhajanlal and others4. The present case does not disclose the facts which fall under any of the guidelines laid down in the above case to quash the FIR. Hence, he submits that there are no justifiable grounds much less legal grounds to quash the FIR. He prays to dismiss the criminal petition.
Having regard to the facts and circumstances of the case, considering the submissions of the counsel and on perusal of the record, this court prima facie came to the conclusion that the 4 AIR 1992 SC 604 8 MGR, J CRL.P.No.7562 of 2018 complaint of the 2nd respondent would disclose the offence under Section 420 IPC, for which it is appropriate to extract the contents of the complaint which is in Telugu language filed by the 2nd respondent against the petitioner, the English version of which reads thus:
"the 2nd respondent Sajjala Sujala, W/o Sridhar Reddy, resident of Nandyal Town made a written complaint on 06-02- 2018 to the Station House Officer, Nandyal III Town Police Station, Kurnool District, stating that she is the Managing Director of Sajjala Finance Private Limited and the Director of Spy Agro Industries as such she is personally looking after the affairs of the said companies. In the month of September 2015, one Sri Buddam Jagadeepak Reddy of Hyderabad, had met her in the company premises and told her that he is doing maize corn business and he would supply maize corn to SPY Agro Industries. When she had asked him how much stock is available, he told her that about two crores worth stock is available and he would supply the same to her company and asked for payment of Rs.50.00 lakhs as advance. She had believed his words and on 07-10-2015, she asked her company's net banking employee G. Manikumar, to transfer Rs.50.00 lakhs to the account of Sri Buddam Jagadeepak Reddy of Hyderabad, accordingly, through RTGS he transferred Rs.50.00 lakhs to the account of Buddam Jagadeepak Reddy, bearing A/c.No.34130200000084 of Bank of Baroda, Begumpet, Hyderabad Branch from A/c.No.10840118900 of State Bank of India, SME Branch, Nandyal. The said amount of Rs.50.00 lakhs was accounted in B. Jagadeepak Reddy's account. He told that he would supply maize corn immediately to her company as he had received advance money. But the said Buddam Jagadeepak Reddy postponed the supply of maize corn stating that he would supply maize corn this month or next month. She waited for months together for supply of maize corn by him. In spite of receipt of advance money, he did not supply maize corn to her company. On her suspicion, when she got enquired by sending company employee China
9 MGR, J CRL.P.No.7562 of 2018 Subbanna to Hyderabad, he informed her that the said Buddam Jagadeepak Reddy had been cheating several persons by not supplying maize corn even after receipt of advances to supply maize corn and thereby cheated her and her company. Buddam Jagadeepak Reddy, maize corn business, with an intention to cheat her company received Rs.50.00 lakhs from her and cheated them and her company, by not supplying maize corn, with dishonest intention to misappropriate the money, he induced her to deliver money thereby cheated her and her company. She prayed to take appropriate action against him as per law."
To find out whether the complaint would disclose the ingredients, which constitute an offence under Section 420 IPC, it is profitable to extract the provisions of Section 415 and 420 IPC for easy reference.
415. Cheating.--Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat". Explanation.--A dishonest concealment of facts is a deception within the meaning of this section.
420. Cheating and dishonestly inducing delivery of property.--Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
This Court, on perusal of the contents of the complaint and a careful reading of the provisions of Sections 415 and 420 IPC, found that the complaint specifically states that the petitioner 10 MGR, J CRL.P.No.7562 of 2018 approached the 2nd respondent that he is doing maize corn business and has stock worth Rs.2.00 crores and if an advance of Rs.50.00 lakhs is given to him, he would supply the same to SPY Agro Industries and accordingly, an amount of Rs.50.00 lakhs was transferred to the petitioner's account through RTGS and that the petitioner, having received the advance money, failed to supply maize corn. This court, while accepting the contentions of the learned counsel for the 2nd respondent, came to the conclusion that the petitioner, without having maize corn stocks much less worth Rs.2.00 crores of maize corn, falsely told to the 2nd respondent and made her to part with Rs.50.00 lakhs towards advance to supply maize corn and failed to supply maize corn to her. It clearly shows that from the beginning of the transactiaon the petitioner with fraudulent dishonest intention without having any maize corn stocks induced the 2nd respondent to part with Rs.50.00 lakhs as advance and thereafter he has not supplied the maize corn, which constitutes an offence of cheating under Section 420 IPC. In the light of the above conclusions of this court, the contra contentions of Sri Vedula Venkata Ramana, learned senior counsel appearing for the petitioner that the complaint of the 2nd respondent does not disclose any offence under Section 420 IPC as the complaint does not satisfy the ingredients required for the constitution of the offence under Section 420 IPC and at best, it amounts to breach of trust for which a civil remedy is available to the 2nd respondent and only to save the limitation to file civil suit, it cannot be resorted to a criminal proceeding and that the crime is registered only to put the petitioner under fear of punishment to 11 MGR, J CRL.P.No.7562 of 2018 settle the civil dispute out of court settlement are untenable. A reading of the complaint clearly disclosed that from the beginning, the petitioner approached the 2nd respondent without having any maize corn stocks and induced the 2nd respondent to part with Rs.50.00 lakhs towards advance for supply of maize corn to SPY Industries and thereafter, the petitioner has not supplied any quantity could be construed as the petitioner has fraudulent and dishonest intention from the beginning of the transaction and the subsequent non-supply of maize corn would strengthen the intention of the petitioner from the beginning to cheat the 2nd respondent by not supplying the maize corn. In these circumstances, learned senior counsel relied upon the decisions reported in 1) Indian Oil Corporation Limited v. NEPC India Limited (1 supra), 2) Thermax Limited and others v. K.M. Johny and others (2supra) 3) Anil Mahajan v. Bhor Industries Ltd., and another (3 supra). A careful reading of the above decisions, it shows that there exists a written contract of agreement between the parties after part performance of the contract agreement, the disputes arose. Considering the same, the Hon'ble Supreme Court held that it amounts to breach of contract as there is no dishonest intention from the beginning of the transaction and it does not give rise to initiation of criminal proceedings for non-performance of the contract agreement. Hence, the above three cases would not help to the case of the petitioner. This court, having accepted the contentions of the learned counsel for the 2nd respondent that the petitioner without having stock worth of Rs.2.00 crores of maize corn with fraudulent 12 MGR, J CRL.P.No.7562 of 2018 and dishonest intention, induced the 2nd respondent-complainant to part with Rs.50.00 towards advance for supply of maize corn would certainly attract the provisions of Section 415 and 420 IPC.
In view of above discussion, this court, without iota of hesitation, came to the conclusion that the complaint, prima facie, discloses the ingredients required for constitution of the offence punishable under Section 420 IPC. Now, this court considers whether sufficient ground exists for quashing FIR at the threshold of the investigation of offence. It is profitable to extract the provisions of Section 482 Cr.P.C, which reads thus:
482. Saving of inherent powers of High Court: Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court /to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.
The Hon'ble Supreme Court, while considering the provisions of Section 482 Cr.P.C., in State of Haryana and others v. Ch. Bhajanlal and others5, had laid down guidelines for exercising the inherent powers of the Court under Section 482 Cr.P.C. to prevent abuse of process of any court or otherwise to secure the ends of justice. The guidelines read thus:
(a) 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;
(b) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156 (1) 5 AIR 1992 SC 604
13 MGR, J CRL.P.No.7562 of 2018 of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code;
(c) 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;
(d) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code;
(e) 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;
(f) 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;
(g) where a criminal proceeding is manifestly attended with malafide 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.
A reading of the provision makes it clear that the provisions of the Section cannot be invoked by exercise of a power which is specifically prohibited by the Code. The inherent powers are meant to be exercised sparingly and with circumspection when there is reason to believe that the process of law is being misused to harass a citizen. Proceedings against an accused in the initial stage can be quashed only if, on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are without adding or subtracting anything, if no offence is made out, then the High Court will be justified in quashing the proceedings in 14 MGR, J CRL.P.No.7562 of 2018 exercise of its power under Section 482 Cr.P.C. The ends of justice are higher than the ends of mere law though justice has got to be administered according to laws made by the legislation. The settled law is that when the allegations set out in the complaint or the charge sheet do not constitute any offence it is competent to the High Court exercising its inherent jurisdiction under Section 482 Cr.P.C. to quash the criminal proceedings.
This court, having carefully considered the submissions of the counsel for both parties and on perusal of the record, with specific reference to the contents of the complaint of the 2nd respondent and registration of the FIR in Crime No.12 of 2018, came to conclusion that a reading of the complaint and the FIR, clearly disclose the prima facie ingredients required for constitution of the offence under Section 420 IPC and that allowing the proceedings to continue against the petitioner/accused would not amount to an abuse of process of court to harass the petitioner, and hence, the Criminal Petition is liable to be dismissed.
Accordingly, the Criminal Petition is dismissed. As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed.
___________________ M. GANGA RAO, J Date: 09-09-2020 Ksn