Madhya Pradesh High Court
Ajay Kumar Agrawal vs The State Of Madhya Pradesh on 4 November, 2024
Author: Sanjeev S Kalgaonkar
Bench: Sanjeev S. Kalgaonkar
1
NEUTRAL CITATION NO. 2024:MPHC-IND:31262
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SANJEEV S. KALGAONKAR
ON THE OF NOVEMBER, 2024
MISC. CRIMINAL CASE No. 5124 of 2024
AJAY KUMAR AGRAWAL
Versus
STATE OF M.P. & ANOTHER
Appearance:
Shri Ajay Bagadia - Sr. Advocate with Shri Bhavesh Tiwari -
Advocate for the petitioner.
Shri Madhusudan Yadav - Govt. Advocate for the respondent
no.1/State.
Shri Nikhil Pandey - Advocate for the respondent no.2.
Reserved on : 03.09.2024
Pronounced on : 04.11.2024
ORDER
This petition having been heard and reserved for orders, coming on for pronouncement this day, Justice Sanjeev S. Kalgaonkar pronounced the following:
This petition under Section 482 of the Code of Criminal Procedure is filed seeking the quashment of order dated 21.06.2023, passed by the learned Judicial Magistrate First Class, Dewas directing the registration of FIR under 2 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 Section 156(3) Code of Criminal Procedure in Unregistered Criminal Complaint case No.2271/22.
2. The exposition of the facts giving rise to the present petition is as under
:-
a. The IDBI Bank Limited through its authorized officer Shri Navin Puri, Branch Head of Sapna Sangeeta Branch, Indore submitted a written complaint in the form of application under Section 156A of the Code of Criminal Procedure before learned Judicial Magistrate First Class, Dewas inter alia stating that the IDBI Bank is indulged in lending activities and provides certain credit facilities to the borrowers on a pledge of certain agricultural crops/goods/products(commodities) as a condition precedent for grant of such credit facilities. The complainant Bank requires the borrower to ensure that the security over the commodity is created in favour of the complainant Bank for which the borrowers are required to store the commodities at the go- downs/warehouses enlisted with the complainant Bank.
b. The accused No.6, LTC Commercial Company Pvt. Ltd. through its Directors approached the complainant Bank and induced the complainant Bank for entering into a Memorandum of Understanding(MOU) for providing collateral management services. Accordingly, the complainant Bank engaged accused No.6 as Collateral Manager to handle, oversee and monitor the storage of the commodities and provide integrated collateral management services vide MOU dated 04.04.2012.
c. The accused No.1, Anurag Mandloi, approached and represented the complainant Bank for enlisting Raghav Warehouse for the purpose of storing the commodities/agricultural products claiming himself to be a proprietor of Raghav Warehouse. The accused No.6, LTC Commercial Co. Pvt. Ltd., also 3 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 issued a declaration notification followed by the Warehouse Inspection Report with regard to Raghav Warehouse.
d. The accused No.1 assured the complainant Bank that the agricultural goods/products/commodities deposited at the Warehouse of accused No.1 shall not be released without prior written consent of the complainant's Bank. On assurance of accused No.1, the complainant Bank empanelled Raghav Warehouse and has authorised accused No.6 for the control management of pledged agricultural goods/products/commodities kept in Raghav Warehouse for which the complainant Bank paid specific amount to the accused No.6. The accused No.6 deployed accused No.4, Vinod Arya, as Deputed Officer and accused No.5, Rahul Bhargav, as Area Manager for taking care and management control of the agricultural goods/products/commodities kept in Raghav Warehouse.
e. The accused No.7 to 17, the farmers and agriculturists, requested the complainant Bank to sanction cash credit short term loan limit on pledging the commodities in the year 2016-2017. Accordingly, the credit limits were issued to accused Nos.7 to 17. The commodities pledged by accused No.7 to 17 were kept at Raghav Warehouse. Accordingly, the complainant Bank has disbursed the loan amount of Rs.4,11,50,000/- against the pledged agricultural goods/commodities. During monthly visit conducted on 18.03.2017 at Raghav Warehouse by the officials of the complainant Bank, on verification, it was found that out of total 16480 bags of pledged agricultural goods/commodities only 4560 bags were available in the Raghav Warehouse. Accused No.3 Ajay Kumar Agrawal, Accused No. 4 Vinod Arya and Accused No. 5 Rahul Bhargav could not put-forth convincing reply for the non-availability of 11920 bags of commodities amounting to Rs.3,80,01,000/-.
f. The accused No.2, Arvind Sharma, proprietor of M/s Modern Agrotech wrote a letter dated 12.04.2018 for repayment of the amount to the complainant 4 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 bank. The complainant Bank initiated the recovery proceedings against accused No.7 to 17 declaring them defaulter before the Debt Recovery Tribunal, Jabalpur. Accused No.3, Ajay Kumar Agrawal (petitioner) filed an application for deletion of his name from the proceedings on the basis of one rent agreement dated 25.11.2015 executed between accused No.3 Ajay Agrawal as owner of Raghav Warehouse and accused No.2 Arvind Sharma, as proprietor of M/s Modern Agrotech and accused No.1, Anurag Mandloi, was a witness in the rent agreement dated 25.11.2015 whereas the accused No.1 has earlier claimed to be proprietor of Raghav Warehouse in the Franchise agreement dated 28.12.2016 executed between himself and accused No.6 - LTC Company. It is alleged that all the accused in connivance with each other have committed an offence of criminal breach of trust in respect of agricultural goods/commodities products which were pledged with the complainant Bank and were entrusted to accused Nos.1, 2 and 3 at Raghav Warehouse as the warehouse keeper and accused No.4, 5 and 6 as agents deployed for supervision, quality control of the pledged agricultural goods/commodities entrusted at Raghav Warehouse. The accused have refused to return the pledged commodities. Further, they have not repaid the amount extended by way of loan against the pledged agricultural goods/commodities products.
g. The complainant had filed a written complaint to the Superintendent of Police, Indore West. After preliminary statement and enquiry, the complaint was forwarded to the Superintendent of Police, Dewas, but no FIR was registered. Further, the concerned officials have not initiated any investigation against the named accused.
h. The Bank has also filed a complaint with the Economic Offence Wing, CBI, Delhi. It was advised that the amount involved in the matter is below the threshold limit of investigation by CBI. Aggrieved by non-registration of FIR, lack of proper investigation by the Police Officials, Bank is compel to file the 5 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 present application under Section 156(3) of the Code of Criminal Procedure. It was requested that the SHO of PS Dewas be directed to register FIR for offence punishable under Sections 407, 409, 418, 420, 421, 422, 467, 468 and 120-B of IPC and investigate the matter.
i. Learned Judicial Magistrate First Class, Dewas on consideration of the content of application and the complaint filed alongwith the application came to the conclusion that offence punishable under Section 407 of IPC is made out against the respondent Nos.1 to 3, which is cognizable offence, therefore, PS Nahar Darwaza, Dewas was directed to register FIR and to investigate the matter.
3. Feeling aggrieved by the aforesaid order dated 21.06.2023, this petition is filed for quashing the order and its subsequent proceedings on following grounds :-
(1) The petitioner is involved in the alleged offence merely for the reason that the alleged offence was committed in his warehouse, whereas, the same was already leased to another person.
(2) The petitioner was not given any opportunity of hearing.
The impugned order was passed exparte.
(3) The agricultural goods/commodities were not entrusted to the petitioner, therefore, the essential ingredients for offence of criminal breach of trust is not made out against the petitioner.
(4) There was absence of knowledge, mensrea and actus reus on part of present petitioner because once the warehouse was given on lease, the present petitioner was unaware with regard to the activities conducted by the accused No.1 and 2 in the warehouse.
(5) The petitioner is not beneficiary of the transaction. He has not received any amount or the property.
6NEUTRAL CITATION NO. 2024:MPHC-IND:31262
4. On these grounds, it is prayed that the impugned order for registration of FIR be quashed to the extent of its applicability upon the present petitioner.
5. Learned Senior Counsel for the petitioner in addition to the grounds mentioned in the application contends that the allegations, even taken on face value, does not constitute the offence alleged against the petitioner. Petitioner is implicated merely for the reason that he is owner of Raghav Warehouse which was used for keeping the agricultural goods and commodities pledged with the Bank under an agreement between the Bank and accused No.6. There is no allegation in the complaint that the petitioner had ever approached the complainant Bank. There was no agreement between the petitioner and complainant Bank with regard to security of the pledged agricultural goods/commodities. Therefore, the petitioner cannot be made vicariously liable for the misdeed committed by accused No.1, 2 or 6. Learned counsel further submits that since the necessary ingredients with regard to entrustment of the property is not made out against the petitioner, direction for registration of FIR for offence punishable under Section 407 of IPC was illegal. The impugned order deserves to be quashed in exercise of inherent powers to restrain abuse of process of the Court.
6. Per Contra, learned counsel appearing on behalf of the complainant Bank opposes the application and submits that the petitioner has applied for deletion of his name before the DRT on the basis of rent agreement dated 25.11.2015. The rent agreement was executed between the petitioner and the respondent No.2, wherein accused No.1 stood as a witness, which indicates conspiracy and meeting of mind between accused No.1, 2 and 3. The learned trial Court considering these aspects of the matter, committed no error in directing registration of FIR against the petitioner alongwith accused No.1 and
2. The petition deserves to be dismissed.
7NEUTRAL CITATION NO. 2024:MPHC-IND:31262
7. Learned counsel for the State submits that the FIR has been registered in compliance with the order of learned Judicial Magistrate and the matter is at the initial stage of investigation. The FIR registered on the impugned order cannot be quashed.
8. Heard both the learned counsel for the parties and perused the record.
9. In case of State of Haryana v. BhajanLal reported in 1992 Supp (1) SCC 335, the Supreme Court laid down the principles for the exercise of the jurisdiction by the High Court in exercise of its powers under Section 482 CrPC to quash the proceedings, 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 CrPC 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.
(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) CrPC except under an order of a Magistrate within the purview of Section 155(2) CrPC.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) CrPC.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person 8 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the 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 with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
10. Relying on the judgment in the case of Bhajanlal (supra), the Apex Court in the case of Zandu Pharmaceutical Works Ltd. & Ors. Vs. MD Sharaful Haque & Ors. reported in (2005) 1 SCC 122 and held as under:
The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and- fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. (See: Janata Dal v. H. S. Chowdhary (1992 (4) SCC
305), and Raghubir Saran (Dr.) v. State of Bihar (AIR 1964 SC 1). It would not be 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 would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. In a proceeding instituted on complaint, exercise of the inherent powers to quash the 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 in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a 9 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 whole. If it appears that on consideration of the allegations in the light of the statement made on oath 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. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings. (See: Dhanalakshmi v. R. Prasanna Kumar (1990 Supp SCC 686), State of Bihar v. P. P. Sharma (AIR 1996 SC 309), Rupan Deol Bajaj v. Kanwar Pal Singh Gill (1995 (6) SCC 194), State of Kerala v. O. C. Kuttan (AIR 1999 SC 1044), State of U.P. v. O. P. Sharma (1996 (7) SCC 705), Rashmi Kumar v.
Mahesh Kumar Bhada (1997 (2) SCC 397), Satvinder Kaur v. State (Govt. of NCT of Delhi) (AIR 1996 SC 2983) and Rajesh Bajaj v. State NCT of Delhi (1999 (3) SCC 259.
11. The Apex Court in the case of Indian Oil Corpn. v. NEPC India Ltd., reported in (2006) 6 SCC 736 has held as under:
"12. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few--Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre [(1988) 1 SCC 692 : 1988 SCC (Cri) 234], State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426], Rupan Deol Bajaj v. Kanwar Pal Singh Gill [(1995) 6 SCC 194 : 1995 SCC (Cri) 1059], Central Bureau of Investigation v. Duncans Agro Industries Ltd. [(1996) 5 SCC 591 : 1996 SCC (Cri) 1045], State of Bihar v. Rajendra Agrawalla [(1996) 8 SCC 164 : 1996 SCC (Cri) 628], Rajesh Bajaj v. State NCT of Delhi [(1999) 3 SCC 259 : 1999 SCC (Cri) 401], Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269 : 2000 SCC (Cri) 615], Hridaya Ranjan Prasad Verma v. State of Bihar [(2000) 4 SCC 168 : 2000 SCC (Cri) 786], M. Krishnan v. Vijay Singh [(2001) 8 SCC 645 : 2002 SCC (Cri) 19] and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005) 1 SCC 122 : 2005 SCC (Cri) 283]. The principles, relevant to our purpose are:
(i) A complaint can be quashed where the allegations made in 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 the case alleged against the accused.
For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of 10 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.
(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.
12. The Apex Court in the case of Iridium India Telecom Limited versus Motorola Incorporated And Ors. reported in (2011) 1 SCC 74 the Apex Court has held as under :
76. As noticed earlier, both the appellants and the respondents have much to say in support of their respective view points. Which of the views is ultimately to be accepted, could only be decided when the parties have had the opportunities to place the entire materials before the Court. This Court has repeatedly held that power to quash proceedings at the initial stage have to be exercised sparingly with circumspection and in the rarest of the rare cases. The power is to be exercised ex debito justitiae. Such power can be exercised where a criminal proceeding is manifestly attended with malafide and have been instituted maliciously with ulterior motive. This inherent power ought not to be exercised to stifle a legitimate prosecution.
77. In the present case, the parties are yet to place on the record the entire material in support of their claims. The issues involved are of considerable importance to the parties in particular, and the world of 11 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 trade and commerce in general. In such circumstances, in our opinion, the High Court ought to have refrained from indulging in detailed analysis of very complicated commercial documents and reaching any definite conclusions.
78. In our opinion, the High Court clearly exceeded its jurisdiction in quashing the criminal proceeding in the peculiar facts and circumstances of this case. The High Court noticed that while exercising jurisdiction under Section 482 Cr.P.C. "the complaint in its entirety will have to be examined on the basis of the allegations made therein. But the High Court has no authority or jurisdiction to go into the matter or examine its correctness. The allegations in the complaint will have to be accepted on the face of it and the truth or falsity cannot be entered into by the Court at this stage." Having said so, the High Court proceeded to do exactly the opposite.
13. In the case of International Advanced Research Centre For Powder Metallurgy And New Materials (ARCT) Vs. Nimra Cerglass Technics (P) Ltd., reported in (2016) 1 SCC 348 the Apex Court has held as under :-
13. The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is, as to whether uncontroverted allegations as made in the complaint establish the offence. The High Court being superior court of the State should refrain from analyzing the materials which are yet to be adduced and seen in their true perspective. The inherent jurisdiction of the High Court under Section 482 Cr.P.C. should not be exercised to stifle a legitimate prosecution. Power under Section 482 Cr.P.C. is to be used sparingly only in rare cases. In a catena of cases, this Court reiterated that the powers of quashing criminal proceedings should be exercised very sparingly and quashing a complaint in criminal proceedings would depend upon facts and circumstances of each case. (Vide State of Haryana & Ors. vs. Bhajan Lal & Ors., 1992 Supp.(1) SCC 335; State of T.N. vs. Thirukkural Perumal, (1995) 2 SCC 449; and Central Bureau of Investigation vs. Ravi Shankar Srivastava, IAS & Anr. (2006) 7 SCC
188.) (emphasis added)
14. It is undisputed that the petitioner owns Raghav Warehouse, which was used to store agricultural goods and commodities pledged with the Bank under an agreement between the Bank and accused No.6.
15. Although, there was no agreement between the petitioner and complainant Bank with regard to security of the pledged agricultural goods/commodities, the fact remains that the petitioner permitted his 12 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 Warehouse for deposit and security of collaterals, the agricultural goods and commodities pledged with the Bank.
16. The rent agreement dated 25.11.2015, allegedly submitted by the petitioner before DRT, Indore (specifically referred to in the complaint para-
9) and available on case diary, prima facie indicates connivance and meeting of minds between accused No.1, 2 and 3 for utilization of Raghav Warehouse for the alleged offences. Thus, the allegation of conspiracy cannot be said to be baseless or absurd.
17. The learned Judicial Magistrate, in the impugned order dated 21.2.2023 has expressed opinion that prima facie, cognisable offence punishable under section 407 of IPC appears to have been committed and directed PS Nahar Darwaja to registered FIR and investigate the matter.
18. At the stage of referring a complaint under section 156(3) of the Code of Criminal Procedure, the Magistrate only needs to consider, if a prima facie cognizable offence is evident, warranting an FIR and investigation. The detailed scrutiny of facts and expressing opinions on specific offenses is unnecessary at this stage.
19. Be that as it may, the investigation officer is not bound by the prima facie opinion expressed by learned Judicial Magistrate. The FIR is starting point of the investigation. The offence mentioned in the FIR are merely indicative to guide the investigation. The investigation would reveal the role of the individual accused and the offence(s) committed by him. On completion of investigation, the offence constituted would be revealed in the final report, therefore, no finality can be attached to prima facie opinion of learned Judicial Magistrate that an offence punishable under section 407 of IPC is made out against the petitioner. There is sufficient material to proceed for investigation against petitioner. Thus, the argument that the petitioner cannot be made 13 NEUTRAL CITATION NO. 2024:MPHC-IND:31262 vicariously liable for the misdeed committed by accused No.1, 2 or 6 has no substance.
20. The contents of complaint and consequent FIR, cannot be said to be malafide, frivolous, vexatious or oppressive. The allegations set out in the complaint, in the light of supporting material, do constitute a cognizable offence. Thus, to scuttle the investigation at initial stage, would itself be an abuse of process of the court. No case is made out to invoke the inherent jurisdiction to quash the impugned order, the consequent registration of FIR and the investigation in the matter.
21. Consequently, present petition under section 482 of the Code of Criminal Procedure is hereby dismissed.
(SANJEEV S KALGAONKAR) JUDGE sh/-
SEHAR Digitally signed by SEHAR HASEEN DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH INDORE, ou=BENCH AT HASEE INDORE, 2.5.4.20=900ec6fc757798eaeb3df7a3286 0bd3298415a4d1c2d91436213f2568c8f2 7da, postalCode=452001, st=Madhya Pradesh, serialNumber=E7DBBA955B262C04B8413 N 251CE7FB6F0B7DBA610C57F1559C08BF6 C6F5DD40D4, cn=SEHAR HASEEN Date: 2024.11.04 19:17:41 +05'30'