Calcutta High Court (Appellete Side)
Mahendra Soni & Ors vs The State Of West Bengal & Anr on 15 January, 2014
Author: Ashim Kumar Roy
Bench: Ashim Kumar Roy
Form No. J(1)
In the High Court at Calcutta
Criminal Revisional Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Ashim Kumar Roy
CRR No. 2927 of 2012
With
CRAN No. 1887 of 2013
Mahendra Soni & Ors.
Vs
The State of West Bengal & Anr.
For the Petitioners : Mr. Sekhar Basu
Mr. Kusal Mukherjee
For O.P. No. 2 : Mr. S.K. Kapoor,
Mr. Debasish Roy,
Ms. Sutapa Sanyal,
Mr. A.N. Bhattacharya,
Ms. Saswati Chatterjee,
Mr. Arijit Roy
For the State : Mr. Manjit Singh, Ld. P.P.,
Ms. Sreyashee Biswas,
Mr. Pawan Kr. Gupta
Heard on:- 01.10.2013
Judgement on:-15.1.2014
The petitioners viz., Mahendra Soni, Srikant
Mohta, Vishnukant Mohta and Jiwan Das Mohta, who
happen to be the directors of Shree Venkatesh Films Pvt.
Ltd., on being charge sheeted under section
403/405/406/408/418/420 IPC, along with two others viz., Satyajit Saha, and Kranti Kumar, a Director and the AGM Operation of the complainant company, Brand Value Communication Limited, have now approached this court invoking its inherent jurisdiction for quashing of the said charge sheet against them.
2. The impugned charge sheet is arising out of the First Information Report relating to Baguiati Police Station Case No. 689/2011 and relates to all the offences for which the FIR was registered.
3. The case of the de facto complainant as it transpires from the allegations made in the FIR is as follows;
a) The complainant company Brand Value Communication Limited entered into an Film Assignment Agreement with the accused company Shree Venkatesh Films Pvt. Ltd.
b) The accused no. 6 and 7 in course of their employment as the Director and AGM Operation of the complainant company approached its management, jointly in connivance with each other and with a pre-planned design and made a proposal for entering into a Film Assignment Agreement with the accused company for obtaining telecast and transmission rights in respect of 70 feature films through its channel Rupasi Bangla against valuable consideration.
c) On being constantly persuaded by the accused no. 6 and 7 the complainant company, Brand Value Communication Limited, on 7.4.2010 had finally entered into a film assignment agreement with the accused company, Shree Venkatesh Films Pvt. Ltd. and in this regard the complainant company paid a sum of Rs. 25 crores to the accused company by account payee cheques and through the accused no. 6 and 7.
d) The said agreement was executed on behalf of the complainant company Brand Value Communication Limited by the accused no. 6 and 7, it's Director and AGM Operation and on behalf of the accused company Shree Venkatesh Films Pvt. Ltd. by the accused no. 2, the petitioner no. 1 herein as it's Director.
e) In terms of the said agreement, it was agreed, that the accused company would give a right to telecast total 70 numbers of feature films, to the complainant company through its entertainment channel Rupasi Bangla against payment of Rs. 25 crores being the consideration amount.
f) Out of the total consideration amount of Rs. 25 crores, a sum of Rs. 9 crores each were paid on April 20, 2010 and May 31, 2010 and Rs. 4.5 crores on April 30, 2010 and thereafter a further sum of Rs. 2.5 crores were paid towards the T.D.S. However, instead of 70 feature films the accused company made over 37 films to the complainant company.
g) On January 10, 2011 the accused no. 6, being the Director of the complainant company addressed a letter to it's Chairman, referring those 37 feature films which were given to its company by the accused company.
h) In the meantime, the officials of the complainant company had been to the office of the accused no. 1 Shree Venkatesh Films Pvt. Ltd. for taking delivery of the rest of the films and contacted the accused no. 2 to 5, the Director of the accused company, who always assured them that the remaining feature films will be supplied shortly but actually never supplied.
i) The management of the complainant company on source information came to learn as to some irregular and illegal activities of accused no. 6 and 7 and started enquiry. In course of such enquiry it revealed that the accused no. 6 and 7 being aided and abetted by each other entered into a criminal conspiracy with the accused no. 2 to 5, the Directors of accused no. 1.
j) The management of the complainant company was under a bona fide belief that the accused no. 6 and 7 shall discharge their duties and responsibilities with utmost sincerity, honesty and strictly in terms of the aforesaid Film Assignment Agreement dated 7.4.2010, but regretfully, it has been proved to be futile.
k) The accused no. 6 and 7 have deliberately and intentionally with an oblique design and in connivance and conspiracy with the accused no. 2 and 5 misappropriated and converted to their own use the said property and committed breach of trust with a sole view to cheat the complainant company in violation of the aforesaid agreement and as a result the complainant company suffered huge finance losses.
l) The accused no. 6 and 7 from the very beginning continuously pressed and persuaded for entering into the aforesaid Film Assignment Agreement against huge consideration with intention to deceive the complainant company.
4. At the beginning of his argument, the learned counsel appearing on behalf of the petitioners drew the attention of this court to the annexure P-3 to this application and pointed out, in fact, total 68 beta tape of different feature films were delivered to the complainant company in between April 29, 2010 and May 27, 2010 and same were duly received by it's authorized representatives. He then pointed out with reference to those annexures that 10 feature films each were delivered on 29th April, 2010 and on May 21, 2010, 20 feature films on May 25, 2010 and 28 feature films on May 27, 2010 respectively. He further contended according to the complainant a total sum of Rs. 22.5 crores were paid to the accused company in instalments and the first instalment on April 20, 2010 and next instalment on May 31, 2010 and April 30, 2010 respectively. Therefore, total 68 feature films were supplied to the complainant company before the last instalment was received. He also invited the attention of this court to annexure P-4, an advocate's letter, addressed to the accused company Shree Venkatesh Films Pvt. Ltd. on behalf of the complainant company and pointed out according to the same 45 technically feasible films were delivered and out of 25 films, which were returned, when found defective, only 6 films were replaced and the balance not. He then contended thus it is evident from the aforesaid documentary materials that all the feature films were supplied to the complainant company before payment of last instalment and dispute arose over technical feasibility of some of the beta tape. He then added even the complainant's case as made out in the FIR 37 number of feature films were supplied to it from time to time against payments made in instalments, therefore no case for cheating can be said to have been made out on the face of such allegations in absence of any case of initial deception. He then contended even assuming that only 37 beta tapes were given to the complainant company, although actually 68 beta tapes were given, failure to deliver the rest of the beta tapes at best makes out a case of failure to keep promise and give rise to civil consequences. He further submitted the impugned charge sheet was submitted for both the offences for commission of criminal breach of trust and cheating in respect of the self-same property, which cannot be legally sustained and it is a clear case where complainant attempted to give a cloak of criminality to a civil dispute. He lastly submitted that both the allegations of cheating and criminal breach of trust have been made against the accused no. 6 and 7 who are the employees of the complainant company and a case of conspiracy against the petitioners. However, no material is forthcoming to prima facie establish the charge against the petitioner and therefore prayed the impugned charge sheet be quashed.
5. On the other hand, the learned counsel for the de facto complainant vehemently contended even though 37 feature films were delivered out of total 70 feature films, which in terms of the agreement the accused persons were supposed to deliver and when they received the full consideration amount, their failure to deliver the rest of the feature films certainly either amounts to cheating or i.e. criminal breach of trust and the accused no. 6 and 7 the employees of the complainant company committed those offences in conspiracy with the petitioners. He however has not disputed the genuineness of those annexures.
6. The learned Public Prosecutor produced the case diary along with the evidentiary materials collected during investigation. He then submitted there is no dispute about delivery of 37 feature films and from the materials collected during investigation, it further transpired besides those films another 24 films were supplied to the complainant company by the company of the accused persons and same were received by the complainant company with the remarks 'ok for telecast'. In this regard he draws the attention of the documents which are at page 183 to 207 of the case diary and were seized by the police during the investigation on being produced by the complainant. He then drew the attention of this court to the pages from 177 to 182 and pointed out that those documents which were seized from the complainant shows that out of those 24 beta tapes, subsequently 18 were found not technically feasible for telecast and were returned to the accused company but were not replaced. He submitted those facts were not disclosed in the petition of complaint. He then submitted during investigation police also seized several papers from the custody of the accused persons which however shows the total 70 films were supplied but dispute arose when subsequently it was found some of the films were not technically feasible for telecast and were not replaced. According to him the aforesaid materials clearly goes against the case of the complainant and the dispute in all likely is civil in nature.
7. Heard the counsels appearing on behalf of the parties. Considered their respective submissions. Perused the charge-sheeted materials and other materials on record.
8. a) According to the case of the complainant, as is made out in the FIR, in terms of a Film Assignment Agreement, the complainant company in three instalments paid a total sum of Rs. 22.5 crores to the accused company and although in terms of the said agreement the accused company was to supply 70 feature films but in spite of receipt of the entire amount only 37 feature films were supplied and the rest were not supplied in spite of repeated demand. It is the further case that one Director of the complainant company, accused no. 6 and another AGM Operation, accused no. 7 jointly in connivance with each other with a pre-planned design made a proposal to their company to enter into the said agreement with the accused company and on being pressed and persuaded by them the complainant company entered into such agreement with the accused company. It is the further case the management of the complainant company having come to learn from source information about various irregular and illegal activities of the accused no. 6 and 7 i.e. it's one of the Directors and AGM Operation, they made an enquiry and came to learn the accused no. 6 and 7 being aided and abetted by each other entered into a criminal conspiracy with the Directors of the accused company and thereby misappropriated the said amount. It is also the case that accused no. 6 and 7 from the very beginning with intention to deceive the complainant company pressed and persuaded it to enter into such agreement with the accused company.
Having regard to what transpires from the face of the aforesaid allegations, without coming to any conclusion whether same on the face of it discloses commission of cognizable offences or not, I find all those allegations are directed against the two of the employees of the complainant company who were one of the Directors and AGM Operation and it is according to the complainant that two of its aforesaid officers are the persons who dishonestly and fraudulently induced the management of the company to enter into the Film Assignment Agreement with the accused company, therefore according to the definition of cheating in section 415 IPC the person who practised such fraud are said to 'cheat'. The only allegation that has been made against the petitioners was this that such offence was committed by the aforesaid two employees of the complainant company in conspiracy with the petitioners. However, in the Four Corners of the first information report, I do not find any fact or material on the basis of which such an inference can be drawn as against the petitioners. Nothing was also found from the materials gathered during investigation in support of such allegations against the petitioners.
b) Against this criminal revision, from the side of the complainant company, the opposite party no. 2, an affidavit-in-opposition and one vacating application were filed and both are on record. Now on perusal of this criminal revisional application and the affidavit-in- opposition and the vacating application, I find certain documents were filed, being annexure P-3 to the instant criminal revisional application, and it was claimed that all the 70 feature films in terms of the agreement were supplied to the complainant company. Such claim of the petitioners was dealt with in paragraphs 9, 10, 11, 12, 13, 14 and 15 of the vacating application. However, the claim of the petitioners that 70 feature films were delivered to the complainant company was nowhere disputed. On the other hand in paragraph 14 and 15 on behalf of the complainant company a case is made out that mere delivery of feature films is not sufficient and unless technically feasible films fit for telecast in the Television Channel are supplied, there cannot be any actual delivery.A chart also was annexed, being annexure A-4, to show after delivery total 21 films were returned to the accused company for replacement. Going through the said chart it is found that there was no mention as to when out of those 21 films 8 were returned for replacement and as far as 6 other films are concerned, no film returned acknowledgment was available and therefore on the own showing of the complainant company it may be accepted 7 films were returned but were not replaced. It is further found form the averment made in the rest of the paragraphs that the complainant company made a thorough market survey and found 61 films which were supplied to the complainant company had an average value of Rs.1 lakh each but the petitioners realized an excess amount of Rs. 14.45 crores from the complainant company by fraudulently overvaluing the same.
Similarly, in affidavit-in-opposition in paragraphs 3(j), 3(k), 3(i), 3(l), 3(m) and 3(n) from the side of the opposite party no. 2 i.e. the complainant company an identical case has been made out.
I further find from the documents seized from the possession of the petitioners by the police during investigation (page 183 to page 208) that in addition to 37 feature films which were admittedly delivered to the complainant company, 24 other feature films were also delivered to it and out of those films records shows 7 films found to be technically not feasible for telecast were returned to the complainant company for replacement but same was not done.
Thus, the aforesaid fact, more particularly from the own showing of the complainant company, it clearly indicates the dispute was not over non-supply of the feature films but over supply of few feature films which were not feasible for telecast and although returned to the accused the same were not replaced and in the market those feature films were available for telecast at much lower rate and there is no allegation that at the time of entering into the contract any misrepresentation was made by the petitioners or even the petitioner no. 3 to 5 were present. These facts not only show that the same do not constitute any criminal offence but the same predominantly civil in nature. It is also evident on the face of the allegations and materials collected during investigation, the allegation of cheating is against the aforesaid two officers of the complainant company who allegedly deceived the complainant company to enter into a Film Assignment Agreement with the accused company and so far as the petitioners are concerned there is only a bold allegation of conspiracy but no facts disclosed in the FIR neither any material was collected during investigation from which a prima facie inference can be drawn against them that they were also involved in such conspiracy.
9) The learned counsel for the opposite party no. 2 the de facto complainant relied on three decisions of the Hon'ble Apex Court viz. State of Madhya Pradesh Versus Surendra Kori, reported in (2012) 10 SCC 155; Arun Bhandari Versus State of Uttar Pradesh and Others, reported in (2013) 2 SCC 801; Diermier and Another Versus State of West Bengal and Another, reported in (2010) 6 SCC 243.
In the case of State of Madhya Pradesh Versus Surendra Kori, (supra), the Apex Court ruled that High Court should normally refrain from giving prima facie decision and quashing the proceedings in a case where facts are incomplete and hazy, more so when evidence has not been collected and produced, and issues involved, whether factual or legal, are of wide magnitude and incapable of being seen in their true perspective without sufficient material being placed on record. However, in the case in hand investigation is already complete and charge sheet has been submitted. Evidence has been collected and sufficient uncontroverted materials are on record and if the same are examined on its face value, undoubtedly in its true perspective no offence for which the charge sheet has been submitted against the petitioners is made out.
In the case of Arun Bhandari versus State of Uttar Pradesh and Others (supra), the Apex Court held mere facts that facts narrated in the complaint, reveal commercial transaction cannot be a ground for holding that offence of cheating could not be committed vide such transactions. Where prima facie allegation of guilty intention to induce the complainant to part with his money were categorically made and where the case is not one where promise initially made could not be fulfilled subsequently, nor was it a case where it could be said that even if the allegation in entirety were accepted no case was made out, the quashing is not permissible. However, in the case in hand there was no allegation against the petitioners that they induced the complainant company to part with the money and such allegation was made only against two of the employees of the complainant company and besides the bold allegation that the petitioners were involved in a conspiracy with the said two co-accuseds no prima facie materials have been disclosed from which inference of conspiracy can be drawn. On the other hand from the materials collected during investigation referred herein before, it is evident that while payment was made in instalments and the feature films were supplied to the complainant company from time-to-time, but the dispute arose when the complainant company came to learn that those feature films were available in the market for telecast at much lower rate and some of the feature films were not technically feasible for telecast and after the same were returned to the complainant company those were not replaced. In this case out of total 70 feature films as per the clear admission in the FIR, 37 feature films were delivered to the complainant company and from the documents seized by the police from the possession of the petitioners it is found apart from those 37 feature films, the complainant company got delivery of 24 more, acknowledging the same were 'ok' for telecasting and out of the same, 21 already were subsequently found not feasible for telecasting but the document seized from the complainant company shows only 7 were returned to the accused company and were not replaced. Therefore, if any case is made out by the complainant, the same is a case of subsequent failure to keep promise by the complainant company by not replacing the 7 feature films which were returned to it as was not fit for telecasting and no case for cheating is made out.
In the third case relied upon relates to a criminal defamation and in that case Apex Court held that 'good faith' and for 'public good' are question of facts and cannot be decided without recording of evidence. This case has no manner of application in the background facts of the impugned proceedings where quashing has been sought for on the ground of non-disclosure of the commission of offence on the face of the allegations made in the FIR and the materials collected during investigation. On the other hand, the law laid down by the Apex Court in those cases, are squarely applicable in the facts and circumstances of the present case and it would be fully justified to quash the impugned charge sheet.
10) In support of its case from the side of the petitioners total 27 decisions of the Apex Court have been relied upon, which are as follows; Sarabjit Singh vs. State of Punjab, reported in 2013 (6) SCC 800; M/s. GHCL Employees Stock Option Trust vs. M/s. India Infoline Limited (SC) : Law Finder Doc ld# 419581, reported in 2013 (4) SCC 505; Arun Bhandari vs. State of U.P., reported in 2013 (2) SCC 801; Lee Kun Hee vs. State of U.P., reported in 2012 (3) SCC 132; M/s. Thermax Ltd. vs. K.M. Johny, reported in 2011 (13) SCC 412; Iridium India Telecom Ltd. vs. Motorola Incorporated and Others, reported in 2011 (1) SCC 74; V.P. Shrivastava vs. Indian Explosives Ltd., reported in (2010) 10 SCC 361; Rama Devi vs. State of Bihar, reported in (2010) 12 SCC 273; State of Maharashtra vs. Sayed Mohammed Masood, reported in 2009 (8) SCC 787; Dilip Kaur vs. Jagnar Singh, reported in (2008) 14 SCC 696; S.V.L. Rep. By CBI, Hyderabad, reported in 2009 (6) SCC 77; Devendra vs. State of Uttar Pradesh, reported in 2009 (7) SCC 495; Harmanpreet Singh Ahluwalia vs. State of Punjab, reported in 2009 (7) SCC 712; Chunduri Siva Ram Krishna vs. Peddi Ravindra Babu, reported in (2009) 11 SCC 203; Sharon Michael vs. State of Tamil Nadu, reported in 2009 (3) SCC 375; V.Y. Jose vs. State of Gujarat, reported in 2009 (3) SCC 78; R. Kalyani vs. Janak C. Mehta, reported in (2009) 1 SCC 516; V.R. Dalal vs. Naranji Thakkar, reported in 2008 (15) SCC 625; Suryalakshmi Cotton Mills Ltd. vs. Rajvir Industries Ltd., reported in 2008 (13) SCC 678; B. Suresh Yadav vs. Sharifa Bee, reported in (2007) 13 SCC 107; Inder Mohan Goswami vs. Uttaranchal, reported in (2007) 12 SCC 1; Anil Ritolla @ A.K. Ritolia vs. State of Bihar, reported in (2007) 10 SCC 110; Veer Prakash Sharma vs. Anil Kumar Agarwal, reported in (2007) 7 SCC 373; N. Devindrappa vs. State of Karnataka, reported in (2007) 5 SCC 228; M/s Indian Oil Corporation vs. M/s NEPC India Ltd., reported in (2006) 6 SCC 736; Mahesh Choudhary vs. State of Rajasthan, reported in (2009) 4 SCC 439; S.P. Gupta vs. Ashutosh Gupta, reported in (2010) 6 SCC 562.
Very carefully going through the aforesaid decisions, I find most of the cases have no application here and appear to be irrelevant to decide the issue.
In the case of M/s. GHCL Employees Stock Option Trust vs. M/s. India Infoline Limited (SC)(supra), the Apex Court quashed a case against the company and it's Director as found the allegations against them were bold and vague and nothing specific. Herein this case also there is no specific allegations against the present petitioners who were the Directors of the accused company and the allegation of conspiracy is not supported by any facts nor by any materials collected during investigation.
In the case of M/s. Thermax Ltd. vs. K.M. Johny (supra), the Apex Court quashed a case relating to offence under section 420/406 IPC ruling that if there is any flavour of civil nature, same cannot be agitated in form of criminal proceeding, more particularly where in a case of section 420 IPC, an essential ingredient of such offence, dishonest intention is absent and dispute pertained to contractual obligation between the parties. Here in this case there is no controversy that dispute arising out of contractual obligation between the parties and having regard to the facts as it transpires from the material collected during investigation that after supply of agreed number of feature films, the feature films which were found to be technically defective, were not replaced and on subsequent enquiry it is found the same was supplied at a higher rate than the market rate, thus no case of an offence punishable under section 420 IPC can said to have been made out.
In the case of Iridium India Telecom Ltd. vs. Motorola Incorporated and Others (supra), the Apex Court held misleading statement which withholds vital facts for intentionally inducing a persons to do or omit to do something would amount to deception. However, there is no allegation against the petitioners far less against any one that any misleading statement was made to induce the accused company to enter into the Film Assignment Agreement. Only allegation is this that they did not supply the total number of feature films which were agreed upon but the material collected during investigation went otherwise and subsequently it was ascertained by the complainant company that those feature films were available in the market at much lower price.
In the case of State of Maharashtra vs. Sayed Mohammed Masood (supra), it was held materials collected during preliminary investigation are relevant when the issue is one of quashing of the FIR. In this case the FIR has been culminated in the charge sheet and the materials collected during investigation clearly indicates that the allegation made in the FIR on the face of the averment made in the affidavit-in-opposition and vacating application and the materials collected during investigation stands contrary and no offence is made out.
In the case of Sharon Michael vs. State of Tamil Nadu (supra), it was held a case under section 420/409/120B IPC was quashed on the ground the allegations contained in the FIR did not reveal that any misrepresentation was made at the time of formation of the contract. Similar is the position in the present case.
In the case of Suryalakshmi Cotton Mills Ltd. vs. Rajvir Industries Ltd. (supra), it was held that a case under section 420/406 IPC was quashed on the ground the intention to cheat must be there right from the beginning when property was parted with. Any subsequent failure to keep promise does not take the case to the mischief of those offences. The ratio of this decision squarely attracts in the background facts of the present case.
In the case of Anil Ritolla @ A.K. Ritolia vs. State of Bihar (supra), the Apex Court held even though a cheating or fraud can very well be committed in course of commercial transaction, it is equally well-settled that the allegations contained in the complaint petition must prima facie show inducement of the victim to delivery any property by the accused. In this case neither the allegation that there is any inducement caused by the petitioners nor there is any allegation pursuant to such inducement money was paid. Furthermore, during investigation it is found that the agreed articles were supplied to the petitioner for which payment has been made.
For the reasons stated above, in my opinion this is a fit case for quashing and accordingly the impugned charge sheet stands quashed.
Criminal Section is directed to deliver urgent xerox certified copy of this order to the parties, if applied for, as early as possible.
(Ashim Kumar Roy, J.)