Madras High Court
M/S.Muthoot Finance Limited vs Davidson Tharmaraj on 11 September, 2018
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 11.09.2018
CORAM
THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN
Crl.O.P.(MD).No.7147 of 2011
1.M/s.Muthoot Finance Limited
2nd Floor, Muthoot Chambers,
Opp. Saritha Theatre Complex,
Banerjee Road, Ernakulam,
Cochin ? 18.
2.M.G.George Muthoot, Chriamn,
Muthoot Finance Limited,
Opp. Saritha Theatre Complex,
Banerjee Road, Ernakulam,
Cochin ? 18.
3.George Alexander Muthoot,
Managing Director,
Muthoot Finance Limited,
Opp. Saritha Theatre Complex,
Banerjee Road, Ernakulam,
Cochin ? 18.
4.George Thomas Muthoot,
Joint Managing Director,
Muthoot Finance Limited,
Opp. Saritha Theatre Complex,
Banerjee Road, Ernakulam,
Cochin ? 18.
5.George Jacob Muthoot,
Joint Managing Director,
Muthoot Finance Limited,
Opp. Saritha Theatre Complex,
Banerjee Road, Ernakulam,
Cochin ? 18. ..Petitioners
Vs.
Davidson Tharmaraj ... Respondent
PRAYER: This Criminal Original Petition has been filed under Section 482 of
Criminal Procedure Code, to call for the entire records pertaining to the
proceedings in C.C.No.110 of 2011 on the file of the Judicial Magistrate,
Tenkasi and quash the same insofar as the petitioners concerned.
!For Petitioner : Mr.N.Mohideen Basha
^For Respondent : Mr.Muthalraj
:ORDER
This quash petition is filed to quash the criminal proceedings in C.C.No.110 of 2011 on the file of the Judicial Magistrate, Tenkasi, having been taken cognizance for the offences under Sections 410, 419, 406, 409 and 120-(B) of I.P.C. as against the petitioners and others on the private complaint filed by the respondent.
2.The case of the complainant/respondent is that on 12.01.2004, he pledged few articles of gold weighing about 78 grams for a sum of Rs.48,000/- . Again, on 27.01.2004, he pledged gold jewels and other golden articles weighing about 118 grams for a sum of Rs.52,000/-. Further, on 03.01.2004, he pledged gold jewels along with other articles weighing 44 grams for a sum of Rs.18,000/- and also on 09.02.2004, again he pledged his gold jewels weighing about 55 grams for a sum of Rs.24,000/-. For all the pledges, the accused issued pawn tickets. Thereafter, the complainant approached the accused for redemption of jewels. However, he was informed that the jewels, which he pledged with the accused, were auctioned for non payment of the interest as well as the principal within a time stipulated by the accused. The complainant also came to understand that without following the Rule 12(6) of the Tamil Nadu Pawn Brokers Act, 1943, without giving sufficient time and without any prior notice to the complainant, the accused auctioned the jewels. Therefore, it is violation of Section 12(3) and 14(D)(2) of the Tamil Nadu Pawn Brokers Act and Section 12(13) of the Tamil Nadu Pawn Brokers Rules, 1943. Hence, the complaint.
3.After receipt of the private complaint filed by the respondent, the learned Judicial Magistrate, Tenkasi had taken cognizance for the offence under Sections 410, 419, 406, 409 and 120-(B) of I.P.C. totally as against seven persons. The petitioners in this quash petition are arraigned as A1 to A5. The said complaint is under challenge in the present quash petition filed by the petitioners/A1 to A5.
4.The learned counsel appearing for the petitioners would raise the following grounds to quash the complaint filed against them:
(i)The offences having been taken cognizance by the learned Judicial Magistrate had not prima facie made out any offence to attract as against the petitioners. The respondent already lodged so many complaints before all the officials such as Reserve Bank of India, District Collector, Tahsildar and police personnels for the very same allegations and all the complaints were turned down. Therefore, the present complaint is nothing but forum shopping.
(ii)The materials on record do not disclose any of the offence as alleged by the complainant. It is also seen that the complainant availed loan by pledging all the jewels on four occasions and since, he did not redeem the pledged jewels with the stipulated time, the auction notices were duly sent and the same were duly received by the respondent. Even after the receipt of notice, the respondent did not redeem the jewels and hence, all the jewels were auctioned to realise the loan amount. Therefore, there are no offences made out as against the petitioners.
(iii)The petitioners 2 to 5 are the Chairman, Managing Director and Joint Managing Directors respectively of the Financial Company and they cannot be made vicariously liable to be prosecuted for the offences as alleged by the respondents. The first accused is a Company and the 6th accused is the Manager of the Principal Branch and the 7th accused is the auctioneer. There is no dishonest intention to induce the respondent to receive anything. Further, the act of pledge cannot amount to any entrustment. This is nothing but commercial transaction between the respondent and the petitioners. Therefore, no offences as alleged by the complainant are made out as against the petitioners.
(iv)The present complaint has been lodged after a period of 5 years.
The jewels were pledged in the year 2004 and thereafter, auction sale notices were issued in November 2005 and February 2006 and thereafter, the auction were conducted on two days viz., 02.12.2005 and 10.03.2006, whereas, the present complaint has been lodged only in the month of February 2011 and therefore, absolutely there is no explanation for the delay in lodgment of the complaint.
Thus, the learned counsel appearing for the petitioners prayed for quashment of the criminal proceedings in C.C.No.110 of 2011 on the file of the Judicial Magistrate, Tenkasi.
5.Per contra, the learned counsel appearing for the respondent would submit that according to the complainant, the auctioneer is not the agent of Pawnbroker and he would be appointed as auctioneer under the Tamil Nadu Pawn Broker Rules 1943 and therefore, he is not the authenticated person to auction the jewels and it is violation of the provisions and Rules of the Tamil Nadu Pawn Broker Act and Rules, 1943. The non following of the mandatory provisions and Rules of the Tamil Nadu Pawn Broker Act and Rules, 1943 amounts to committal of offence of misappropriation and cheating. Therefore, without holding a valid licence and without following the procedures laid down under the Tamil Nadu Pawn Brokers Act and Rules, 1943, the petitioners sold out the respondent's jewels. Further the auction notices are bereft of particulars such as the date of notice, place of auction and time. Further, the petitioners have no licence to conduct auction all the jewels pledged by the respondents. Further, he would submit that the complaint is in the preliminary stage and the question of facts cannot be quashed under the quash petition filed under Section 482 of Cr.P.C and prayed for dismissal of the quash petition.
6.Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent and perused the materials produced before this Court.
7.It is not in dispute that the respondent pledged jewels weighing 78 grams, 118 grams, 44 grams and 55 grams on 12.01.2004, 27.01.2004, 31.01.2004 and 09.02.2004 for a sum of Rs.48,000/-, Rs.52,000/-, Rs.18,000/- and Rs.24,000/- respectively with the petitioners' finance company. Thereafter, neither he paid the interest nor paid any principal amount as agreed vide pledged receipts. Therefore, the auction sale notices were sent to the respondent on 15.11.2005 through the Government Auctioneer viz., the 7th accused. Thereafter, the auction were conducted on 02.12.2005 and 10.03.2006 and through the auction, the pledged amount with the interest were realised by the petitioners. Though there is balance amount to be recovered from the respondent, the petitioners did not take any steps to recover the balance amount from the complainant.
8.The crux of the complaint is that while the petitioners were issuing pawn tickets, they did not mention the rate of interest to be paid by the complainant/respondent. Even before auction, the petitioners did not inform the date of auction and did not give sufficient time to redeem the jewels, which were mortgaged by the respondent as contemplated under section 12(6) of the Tamil Nadu Pawn Brokers Rules, 1943.
9.It is seen from the records that the jewels were mortgaged by the respondent on 12.01.2004, 27.01.2004, 31.01.2004 and 09.02.2004. Thereafter, the respondent/complainant did not pay the interest as well as the principal and did not take any steps to redeem the jewels mortgaged by them. Admittedly, the petitioners auctioned the jewels on 02.12.2005 and 10.03.2006. After a period of one year, the petitioners auctioned the jewels.
10.Section 12(3) of Tamil Nadu Pawn Brokers Act reads as follows:
?12.Sale of pledge and inspection of sale book.-
1. .........
2. .........
3.At any time within three years after the public auction, the holder of pawn ticket may inspect the entry relating to the sale either in the pawnbroker's book or in such catalogue of the auction as may be prescribed.?
Section 14-D (2) of the Act reads as follows:
?14-D.Auctioneers to maintain certain registers. -
1. ..........
2.At any time within three years after the public auction, any police officer not below the rank of Sub-Inspector may inspect the registers preferred to in sub-section (1) at all reasonable times and at such place as may be prescribed.?
Rule 12(13) of the Rules read as follows:
?12.Procedures in auction of pledges.-
1. to 12. ............
13.The pawnbroker shall preserve every such catalogue for at least three years after the auction.?
11.The time for lodging any complaint as against the auction is three years viz., the maximum time limit is three years from the date of auction. Admittedly, the present complaint has been lodged by the respondent in the year 2011 i.e. after six years from the date of auction. The delay caused in lodgment of complaint has not been explained by the respondent, which shows that the present complaint is nothing but clear abuse of process of law.
12.It is seen from the jewel auction notices dated 15.11.2005 and 20.02.2006, the petitioners duly sent the auction notices to the respondent stating that the respondent did not pay any interest and did not redeem the jewels within a period of one year and 7 days as contemplated in the pawn tickets. Therefore, as per the rules, all the amount can be realised by way public auction of all the jewels. Even after receipt of notices, the respondent did not take any steps to redeem the jewels before the auction. Further, the respondent had sent complaint to the District Collector, Tirunelveli and also lodged a complaint before the District Legal Services Authority at Tirunelveli with regard to the auction conducted by the petitioners. The said complaints were forwarded to the Inspector of Police, Tenkasi Police Station. The said Inspector of Police duly conducted an enquiry, after receipt of the explanation as well as the documents from the petitioners as well as the respondent. After due perusal of the statements and material evidence, he found that any of the offences as alleged by the respondent are not made out as against the petitioners herein. Therefore, entire action was dropped as per the report of the Inspector of Police, Tenkasi Police Station by all the officials. Further, they found that after due notice and sufficient time given to the respondent, the auction was conducted by the petitioners to realise the sum borrowed by the respondent herein. Further, they concluded that the respondent approached the officials only after four years from the date of auction. Therefore, the present complaint is lapsed and it is nothing but an abuse of process of Court and it is liable to be quashed.
13.The entire crux of the allegations contained in the complaint pertain to redemption of pledged jewels. The petitioners have exercised their rights and powers that are vested with them by law and rules. They acted in accordance with law and rules and as per the clauses contained in the pawn tickets, which were issued at the time of pledging the jewels. There is no dispute about the loan availed by the respondent by pledging his jewels. Further admittedly, the respondent neither paid the interest nor paid the principal amount. An act of pledge is not amount to entrustment of any property. Therefore, the offence under Section 409 of I.P.C. is not made out against the petitioners. Insofar as the other offences are concerned, the main ingredients of the said offences are wholly absent in the complaint.
14.Section 405 of I.P.C. reads as follows:
?405. Criminal breach of trust ?
Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".
Section 409 of I.P.C. reads as follows:
?409. Criminal breach of trust by public servant, or by banker, merchant or agent.?
Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
Section 415 of I.P.C. reads as follows:
?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".
15.In this regard, it is very relevant to cite the decision of Hon'ble Supreme Court of India reported in (2011) 2 MLJ (Crl.) 365 (SC) ? V.P.Shrivastava V. Indian Explosives Ltd., wherein, the Apex Court has held as follows:
?34.In the instant case, there is nothing in the complaint which may even suggest remotely that the IEL had entrusted any property to the appellants or that the appellants had dominion over any of the properties of the IEL, which they dishonestly converted to their own use so as to satisfy the ingredients of Section 405 of the IPC, punishable under Section 406 IPC.
35.Having come to the conclusion that no prima facie case had been made out against the appellants in respect of the alleged offences under Sections 420 and 406 IPC, the question of alleged conspiracy between the appellants does not arise. Nevertheless, in order to bring home the charge of conspiracy within the ambit of Section 120B of the IPC, it is necessary to establish that there was an agreement between the appellants for doing an unlawful act.
The complaint lacks any such substance.?
In another decision, the Hon'ble Supreme Court reported in (2010) 1 MLJ (Crl.) 1095 (SC) ? Devendra V. State of U.P., wherein, the Hon'ble Apex Court has held as follows:
?15.`Cheating' has been defined in Section 415 of the Indian Penal Code to mean:
"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 9 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'."
16.In V.Y. Jose v. State of Gujarat and Anr. [(2009) 3 SCC 78], this Court opined:
"14.An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied:
i) deception of a person either by making a false or misleading representation or by other action or omission;
(ii) fraudulently or dishonestly inducing any person to deliver any property;
or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out."
10 It is, therefore, evident that a misrepresentation from the very beginning is a sine qua non for constitution of an offence of cheating, although in some cases, an intention to cheat may develop at a later stage of formation of the contract.
17.In Hridaya Ranjan Prasad Verma and Ors. v. State of Bihar and Anr.[(2000) 4 SCC 168], this Court held:
"14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest.
15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show 11 that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed."
[See also Indian Oil Corporation v. NEPC India Ltd. and Ors. (2006) 6 SCC 736, Veer Prakash Sharma v. Anil Kumar Agarwal and Anr. 2007 (9) SCALE 502, V.Y. Jose (supra) and Ravindra Kumar Madhanlal Goenka & Anr. v. M/s. Rugmini Ram Raghav Spinners & Anr. 2009 (6) SCALE 162] 23.
18.Section 463 of the Indian Penal Code reads as under:
"463. Forgery - Whoever makes any false documents or false electronic record or part of a document or electronic record with intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery."
According to Mr. Das, making of a false document so as to support any claim over title would constitute forgery within the meaning of the said provision and as a document was created for the purpose of showing one- third share in the joint property by the appellants although they were not entitled to therefor, they must be held to have committed an offence.
19.Making of any false document, in view of the definition of `forgery' is the sine qua non therefor. What would amount to making of a false document is specified in Section 464 thereof. What is, therefore, necessary is to execute a document with the intention of causing it to be believed that such document inter alia was made by the authority of a person by whom or by whose authority he knows that it was not made.
20. to 26. ................
27. Mr. Das submits that a wrong committed on the part of a person may be a civil wrong or a criminal wrong although an act of omission or commission on the part of a person may give rise to both civil action and criminal action. A distinction must be made between a civil wrong and a criminal wrong. When dispute between the parties constitute only a civil wrong and not a criminal wrong, the courts would not permit a person to be harassed although no case for taking cognizance of the offence has been made out.
28.Furthermore, in a case of this nature where even, according to Mr. Das, no case has been made out for taking cognizance of an offence under Section 420 of the Indian Penal Code, it was obligatory on the part of the learned Chief Judicial Magistrate to apply his mind to the contents of the chargesheet. Such application of mind on his part should have been reflected from the order. [See State of Karnataka and Anr. v. Pastor P. Raju (2006) 6 SCC 728 and Pawan Kumar Sharma v. State of Uttaranchal, Criminal Appeal No. 1692 of 2007 decided on 10th December, 2007].
29.We, however, must place on record that we have not entered into the merit of the dispute as the civil suit is pending. The same has to be determined in accordance with law. We would request the court concerned to consider the desirability of the disposing of civil suit as expeditiously as possible. The appeal is allowed with the aforementioned directions.?
16.In the present case on hand, the ingredients of any offences as alleged by the respondent are not at all attracted to prosecute them for the offence under Sections 410, 419, 406, 409 and 120-(B) of I.P.C. To constitute an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. In the absence of such culpable intention, no offence under Section 420 of the Indian Penal Code been made out against the petitioners. Further, all the competent authorities enquired the complaints lodged by the respondent including the Inspector of Police, Tenkasi Police Station and rejected the complaints lodged by the respondent as no offence made out as against the petitioners. Therefore, the present complaint is only an abuse of process of law.
17.In view of the above discussion, the complaint is liable to be quashed. Accordingly, this criminal original petition is allowed and the complaint in C.C.No.110 of 2011 on the file of the Judicial Magistrate, Tenkasi is quashed as against the petitioners alone.
To
1.The Judicial Magistrate, Tenkasi.
.