Rajasthan High Court - Jaipur
Vijayander Kumar And Ors. vs State Of Rajasthan And Anr. on 12 February, 1999
Equivalent citations: 1999CRILJ1849
ORDER A.S. Godara, J.
1. This petition for quashing FIR No. 125/98 Under Section 120-B read with Section 420, IPC, qua all the petitioners, has been filed invoking inherent jurisdiction of this Court Under Section 482, Cr. P.C.
2. Briefly stated the facts relevant for disposal of this petition are that Mr. Surendra Singla, presently arrayed as respondent No. 2, lodged a written report against the accused-petitioners as well as Satish Singhal s/o Shri Malook Chand Agarwal at the Police Station, Kotwali, Sriganganagar on 28-4-1998. The complainant-respondent is a partner of the firm Raj Shree Cotton Company, Sriganganagar working as a broker as well as a dealer in the sale and purchase of cotton. All the petitioners are Directors of R.P. Texfab Ltd., Modinagar who purchased cotton through the said firm of Ganganagar for that company from time to time. Lastly, a sum of Rs. 47,28,115.80 stood in the credit balance of the Ganganagar firm owned by the said company of the accused persons. The accused persons, without taking into confidence the complainant, at his back, entered into an agreement for transfer of management, assets and liabilities of their company in favour of Satish Singhal, Bharat Bhusan and Anil Gupta who were placed as new Directors of the said R.P. Texfab Ltd. Company. On 27-2-95, the accused persons summoned the complainant at Modinagar and they held a joint meeting in presence of Surendra Singla in the campus of the Company at Modinagar. All these accused persons, for the first time, informed the complainant that the management of the company was so transferred to Mr. Satish Singhal and his associates and the liabilities as well as the assets of the company were also simultaneously transferred to Mr. Satish Singhal and his associates, therefore, the aforesaid outstanding amount of Rs. 47,28,115.80 shall be paid by the new management of the Company to which the complain-ant did not agree and insisted upon payment and clearance of the outstanding liabilities by the old management of the Company including the accused-petitioners but, however, all the aforesaid accused persons present in the meeting, gave an assurance that the Directors of the new company, including Mr. Satish Singhal, would pay a part of the outstanding amount by delivery of Bank drafts while rest of the amount shall be adjusted by delivery of thread and, for the balance, if any, the payment shall be arranged by Mr. Satish Singhal and his associates taking over management of the company. The complainant was still not agreeable and he sought sometime for thinking over the matter and to convey his consent to the aforesaid purchasers. However, on 28-2-1998 itself, all the accused persons, accompanied by Satish Singhal, rushed up to Sriganganagar whereat the complainant is residing and carrying on his business and insisted upon the complainant that they should agree to the aforesaid proposals whereby all the accused persons and so also as agreed to and assured by Satish Singhal, they were ready to deliver Bank drafts of Rs. 10 lacs and some quantity of thread was ready for delivery which would be delivered at the instance and on the order of the complainant while, for the balance amount, Satish Singhal was ready to issue post-dated cheques with an assurance to honour the same on the due dates of the payment. On the assurance of all the accused persons so given and assuming that since Satish Singhal was assured to be a reputed and a person of sound finances and hence, believing the statement of timely payments in the aforesaid manner given by the accused persons, he accepted the Bank draft of Rs. 10 lacs. Besides, thread valuing at Rs. 13,26,560/- was offered to be delivered as ordered to by the complainant. For the balance amount of Rs. 23 lacs, four post dated cheques for 25-3-1998, 12-4-1998, 30-4-1998 and 30-4-98 for Rs. 5 lacs, 5 lacs, 5 lacs and 8 lacs respectively drawn on the Union Bank of India, Noida, were simultaneously delivered to the complainant with a specific assurance and undertaking by all the accused persons that the post-dated cheques so issued, shall be honoured on the respective dates on their presentment by the Bank. This assurance led the complainant to accept the documents. Similarly, on the aforesaid assurances, the complainant was made to sign an agreement whereby he agreed to receive payment and the goods asstated above from Satish Singhal instead of the accused petitioners. However, the cheques, on their presentation, due to insufficient fund in the account of the drawer and stoppage of payments, were not honoured and on receipt of information of the dishonour on the ground that the payment of cheques were ordered to be stopped by Mr. Anil Gupta & Associates lodging the aforesaid written report, it was further alleged that all the assurances as well as the conduct exhibited by the accused persons conjointly on 27-2-1998 and, lastly, on 28-2-98 at Sriganganagar, made the complainant to believe that the assurance was bona fide and the cheques would be honoured on their presentment to the concerned branch of the Bank but, fraudulently, the payments were stopped. On this complaint, the aforesaid FIR was registered and investigation commenced which is yet pending.
3. This petition is also being seriously contested on behalf of respondent No. 2 Surendra Singla who has also filed a rejoinder.
4. I have heard the learned counsel for the parties and also the learned P.P. for the State and have also called and perused the investigation report.
5. At the outset, so far as the facts and allegations of the report resulting in registration of the impugned FIR and commencement of the investigation, which is yet pending, and the liabilities worth Rs. 47,28,115.80 owned by the other Directors of the said company including the accused-petitioners is undisputed. Besides, this fact is also not denied by the new Directors of the company taking over management and liabilities of the said company from the accused-petitioners. Besides, issuance of the disputed cheques for a total sum of Rs. 23 lacs is also not disputed. Similarly, non-payment as well as factum of stoppage of payment, by Mr. Anil Gupta a partner of Satish Singhal is also not denied. This is also not disputed that it was on 28-2-98 that all the accused-petitioners accompanied by Satish Singhal came to Ganganagar and the aforesaid agreement though purporting to be dated 27-2-98, was agreed and signed by the first informant Satish Singhal at Sriganganagar on the clear undertaking given by the new Director Satish Sighal as well as the accused-petitioners being the old directors of R.P. Texfab Ltd., Modinagar, that the amounts of the post-dated cheques total-ling Rs. 23 lacs would be honoured on their respective dates being 25-3-98,12-4-98,22-4-98 and 23-4-98. This is also not denied by the accused-petitioners or on their behalf that, before the cheques issued for 25-3-98, could be presented for payment to the Bank, it was Anil Gupta a co-Director of Satish Singhal who on 16-4-98, addressed a letter to the aforesaid Bank at Noida whereby it was informed that, on presentment of the aforesaid cheques, no payment was to be made to the party and, accordingly, there did not arise any question of honouring or encashment of the aforesaid cheques and the liabilities worth Rs. 23 lacs so undertaken for payment and alleged to have transferred by the old Directors of the company, presently, accused-petitioners, to the new management headed by Mr. Satish Singhal and others, have not been wiped off and, instead, the former lot of management as well as the new Directors refused to fulfil and honour commitment and undertaking given to the first informant-respondent.
6. The learned counsel for the petitioners while assailing the allegations of the impugned F.I.R., relying on the decision of the apex Court rendered in Hari Prasad Charnaria v. Bishun Kumar Surekha AIR 1974 SC 301 : 1974 Cri LJ 352 submits that since it was a simpliciter commercial transaction between the parties which has, unfortunately, as alleged, subsequently resulted in breach of contractual liability, if any, on the part of the accused-petitioners or the new Directors, of the said Company of Modinagar which furnished no ground to proceed with the investigation of the case since the necessary ingredients of criminal conspiracy and cheating are completely missing from the allegations of impugned F.I.R. He also relies on single Bench decision of this Court rendered in Shakuntala Vyas v. State of Rajasthan 1996 CrLR (Raj) 829 wherein it has been held that necessary ingredients of offence of cheating described Under Section 145 read with Section 420, I.P.C. were not disclosed either from the complaint or the charges subsequently framed against the petitioner and hence any continuation of the trial therefor, would merely amount to abuse of process of the Court as well as for securing the ends of justice in exercise of inherent powers of the Court quashing of charges was warranted. Similarly, petitioners rely on the decision in State of H.P. v. Sher Singh 1998 Cri LI 3191 in which the decision of Samuel Raj v. The Inspector of Police (Crime) Alliyur 1992 Mad LW Weekly (Criminal) 429 has been followed, in which it was held as under :-"According to the learned counsel, in order to attract Section 420 IPC, the complainant should have been deceived and thereby dishonestly induced 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 scaled, and which is capable of being converted into a valuable security. The cheque was given to discharge an existing debt. By receiving the cheque, the complainant has not parted with any valuable security. Receiving useless security for an existing debt cannot form the basis for an offence punishable under Section 420, I.P.C. I entirely agree with the reasoning adopted by the learned counsel for the petitioner and as such, I find that the receipt of the cheque for an existing debt will not form the basis for an offence punishable under Section 420, IPC in the event of the cheque bouncing back for want of funds. This decision will also confirm the view that for the existing dues, if any cheque was issued at a later point of time and the cheque is returned, the dishonest intention cannot be inferred from such circumstances. When the above decisions are applied to the instant case, it is clear that as the cheques have been issued by the revision petitioner for the existing dues, the said act will not fall under Section 420, IPC and as such the conviction and sentence passed by the trial Court and upheld by the appellate Court have to be set aside. "On the aforesaid ratio, it was held that in absence of dishonest or fraudulent intention, no offence of cheating can be said to have been committed. Besides, he also relies on the decision rendered in State of Haryana v. Ch. Bhajan Lal AIR 1992 SC 604 : 1992 Cri LJ 527 on the ground that the allegations made in the report resulting in the impugned F.I.R. clearly do not constitute any cognizable offence justifying the registration of a case and an investigation thereon and since the case falls in category (1) of the aforesaid categories of cases formulated in the aforesaid decision of the apex Court and hence there is every warrant for exercise of inherent powers of this Court to quash the F.I.R.
7. In addition to, though with equal vehemence, it has also been contended that since no part of the aforesaid transaction of alleged cheating took place within the territorial jurisdiction of police station, Kotwali, Sriganganagar could have been registered and investigated and on this score as well, the investigation proceedings are without jurisdiction and hence the same are liable to be quashed.
8. It is seriously opposed to by the learned counsel for the first informant-respondent as well as the learned P. P. on the ground that the allegations so borne out from the F.I.R. and so also, since the substantial investigation into the allegations of the impugned F.I.R. has been made resulting in substantiation of the allegations, prima facie disclose commission of pre-existing criminal conspiracy and subsequently commission of offence of cheating by the accused-petitioners along with their co-conspirators Satish Singhal and his co-Directors and, as a result, there is no warrant for exercise of inherent powers by this Court since in case the investigation is allowed to proceed and taken to the logical conclusion, the same would not result in abuse of process of law or that the same warrants to be quashed to secure ends of justice.
9. As already stated above, since the first informant, in the impugned F.I.R. itself, as also reiterated by the learned counsel for the respondent and so also borne out from the investigation record, from the statements of Surendra Singla as well as Bal Kishan and Ashwini Kumar, the agreement whereby the first informant agreed to propose the manner of payment under which post-dated cheques worth Rs. 23 lacs were to be issued on behalf of new management of the Company with an assurance to honour the same on their presentment as also assured by all the accused-petitioners at Sriganganagar itself, it was on this undertaking of payment without any condition that Surendra Singla, the first informant signed the documents purporting to have been originally typed on 24-2-98 and 27-2-98, lastly, at Sriganganagar. Had they not so given an unambiguous and unequivocal assurance to make him believe that the cheques of Rs. 23 lacs, as were being issued, were, by all means, to be honoured and their amounts paid on the dates for which they were issued, he would have never signed the agreement and accepted the cheques. This is the bone of contention between the parties.
10. Presently, the allegations made in the impugned F.I.R. itself and so also corroborated by the first informant and his aforesaid two witnesses, there being no warrant for evaluation of their evidence by way of embarking on evaluating their probability and credibility by exercising checks and balances.
11. In view of these circumstances, since investigation is at the verge of completion and the progress made so far by the Investigating Officer, does not, lead to an irresistible conclusion that no offences of criminal conspiracy as well as cheating were committed and that the allegations made in the impugned F.I.R., 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. similarly, presently, it cannot lead to believe that the allegations made in the impugned F.I.R. 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. The learned counsel for the petitioners has relied on the decision rendered in the case of State of Haryana v. Ch. Bhajan Lal (supra). The relevan para of the same which also concludes the present controversy before the Court is quoted as follows :"It is only in the following categories of cases that FIR can be quashed by the High Courts in exercise of its powers under Section 482 or Article 226 of Constitution :
1. Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
2. Where the allegations in the First Information Report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
4. Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a 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.
5. Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
6. Where there is an express legal bar en-grafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
7. Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
Thus, where allegations made in the complaint do clearly constitute a cognizable offence justifying the registration of a case and an investigation thereon and case does not fall under any. one of the categories of cases formulated above calling for the exercise of extraordinary or inherent powers of the High Court to quash the FIR itself, the order of the High Court quashing the First Information Report, cannot be sustained.
12. Accordingly, as held in the decision by the Hon'ble Apex Court, there are allegations made in the F.I.R. itself which do constitute a cognizable offence justifying the registration, of a case and investigation thereon and hence the case does not fall in any one of the categories of cases formulated above calling for exercise of inherent jurisdiction of this Court to quash the impugned order itself. There is no allegation that the impugned F.I.R. is motivated nor there are grounds to believe that the same is frivolous and vexatious or oppressive. The allegations set out in the F.I.R. itself do constitute offence of which cognizance could be taken by the Magistrate, warranting an investigation by the police. This is too pre-mature to make a meticulous analysis of the case during the pendency of the investigation. As also observed by the Apex Court in Jayant Vitamins Ltd. v. Chaitanyakumar AIR 1992 SC 1930 : 1992 Cri LJ 3450, investigation into an offence is a statutory function of the police and the superintendence thereof is vested in the State Government and the Court is not justified without any compelling and justifiable reasons to interfere with the investigation. Thus, where investigation is on and further investigation in the offence is legally permissible as contemplated by the provisions of Section 173, Cr. P.C. itself, before the investigation is complete, there cannot be any pre-mature justification for quashing of the F.I.R. itself.
13. As regards the contention that it was Satish Singhal alone working on behalf of the set of new Directors of the Company taking over the management of the said Company from the old Directors, presently, petitioners before Court and that, subsequently entering into an agreement as admitted and also signed by the first informant, since the old liabilities of the Company stood transferred to the new management of the Company and that, in no manner, whatsoever, the petitioners were liable for commission of any aforesaid offence, suffice it to observe that the first informant had clearly stated that he was not agreeable to the proposals put forth from 24-2-98 to 27-2-98 and that the formalities of transfer of management and liabilities of the Company were already agreed to transfer by the old management of the Company to the new management at the back of the first informant himself who did not know as to what had transpired between these parties in accepting, when forced to accept the aforesaid proposals on 27-2-98 between the transferor and transferee and that he was never willing to be a party to the said transaction of transfer of management and liabilities of the Company whereunder he was forced to agree to receive the aforesaid post-dated cheques as well as the Bank drafts and the thread in settlement of his outstanding liabilities of the Company towards the first informant. There was no condition in regard to, refusal or acceptance of payment or dishonour of cheques on any ground whatsoever entered in the agreement dated 27-2-98 alleged to have been signed by the first informant on 28-2-98 itself at Sriganganagar. Therefore, presently, there is nothing to disbelieve the version and allegations of the first informant that all the accused-petitioners and so also Satish Singhal made false statements whereby he was induced to sign the agreement thereby accepting four post-dated cheques worth Rs. 23 lacs in discharge of liabilities of the Company owed to the first informant and, as alleged, the subsequent conduct attributed to Shri Satish Singhal as well as his co-Director Anil Gupta stopping the payment of the aforesaid cheques as well as the conduct precedent to the transaction of 28-2-98 on the part of the accused-petitioner when, conjointly, considered, resulting in and culminating into the present proceedings as well, furnishes enough ground to lead to the conclusion that there was a pre-existing criminal conspiracy whereby the accused-petitioners, thought of to pass over existing liabilities to the new management of their Company, at the same time, inducing the first informant to accept the cheques worth Rs. 23 lacs issued by Satish Singhal and when Anil Gupta assigning inconsistent reasons for dishonour of the cheques and proceeding to stop payment of the aforesaid cheques, the Bank refused to honour the liability under the cheques so issued and so also the accused-petitioners did not come forward with any offer to make payment to wipe off their liability on the face of bald allegations, the new management of the Company, there were undisclosed liabilities of Rs. 85 lacs or so left over by the old management of the Company and, therefore, they were unable to honour their commitment including payment of l/4th amount of cheques worth Rs. 23 lacs issued in favour of the first informant.
14. The learned counsel for the first informant-respondent has cited decision rendered in Nagpur Steel & Alloys Pvt. Ltd. v. P. Radhakrishana alias Rajan 1997 SCC (Cri) 1073 as well as Ashok Chaturvedi v. Shitul H. Chanchani 1998 Cr LR (SC) 535 : 1998 Cri LJ 4091 to repel the aforesaid contentions of the learned counsel for the petitioners further contending that merely, because a corresponding civil liability in regard to payment of disputed amount of Rs. 23 lacs for which dishonoured cheques were issued" it cannot be said that, on the same ground, no offence of cheating appears to have been committed. As the Hon'ble Apex Court, in the decision of Nagpur Steel & Alloys Pvt. Ltd. (supra), while rejecting the contention of the appellant that since there was a commercial transaction between the parties and alleged breach of contractual liability, there was no sufficient ground to proceed with the trial of the respondent and so there being a justification for quashing the criminal complaint and the proceedings taken by the High Court. While accepting the appeal against the decision of the High Court quashing the criminal complaint and the proceedings as such, observed as follows :
We have perused the complaint carefully. In our opinion it cannot be said that the complaint did not disclose the commission of an offence. Merely because the offence was committed during the course of a commercial transaction, would not be sufficient to hold that the complaint did not warrant a trial. Whether or not the allegations in the complaint were true was to be decided on the basis of evidence to be led at the trial in the complaint case. It certainly was not a case in which the criminal trial should have been cut short. The quashing of the complaint has resulted in grave miscarriage of justice. We, therefore, without expressing any opinion on the merits of the case, allow this appeal and set aside the impugned order of the High Court and restore the complaint. The learned trial Magistrate shall proceed with the complaint and dispose of it in accordance with law expeditiously.
15. Similarly, in the decision of J.P. Sharma v. Vinod Kumar Jain AIR 1986 SC 833 : 1986 Cri LJ 917, it has been held that when allegations as are made in the complaint, presently the impugned F.I.R., it taken to be true on their face value, reveal commission of an offence, there can hardly be any justification for exercise of inherent powers Under Section 482, Cr. P.C. by the High Court. In the instant case as well, as already observed above, in case the allegations of the impugned F.I.R. as made by the first informant are taken to be true on its face value there being nothing contrary to the same, it is too pre-mature to say that the commission of the offences as alleged therein and presently under investigation are not made out at all. So also, in the decision rendered in Poovalappil David v. State of Kerala 1989 Cri LJ 2452, it has been clearly held that where the petitioners running a licensed air-conditioned cinema theatre, used to switch off the air-conditioning unit after the entry of the customers, to save the electrical energy for illegally enriching themselves, the action of the petitioners would amount to cheating and they would be liable for the punishment Under Section 420 of the Indian Penal Code. So also, at present the contention of the learned counsel for the petitioners that even if there was any dishonour or refusal of payment of cheques and liability said to be cleared therein, which is by on subsequent conduct of the petitioners, does not make them liable for commission of any offence also cannot be sustained since there are contrary circumstances lending circumstantial support to the allegations made in the impugned F.I.R. by the first informant that the accused-petitioners in connivance with Satish Singhal did not intend to wipe off previous liability owed to the first informant and instead with an intention to cheat him dishonestly and fraudulently induced him to enter into an agreement and accept the cheques for a sum of Rs. 23 lacs so as to dishonour the same subsequently.
16. Contrarily, the decision of Ashok Chaturvedi (supra) as relied on by the learned counsel for the respondent, suffice it to observe that as already discussed hereinbefore, it cannot be said that there is no case worth investigation after consideration of allegations of investigation and the same having being substantially and progressively substantiated by the material and evidence collected during the course of investigation and, as a result, when there are specific allegations as substantiated above against the act and conduct of the accused-petitioners as well whereby the first informant has alleged that he was deceived fraudulently or dishonestly being induced to sign subscribing to the execution of the aforesaid agreement on 28-2-98 and, under the terms of the same, to accept an undertaking and a solemn assurance from the accused-petitioners and Satish Singhal that the cheques of Rs. 23 lacs would be honoured on the date of their presentment, to accept the same but, subsequently, it turned out all these assurances and statements so given/made inducing the first informant to accept delivery of those cheques in discharge of his old liabilities owed by the accused-petitioners on behalf of the aforesaid Company to the first informant, he was cheated. Had the accused-petitioners not produced Satish Singhal before them and they conjointly made a false promise and gave assurance for encashment and honouring of the cheques worth Rs. 23 lacs, he would have never signed the aforesaid agreement thereby accepting the cheques which were, lastly, dishonoured resulting in depriving and refusal of payment of a sum of Rs. 23 lacs to the first informant. At present, there is hardly any material for distinguishing between the act and conduct of the accused-petitioners with that of Satish Singhal.
17. As a result, from which ever angle it is viewed, on the basis of aforesaid discussion for the limited purpose of disposal of the present petition only, the F.I.R. is not liable to be quashed against the present petitioner on any account whatsoever. If it were so, there is neither a case of abuse of process of law nor does it appear to be so in the interest of justice.
18. As already discussed and concluded hereinbefore, since all the accused-persons including the petitioners went to Sriganganagar to meet the first informant and the aforesaid last transaction including that of issuance of and delivery of cheques worth Rs. 23 lacs by the accused-petitioners and Satish Singhal took place at Sriganganagar itself and, as a result, since the accused-persons including the petitioners have refused to honour liability arising under the aforesaid cheques and so also subsequent thereto and, as a result, it cannot be said that no part of the aforesaid transaction, as alleged in the impugned F.I.R., took place or happened at Sriganganagar and so the police of Sriganganagar had no territorial jurisdiction to have registered and investigated the case. Hence the contention that no offence was committed at Sriganganagar is also ' devoid of any force and is untenable.
19. On the basis the aforesaid discussion, I do not find any merit in this petition and the same is liable to be dismissed. Accordingly, this petition is hereby dismissed along with its connected stay petition. The investigating agency is hereby directed to expedite the investigation as per the provisions of Sub-section (1) of Section 173, Cr. P.C. and file result before the competent Court. The aforesaid discussion shall be meant to be limited to the purpose of this petition not prejudicing the trial on merit.