Bombay High Court
M/S Bush India Ltd. And Another vs Lekharaj Pohoomal Kewalramani And ... on 26 April, 1983
JUDGMENT
1. This is a petition under Section 397/401 and in the alternative under Section 482, Criminal P.C., for setting aside the order of the learned Addl. Sessions Judge, Gr. Bombay, Shri G. V. Kalikar, dated 2nd March, 1981. By this order the learned Judge in exercise of revisional jurisdiction has set aside the order of the learned Metropolitan Magistrate, 22nd Court, Andheri, dated 29th April, 1980, staying the proceedings in Criminal Case No. 478/S/78 before him pending decision of a civil suit on the original side of this Court.
2. In April, 1978 respondent 1 Lekhraj filed Criminal Complaint No. 478/S/78 before the learned Magistrate against the present petitioners 1 and 2, viz. Bush India Ltd. and their Director Shri T. R. Mulchandani respectively, and the present respondent 3 Sabena Airways Ltd. for offences punishable under Sections 403, 406 and 420, I.P.C. Admittedly, petitioner 1 manufactures radio sets, cassettes and other allied items at Bombay. Respondent 1 is the partner of a business firm 'M/s. Pohoomal Kevalram Sons' of Bombay. The main allegations in the Criminal Complaint were that the petitioners had appointed respondent 1 firm as their sole agents for sale and export of their products to certain West African countries. Hereafter respondent 1 firm will be referred to as the agents for convenience. In return the agents were to get commission at 10%. It appears that in September 1975, t!he petitioners directly proceeded to despatch 80 cartons of radio sets to a concern in Kango called Kabiru Ado Trading Co. They handed over the consignment to respondent 2 for carriage and also made over the material documents to the agents for negotiating them with the banks. The grievance of the agents is that subsequently the petitioners approached the carriers and fraudulently got back the goods on the false pretext that they were defective. The agents' case was that the petitioners had made a false representation to them that they would not directly deal with any customers in the West African countries, except through them (that is, agents) and thereby induced the agents to disclose their own customers to the petitioners. Thereafter, the petitioners dishonestly took advantage of this disclosure and started dealing with the customers. Further according to the agents, the petitioners by handing over to them documents relating to the goods for negotiations with the Banks, had in law entrusted their custody to the agents. On these allegations, the agents held the petitioners responsible for offences punishable under Sections 403, 406 and 420, I.P.C. and the carriers for aiding the petitioners in commission of the offences.
3. Here it may be stated that on 9th December, 1975 petitioner 1 had filed a suit being Suit No. 1395 on the Original Side of this Court, against the agents for a declaration that they were not their sole selling and exporting agents for the West African countries and for an injunction restraining them from laying such a claim. Damages were also claimed for alleged wrongful detention of petitioners documents. The learned Magistrate issued process against the accused persons under Sections 403, 406 and 420, I.P.C. After being served, the present petitioner 1 filed an application before the learned Magistrate in March, 1979 for stay of the criminal proceedings pending the decision of suit. This application was allowed by the learned Magistrate by his order dated 29th April, 1980 and the criminal case was stayed. On revision by the agents, the learned Addl. Sessions Judge by the impugned order reversed the learned Magistrate's order.
4. Shri Vashi, who appears for the petitioners before me has raised two contentions. In the first place, Shri Vashi submits, the learned Sessions Judge's order is unsustainable on merits. The second submission is that the Sessions Court had no power to entertain revision against the, original order of stay, as it is an interlocutory order within the meaning of Section 397(2), Criminal P.C., I find much substance in both these contentions.
5. Shri Vashi has cited a single Judge's ruling of this Court reported in 72 BLR 495, Dhanrajmal Gobindram and Co. P. Ltd. v. The State of Maharashtra which recapitulates the relevant law on stay of proceedings, succinctly if I may say so with respect. I can do no better than reproduce the summing up of the law by Vimadalal, J. in his own words :-
"Regarding the question of stay, two general principles of a negative character emerge from the authorities viz. (1) that there is hard and fast rule as to whether a criminal proceeding should be stayed or a civil proceeding should be stayed, the question being one which has to be decided on the facts and circumstances of each particular case and (2) that the possibility of conflicting decision in civil and criminal Courts is not a relevant consideration since the law itself envisages such an eventuality. Apart from these principles there are guidelines chalked out by judicial decisions indicating how the Court's power to stay should be exercised. The primary consideration is the interests of justice which are opposed to multiplicity of proceedings on the same facts. This would imply that the Court must consider whether one of the proceedings was instituted with a view to prejudice, or whether one of these proceedings would tend to embarrass the other, and in that connection, the question as to whether the criminal proceeding or the civil suit was instituted first, as well as the question as to whether the former was public or a private prosecution are important, though not conclusive. There are other considerations which the Court must also bear in mind, namely, whether the object of instituting the criminal proceeding, was to use same as a lever to coerce a compromise of the civil suit and the nature of the proceeding, the conduct of the parties, the likelihood of delay in the decision of the civil suit, the possible loss of evidence, and the suitability of a particular dispute being more effectively and more satisfactorily decided by the civil or the criminal court."
6. I now proceed to examine the merits of the impugned order. According to the learned Judge, the principal questions arising in the criminal proceedings and the suit were entirely different and as such, the order of stay was improper. The learned Judge conceded that grant of stay was in the discretion of the Magistrate. Having said so, he proceeded to reverse the order, without showing where the learned Magistrate went wrong in exercising his discretion. The learned Magistrate granted stay mainly for three reasons. According to him, the material point in both the matters was the same and if the criminal proceedings were allowed to proceed, that would result in multiplicity of proceedings. In the second place, he was of the view that by refusing to grant stay, prejudice was likely to be caused to the petitioners whereas no prejudice was likely to be caused to the agents by grant of stay. Thirdly, the learned Magistrate felt that the dispute was essentially of a civil nature and as such the matter could be adjudicated upon more effectively and comprehensively by the High Court in the suit.
7. The learned Addl. Sessions Judge appears to have missed the core of the real aspect of the matter. His finding that the material questions that arose in the two proceedings were effectively different, is not at all sustainable. If is difficult to understand his reasoning in this regard. As I have understood, the learned Judge means to say that so far as the criminal complaint is concerned, the main question is whether the agreement between the parties stipulated that the petitioner should not deal directly with customers from West African countries and pay 10% commission to respondent 1 and that the petitioners went back on this promise by asking respondent 2 carriers to return back the consignment on a false pretext that the goods were defective. As against this, the learned Judge feels, that the main question arising in the suit is whether respondent 1 firm are not the sole selling and exporting agents of the petitioners for the West African countries. I fail to understand what is the qualitative difference between the two stands. The parties are merely formulating the same propositions in the two proceedings in different words. The distinction made by the learned Judge is without any difference. As observed by the learned Magistrate and as is also apparent from the record, the dispute in the criminal complaint also revolves on the pivot whether or not respondent 1 are the sole agents of the petitioners for sale and export of the petitioners' goods to the countries concerned. The learned Addl. Sessions Judge's interpretation is clearly wrong so far as this aspect is concerned.
8. The other two reasons given by the learned Magistrate and indicated in para 6 supra, are also sound and the learned Addl. Judge has not bothered himself to consider them. Here it may be mentioned that before the present complaint out of which these proceedings arise, the agents had filed two earlier complaints against the petitioners and the carriers in October, 1975 and September, 1977 on identical allegations. Both came to be dismissed in default in January, 1977 and January 1978 respectively. In the first case, the Magistrate had referred the matter to the police for preliminary report and it is common ground that an adverse report was received that the dispute was of a civil nature. The learned Magistrate's order staying the prosecution was eminently just and the learned Additional Sessions Judge should not have interfered with it in revision.
9. There is substance in Shri Vashi's second contention also based on the bar to revision under Section 397(2) of the Code. The preliminary objection was thrown out by the learned Judge, observing that order affected the rights of the complainant and as such was not interlocutory. Apparently the learned Judge has relied upon , Amar Nath v. State of Haryana. To attract this ruling the impugned order has to be "a matter of moment and must affect or adjudicate the rights of the accused or a particular aspect of the trial". It is difficult to see how an order of stay fulfils this requirement.
10. Now what is the test that will apply here ? An order which terminates a proceeding will be obviously not an interlocutory order, inasmuch as it is a final one. However, the reverse of this proposition is not always true. In other words, in a situation an order which is not final, can also be a non-interlocutory order within the meaning of Section 397(2). For example, an order may reject the plea of the accused on a point which when accepted, will conclude the particular proceeding. In such a case, if the order goes in favour of the accused, it terminates the proceeding and as such it will not be an interlocutory order. However, where the order goes against the accused, it will not terminate the proceedings; yet it will remain non-interlocutory and not attract the bar under Section 397(2). Please see , Madhu Limaye v. State of Maharashtra. In my opinion, the test adumbrated in Madhu Limaye's case applies more aptly to the facts of the present case. The order of stay passed by the learned Magistrate would have remained and does remain interlocutory, whatever way he had passed it either granting or rejecting the request for stay. The order was thus not open to revision by the Sessions Court.
11. The learned Addl. Sessions Judge's order will thus have to be set aside. Shri Vashi did not press his alternative relief for quashing the criminal proceedings in their entirety. He, however, seeks liberty to the petitioners to move the learned Magistrate, if so advised, for discharge of the accused persons under Section 245(2), Criminal P.C. for the reason that the charge is groundless. This liberty is reserved to the petitioners. In the result, the order of the learned Addl. Sessions Judge dated 2nd March, 1981 is hereby set aside and the order of the learned Magistrate dated 29th April, 1980 is restored. Rule made absolute accordingly.
12. Rule made absolute.