Gujarat High Court
Paresh Jayantilal Amin vs State Of Gujarat on 11 August, 2021
Author: B.N. Karia
Bench: B.N. Karia
R/CR.MA/20348/2017 ORDER DATED: 11/08/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 20348 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 17369 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 17371 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 20356 of 2017
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PARESH JAYANTILAL AMIN
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR MANISH J PATEL(2131) for the Applicant(s) No. 1
NOTICE SERVED THRU CONCERNED POLICE STN for the Respondent(s)
No. 2
MR. H.K. PATEL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE B.N. KARIA
Date : 11/08/2021
ORAL ORDER
1. Rule. Learned APP Mr. H.K. Patel waives service of rule for the respondent No. 1 State and learned advocate Mr. Tulsi Savani for the respondent No.2, in these four matters.
2. In this group of four matters, common question and similar facts are involved, learned advocate appearing on behalf of either side requested to decide these four matters by passing common order as identical question is involved, therefore common judgment is passed treating Criminal Misc. Application No. 20348 of 2017 as a lead matter.
3. The brief facts of the present case may be referred as under:
The petitioner viz., Paresh Jayantilal Amin as well as Page 1 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 Jayantilal Punjiram Patel have preferred their petitions under Section 482 of the Criminal Procedure Code with a request to quash and set aside the complaint filed by the complainant i.e. respondent No. 2 - Ashokbhai Manjibhai Lathiya - Director of Ambuja Ginning Pressing & Oil Co. Pvt. Ltd before the Court of learned JMFC, Talaja, District - Bhavnagar being Criminal Case No. 601 of 2017 and process issued under Section 406, 420 and 120(B) of the Indian Penal Code (for short hereinafter referred as 'the IPC'). The petitioner in Criminal Misc. Application No. 17369 of 2017 and Criminal Misc. Application No. 20356 of 2017 have filed their petitions under Section 482 of the Cr.PC and requested to quash the complaint filed by the complainant i.e. respondent No. 2 Gajanand Ginning Pressing Pvt. Ltd and it's Director viz., Nagjibhai Kuberbhai Kheni before the Court of learned JMFC, Talaja, Dist - Bhavnagar being Criminal Case No. 600 of 2017 and process issued under Section 406, 420 and 120(B) of the Indian Penal Code.
4. A private complaint was filed by Mr. Ashokbhai Manjibhai Lathiya - Director of Ambuja Ginning Pressing & Oil Co. Pvt Ltd (who will be referred as complainant) before the Court of learned JMFC, Talaja, District - Bhavnagar under Section 406, 420 and 120(B) of the IPC, which was registered as Criminal Case No. 601 of 2017. As per the averments made in the complaint, accused No. 1 is a company and accused Nos. 2 to 5 are the Directors and accused No. 6 is son of accused No. 3. The transaction of selling goods (cotton bells) with the accused No. 1 - company was proceeded in the year 2014-15 and the amount, which was payable, have not been paid and for that, cheques were issued in the year 2014 but same were returned as dishonoured and therefore, a complaint was filed against the accused persons. The Page 2 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 petitioner in petition being Criminal Misc. Application No. 20348 of 2017 is shown as accused No. 3 being Director of the accused No. 1 Company. The petitioner in petition being Criminal Misc. Application No. 17369 of 2017 is shown as accused No. 6.
5. Heard learned advocate Mr. Manish J. Patel appearing for the petitioner in all these four petitions, learned advocate Mr. Tulsi Savani appearing for the respondent No. 2 - the complainant in all four petitions and learned APP Mr. H.K. Patel for the respondent State.
6. Learned advocate Mr. Tulsi Savani appearing for the respondent No. 2 in Criminal Misc. Application No. 20348 of 2017 has not filed his Vakalatnama on behalf of respondent No. 2. He sought permission to file his Vakalatnama. Permission is hereby granted to file his Vakalatnama.
7. Learned advocate for the petitioner has submitted in his arguments that in the entire complaint, there are no specific allegations made by the respondent No. 2 that the petitioner dishonestly delivered the property, misappropriated the same and converted the property to his own use or disposed of the property. It is further submitted that to attract provisions under Sections 415 of the IPC, the complainant must establish dishonest intention for inducing any person in any property. It is further submitted that non making of payment of transaction is converted by the respondent No. 2 in Criminal proceedings, saying that criminal breach is committed by the petitioner. It is further submitted that if the cheques were dishonoured, respondent No. 2 has not utilized its legal rights to take steps under the Negotiable Instruments Act. It is further submitted Page 3 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 that there was no intention on the part of the petitioner to induce the property with dishonest intention. The payment was regularly made by the petitioner since last 10 years, however, due to some financial problems payment was not received from the persons of company to whom the goods was sold. It was not transferred to the complainant and it is a part of the business, this cannot be converted in the criminal offence. That issuance of process by the Magistrate is without ingredients of criminal breach of trust or cheating, which is prima-facie illegal and erroneous. That remedy of recovering the amount was available with the complainant but he has not availed such remedy before the Civil Court. There is no prima-facie case made out against the person under Sections 406 and 420 of the IPC. That as the remedy available with the complainant for recovering the due amount, he cannot be permitted to file a criminal complaint under Sections 406 and 420 of the IPC. Learned advocate Mr. Manish Patel for the petitioner has requested to quash and set aside the Criminal Case No. 600 of 2017 as well as Criminal Case No. 601 of 2017 and process issued under Sections 406, 420, 120(B) of the IPC.
8. Per contra, learned advocate Mr. Tulsi Savani appearing for the respondent No. 2 has strongly opposed the submissions made by the learned advocate for the petitioner and submitted that prima-facie, the petitioners are involved in the offence punishable under Section 406 as well as 420 of the IPC and there was an intention on the part of the petitioner to commit breach of trust and misappropriation of the amount by entering into transactions with respondent No. 2. He further submitted that the petitioner himself has admitted in their petitions that due to some financial problems as payment was not received from the persons of the company to whom the goods was sold, the same Page 4 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 payment was not transferred to the complainant. It is further submitted that this picture shows the criminal intention of the petitioner himself as dishonest misappropriation to convert the property to his own. That after considering the Police report, the learned JMFC, Talaja has issued process under Sections 406, 420 and 120(B) of the IPC against the petitioner. It is further submitted that the complaint lodged by the respondent No. 2 against the petitioner cannot be thrown away without recording evidence of the prosecution. It is further submitted that mere civil remedy is available with the complainant and it is not expected that criminal complaint cannot be lodged against the petitioner. Hence, learned advocate appearing for the respondent No. 2 has requested to dismiss the present petition.
8.1 Learned advocate for the respondent No. 2 in support of his arguments has relied upon the judgment in case of Priti Saraf Vs. State of NCT of Delhi reported in 2021 (0) AIJEL- SC 67113, wherein Para 23 and 32 are read as under:
"23. It being a settled principle of law that to exercise powers under Section 482 CrPC, the complaint in its entirety shall have to be examined on the basis of the allegation made in the complaint/FIR/charge-sheet and the High Court at that stage was not under an obligation to go into the matter or examine its correctness. Whatever appears on the face of the complaint/FIR/charge-sheet shall be taken into consideration without any critical examination of the same. The offence ought to appear ex facie on the complaint/FIR/charge-sheet and other documentary evidence, if any, on record.
32. In the instant case, on a careful reading of the complaint/FIR/charge-sheet, in our view, it cannot be said that the complaint does not disclose the commission of an offence. The ingredients of the offences under Sections 406 and 420 IPC cannot be said to be absent on the basis of the allegations in the Page 5 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 complaint/FIR/charge-sheet. We would like to add that whether the allegations in the complaint are otherwise correct or not, has to be decided on the basis of the evidence to be led during the course of trial. Simply because there is a remedy provided for breach of contract or arbitral proceedings initiated at the instance of the appellants, that does not by itself clothe the court to come to a conclusion that civil remedy is the only remedy, and the initiation of criminal proceedings, in any manner, will be an abuse of the process of the court for exercising inherent powers of the High Court under Section 482 CrPC for quashing such proceedings."
9. Learned APP appearing for the respondent No. 1 state has supported the arguments advanced by the learned advocate for the respondent No. 2 and submitted that ingredients of Sections 406 as well as 420 of the IPC are prima-facie made out by the complainant. It is further submitted that in the allegations made by the respondent No. 2 in his complaint requires to be recorded by the trial Court concerned. It is further submitted that petition itself is not maintainable for the reasons that it is disputed question of facts which requires detailed discussion of evidence and decided by the documentary evidence. It is further submitted that this petition is under Section 482 of the Criminal Procedure Code and it is not appropriate to raise disputed question of fact for adjudication by this Court. That the petitioner has committed offence against the complainant itself with the other co-accused and investigation is to be carried out by the prosecution. Despite the averments made by the petitioner are devoid of merits and are untenable in the law as well as on facts and requested to dismiss the petition.
10. Having heard learned advocates for the respective parties as well as APP and also perused the materials on record, it appears that in the present case process has been issued to Page 6 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 recover the amount from the petitioner. The contents of the FIR shows that certain business transactions were carried out with the complainant from 01.04.2014 to 20.01.2015. It is also clear that allegation was made that amount of Rs.64 lacs was to be recovered from the accused No. 1 and liability was accepted by the sister concern i.e. Komal Fashion and in this connection a letter was also received by the complainant. Description of the bill was given by the complainant to the sister concern of the accused No. 1, which is also mentioned in the complaint. Further, certain amount of business transactions were between the parties credited in the account of the complainant, so as to shown in the ledger books but however the amount of Rs. 64,21,650/- was not paid by the accused persons though frequent request was made by the complainant to clear the dues but no response was received from the other side and therefore, by not paying the amount of bill, offence was committed under Sections 406 and 420 of the IPC. Further, it appears that against the accused No. 6 who happens to be the father of the accused no. 3, there are no other allegations except abetment to accused Nos 2 to 4 and he was neither the party in business transactions with the complainant. Accused No. 6 father of the accused No. 3 who is director of the accused No. 1 -Company arraigned the present accused No. 6 in the complaint without any specific allegations against him. It appears that the verification of the complainant was recorded by learned JMFC, Talaja on 01.10.2015 and thereafter, order to inquiry under Sections 406, 420, 120(B) of the IPC was passed by learned JMFC, Talaja by order dated 20.05.2017. If we considere the judgment and order passed by this Court (Coram: Hon'ble Mr. Justice J.B. Pardiwala) in Criminal Misc. Application No. 3409 of 2015, the same fact was there of pursuant to cotton bell and payment was not made and Page 7 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 therefore, complaint was filed under Sections 406, 420, 504, 506(2) read with Section 114 of the IPC. This Court observed in the said judgment, we refer relevant paras which read as under:
"7. The offences of criminal breach of trust (Section 406 IPC) and cheating (Section 420 IPC) have specific ingredients. In order to constitute a criminal breach of trust (Section 406 IPC).
(1) There must be entrustment with person for property or dominion over the property, and
2) The person entrusted :
a) dishonestly misappropriated or converted property to his own use, or
b) dishonestly used or disposed of the property or willfully suffers any other person so to do in violation
i) any direction of law prescribing the method in which the trust is discharged and
ii) of legal contract touching the discharge of trust (see: S.W.P. Palanitkar v. State of Bihar, (2002)1 SCC
241) : (AIR 2001 SC 2960).
Similarly, in respect of an offence under section 420 IPC, the essential ingredients are :
1) deception of any person, either by making a false or misleading representation or by other action or by omission;
2) fraudulently or dishonestly inducing any person to deliver any property, or
3) the consent that any persons shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit (see: Harmanpeet Singh Ahluwalia v. State of Punjab, (2009)7 SCC 712 : (2009) Cr.L.J. 3462 (SC) )
8. Further, in both sections, mens rea i.e. intention to defraud or the dishonest intention must be present from the very beginning or inception without which either of these sections cannot be invoked.
9. In my view, the plain reading of the First Information Report fails to spell out any of the aforesaid ingredients noted above. I may only say with a view to clear a serious misconception of law in the mind of the police as well as the courts below that if it is a case of the complainant that offence of criminal breach of trust as defined under Section 405 Page 8 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 of IPC, punishable under Section 406 of IPC, is committed by the accused, then in the same breath it could not be said that the accused has also committed the offence of cheating as defined and explained in Section 415 of the IPC, punishable under Section 420 of the IPC.
10. Every act of breach of trust may not be resulted in a penal offence of criminal breach of trust unless there is evidence of manipulating act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person may seek his remedy for damages in civil courts but any breach of trust with a mens rea gives rise to a criminal prosecution as well. It has been held in Hart Prasad Chamaria v. B.K. Surekha and others, reported in 1973(2) SCC 823 as under :
We have heard Mr. Maheshwarit on behalf of the appellant and are of the opinion that no case has been made out against the respondents under Section 420 Indian Penal Code. For the purpose of the present appeal, we would assume that the various allegations of fact which have been made in the complaint by the appellant are correct. Even after making that allowance, we find that the complaint does riot disclose the commission of any offence on the part of the respondents under Section 420 Indian Penal Code. There is nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with Rs. 35.000/- There is also nothing to indicate that the respondents induced the appellant to pay them Rs. 35.000/- by deceiving him. It is further not the case of the appellant that a representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability on the respondents for the offence of cheating.
11. To put it in other words, the case of cheating the dishonest intention starts with the very inception of the transaction. But in the case of criminal breach of trust, the person who comes into possession of the movable property receives it legally, but illegally retains it or converts it to his own use against the Page 9 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 terms of the contract. Then the question is, in a case like this, whether the retention is with dishonest intention or not. Whether the retention involves criminal breach of trust or only a civil liability would depend upon the facts of each case.
12. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating are fine one. In case of cheating, it depends upon the intention of the accused at the time of inducement, which may be judged by a subsequent conduct but for this the subsequent conduct is not the sole test but mere breach of contract which cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed.
Therefore, it is his intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence after breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership of it must be of some other person. The accused must hold that property on trust of such other person. But the offence, i.e. the offence of breach of trust and cheating involve dishonest intention but they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of entrustment. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender practices fraudulent or dishonest to induce with another person to deliver the property. In such situation, both the offences cannot co-exist simultaneously."
11. Learned advocate appearing for the respondent No. 2, during the course of his arguments submitted that the respondent No. 2 has filed Civil Suit before the concerned Civil Page 10 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 Court for recovery of the amount from the present petitioner, which is pending as on date. It appears that all the impugned FIRs are based on commercial transactions during the course of trading between the parties and it is of civil nature. Learned advocate for the complainant in support of his arguments relied upon judgment delivered in case of Indo Asian Limited vs. State of Uttarakhand and Another reported in (2014) 3 SCC 191, wherein it was held that for commercial transactions breach of trust and cheating, etc, criminal proceedings cannot be quashed by the High court by exercising powers under Section 482 of the Cr.PC. In the cited case the company was manufacturer of copper wire and had conducted transactions with petitioner No. 2. Certain copper wire to be returned and the part of the copper wire was used in processing but other part remained with the accused who misappropriated and converted the same to his own use, despite undertaking to return it. Under these circumstances, the Hon'ble Apex Court observed that the High Court should not have quashed the complaint and summons issued by the Criminal Court. The facts of the cited case and the present case are quite different. In the instant case, the business transactions is carried out with the complainant. This Court has also considered the judgment delivered in in case of Priti Saraf Vs. State of NCT of Delhi reported in 2021 (0) AIJEL- SC 67113. We may refer Para 23 and 32 which read as under:
"23. It being a settled principle of law that to exercise powers under Section 482 CrPC, the complaint in its entirety shall have to be examined on the basis of the allegation made in the complaint/FIR/charge-sheet and the High Court at that stage was not under an obligation to go into the matter or examine its correctness. Whatever appears on the face of the complaint/FIR/charge-sheet shall be taken into consideration without any critical examination of the same. The offence ought to appear ex facie on the Page 11 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 complaint/FIR/charge-sheet and other documentary evidence, if any, on record.
32. In the instant case, on a careful reading of the complaint/FIR/charge-sheet, in our view, it cannot be said that the complaint does not disclose the commission of an offence. The ingredients of the offences under Sections 406 and 420 IPC cannot be said to be absent on the basis of the allegations in the complaint/FIR/charge-sheet. We would like to add that whether the allegations in the complaint are otherwise correct or not, has to be decided on the basis of the evidence to be led during the course of trial. Simply because there is a remedy provided for breach of contract or arbitral proceedings initiated at the instance of the appellants, that does not by itself clothe the court to come to a conclusion that civil remedy is the only remedy, and the initiation of criminal proceedings, in any manner, will be an abuse of the process of the court for exercising inherent powers of the High Court under Section 482 CrPC for quashing such proceedings."
12. At this juncture, it would be advantageous to refer to the judgment of the Hon'ble Apex Court in the case of State of Haryana Vs. Bhajan Lal reported in AIR 1992 SC 604, wherein in paragraph no.108 it is observed thus:
"108. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
1. Where the allegations made in the First Information Page 12 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 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 F. I. R. 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 F.I.R. 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 F.I.R. 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 engrafted 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 oncerned 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."
8. As observed above, even if the impugned FIR is taken at its face value, the same does not disclose the offence as alleged. The impugned FIR reflects that the dispute is purely of civil nature which fact is even evident from the Page 13 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022 R/CR.MA/20348/2017 ORDER DATED: 11/08/2021 submissions made by the learned Counsel that the parties have amicably settled the issue and have entered into the written deed of settlement. In the facts and circumstances of the case, therefore, the institution of criminal proceedings pursuant to the impugned FIR would amount to abuse of process of court and law and therefore, in order to secure the ends of justice, the impugned FIR deserves to be quashed.
13. In view of the above facts that the despite civil nature business transactions was carried out between the parties, the payment was not made by the petitioner of the said business transactions to the complainant, and the impugned complaints filed under Sections 406 and 420 of the IPC, if the entire complaints are taken in to consideration, the same does not disclose offences as alleged therein. The impugned complaints are of purely of civil nature. In the facts and circumstances of the case, the initiation of the criminal proceedings pursuant to the impugned complaints which amounts to abuse of process and the judgment relied by the learned advocate for the respondent No. 2 are not applicable to the present case therefore, in order to secure ends of justice, the impugned complaints are required to be quashed and set aside.
14. In view of the above, all the four petitions are allowed. The impugned complaints being Criminal Case No. 600 of 2017 and Criminal Case No. 601 of 2017 filed before the JMFC, Talaja, Dist- Bhavnagar under Sections 406, 420 and 120(B) of the IPC are quashed and set aside. Rule is made absolute to the aforesaid extent.
(B.N. KARIA, J) prk Page 14 of 14 Downloaded on : Sun Jan 16 07:48:25 IST 2022