Delhi District Court
State vs . S.K. Mathur Etc. Fir No.461/04 on 16 November, 2019
State vs. S.K. Mathur etc. FIR no.461/04
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IN THE COURT OF CHIEF METROPOLITAN MAGISTRATE:
ROHINI COURTS NORTH DISTRICT, DELHI
Presided Over by : GAGANDEEP SINGH
State Vs. S.K. Mathur Date of Institution 11.02.2005
FIR No. 461/04 Judgment Reserved on 06.08.2019
PS Connaught Place(EOW) Date of Judgment 16.11.2019
Under 406/420/120B IPC
Section
JUDGMENT
a) New Regn. No. of the case 5290052/16
b) Date of offence During the period 2003 or before
c) Name of the complainant Sh. Jitender Wadhwa, S/o Sh. H.P.
Wadhwa, R/o B66, Satish Marg, Rishi
Nagar, Rani Bagh, New Delhi & 647, Rishi
Nagar, Rani Bagh, Delhi.
d) Name & address of the accused (1) S.K. Mathur, S/o Late Sh. Prahlad
Kishore Mathur, R/o 10, Babar Lane, New
Delhi.
(2) Smt. Meena Mathur, W/o Sh. S.K.
Mathur, R/o C/o House of Vijay Kumar
Mathur, Agra University Campus, Agra,
U.P.
(3) Smt. Shefali Mathur, W/o Sh. Pankaj
Mathur, R/o C/o House of Vijay Kumar
Mathur, Agra University Campus, Agra,
U.P.
e) The offence complained of 406/420/120B IPC
State vs. S.K. Mathur etc. FIR no.461/04
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a) New Regn. No. of the case 5290052/16
f) Plea of accused Pleaded not guilty
g) The final order Acquitted
h) Date of order 16.11.2019
BRIEF STATEMENT OF REASONS FOR DECISION:
1. The FIR in question was got registered on the complaint of complainant Jitender Wadhwa lodged on 27.03.2003. It was alleged that he through newspaper advertisements came to know about one company i.e. M/s Aapka Bazar Jaipur Pvt. Ltd. run by the accused persons. They claimed in the advertisement that in lieu of deposit of Rs.4/5 lacs, one provision store in the name of Aapka Bazar would be opened and grocery items to the tune of Rs.4 lacs would be provided. In lieu of investment, the franchisee will be entitled to Rs.36,00045,000/ in lieu of the investment of Rs.45 lacs respectively. He accordingly contacted the accused persons and agreed to become their franchisee. An agreement was executed and he deposited Rs.4 lacs. He also provided his premises i.e. B 66, Captain Satish Marg, Rishi Nagar, Rani Bagh, Delhi. The accused company, thereafter, provided few articles for opening the franchisee is the said shop i.e. Air conditioner, computer, stock, etc. They also provided few cheques in lieu of the investment which got honoured for one or two months. But, thereafter, neither the stock was provided nor the said commission amount was paid by the accused company. The State vs. S.K. Mathur etc. FIR no.461/04 3 Directors and the office bearers of the said company thereafter started avoiding him and even manhandled when he confronted them in this regard. He also thereafter informed that accused company has cheated several other persons in a similar manner by taking money from them. On the said complaint, the FIR was got registered. The accused S.K. Mathur being the person responsible for running and looking after the affairs of M/s Aapka Bazar Jaipur Pvt. Ltd. was arrested. Subsequently, supplementary chargesheet was filed against other accused persons, namely, Shefali Mathur and Meena Mathur.
2. The cognizance upon the said final report was taken by the Ld. Predecessor on 23.02.2005 and the accused persons were summoned to face the trial. The charge for the offences u/s 420/120B IPC and in alternative u/s 406 IPC was framed on 04.03.2014 against accused S.K. Mathur, Meena Mathur and Shefali Mathur. All accused persons pleaded not guilty and claimed trial.
3. The prosecution in order to prove their case has examined four witnesses in all.
4. PW1 Jitender Wadhwa is the complainant/victim. He deposed that in June, 2002, he saw an advertisement in the name of Aapka Bazar Jaipur Pvt. Ltd. wherein it was mentioned that if anyone would deposit Rs.4 lacs with the company and also provided a place to open a departmental store, then, the investor would earn Rs.36,000/ per month. Moreover, the company would also provide stock of grocery items of Rs.4 lacs to the State vs. S.K. Mathur etc. FIR no.461/04 4 investor. It was also assured that company will also do renovation work to the tune of Rs.2 lacs in the space provided. He went to the office of the company at Connaught Place where all the accused persons met him and explained the scheme. He agreed to invest his money and provided his shop at Rishi Nagar. He made payment through receipts Ex.PW1/A and Ex.PW1/B. An Agreement Ex.PW1/C was also executed. The accused persons directed him goods to the tune of Rs.30,00040,000/ and conducted some small fittings. Thereafter, he was handed over cheques of Rs.32,000/ for three months and after that, no amount was paid. The cheques provided by the company got dishonoured. The company also stopped providing any goods to him. The accused persons showed their inability to pay anything. They also refused to return his investment. Accordingly, he being cheated lodged the complaint Ex.PW1/D with police.
5. PW2 Insp. Keshav Mathur was part of investigation with IO SI Manmohan Singh on 14.12.2004. In his presence, accused S.K. Mathur was arrested and his disclosure statement Ex.PW2/A was got recorded.
6. PW3 Insp. Manmohan Singh is the second Investigating Officer who was marked the investigation on 28.01.2005. The complainant produced to him the documents as mentioned in seizure memo Ex.PW1/E. He arrested the accused S.K. Mathur vide arrest memo Ex.PW3/A and recorded his disclosure statement. The also recorded the statement of witnesses and filed the chargesheet against the said accused. On 09.10.2006, he State vs. S.K. Mathur etc. FIR no.461/04 5 arrested the accused Shefali Mathur, Meena Mathur vide arrest memos Ex.PW3/B and Ex.PW3/C respectively and filed the supplementary chargesheet.
7. PW4 Insp. Satbir Singh is the first Investigating Officer who deposed that on 22.03.2003, the complaint Ex.PW1/D was received at the police station which was marked to him on 27.03.2003. He clubbed it along with other case FIR No.133/03 and 163/03 wherein the allegations were same against the accused. On 06.08.2004, he got registered the separate FIR in the present matter on the direction of the Hon'ble Court. Thereafter, the investigation was handed over to other official.
8. After completion of the prosecution evidence, the statement of all accused persons were recorded u/s 313 Cr.PC wherein the accused claimed that they have been falsely implicated and the allegations of the complainant are only in respect of violation of terms of the franchisee agreement executed between them. The franchisee himself committed the violation of the agreement and misused the properties belonging to the company. The present complaint is a pure civil dispute converted into criminal one. No defence evidence was led on behalf of the accused persons.
9. I have heard the Ld. APP and Ld. Counsel for the accused persons and gone through the record.
10. The Ld. APP for the State argued that the statement of complainant/victim PW1 Jitender Wadhwa proves their case for the offence of cheating committed by accused State vs. S.K. Mathur etc. FIR no.461/04 6 persons by floating a bogus scheme of running a grocery stores in the name of M/s Aapka Bazar Jaipur Pvt. Ltd. Per contra, Ld. Counsel for accused persons argued that it has been admitted by PW1 in his cross examination that he signed the agreement after ten days of the advertisement and after reading it. No fact or averment mentioned in the said agreement has been found to be false or untrue during investigation. The accused persons never absconded nor ever shut down their place of business as has been admitted by the Investigating Officer. Hence, there is no question of dishonest intention or false inducement being made by them to the complainant. It is a mere case of breach of contract and the remedy for the same lies before the Civil Court.
11. The relations between the accused herein, who were running the establishment in the name of M/s Aapka Bazar Jaipur Pvt. Ltd. and the complainant PW1 came into picture after the execution of franchisee agreement Ex.PW1/C. Through the averments in the said franchisee agreement or in it advertisement floated by them, it has to be seen as to whether the ingredients of the offence u/s 415 or 406 IPC are made out or not. The execution of the said agreement Ex.PW1/C is not disputed by either of the parties and, in fact, PW1 in his cross examination admitted to the fact that he had signed the said agreement after going through the contents of the same. Thus, his testimony rules out the possibility of the said agreement being somehow got signed from him under mis impression or the terms being not clear to him. It is also not disputed that the accused State vs. S.K. Mathur etc. FIR no.461/04 7 persons, namely, Meena Mathur and Shefali Mathur were the Directors in the said company, and therefore, responsible for the daytoday affairs of the said company. As far as the accused S.K. Mathur is concerned, his role in the company was that of managing the affairs but without having any formal designation. The PW1 clearly reiterated the said fct that all the accused persons met him when he went to their office at Connaught Place and had explained the terms of the scheme to him. Thus, all the accused persons chargesheeted were running the affairs of the said company and were dealing with the complainant herein.
12. The only material question in hand is as to whether the ingredients of the offence of cheating or criminal trust are made out through the version given by PW1 or not. PW1 lodged his complaint Ex.PW1/D which the basis of the present case wherein he alleged the following facts which as per him are the facts constitute cheating with him:
(i) The accused company provided few articles for furnishing and never provided the complete articles as agreed in the Franchisee Agreement.
(ii) The grocery stock, which was to be provided on monthly basis, was provided only once and never provided thereafter.
(iii) The agreed commission amount to the tune of Rs.36,000/ per month was provided for 12 months only, and thereafter, the cheques given in this regard got dishonoured.
State vs. S.K. Mathur etc. FIR no.461/04 8
(iv) Lastly, when the complainant confronted the accused persons in this regard, they misbehaved with him and refused to refund the invested amount.
13. The PW1 in his examination in chief reiterated the said facts by deposing that only few furnishing items were provided and some grocery items to the tune of Rs.40,000 50,000/. He further reiterated the fact that he was provided the commission amount of Rs.32,000/ for two months, and thereafter, the cheques given by the complainant got dishonoured. But, the cross examination of the said witness is quite material on all the above said aspects which reflect his testimony on the above said aspects to be not worthy credence. As far as the issue of furnishing by the accused company, the Agreement Ex.PW1/C, Clause3 of the part "SETTING UP" put an obligation upon the principal company i.e. M/s Aapka Bazar Jaipur Pvt. Ltd. to set up at their cost and expense the Super Store of the Franchisee by furnishing it with necessary interiors, Air Conditioners, Refrigeration equipments, Computers, etc. as detailed in Schedule B hereto. Thus, as per the agreement, after the initial deposit of Rs.4 lacs, the accused company was under the obligation to provide furnishing as well as providing necessary equipments to the complainant PW1 at his store at Rishi Nagar. The PW1 in his cross examination claimed that only racks, counter and Air Conditioner were provided. Apart from that, no other infrastructure was provided. But, he contradicted his own version by admitting to the suggestion that all the goods mentioned in the Schedule B were received by him and total State vs. S.K. Mathur etc. FIR no.461/04 9 number of said goods in the Schedule was 1819 items. The said schedule was claimed by him to be provided to the Investigating Officer but the same is not available on record nor does find mention in the seizure memo of the documents Ex.PW1/E. Thus, the said material document was deliberately withheld by the complainant and the adverse inference has to be drawn against him in this regard.
14. The second allegation was concerning the nonsupply of grocery items which as per the complainant was provided only once that too to the tune of Rs.40,00050,000/. In this regard also, the agreement Ex.PW1/3 is the basis of the relationship between the parties and Clause3 of PROCUREMENT OF STOCK IN TRADE para provides its terms. The Franchisee i.e. complainant herein was under the obligation to replace the stock and goods from the principal company as and when it is sold by making payments of the same against the sales. He was further under the obligation to have sufficient stocks of the items and maintain a record of stock received at the end of every day. The complainant herein was further under the obligation further to maintain proper register with respect to the said stock of the principal company (Clause6). The complainant failed to produce any of the said material registers of the daily sales and daily left over stock. He admitted in the cross examination that he does not have any such record, and hence, cannot produce the same. He further claimed that he used to deposit the daily sale proceeds in the bank account of the accused company and the said deposit continued for State vs. S.K. Mathur etc. FIR no.461/04 10 56 months. But, again, no such record was produced either during the investigation or during the trial by the complainant. Thus, it is quite apparent from the testimony of complainant itself that he failed to abide by the terms and conditions of the Agreement Ex.PW1/C himself. He never maintained the requisite registers in this regard. He also failed to produce the deposit slips of the stock sold by him in the account of the accused company despite the said material document being in his possession. If, indeed, the averment of the complainant regarding he having not committed any default as per the Agreement Ex.PW1/C, the onus was upon him to produce the said material documents in his possession to show his bonafides. But, the complainant failed to produce him, and hence, adverse inference has to be drawn against him in this regard.
15. The third limb of the allegations which was levelled by the complainant was non supply of grocery items by the accused company after few months despite demand being raised by him. The PW1 in this regard deposed that for few months, he received the stipulated commission amount i.e. 12 months, and thereafter, the cheques got dishonured and accused company stopped providing any goods as required under the Agreement. It has already been observed that the complainant being the Franchisee was under the obligation as per the agreement Ex.PW1/C to maintain the daily stock register of sale as well as left over goods. He was further under the obligation to make the payment against the daily sales, and thereafter, only obligation shifted upon M/s Aapka Bazar Jaipur Pvt.
State vs. S.K. Mathur etc. FIR no.461/04 11 Ltd. to supply and replace the stock at the premises owned by the complainant. The complainant failed to maintain such record and even failed to produce the deposits qua daily sales, and hence, there was no question of principal company being under the obligation to supply further goods. It is also admitted fact that once the grocery items were provided by the accused company as well as the commission amount being paid for few months. But, it is not clear from the testimony of PW1 as well as his complaint as to when the actual business initiated at his premises as Franchisee. As per the complainant, he received only once the goods grocery items to the tune of Rs.40,00050,000/. He further claimed that he continued the sale of the business for a period of 56 months and deposited the sale proceeds for the said period. The said version of the complainant on the face of it appears to be false one. It cannot be believed that the grocery items to the tune of Rs.40,00050,000/ remained with him for the period of six months after the execution of Agreement Ex.PW1/C dtd. 09.7.2002. Therefore, his version on the said aspect regarding nonsupply of goods despite the demand being raised and he having deposited the sale proceeds in the company's account does not inspire confidence.
16. The last allegation which was levelled by the complainant against the accused company is that after their failure to pay the commission amount and replace the stocks, he demanded his investment back from the accused to which they manhandled and abused him. He was also threatened in this regard. The PW1 in the cross examination State vs. S.K. Mathur etc. FIR no.461/04 12 contradicted his own allegations. He claimed that he never met the accused persons in their office after encashment of his initial investment of Rs.4 lacs. He used to have no direct interaction with him after Agreement and used to deal with Mr.Beniwal. Thus, there was no question of any threat or misbehaviour by the accused persons with the complainant when he demanded his investment to be returned.
17. Even otherwise, the question of return of the investment amount has to be governed by Franchisee Agreement Ex.PW1/C. The Clause4 of Agreement and its terms provides for the same. It was specifically agreed between the parties herein that minimum period of the Agreement was five years and in case of termination of Agreement by Franchisee, one month prior notice was required to be given. He further was under the obligation to pay compensation to the tune of Rs.1.5 lacs and only thereafter, the Agreement could have been legally terminated. Further, the company was having the lien in its favour till that time over the stock and goods etc. for recovery of said amount of Rs.1.5 lacs. Thus, it is quite apparent from the said term of the Agreement that once the termination notice accompanied by Demand Draft to the tune of Rs.1.5 lacs was given, the Agreement would get terminated and the Franchisee would have the control over all the left over stock and trade at the shop. All the furnishing and fixtures items provided by the principal company were to be returned back. Admittedly, the complainant never preferred to terminate the said Agreement through the said legal State vs. S.K. Mathur etc. FIR no.461/04 13 manner. He alleged in initial cross examination that the company took away all the goods and material lying with him when the business was closed. But, he himself contradicted the said version in the subsequent cross examination and claimed that all the articles as mentioned in the ScheduleB, which is the property of the accused company, are still with him and never been returned by him. Therefore, the complainant never performed his part of the obligation for the termination of the Agreement and there was no question of his investment being returned.
18. Even if for the sake of argument it is belief that the allegations levelled by the complainant qua nonsupply of stocks and trade, furnishing items and commission amount being not paid after few months, the said allegations does not, in any manner, reflect the dishonest intention at the time of execution of Franchisee Agreement or the complainant being dishonestly induced to enter into an Agreement. The subsequent breach of contract alone cannot be the ground to assume the dishonest intention or complainant being deceived. The testimony of complainant as well as first IO PW3 Insp. Manmohan Singh and PW4 Insp. Satbir Singh reflect that none of the promises or claims made by accused company at the time of agreement were found to be false. It is also not the case herein that the accused company had no capacity to perform part of its contract or they vanished after taking the investment amount from franchisees. The first Investigating Officer, who got registered the case u/s 420 IPC against the accused claimed State vs. S.K. Mathur etc. FIR no.461/04 14 that after entering into the contract with various Franchisees, accused vanished. Admittedly, no such allegations were levelled in the FIR or by the complainant during his testimony in the Court. The second IO PW3 Insp. Manmohan Singh too, in his cross examination, claimed that he never visited any of the warehouse or godown of the accused company. He never collected any information about storage of articles. He also never verified the account or recovered computers which were seized in case FIR No.133/03, PS Connaught Place. Thus, it is quite apparent from the testimonies of the IOs that none of the said allegations and averments made in the Franchisee Agreement by the principal company i.e. accused herein were ever investigated or found by them to be false. Rather, the evidence on record reflects that the accused company performed part of his contract by furnishing the shop of the complainant as their franchisee and also provided the stock and trade. They also paid the commission amount for few months and later on, stopped paying it. The reasons for nonpayment of commission subsequent to the initial payments is not clear either from the testimony of PW1 or was got investigated by the IOs. Rather, it appears to be case of mere breach of contract.
19. In this regard, the judgment of the Hon'ble Supreme court in the case of Hridaya Ranjan Prasad Verma v. State of Bihar, AIR 2000 SC 2341 is relevant and (at Pp.2345 46 of para 16) is as below:
"15. In determining the question it has to be kept in mind that the State vs. S.K. Mathur etc. FIR no.461/04 15 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 of 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 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."
20. Thus, it has to be held that there is no material on record reflecting the dishonest intention or false inducement being made to the complainant at the time of entering into Franchisee Agreement. It is a mere case of breach of contract and the parties having not complied with their obligation as per the Franchisee Agreement Ex.PW1/C.
21. In light of the above said reasons, it has to be held that there is no material on record proving against the accused persons for committing the offences us/ 420/406 IPC.
State vs. S.K. Mathur etc. FIR no.461/04
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All the accused deserve benefit of doubt. Accordingly, the accused persons stand
acquitted for the charges levelled against them for the offences u/s 420/406/120B IPC. Digitally signed by
GAGANDEEP GAGANDEEP SINGH
Announced in open Court. SINGH Date: 2019.11.19
16:29:19 +0530
Delhi, Dated the 16.11.2019 GAGANDEEP SINGH
This Judgment contains 16 pages Chief Metropolitan Magistrate
and each page is signed by me. Rohini/New Delhi