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Delhi District Court

Mr. Navneet Chadha vs State on 30 November, 2015

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                  IN THE COURT OF SHRI A.K.KUHAR
              ASJ/SPECIAL JUDGE-NDPS/SOUTH DISTRICT
                 SAKET COURT COMPLEX, NEW DELHI
CR No. 16/15
M/s. Olympic Metals LLC,
8101 Biscayne Blvd-PH707 Miami, FL 33138
United States of America.

Through its Authorized Representative :

Mr. Navneet Chadha
POA Holder
S/o Mr. Kuldeep Chadha,
R/o G-44 A, Ansals Palam Vihar,
Gurgaon, Haryana
                                                 ....Petitioner/Revisionist
                                VERSUS
1.       State
2.    M/s. RAG Exports Pvt. Ltd.
      F-79/1, Western Avenue,
      Lane No. 1, Sainik Farms,
Also at
      469, Green Avenue,
      Amritsar, Punjab-143001.

3.       Mr. Sanjeev Gupta,
         Chief Executive Officer of :
         M/s. RAG Exports Pvt. Ltd.

4.       Mr. Ishan Gupta
         Director of :
         M/s. RAG Exports Pvt. Ltd.

5.       Mrs. Asha Gupta
         Director of :
         M/s. RAG Exports Pvt. Ltd.
                                                      ..... Respondents
Computer ID No: 02406R0300772015
Date of institution                         : 21.09.2015
Date of arguments                           : 30.11.2015
Date of order                               : 30.10.2015

CR No.16/15                                           M/s. Olympic Metals vs. State & Ors.
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                                ORDER

1. The present Criminal Revision Petition has been filed u/s 397 read with Section 399 of the Criminal Procedure Code, 1973, challenging the illegality and correctness of the order dated 05.06.15, passed by the Ld. Metropolitan Magistrate-03, South District, Saket Courts, New Delhi, in Criminal Complaint no. 8/1/14 titled as "M/s. Olympic Metals vs. M/s RAG Exports".

2. Trial Court Record (TCR) has been summoned for perusal. Arguments have been heard after notice to the State, the respondent no. 1.

3. The revisionist herein is a registered company in the United States of America (U.S.A.) and deals in sale-purchase of non- ferrous and ferrous scrap and primarily metals as well as residues. The company source and export the material to numerous countries worldwide and is engaged in global export business. The petitioner filed the present petition through its constituted true and lawful attorney vide Special Power Attorney dated 20.07.2015. The petitioner herein had filed a criminal complaint against M/s. RAG Exports Pvt. Ltd. u/s 200 Cr.P.C. and also moved an application u/s 156 (3) Cr.P.C. for direction to the SHO of Police Station (PS)-Neb Sarai, to register an FIR on the allegations made in the complaint. Prior to filing of the complaint, a written complaint was made to the SHO, PS-Neb Sarai, but the FIR was not registered. The application u/s 156 (3) Cr.P.C. filed by the petitioner before the Ld. Metropolitan Magistrate, has been dismissed vide the impugned order dated 05.06.2015.

4. The complaint of the petitioner u/s. 200 Cr.P.C. is based on the allegations that Mr. Sanjeev Gupta, Chief Executive Officer (CEO) of M/s. RAG Exports Pvt. Ltd., had approached the petitioner company for supply of shipment of HMS (Heavy Melting Steel) to Thiland. The petitioner company entered into a contract with the CR No.16/15 M/s. Olympic Metals vs. State & Ors.

respondent no. 2 to 5 for supply of 1000 Metric Tons (MT) of HMS 70/30 (Heavy Melting Steel) at the rate of $ 355 per Metric Ton, vide contract no. 3486 on 24.09.2012. As per allegations made in the complaint the respondent company M/s. RAG Exports Pvt. Ltd., did not make entire payment and deposited only a part payment of $30,000 instead of $ 35,500 on 08.10.2012.

5. The petitioner company sent e-mails with regard to the payment, which was due on this contract. On the promise and assurance of respondents no. 3 to 5, the petitioner company again entered into a contract on 24.10.2012 vide no. 3598 to supply a consignment of 500 MT of HMS 80/20 @ $345 per MT. Similarly another contract bearing no. 3604 was entered into between the petitioner company and the respondent M/s. RAG Exports Pvt. Ltd. for consignment of 500 MT of HMS 80/20 @ 345 per MT. The petitioner company received $17,750 as advance payment on 09.11.2012 against contract no. 3598 and on 19.11.2012, had received an advance payment of $17,750 against contract no. 3604. At the same time, the remaining balance payment of $ 5500 against initial contract no. 3486 was also received by the petitioner. The consignment put in the batch of 46 containers, was scheduled to reach Thailand between 22.12.12 to 29.12.12. The petitioner company made contact with Mr. Sanjeev Gupta, CEO of M/s. RAG Exports Pvt. Ltd., for making the payment of the said consignment of the 46 containers, but did not get response. The petitioner company, however, did not stop the shipment of the consignment as it would have cost huge loss on account of non-performance of the contract.

6. Both the parties exchanged several e-mails regarding the payment as per the contract. However, as per the allegations, M/s. RAG Exports Pvt. Ltd., did not honour the contract and make full payment in lieu of the supply of the material by the petitioner CR No.16/15 M/s. Olympic Metals vs. State & Ors.

company. The said Sanjeev Gupta, CEO of M/s. RAG Exports Pvt. Ltd., did not respond to the queries of the petitioner company despite repeated reminders and furnishing of a Promissory Note of M/s. RAG Exports Pvt. Ltd. It is further alleged in the complaint that the petitioner company had to make payment to the shipping line M/s. Maersk also to aid the release of Bills and Lading, as such the petitioner company had made payment of $1,00,000/- to M/s. Maersk Shipping Line towards payment of demurrage charges, which were wholly and completely payable by the M/s. RAG Exports Pvt. Ltd.

7. When the respondent company M/s. RAG Exports Pvt. Ltd. did not make the payment and honour the Promissory Note, the complaint u/s 200 Cr.P.C. was filed with an application u/s 156 (3) Cr.P.C. for registration of FIR.

8. The Ld. Magistrate has observed in the impugned order that the transaction has taken place through e-mails and same can be proved by leading evidence in the Court and the complainant therefore is in possession of required evidence. It was also observed that documents are within the reach of complainant company and also there is no requirement of any scientific evidence. By placing reliance on the judgment in M/s. Skipper Bewerages Pvt. Ltd. vs. State-2001 IV AD Delhi 625, Gulab Chand Upadhyaya vs. State of UP & Ors-2002 (2) Crimes 488 and Baldev Thakural vs. State of Uttaranchal-2006 (1) Crimes 239, Ld. Metropolitan Magistrate dismissed the application u/s 156 (3) Cr.P.C. However, the complainant was allowed to lead pre- summoning evidence.

9. The impugned order therefore, shows that the Ld. Metropolitan Magistrate had preferred to proceed with the complaint u/s 200 Cr.P.C. taking cognizance of the offence instead of directing registration of an FIR u/s 156 (3) Cr.P.C. This order is CR No.16/15 M/s. Olympic Metals vs. State & Ors.

under challenge on the grounds, inter-alia, that the order has been passed mechanically and in arbitrary manner; that the order is without application of mind and therefore not a reasoned order. The petitioner herein has referred to certain judgments in the pleadings itself to rely upon them in support of the arguments to challenge the impugned order. Following judgments have been relied upon :-

i. Acharya Arun Dev v. State & Anr, 2005 [2] JCC 897 ii. Amit Khera v. Govt. of NCT of Delhi & Ors., 2010 [4] JCC 2515 iii. S.P. Sharma v. National Capital Territory of Delhi & Ors.

         1999 [1] JCC (Delhi) 59
iv.      Priya Gupta v. The Stage 2007 [2] JCVC 1330
v.       Laxminarayan Gupta v. Commissioner of Police & Ors.
         2006 [2] JCC 1058.

10. The revisionist/petitioner herein has pleaded that Ld. Metropolitan Magistrate has failed to appreciate that M/s. RAG Exports Pvt. Ltd., has caused wrongful loss to the petitioner and criminal conspiracy has been executed by M/s. RAG Exports Pvt. Ltd., and all its Directors.

11. The Ld. counsel appearing for the revisionist has vehementally argued that the investigation is required to seize the computers, from which the e-mails were sent and orders were placed and its only the police, which can seize these computers.

Apart from this, no logical and reasonable ground has been mentioned in the Revision Petition, why a direction u/s 156 (3) Cr.P.C. was required to be made. The judgments, which have been referred to in the petition, have been considered and there is no dispute with the preposition of law laid down in the judgments. The facts of the case, however, needs to be considered before the ratio of any judgment is applied.

12. Section 156 (3) Cr. PC appears in Chapter XII of the CR No.16/15 M/s. Olympic Metals vs. State & Ors.

Code of Criminal Procedure which deals with the "Information to the Police and their powers to Investigate" an offence. Section 156 (3) Cr. PC specifically provide for Police officer's power to investigate cognizable case. It reads as under:

(1) Any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable cases which a Court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIII.

(2) No proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate.

(3) Any Magistrate empowered under Section 190 may order such an investigation as above mentioned.

13. In Mohd. Salim vs State in Crl. M. C No. 3601/2009, it has been observed, "11. The use of the expression 'may' in sub-section (3) of Section 156 of the Code leaves no doubt that the power conferred upon the Magistrate is discretionary and he is not bound to direct investigation by the Police even if the allegations made in the complaint disclose commission of a cognizable offence, in the facts and circumstances of a given case, the Magistrate may feel that the matter does not require investigation by the Police and can be proved by the complainant himself, without any assistance from the Police. In that case, he may, instead of directing investigation by the Police, straightaway take cognizance of the alleged offence and proceed under Section 200 of the Code by examining the complainant and his witnesses, if any. In fact, the Magistrate ought to direct investigation by the Police only where the assistance of the Investigating Agency is necessary and the Court feels that the cause of justice is likely to suffer in the absence of investigation by the Police. The Magistrate is not expected to mechanically direct investigation by the Police without first examining whether in the facts and circumstances of the case, investigation by the State machinery is actually required or not. If the allegations CR No.16/15 M/s. Olympic Metals vs. State & Ors.

made in the complaint are simple, where the Court can straightaway proceed to conduct the trial, the Magistrate is expected to record evidence and proceed further in the matter, instead of passing the buck to the Police under Section 156 (3) of the Code. Of course, if the allegations made in the complaint require complex and complicated investigation of which cannot be undertaken without active assistance and expertise of the State machinery, it would only be appropriate for the Magistrate to direct investigation by the Police. The Magistrate is, therefore, not supposed to act merely as a Post Office and needs to adopt a judicial approach while considering an application seeking investigation by the Police."

14. It is crystal clear that when a complaint u/s 200 Cr. PC is filed alongwith an application u/s 156 (3) Cr. PC, the Magistrate has a discretion either to give direction for registration of FIR in exercise of his power u/s 156 (3) Cr. PC or take cognizance and proceed with the complaint u/s 200 Cr. PC. While dealing with application u/s 156 (3), the Magistrate has to consider the requirement of case. Certain guidelines have been laid down in this regard in the case of Shubh Karan Luharuka and others vs State Crl. M. C. No. 6122-23/2005, (date of decision 09.07.2010) which inter-alia reads;

"(iv) Of course, it is open to the Magistrate to proceed under Chapter XII of the Code when an application under Section 156 (3) of the Code is also filed alongwith a Complaint under Section 200 of the Code if the Magistrate decides not to take cognizance of the Complaint. However, in that case, the Magistrate, before passing any order to proceed under Chapter XII, should not only satisfy himself about the pre-requisites as aforesaid, but, additionally, he should also be satisfied that it is necessary to direct Police investigation in the matter for collection of evidence which is neither in the possession of the complainant nor can be produced by the witnesses on being summoned by the Court at the instance of complainant, and the matter is such which calls for CR No.16/15 M/s. Olympic Metals vs. State & Ors.

investigation by a State agency. The Magistrate must pass an order giving cogent reasons as to why he intends to proceed under Chapter XII instead of Chapter XV of the Code."

15. Thus, it is clear that discretion lies with the Magistrate either to proceed u/s 156 (3) Cr. PC or to proceed u/s 200 Cr. PC whenever commission of a cognizable offence brought to his notice by way of a criminal complaint. The exercise of discretion either way by the Magistrate need not be interfered with, "unless there is a jurisdictional error or an error of law." (Krishan Lal vs Dharmender Lal Bagana 2009 (9) SCALE 768).

16. The allegations, which are made in the complaint pertain to non-payment of the consideration amount of the contract for supply of HMS (Heavy Melting Steel), by the company M/s. RAG Exports Pvt. Ltd. The Ld. counsel for the petition has vehementally argued that apart from the civil liability, criminal offence of cheating, breach of contract is also made out. He submitted that the evidence with regard to the shipment cannot be collected by the revisionist, for which the police investigation is required.

17. The dispute between parties arise out of a contract and has an aura of a civil dispute. The transaction is document based and both parties have had communication through e-mails. The Ld. Magistrate, in the impugned order has categorically observed that the evidence is within the control of the petitioner. Brevity of the impugned order cannot be a ground to say that it is without application of mind. No justification has been found for direction for registration of FIR by the Ld. Metropolitan Magistrate and he has opted to take cognizance and proceed with the examination of the witnesses of the complainant. The discretion, which lies with the Ld. Magistrate, need not to be interfered that unless there is some jurisdictional error or an error of law is noticed. Once the CR No.16/15 M/s. Olympic Metals vs. State & Ors.

complainant has invoked the jurisdiction of the Court, the discretion lies with the Court either to proceed u/s 200 Cr.P.C. or refer the matter to the police for registration of FIR u/s. 156 (3) Cr.P.C. There are several guidelines for a Magistrate, in which cases, the investigation is to be directed u/s 156 (3) Cr.P.C., based on which the Ld. Metropolitan Magistrate has passed the impugned order.

18. Considering the facts of the present complaint, I am of the view that the Ld. Metropolitan Magistrate has exercised jurisdiction and discretion judiciously and no interference therein is called for. Revisionist has been given an opportunity to proceed with the complaint and examine the witnesses. No illegality or impropriety is noticed in the impugned order.

19. Therefore, Criminal Revision Petition stand dismissed. Trial Court shall proceed with the complaint as per the law after recording pre-summoning evidence of the petitioner/complainant.

20. TCR be sent back with a copy of this order.

21. The criminal revision file be consigned to Record Room Announced in Open Court on 30th November, 2015 (Ajay Kumar Kuhar) Special Judge (NDPS) South District: Saket CR No.16/15 M/s. Olympic Metals vs. State & Ors.