Calcutta High Court (Appellete Side)
Sri Amitava De Bhowmick vs The State Of West Bengal & Ors on 16 May, 2024
IN THE HIGH COURT AT CALCUTTA
(Criminal Revisional Jurisdiction)
APPELLATE SIDE
Present:
The Hon'ble Justice Shampa Dutt (Paul)
CRR 2980 of 2019
Sri Amitava De Bhowmick
Vs
The State of West Bengal & Ors.
For the Petitioner : Mr. Pawan Kumar Gupta,
Mr. Abhimanyu Bannerjee,
Ms. Sofia Nesar,
Mr. Santanu Sett.
For the State : Ms. Rita Datta.
For the Opposite Party No. 2 & 3 : Mr. Jayanta Narayan Chatterjee,
Mr. Supreem Naskar,
Ms. Jayshree Patra,
Ms. Pritha Sinha.
Hearing concluded on : 23.04.2024
Judgment on : 16.05.2024
2
Shampa Dutt (Paul), J.:
1. This revision has been preferred against an order dated 19.07.2017 passed by the Learned Additional Chief Judicial Magistrate, Sealdah General Registrar Case No. 3993 of 2015 Manicktala Police Station Case No. 278 of 2015 dated 07.12.2015 under Sections 341/323/504/506/363/511/34 of the Indian Penal Code, 1860 read with Section 25(1B)(a)/27 of The Arms Act, 1959 whereby the Learned Magistrate was pleased to receive final report in form of Mistake of Fact vide no. 52 of 2016 dated 03.08.2016 submitted on 14.09.2016 and thereupon was further been pleased to accept the same by dropping the entire proceeding upon issuance of notice upon the de-
facto complainant/petitioner.
2. The proceedings in this case against the private opposite parties was initiated on the basis of a written complaint dated 19.11.2015, wherein it appears that there was an execution of a sale agreement between the parties for sale of a flat to the opposite parties/accuseds.
There is a dispute relating to payment of Rs. 8,40,000/- made by the accuseds/opposite parties to the petitioner, which is denied by the petitioner.
3. The accuseds/opposite parties insist that they have paid but have lost the receipt. The petitioner herein has also alleged extortion by local leaders, who are assisting the accuseds.
34. It is the further case of the petitioner/complainant that no notice was served upon him, to enable him to file a 'Naraji' petition and that it is evident from the order under revision.
5. The order under revision is as follows:-
"Dated : 19.07.2017 Accused No. (1+2) are on CB, and appear by filing hazira.
For discharging both of said accused through final form, notice upon D/complainant was issued and same is return from O/C Manicktala Police Station as unreserved with report in which intimated that, Two e-mails message were sent to said D/complainant, one through O/C Taltala P.S. and another through O/C Sonarpur P.S. but D/complainant earlier was absent and today also not appear. Heard perused, D/complainant is not appear in spite of repeated call and F.I.R. named accused namely 1) Bablu Karmakar and 2) Sandhya Karmakar are discharged on the prayer of I.O.
Hence the final form is hereby accepted as mistake of fact. None was arrested into this case.
C.D. is return to concern P.S. which was submitted on 14.09.16.
D/C by me.
Sd/-
A.C.J.M. Court, Sealdah, South 24 Parganas"
6. By way of a supplementary affidavit the petitioner has filed copies of the order and the Final Report.
7. The State has placed the case diary.
8. Written notes of Argument has been filed by the parties herein.
49. The petitioner has relied upon the following Judgments:-
i. Chittaranjan Jana Vs. State Of West Bengal & Ors., 2023 SCC OnLine Cal 133, decided on 19th January, 2023.
ii. State through CBI Vs. Hemendhra Reddy & Anr., 2023 SCC OnLine SC 515, decided on 28th April, 2023.
iii. Anant Thanur Karmuse Vs. State of Maharashtra & Ors., (2023) 5 SCC 802, decided on 24th February, 2023.
iv. Jakia Nasim Ahesan and Anr. Vs. State of Gujarat and Ors., (2011) 12 SCC 302, decided on 12th September, 2011.
10. The opposite parties/accuseds have stated as follows:-
a. On 03.12.2014 a Sale Agreement was executed between the De- facto Complainant/Petitioner and others and the Opposite Party No.2 herein in respect of the peace of a self-contained residential flat consisting of three rooms, one hall room, one kitchen and one bath cum privy measuring about 500 Sq. Ft more or less including 20% super built up area lying and situated on the 3 rd Floor, back position (Western Side) being premises No. 34/1/1, Biplab Barin Ghosh Sarani (Formarly 34 & 34/1, Murari Pukur Road), Police Station - Maniktala, Kolkata - 700 067 for a total amount of consideration to the tune of Rs. 21,00,000/-. As per the said Agreement for Sale the Petitioner/Complainant was under the obligation to deliver the possession of the Apartment for which he had accepted the consideration money within a span of 36 months from the date of sanctioned of the plan from the appropriate authorities.
b. That as per the terms of the said agreement the Opposite Party No. 2 had paid a sum of Rs. 6,40,000/- to the Petitioner as advance consideration amount and agreed to pay the rest of the amount as per the terms of the agreement.
c. That after a span of 8 months the Petitioner expressed his unwillingness to proceed as per the terms of the Agreement dated 03.12.2014 and fulfill his part as stated in the Agreement citing his personal problems and further stated he will refund the entire money which he had accepted as advance consideration amount from the Opposite Party No. 2. d. That in terms of the aforesaid declaration made by the Petitioner on 10.08.2015 he gave a written declaration on a Non-Judicial Stamp Paper stating that he will refund the entire advance consideration amount to the Opposite Party No.2 on installment basis and the first installment and he would pay the first 5 installment from the first week of November, 2015 and upon such payment the agreement dated 03.12.2014 shall stand cancel.
e. That the Opposite Party Nos. 2 and 3 on good faith believed the words of the Petitioner and even after waiting for him to comply with the same the Petitioner failed to pay the advance consideration amount.
11. It is further stated by the opposite party that the petitioner has instituted the false proceedings in this case. That an express and deliberate attempt has been made by the Petitioner to misguide his Learned Advocate and thus misguide the Hon'ble Court by suppressing the essential fact that on 14.12.2015 the Petitioner has already instituted a Civil Proceeding before the Learned Civil Judge (Jr. Division) 2nd Court at Sealdah being T.S. No. 359 of 2015 (R-1481/15) (Amitava De Bhowmick V. Bablu Karmakar & Ors.). On the same set of facts and allegations and thus on the self-same cause of action.
The Title Suit has taken up for hearing by the Learned Court on 06.09.2023 and the next date has been fixed on 08.04.2024 for hearing of the Injunction Application.
12. That the Opposite Party No.2 was compelled to approach the Learned State Consumer Dispute Redressal Forum by filling a petition of complaint under Section 12 read with Section 13 of the Consumer Protection Act, 1986 against the Petitioner herein inter alia with the prayer for issuing the requisite directions against the Petitioner for refunding the entire advance consideration amount being an amount 6 to the tune of Rs. 6,40,000/- along with 12% interest per anum on the said amount.
13. The Opposite Party has relied upon the following Judgments:-
a. In INDIAN OIL CORPORATION V. NEPC INDIA LTD. AND OTHERS Reported in (2006) 6 SCC 736 it was specifically pointed out by the Hon'ble Apex Court that there is a growing tendency in business circles to convert purely Civil disputes in to Criminal Case on the prevalent impression that Civil Law remedies are time consuming and if a person could somehow be entangled in a Criminal Prosecution, there is a likelihood eminent settlement. It was further noted by the Hon'ble Apex Court that any effort to settle Civil disputes and claims, which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and discouraged [PARA 13 & 14].
b. It was observed by the Hon'ble Apex Court in the matter of G. SAGAR SURI V. STATE OF UTTAR PRADESH Reported in (2000) 2 SCC 636 that if a matter is essentially of a Civil nature but has been given a cloak of Criminal Offence then the Criminal Proceedings cannot be short cut of other remedies available in law. That before issuing process a Criminal Court has to exercise a great deal of caution as it is a serious matter for the accused.
The Hon'ble Apex Court has already laid down certain principles on basis of which the High Courts are to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 in order to prevent abuse of the process of any Court or otherwise to secure the ends of justice. [PARA 8].
14. Surprisingly, though the Opposite Parties have filed the lengthy copies of their pleadings filed before various forums, not a single document has been filed in support of their contention that they had made certain payments to the petitioner as claimed by them.
715. This prima facie makes out a clear case of the offences alleged and also a prima facie case of the offences under Sections 406/415/420 of IPC.
16. Considering the nature of dispute between the parties based on a development agreement and subsequent transfer of the property to another person thereby effecting the right of the complainant, the following judgment of the Supreme Court is relied upon:-
In M/s. Indian Oil Corporation vs. M/S Nepc India Ltd. & Ors., Appeal (crl.) 834 of 2002, decided on 20.07.2006, the Court considered the following point among the two points decided.
"8. The High Court by common judgment dated 23.3.2001 allowed both the petitions and quashed the two complaints. It accepted the second ground urged by the Respondents herein, but rejected the first ground. The said order of the High Court is under challenge in these appeals. On the rival contentions urged, the following points arise for consideration :
(i) Whether existence or availment of civil remedy in respect of disputes arising from breach of contract, bars remedy under criminal law?
(ii) Whether the allegations in the complaint, if accepted on face value, constitute any offence under sections 378, 403, 405, 415 or 425 IPC ?
Re : Point No. (i) :
9. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few - Madhavrao Jiwaji Rao Scindia v. Sambhajirao Chandrojirao Angre [1988 (1) SCC 692], State of Haryana vs. Bhajanlal [1992 Supp (1) SCC 335], Rupan Deol Bajaj vs. Kanwar Pal Singh Gill [1995 (6) SCC 194], Central Bureau of Investigation v. Duncans Agro Industries Ltd., [1996 (5) SCC 8 591], State of Bihar vs. Rajendra Agrawalla [1996 (8) SCC 164], Rajesh Bajaj v. State NCT of Delhi, [1999 (3) SCC 259], Medchl Chemicals & Pharma (P) Ltd. v.
Biological E. Ltd. [2000 (3) SCC 269], Hridaya Ranjan Prasad Verma v. State of Bihar [2000 (4) SCC 168], M. Krishnan vs Vijay Kumar [2001 (8) SCC 645], and Zandu Phamaceutical Works Ltd. v. Mohd. Sharaful Haque [2005 (1) SCC 122]. The principles, relevant to our purpose are :
(i) A complaint can be quashed where the allegations made in 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 the case alleged against the accused.
For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with malafides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.
(v) A given set of facts may make out : (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, 9 apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.
10. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged. In G. Sagar Suri vs. State of UP [2000 (2) SCC 636], this Court observed :
"It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice."
While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal 10 proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may."
17. Section 406 of the Indian Penal Code, lays down:-
"406. Punishment for criminal breach of trust.-- Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
Ingredients of offence.-- The essential ingredients of the offence under Sec. 406 are as follows:-
(1) Mens rea is essential ingredient of offence. (2) There must be an entrustment, there must be misappropriation or conversion to one's own use, or use in violation of a legal direction or of any legal contract.
(3) The accused was entrusted with the property or domain over it.
(4) He dishonestly misappropriated or converted to his own use such property;
(5) He dishonestly used or disposed of that property or willfully suffered any other person to do so in failure of-
(a) Any direction of law prescribing the mode in which such trust is to be discharged, or
(b) Any legal contract made touching upon the discharge of such trust."
18. Section 405 of the Indian Penal Code, defines:-
"405. Criminal breach of trust.--Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or 11 converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust"."
19. In M/s. Indian Oil Corporation vs. M/s Nepc India Ltd. & Ors.
(Supra) the Supreme Court also held:-
"18. In Chelloor Mankkal Narayan Ittiravi Nambudiri v. State of Travancore, Cochin [AIR 1953 SC 478], this Court held :
"to constitute an offence of criminal breach of trust, it is essential that the prosecution must prove first of all that the accused was entrusted with some property or with any dominion or power over it. It has to be established further that in respect of the property so entrusted, there was dishonest misappropriation or dishonest conversion or dishonest use or disposal in violation of a direction of law or legal contract, by the accused himself or by someone else which he willingly suffered to do. It follows almost axiomatically from this definition that the ownership or beneficial interest in the property in respect of which criminal breach of trust is alleged to have been committed, must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit."
[Emphasis supplied] In Jaswantrai Manilal Akhaney v. State of Bombay [AIR 1956 SC 575], this Court reiterated that the first ingredient to be proved in respect of a criminal breach of trust is 'entrustment'. It, however, clarified :
".. But when S. 405 which defines "criminal breach of trust" speaks of a person being in any manner entrusted with property, it does not contemplate the creation of a trust with all the technicalities of the law of trust. It contemplates the creation of a relationship whereby the owner of property makes it over to 12 another person to be retained by him until a certain contingency arises or to be disposed of by him on the happening of a certain event."
19. The question is whether there is 'entrustment' in an hypothecation? Hypothecation is a mode of creating a security without delivery of title or possession. Both ownership of the movable property and possession thereof, remain with the debtor. The creditor has an equitable charge over the property and is given a right to take possession and sell the hypothecated movables to recover his dues (note : we are not expressing any opinion on the question whether possession can be taken by the creditor, without or with recourse to a court of law). The creditor may also have the right to claim payment from the sale proceeds (if such proceeds are identifiable and available). The following definitions of the term 'hypothecation' in P. Ramanatha Aiyar's Advanced Law Lexicon (Third (2005) Edition, Vol.2, Pages 2179 and 2180) are relevant :
"Hypothecation : It is the act of pledging an asset as security for borrowing, without parting with its possession or ownership. The borrower enters into an agreement with the lender to hand over the possession of the hypothecated asset whenever called upon to do so. The charge of hypothecation is then converted into that of a pledge and the lender enjoys the rights of a pledgee."
'Hypothecation' means a charge in or upon any movable property, existing in future, created by a borrower in favour of a secured creditor, without delivery of possession of the movable property to such creditor, as a security for financial assistance and includes floating charge and crystallization of such charge into fixed charge on movable property. (Borrowed from section 2(n) of Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002)"
But there is no 'entrustment of the property' or 'entrustment of dominion over the property' by the hypothecatee (creditor) to the hypothecator (debtor) in an hypothecation. When possession has remained with the debtor/owner and when the creditor has neither ownership nor beneficial interest, obviously there cannot be any entrustment by the creditor.13
20. The question directly arose for consideration in Central Bureau of Investigation v. Duncans Agro Industries Ltd., Calcutta [1996 (5) SCC 591]. It related to a complaint against the accused for offences of criminal breach of trust. It was alleged that a floating charge was created by the accused debtor on the goods by way of security under a deed of hypothecation, in favour of a bank to cover credit facility and that the said goods were disposed of by the debtor. It was contended that the disposal of the goods amounted to criminal breach of trust. Negativing the said contention, this Court after stating the principle as to when a complaint can be quashed at the threshold, held thus :
".a serious dispute has been raised by the learned counsel as to whether on the face of the allegations, an offence of criminal breach of trust is constituted or not. In our view, the expression 'entrusted with property' or 'with any dominion over property' has been used in a wide sense in Section 405, I.P.C. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and dishonestly disposed of in violation of law or in violation of contract. The expression 'entrusted' appearing in Section 405, I.P.C. is not necessarily a term of law. It has wide and different implications in different contexts. It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. The expression 'trust' in Section 405, I.P.C. is a comprehensive expression and has been used to denote various kinds of relationship like the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee........."
20. The Supreme Court in Satishchandra Ratanlal Shah vs. The State of Gujarat & Anr., Criminal Appeal No.9 of 2019 (arising out of 14 SPL (Crl.) No. 5223 of 2018), decided on 3 January, 2019, held that :-
"11. Coming to the aspect of quashing of the charges, it is well settled that such exercise needs to be undertaken by the High Court in exceptional cases. It is also well settled that the framing of charges being initial stages in the trial process, the court therein cannot be the decision of quashing the charge on the basis of the quality or quantity of evidence rather the enquiry must be limited to a prima facie examination[refer to State of Bihar vs. Ramesh Singh, 1977 CrlLJ 1606].
12. Having observed the background principles applicable herein, we need to consider the individual charges against the appellant. Turning to Section 405 read with 406 of IPC, we observe that the dispute arises out of a loan transaction between the parties. It fails from the record that the respondent no.2 knew the appellant and the attendant circumstances before the lending the loan. Further, it is an admitted fact that in order to recover the aforesaid amount, the respondent no.2 had instituted a summary civil suit which is still pending adjudication. The law clearly recognizes a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being a clear case of entrustment.
13. In this context, we may note that there is nothing either in the complaint or in any material before us, pointing to the fact that any property was entrusted to the appellant at all which he dishonestly converted for his own use so as to satisfy the ingredients of Section 405 punishable under Section 406 of IPC. Hence, learned Magistrate committed a serious error in issuing process against the appellant for the said offence. Unfortunately, the High Court also failed to correct this manifest error.
14. Now coming to the charge under Section 415 punishable under Section 420 of IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea.(See Hridaya Ranjan Prasad 15 Verma v. State of Bihar (2000) 4 SCC 168). I the case before us, admittedly, the appellant was trapped in economic crisis and therefore, he had approached the respondent no.2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the respondent no.2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are take on their face value, no such dishonest representation or inducement could be found or inferred.
15. Moreover, this Court in a number of cases has usually cautioned against criminalizing civil disputes, such as breach of contractual obligations [refer to Gian Singh v. State of Punjab, (2012) 10 SCC 303]. The legislature intended to criminalize only those breaches which are accompanied by fruadulent, dishonest or deceptive inducements, which resulted in involuntary and in-efficient transfers, under Section 415 of IPC.
16. However, the High Court appears to have been carried away by the moral element involved in the breach of promise and made certain observations. Being a policy consideration, such suggestions need to be restricted. The aforementioned observations of the High Court were not only unnecessary for the adjudication of this matter, but the same could have been understood as casting some kind of aspersions on the accused. This clearly reflected a loaded dice situation against the appellant herein.
17. In our considered opinion, the High Court should have maintained judicial restraint and desisted from making such general observations at this stage of the criminal proceeding, as they may have had a bearing on the adjudication of the trial. Therefore, the observations made in paragraphs 42 and 43 of the impugned judgment stand expunged."
21. From the order under revision passed by the Magistrate, it is apparent that the service attempted upon the 16 petitioner/complainant herein was not due service. Thus the order under revision if allowed to remain will be clear abuse of the process of the law/and is thus set aside, in the interest of justice.
22. CRR 2980 of 2019 is disposed with the direction that the petitioner shall be permitted to file a 'Narazi' application before the trial Court (Magistrate) within 15 days from the date of communication of this order, which the Magistrate shall consider and decide the same in accordance with law, within two months thereafter, keeping in mind the observations made in this judgment in respect of the materials on record.
23. CRR 2980 of 2019 is thus allowed.
24. All connected applications, if any, stand disposed of.
25. Interim order, if any, stands vacated.
26. Copy of this judgment be sent to the learned Trial Court for necessary compliance.
27. Urgent certified website copy of this judgment, if applied for, be supplied expeditiously after complying with all, necessary legal formalities.
(Shampa Dutt (Paul), J.)