Allahabad High Court
M/S Amrutanjan Health Care Ltd. And ... vs State Of U.P. And Another on 29 January, 2020
Author: Naheed Ara Moonis
Bench: Naheed Ara Moonis
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 46 Case :- APPLICATION U/S 482 No. - 24869 of 2009 Applicant :- M/S Amrutanjan Health Care Ltd. And Others Opposite Party :- State of U.P. and Another Counsel for Applicant :- Yashwant Varma,Prashant Kr. Mishra Counsel for Opposite Party :- Govt.Advocate,Sushil Shukla Hon'ble Naheed Ara Moonis,J.
Heard learned counsel Shri Prashant Kumar Mishra for the applicants, Shri Aditya Prakash Singh, Advocate holding brief of Shri Sushil Shukla, learned counsel for the opposite party no.2 and the learned A.G.A. for the State.
The applicants have invoked jurisdiction of this Court under Section 482 of Code of Criminal Procedure with a prayer to quash the proceeding pursuant to the summoning order dated 26.6.2009 passed by the learned Chief Judicial Magistrate Rampur in Complaint Case No. 5810 of 2009 (M/s Swati Menthal & Allied Chemical Ltd. Vs. M/s Amrutanjan Health Care Ltd. and others) under Section 418/120B I.P.C.
The factual matrix in brief is that the opposite party no.2 who is a limited company having its office at Bareilly Road, Opposite Akashwani, P.O. Modipur, Rampur and was engaged in business of manufacturing of Mentha Crystals and other Mentha Allied Products had filed the complaint dated 19.4.2009 against the applicants who are engaged in business of manufacturing and sale of Pain Balms known as Amrutanjan Balm. The applicant nos.2 & 3 are the General Manager and Deputy Manager (Materials) respectively of the company of the applicant no.1. There was business transaction between the applicants and the opposite party no.2 who had placed purchase order on 14.7.2008 for purchase of 5 tons of Pudina ka Phool (Mentha IP Crystals) at the rate of Rs.1125/- per Kg. and also another purchase order dated 14.7.2008 for purchase of 5 tons of Pudina ka Phool (Mentha IP Crystals) at the rate of Rs.1065/- per Kg. The applicant nos.2 and 3 assured the complainant-opposite party no.2 that they will purchase agreed quantity at the agreed rate as stipulated above in the purchase order. The complainant company incurred huge expenses of nearly Rs.49.5 lacs in buying raw materials i.e. Mentha Oil from the open market at high rate, which were then prevailing in the commodity market. The receipts of the invoice purchased by the complainant dated 14.7.2008 annexed with the complaint. The products were dispatched on 22.7.2008 and 26.7.2008 which were received by the applicants company. Another consignment containing quantity of 2 tons of Pudina ka Phool (Mentha IP Crystals) was transported through Transport Corporation of India Ltd., Rampur on 8.8.2008 to the Chennai Factory of the applicant no.1. This dispatch of product was also received by the applicants on 28.8.2008, of which receipt of delivery was received by the complainant.
It is alleged in the complaint that prior to the dispatch of product on 8.8.2008, similar quality to that of the product had already been received by previous consignment dated 22.7.2008 and 26.7.2008. The complainant company has never compromised with the quality of its products who has been engaged in business with several other companies i.e. Zhandu, Emami etc. In order to maintain the business relationship with the applicants, the opposite party no.2 had dispatched another consignment of 2 tons of products by way of replacement on 5.9.2008 through Transport Corporation of India, Rampur and lifted the previous consignment from the factory premises of the applicant no.1. But the applicant nos.2 & 3 did not care to even receive the said consignment inside their factory at Chennai. With the result, the transporter was compelled to bring back the same to the premises of the complainant company.
After the consignment dated 8.8.2008, the price of Mentha Oil was crushed and there was considerable difference between the price. Later on the applicant-company is said to have entered into criminal conspiracy to defraud the complainant company and its official and asked to take back the articles on the pretext of its poor quality and further asked not to dispatch any further consignment. This act of the applicants company has caused wrongful loss of huge money as the complainant opposite party no.2 had already invested in procuring the raw materials of Mentha Oil at high prevailing prices from the commodity market at the time when they have assured through their legal contract of purchase order to buy the product to be manufactured by the complainant company in coming months.
Refusal of the applicants was communicated by the Transport Company through its letter. Thus on account of illegal act committed by the applicants, complainant-company has suffered wrongful loss to the tune of nearly Rs.26 lacs as the accused persons were legally bound to protect in the transactions carried out in terms of the legal contract and hence they have committed offence punishable under Sections 418/120B IPC. On the basis of which certain documents as mentioned hereinabove have also been annexed with the complaint filed by the opposite party no.2. Thereafter the learned Chief Judicial Magistrate recorded the statement of the complainant (P.W-1) under Section 200 Cr.P.C. who has reiterated the version as mentioned in the complaint and the statement of Anurag Jain (P.W-2) was recorded under Section 202 Cr.P.C, pursuant to which, learned Magistrate prima facie found offence against the applicants and hence summoned them to face trial under Sections 418 & 120B IPC by the order impugned dated 25.6.2009.
The applicants aggrieved with the aforesaid order impugned, has approached this Court by way of filing the instant petition and by order dated 18.11.2009 while issuing notice to the opposite party no.2 to file counter affidavit, the proceeding of the aforesaid complaint case was kept in abeyance. In pursuance of the aforesaid order counter affidavit along with stay vacation was filed on behalf of the opposite party no.2, to which the rejoinder affidavit along with stay extension application on behalf of the applicants was filed on 9.12.2019.
It is submitted by the learned counsel for the applicants that from bare perusal of the complaint it cannot be said that any offence is made out against the applicants under Section 418 IPC. There is no deceitful intent shown in the complaint that the complainant was compelled to deliver the material. The applicants had already informed that the goods were of poor quality and not in fit condition and hence the same were being returned. The goods were not supplied by the complainant as agreed between the parties which has deliberately been concealed by the complainant and it was informed through various E-mails, dated 10.9.2008, 11.9.2008 & 15.9.2008. Since the complainant had failed to supply the goods as per specification, it was by E-mail dated 1.9.2008 informing that the order placed stood cancelled. Despite the aforesaid correspondence the complainant sent a fresh consignment on 5.9.2008 and upon coming to know of the same, the applicants again informed the complainant that they were no longer interested in receiving or using the said materials vide E-mail dated 4.9.2008, 11.9.2008 & 9.10.2008. As the quality of goods were not upto the mark which has also been admitted by the complainant, who sent a fresh consignment.
Subsequent consignment/purchase order stood cancelled which has duly been informed to the complainant that the goods lying at the FCI go-down was at his own risk and cost and no longer interested in transacting any business. The opposite party no.2 had sent a legal notice on 9.2.2009, of which reply was given by the applicants. Later on the present complaint has been instituted against the applicants with wild allegations only in order to exert pressure upon them. There was no guilty intention of the applicants to induce the opposite party no.2 to deliver the property. There was no dishonest intention at all on the part of the applicants, even there is no allegation that the applicants had received the goods as per the specification agreed upon and thereafter failed to pay for the same.
It is further submitted that the opposite party no.2 has himself admitted in his complaint that the goods were returned due to inferior quality hence the ingredients of Section 418 IPC are not attracted. The opposite party no.2 has himself dispatched the consignment on its own risk hence it cannot be said that the applicants had failed to send the goods as the goods were not as per the agreement. Thus it would not constitute any offence under Section 418 IPC. The complaint has been filed with ulterior motive to wreak vengeance by concealing material facts. It has also been argued that under the aforesaid section it is inbuilt that there has to be dishonest intention from the very beginning which is sine qua non to held the accused guilty for the commission of the said offence. In the complaint it is no where alleged that the applicants from beginning wanted to defraud the complainant to deliver the property.
It is further submitted that the applicants had entered into compromise in business transaction with the complainant. The applicants' company is a reputed company and had no intention to any wrongful loss to the complainant At the same time it could not have been expected that the quality was not as per agreement and it has been communicated to the opposite party no.2 with respect to the specification not in conformity with the agreement between the parties. Hence when the applicants had already informed to the complainant not to send any further consignment even then if he has sent the same on his own volition, the applicants cannot be made liable for commission of any cognizable offence.
It is lastly submitted that the dispute is purely civil in nature, yet the learned Chief Judicial Magistrate has proceeded to summon the applicants to face trial in the aforementioned case, as such the present petition deserves to be allowed while quashing the summoning order impugned passed against them.
Per contra learned counsel for the opposite party no.2 and the learned A.G.A. have contended that there is no illegality or perversity in the order impugned summoning the applicants to face trial under the charged sections. As mentioned in the complaint itself that the applicants company had placed purchase orders for purchasing Mentha (Pudina Ka Phool) at different rates and the complainant had incurred huge expense of nearly Rs.49.5 lacs in buying raw material i.e. Mentha Oil from the open market at high rate, which were then prevailing in the commodity market and thereafter dispatched two consignments each of 2 Tons and one Ton of manufactured products to the applicants company on 22.7.2008 & 26.7.2008 respectively which were duly received by the applicants without any complaint. Had there been any complaint by the applicants company, the opposite party no.2 under the terms of the contract is liable to replace such quantity of damaged material free of charge. But the applicants company had refused to receive the delivery of consignment of 2 tons of product sent on 8.8.2008 which was of the same quality and specification as that of already received on previous delivery. Receipts were also sent by the applicants, thus the applicants company had deliberately defrauded the complainant refusing to receive consignment dated 8.8.2008. The market price of Mentha had gone considerably high from the price, which was aggreed by them while placing purchase order.
It is further contended that the defence of the applicants cannot be considered at this stage that on account of poor quality of dispatch product they did not want to continue the business between them. The complainant company had dispatched another 2 tons of consignment later on by way of replacement on 5.9.2008 through Transport Corporation of India, Rampur and lifted previous consignment from the applicants company. But subsequent consignment was not received by the applicants in their factory at Chennai hence the transporter was compelled to bring back the same from the premises of the applicants. There is ample proof of supply of goods and it is wrong to say that quality of the product was of inferior quality at any point of time. Merely on the basis of E-mail dated 23.10.2008 sent by the applicants that the material was of poor quality in the absence of any analysis or expert report will not absolve the applicants from causing wrongful loss of money to the complainant company.
It is further contended that the learned Chief Judicial Magistrate has passed the order impugned summoning the applicants to face trial under Sections 418,120B IPC after considering the documentary evidence on record and hence they do not deserve any leniency as the defence of the applicants cannot be considered at this stage.
Having considered the submissions of the learned counsel for the contesting parties and having perused the material placed on record, it transpires that a legal notice was sent by the opposite party no.2 on 9.2.2009 in respect of breach of contract and damages giving in detail about consignment to the applicants company and it is itself mentioned that the complainant has suffered loss due to breach of contract, to which he is entitled to recover from the applicants company and thus it was asked to pay a sum of Rs.26 lacs being the amount of loss incurred/damages along with interest at the rate of 18% per annum from the date of illegal cancellation of purchase order till the date of actual payment within a period of 15 days from the date of receipt of notice, failing which the opposite party no.2 will be constrained to file a suit against the applicants company for recovery of the said amount bearing all the receipts of cost and consequences, to which reply was given by the applicants mentioning that the allegations contained in the notice are false and baseless. As per the terms of the contract. If the goods are not as per specification, they are entitled to terminate the contract as the goods were of inferior quality and not as per the contract which was already acknowledged by the applicants.
The opposite party no.2 could have approached before the appropriate forum for the payment of sum including the damages or interest as alleged in the notice dated 9.2.2009 vide Annexurre-7 instead of filing the present complaint against the applicants. It is evidently clear from the notice given by the opposite party no.2 to the applicants on 9.2.2009 vide Annexure-7 and its reply was duly sent by the applicants on 23.2.2009 vide Annexure-8 to the petition.
There is no whisper about the aforesaid notice either in the complaint or in the statement of the complainant recorded under Section 200 Cr.P.C. Even in the counter affidavit filed by the opposite party no.2 in para 10 in respect of legal notice qua damages and interest it is replied that it is matter of record need no comment. Thus it is discernible that it is admitted to the opposite party no.2 that in case of failure to pay Rs.26 lacs he will file the suit for recovery and damages. This shows that only to exert pressure and to cause sheer harassment to the applicants, the criminal complaint has been filed by the opposite party no.2.
No doubt a wrong committed on the part of a person could be civil wrong or criminal wrong which may give arise to both civil action and criminal action. When dispute between the parties constitute only a civil wrong and not a criminal wrong, the court would not permit a person to be harassed even though no case has been made out. Particularly in the case of this nature it was obligatory on the part of the learned Chief Judicial Magistrate to apply his mind to the contents of the complaint which discloses a dispute relating to business transaction and as such person should not be subjected to persecution and humiliation on the basis of a complaint, if even it is taken to be correct in its entirety mere breach of contract cannot give rise to criminal prosecution which does not make out any offence against the applicants unless it is shown right at the beginning that the applicants had fraudulent or dishonest intention to deceive the complainant.
In the light of above prolix discussions, this Court has no hesitation in allowing the petition and quashing the prosecution of the applicants pursuant to the summoning order dated 26.6.2009 passed by the learned Chief Judicial Magistrate Rampur in Complaint Case No. 5810 of 2009 (M/s Swati Menthal & Allied Chemical Ltd. Vs. M/s Amrutanjan Health Care Ltd. and others) under Section 418/120B I.P.C. Aforesaid summoning order is refused.
The instant petition is accordingly allowed.
It is always open for the opposite party no.2 to approach before the appropriate forum in respect of any claim relating to the recovery and damages in the said business transaction.
Order Date :- 29.1.2020 M. Tariq