Madhya Pradesh High Court
Khushal Chand Shrishrimal (Jain) vs The State Of Madhya Pradesh on 2 May, 2019
1
THE HIGH COURT OF MADHYA PRADESH
Mcrc. 3250/16
Kushal Chand Shrishrimal (Jain) & others
Vs.
State of M.P. & another
Cri. Rev. No. 984/2017
Kushal Chand Shrishrimal (Jain) & others
Vs.
State of M.P. & another
Gwalior Dt. 02/5/2019
Shri Amit Lahoti, Advocate for the petitioners.
Shri Manish Nayak, Panel Lawyer for the respondent No.1.
Shri Rajiv Sharma, Advocate for the respondent No.2/victim.
1. The petition being Mcrc 3250/16 filed u/S. 482 Cr.P.C. seeks quashment of the FIR dated 25/2/2016 bearing Crime No. 153/16 alleging offences punishable u/Ss. 406, 417, 418, 420 r/w 34 IPC registered at Police Station Vidisha. In this petition by interim order dated 18/5/2017 this court directed that framing of charges in the matter shall not come in way of the petitioners who are 4 in number (petitioner No.1 Khushal Chand Shrishrimal, petitioner No.2 Dilip Kumar Shrishrimal, petitioner No.3 Hemandra Kumar Jain and petitioner No.4 Vishal Kumar Shrishrimal) to prosecute the Mcrc.
1.1 Whereas Cr.Rev.984/17 filed later assails framing of charge against the aforesaid four petitioners for offence u/Ss. 409/34 & 2 420/34 IPC, arising out of the same crime number.
2. The subject matter of both the cases i.e. Mcrc and Criminal Revision (s) being common, arguments have been heard analogously and both are decided by the present common order.
3. Learned counsel for the rival parties are heard on the question of admission and final disposal.
4. The undisputed foundational facts of the case are that written complaint was filed on 25/2/2016 which led to registration of FIR dated 25/2/2016 impugned in the Mcrc where petitioners are erstwhile and serving directors of M/s Shri Adishwar Oil and Fats Ltd. having registered office at Mahasamund Chhatisgarh which is engaged in the business of purchasing and processing of Soyabean to produce oil and de-oiled cake. In furtherance of the business object, the company of the petitioners entered into various transactions of purchase of Soyabean from the complainant/respondent No.2. In regard to all the transactions of purchase made by the petitioners till 2009 there was no dispute. However, dispute arose qua transactions of purchase of Soyabean by the petitioners from complainant in 2010 & 2011 wherein part sale consideration to the tune of Rs. 1,59,25,320/- became the bone of contention between rival parties. It is further undisputed that in regard to the said transactions in 2010 & 2011 no written 3 agreement was entered into and the same were based on oral agreement between the petitioners and complainant/respondent No.2. The alleged condition subject to which oral agreement was made was that till payment of entire sale consideration of entire stock of Soyabean purchased by the petitioners, the stock of Soyabean would be held by petitioners as trustees on behalf of the complainant and the same shall not be misappropriated. The complainant did not make any written protest in regard to the non- payment of about 25% of the sale consideration (Rs.1,59,25,320/-) of the Soyabean sold to the petitioners. As late as on 25/2/2016 (vide page 338 of the petition) written complainant was made to the SHO of police station Kotwali Vidisha on the basis of which the impugned offence was registered on the very said day.
5. Learned counsel for the petitioners on the basis of aforesaid undisputed foundational factual matrix contends that the entire transaction and the grievance of complainant at best gives rise to civil dispute, but the same has been given a criminal colour to wreak vengeance upon the petitioners. It is submitted that the police intentionally turning a blind eye towards the palpable civil nature of the dispute post haste registered offence on the very same day on which the complaint was made, without holding any 4 preliminary enquiry into the veracity of the allegations. It is submitted that delay of 5 years in lodging of FIR clearly demonstrates the intention of the complainant who wants to convert civil dispute into a criminal offence knowing very well that period of limitation for filing a suit for recovery had expired. Further grievance is raised that the company which had purchased the Soyabean has not been made party and therefore the petitioners who were ex/current directors cannot be arraigned as accused. It is submitted that present is a case solely of non- payment/under payment of purchase price but not of criminal breach of trust and cheating.
5.1 It is lastly submitted by learned counsel for petitioners that there is documentary proof to establish that entire amount of sale consideration due against the petitioners and payable to the complainant has already been paid by the petitioners. 5.2 In support of his submissions, learned counsel for petitioners has placed reliance on the decisions of the Apex Court in Vir Prakash Sharma Vs. Anil Kumar Agarwal & another (2007) 7 SCC 373 (paras 7, 8, 13 to 15 and 17), Umashankar Gopalika Vs. State of Bihar & others (2005) 10 SCC 336, Hotline Teletubes and Components Ltd. & others Vs. State of Bihar & another (2005) 10 SCC 261 and Anil Mahajan 5 Vs. Bhor Industries Ltd & another (2005) 10 SCC 228 . 5.3 Per contra, learned counsel for the respondent No.2 placing reliance on the decisions of Apex Court in Sesami Chemicals (P) Ltd. Vs. State of Meghalaya (2014) 16 SCC 711, State of Orisa Vs. Debendra Nath Padhi (2005) SCC (Cri) 415 and Mosiruddin Munshi Vs. Mohd. Siraj & another (2014) 14 SCC 29 does not dispute that there was no express agreement between the petitioners and the complainant in regard to purchase of stock of Soyabean in the year 2010 & 2011 and instead a mere oral agreement was entered into. Attention of this court is invited by the learned counsel for respondent No.2 and as well as State to the statement of complainant Girraj Kumar recorded u/S. 161 Cr.P.C. dated 26/2/2016 to emphasize that element of fraud was present in the transaction right since it's inception. The written complaint filed by the complainant which led to lodging of the impugned FIR has been read over by the counsel for the complainant to explain the delay of about 4-5 years in lodging the FIR. The statement of complainant u/S. 161 Cr.P.C. (at page 323 of the petition) reveals that the complainant had made complaint to the police in 2012 itself and that repeated demands were made from the petitioners to clear the dues but to no avail. It is also revealed from the statement of complainant that the petitioners 6 shifted their place of residence to Mahasamund Chhatisgarh where the complainant further raised demand of clearing the dues to which the petitioners responded by assuring to do the needful and such assurance as it is alleged in the statement was given repeatedly by the petitioners. The statement further reveals that meagre amounts on different intervals were paid to the tune of Rs. 2 lakh, 5,000/- 25,000/- and 10,000/-. Whereafter it is revealed from the statement that the petitioners declined to pay anything further by categorically refuting that there were any further dues. The statement further reveals that on 27/1/2016 when the complainant approached the petitioners at Mahasamund and visited the residence of the petitioners with the aid of the police force, the petitioners did not open the gate. Whereafter, the statement reveals that the impugned FIR was lodged following the complaint.
6. However, learned counsel for respondent No.2/complainant does not dispute that in regard to transaction of sale and purchase of soyabean between the complainant and petitioners nearly 75% of the sale consideration has already been received by the complainant leaving only 25% as unpaid.
7. After hearing learned counsel for the rival parties and considering the statement of complainant and perusing the record, 7 this court is of the considered view that the impugned criminal prosecution is based on dispute which is predominantly of civil nature and has been made to appear an offence of breach of trust and cheating for the reasons infra:-
(a) The transaction of sale and purchase of soyabean entered into between the complainant and petitioners which was not backed by any express agreement but merely on oral understanding, giving rise to grievance to the complainant of non-payment of part sale-
consideration sometime in 2012 and 2013 when after repeated oral reminders by the complainant, the amount of sale consideration was not paid by the petitioners.
(b) The record does not indicate and neither has the counsel for respondent No.2 been able to reveal that written request was ever made by the complainant to the petitioners demanding the un-paid part sale consideration during the period from 2011-12 & 2015-16.
(c) The entire transaction since it's very inception was oral in nature and based on the trust reposed by the rival parties upon each other.
(d) The complainant in his complaint has revealed the terms and conditions of the oral agreement that till the complete payment of sale consideration the petitioners shall hold the 8 purchased stock of soyabean in trust but looking to the transaction which was of large in quantity of soyabean it is beyond comprehension that the complainant did not insist for taking down the terms and conditions of the agreement in writing.
(e) Thus, no fraud or criminal intent can be deciphered in the said transaction of purchase of soyabean by the petitioners from the complainant. However, possibility cannot be ruled out that after receiving the stock of soyabean the petitioners decided not to pay the full sale consideration but that by itself cannot reveal that fraud was the foundation of the transaction from it's very inception.
8. From the above discussion what comes out loud and clear is that the transaction between the complainant and the petitioners was a pure and simple civil transaction of sale and purchase of goods where part of the amount of money promised to be paid by the petitioners as sale consideration was not tendered. The sale consideration is admitted to be paid to the extent of 75%. The complainant does not dispute that only 25% of the total sale consideration is due against the petitioners. It thus appears to be a case of underpayment which cause could have very well been raised by the complainant in a suit for recovery.
9. For reasons best known to the complainant no initiative was 9 taken to approach the civil court against the petitioners by filing a recovery suit. The complainant continued to let time pass and in the process the period of limitation for filing suit for recovery expired. It appears that on realizing the failure to take appropriate action of approaching the civil court within the opportune time, the complainant thought it best to set the criminal law in motion against the petitioners by lodging impugned FIR alleging such offences where punishment prescribed is more than 3 years and therefore the bar of limitation provided u/S. 468 Cr.P.C. shall not come in way of petitioners.
10. In view of above discussions, it is obvious that the complainant is using the criminal law as a means to pressurize and compel the petitioners to pay the alleged balance sale consideration which the complainant knew cannot now be recovered by invoking the civil law.
11. In the conspectus of the aforesaid discussions, it is evident as day light that the basic element of inducement & deceit necessary for cheating is not present in the allegations made in the complaint or the FIR lodged by the complainant. More so, in the absence of any element or mens rea the offence of criminal breach of trust is not made out.
11.1 The Apex Court in the case of Anil Mahajan Vs. Bhor 10 Industries Ltd & another (2005) 10 SCC 228 has explained foundational pre-requisites of offence of cheating. Relevant portion of the said decision is reproduced below:-
"6...............mere failure of a person to keep up promise subsequently, a culpable intention right at the beginning, that is, when he made the promises cannot be presumed. A distinction has to be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of inducement. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction. The substance of the complaint is to be seen. Mere use of the expression 'cheating' in the complaint is of no consequence."
11.2 The Apex Court recently in somewhat similar case to the facts of present case in Prof. R.K. Vijayasarathy & ANR Vs. Sudha Seetharam & ANR [Criminal Appeal No. 238 of 2019 Special Leave Petition (CRL) No. 1434 of 2018] decided on 15/2/2019, has come to conclude as under :-
"23. The jurisdiction under Section 482 of the Code of Criminal Procedure has to be exercised with care. In the exercise of its jurisdiction, a High Court can examine whether a matter which is essentially of a civil nature has been given a cloak of a criminal offence. Where the ingredients required to constitute a criminal offence are not made out from a bare reading of the complaint, the continuation of the criminal proceeding will constitute an abuse of the process of the court.
24. In the present case, the son of the appellants has instituted a civil suit for the recovery of money against the first respondent.11
The suit is pending. The first respondent has filed the complaint against the appellants six years after the date of the alleged transaction and nearly three years from the filing of the suit. The averments in the complaint, read on its face, do not disclose the ingredients necessary to constitute offences under the Penal Code. An attempt has been made by the first respondent to cloak a civil dispute with a criminal nature despite the absence of the ingredients necessary to constitute a criminal offence. The complaint filed by the first respondent against the appellants constitutes an abuse of process of court and is liable to be quashed.
25. For the above reasons, the appeal is allowed. The judgment of the High Court is set aside and the criminal proceedings arising from PCR 2116 of 2016 instituted by the first respondent against the appellants are quashed. We however clarify, that no opinion has been expressed on the merits of the pending civil suit filed by the son of the appellants for the recovery of money. The pending suit shall be disposed of in accordance with the law."
12. In view of the above, this court has no hesitation to hold that the dispute between the complainant and the petitioners is of civil nature which is being given a criminal colour by the complainant in shape of impugned FIR and the consequential proceedings including framing of charges u/Ss. 409/34 & 420/34 IPC.
13. Consequently, both the petitions are allowed with following directions:-
(1) The impugned FIR dated 25/2/2016 bearing Crime No. 153/16 alleging offences punishable 12 u/Ss. 406, 417, 418, 420 r/w 34 IPC registered at Police Station Vidisha and all the consequential proceedings flowing out of the said FIR assailed in Mcrc. 3250/16 are hereby quashed.
(2) Similarly, the impugned order dated 9/8/2017 passed in S.T.No.51/2017 by the First Additional Sessions Judge, Vidisha framing charges against the aforesaid four petitioners for offence u/Ss. 409/34 & 420/34 IPC also stands set aside.
14. Let a copy of this order be sent to the trial court concerned for compliance.
(Sheel Nagu) Judge 02/5/2019 (Bu) DHANAN Digitally signed by DHANANJAYA BUCHAKE DN: c=IN, o=HIGH COURT OF M.P. BENCH GWALIOR, ou=P. S., postalCode=474011, st=Madhya Pradesh, JAYA 2.5.4.20=d94ba0c97d32b052dc2b2953e5 0aa2259fffca02f0df64f6e380887af9a7647 1, 2.5.4.45=03210001789E00741B6821B476 BUCHAKE 8B566B4765F459D8C46A18A92D65787E3 24985807413, cn=DHANANJAYA BUCHAKE Date: 2019.05.03 10:19:08 +05'30'