Orissa High Court
Unknown vs Biological E. Ltd. Reported In (2000) 3 ... on 11 February, 2020
Author: S. Pujahari
Bench: S. Pujahari
CRLMC No.3614 of 2019 05. 11.2.2020 This petition under Section 482 Cr.P.C. has been filed by the petitioner challenging the order of cognizance dated 20.8.2016 passed by the learned S.D.J.M., Bhubaneswar in ICC No.3516 of 2006. 2. The facts relevant for disposal of the criminal misc. case are as follows; Vinayak Mission Lord Jagannath Institute of Dental Sciences and Research (hereinafter referred to as "petitioner's trust") was established by the Thirumuruga Trust, at Toshali Plaza, Satyanagar, Bhubaneswar in the year 1997 with the approval and permission of the Government of Orissa, Utkal University, Dental Council of India and the Government of India. The original complainant Gangadhar Sahu used to run a trust by the name of Sahu trust (hereinafter referred to as "Sahu trust"). On 26.7.2000, petitioner's trust signed a memorandum of agreement with the Sahu Trust to transfer the management and control of the dental college with its assets and liabilities to the Sahu trust including leasehold rights of the land earmarked for the medical college. Pursuant to the memorandum of agreement, Sahu trust advanced a sum of Rs.1 crore to the petitioner's trust in the 2 year 2000. However, on 10.11.2000 the letter of authorization given in favour of the Sahu trust to take over and run the dental college was revoked. In the year 2001, as such Sahu trust raised a demand of Rs.2 crores including repayment of Rs.1 crore, which had been paid pursuant to the memorandum of agreement to the petitioner's trust. In the year 2003, Managing Director of Sahu trust, namely, Gangadhar Sahu as such filed Arbitration Misc. Case No.239 of 2003 before the learned District Judge, Khurda and obtained an order of injunction against the petitioner's trust from alienating the remaining seven acres of land. Apart from that he also filed ICC No.829 of 2005 before the learned S.D.J.M., Bhubaneswar for initiating a criminal proceeding under Sections 420/403 IPC. While the matter stood thus, on 13/14.9.2006, a memorandum of settlement was executed between the parties to resolve the dispute amicably on certain terms and conditions including the condition that the petitioner's trust shall pay Rs.3.75 crore to Sahu trust and the Sahu trust shall withdraw both civil and criminal cases. On 14.9.2006, the Sahu trust filed an application under Section 257 Cr.P.C. to withdraw ICC Case No.829 of 2005 pending before the 3 learned S.D.J.M., Bhubaneswar. Both the parties appeared before the learned S.D.J.M., Bhubaneswar on 19.9.2006 and the complaint case was withdrawn. The petitioner's trust handed over a demand draft of Rs.1 crore along with 10 PDCs of Rs.17.5 lakh each to the Sahu trust. However, on 12.10.2006, the petitioner's trust filed criminal complaint no.345 of 2006 before the learned Judicial Magistrate No.III at Salem, Tamilnadu, alleging breach of terms of the settlement agreement by the Managing Director of Sahu trust for extorting 10 PDCs without withdrawing the arbitration case as agreed. On 12.10.2006, learned Magistrate took cognizance of the offence under Sections 420/511/384 IPC against the trustee of the Sahu trust. So also O.S. No.267 of 2006 was filed before the Civil Court at Salem wherein an order of injunction was obtained restraining the Sahu trust from negotiating, presenting or dealing with the PDCs. As such Sahu trust filed ICC No.3516 of 2006 against the petitioner's trust before the learned S.D.J.M., Bhubaneswar on 13.12.2006 again. Learned S.D.J.M., Bhubanessar took cognizance under Sections 420/403/506/120B/ 34 IPC on 22.12.2006. On 8.1.2007 the complainant 4 managing trustee of Sahu trust filed a memo for conditional withdrawal of ICC No.3516 of 2006 before the learned S.D.J.M., Bhubaneswar due to subsequent development and commitment by the accused persons to settle the matter. But no order was passed and the case was adjourned to 11.1.2007. On 11.1.2007 the complainant filed an objection to the petition filed by the accused against petitioner's trust under Section 205 Cr.P.C. and did not press the petition for withdrawal. On 15.1.2007 accused trustee of petitioner's trust filed Criminal Revision No.49 of 2007 before this Court for quashment of the order of cognizance passed by the learned S.D.J.M., Bhubaneswar in ICC No.3516 of 2006. On 22.1.2007, learned S.D.J.M, Bhubaneswar allowed the application under Section 205 Cr.P.C. without allowing the conditional withdrawal of the complaint case. However, pursuant to the notice under Section 138 of the N.I Act, on 28.6.2007 the petitioner's trust paid under protest Rs.87.5 lakhs due under 5 PDCs. On 16.3.2012, the Madras High Court quashed Complaint Case No.345 of 2006 filed by the petitioner's trust against Gangadhar Sahu pending before the learned Magistrate as the disputes between the parties 5 relates to handing over the PDCs was purely civil in nature. While the matter stood thus, on 29.6.2016, this Court in Criminal Revision No.49 of 2007 set aside the order of cognizance taken by the learned S.D.J.M., Bhubaneswar as the same was taken in utter disregard to the mandate of Section 202 Cr.P.C. and remitted the case to the learned S.D.J.M., Bhubaneswar to redress the same on compliance with the mandate of Section 202 Cr.P.C. In obedience to the aforesaid order of this Court passed in the said criminal revision, learned S.D.J.M. on due compliance of Section 202 Cr.P.C. and going through the materials available on record took cognizance and decided to proceed against the petitioner, which has been challenged in this case. 3. It appears that the prayer of the petitioners after such cognizance seeking to dispense with their personal attendance was rejected by the learned S.D.J.M., Bhubaneswar vide order dated 27.10.2016. The petitioners thereafter filed Criminal Revision No.872 of 2016 before this Court seeking quashment of the order of cognizance and also the order dated 27.10.2016 rejecting the prayer to dispense with their personal attendance under Section 205 Cr.P.C. It 6 appears from the order passed in the said criminal revision, a submission was advanced that the petitioners therein shall cooperate with the trial and shall not seek any adjournment for cross- examining of the witnesses produced by the complainant and also in producing their own witnesses. The complainant as such had no objection, if they are released on bail. In such premises, this Court disposed of the said criminal revision with the order that since both the parties are ready and willing to cooperate with the trial, learned S.D.J.M shall release the petitioners therein on bail on such terms and conditions as deem fit and proper with further order to frame charge against the petitioners on the very day of their appearance and further directed that the learned S.D.J.M shall make all endeavour to conclude the trial by end of February, 2017. It was further observed that after their appearance, if a petition under Section 317 Cr.P.C. is filed, the same shall be favourably considered but the petitioners shall appear on the date of recording of the accused statement. However, the petitioners did not comply with the said direction and as such, N.B.W was issued against them, which is pending. Then a Misc. Case No.1328 of 2016 for 7 extension of time was filed before this Court in the disposed of criminal revision and in the said misc. case, petitioners were given time to appear by 23.12.2016 with direction that the learned S.D.J.M shall proceed in terms of the earlier order passed. Thereafter also the petitioners did not comply with the said direction and as such, N.B.W was issued against them to secure their attendance. In the meanwhile the complainant Gangadhar Sahu, who happens to be the Managing Trustee of the Sahu trust, died. The continuance of the complaint as such was challenged by filing Criminal Misc. Case No.4201 of 2016 by the petitioners before this Court on account of the death of the complainant. This Court disposed of the said criminal misc. case directing the parties to put-forth their grievances before the learned S.D.J.M by order dated 3.8.2017. Accordingly, on 29.8.2017, learned S.D.J.M examined the matter and substituted the opposite parties on the death of Gangadhar Sahu, Managing Director, to prosecute the case. The said order was challenged in Criminal Misc. Case No.2515 of 2017 by the petitioners. However, on 29.8.2017, they did not press the criminal misc. case and wanted to withdraw the same. 8 Accordingly, the same was withdrawn. But a revision challenging the order of the learned S.D.J.M. dated 29.8.2017 with regard to substitution was pending before the learned Sessions Judge, Bhubaneswar. Learned Sessions Judge, Bhubaneswar also dismissed the same. Then, opposite parties had come to this Court in Criminal Misc. Case No.1452 of 2017 seeking a direction for early execution of NBW(A) to secure the attendance of the petitioners. This Court disposed of the said criminal misc. case directing the learned S.D.J.M to dispose of the application to be made in this regard by the opposite parties complainant. Accordingly, learned S.D.J.M has taken steps as permissible under the Code of Criminal Procedure to secure the attendance of the accused persons. In the meanwhile O.S. No.267 of 2006 pending before the Subordinate Judge, Salem having been disposed of and the matter has been referred to the arbitration, an arbitral proceeding is pending between the parties before the sole arbitrator Justice M.M. Das, formerly a Judge of this Court. 4. In the aforesaid factual backdrop, the petitioners have come to this Court challenging the order of cognizance to be unsustainable on the 9 ground that the dispute having arisen out of breach of contract as such the same is purely civil in nature. The Hon'ble Madras High Court having also quashed the criminal prosecution arising out of such agreement lodged against the complainant, the Managing Director of the Sahu Trust, by the petitioners before the learned Judicial Magistrate III, Salem and the matter having been referred to arbitration between the parties, a criminal prosecution for such violation is incompetent. 5. The opposite parties have appeared on their own and made a serious objection by filing a counter affidavit to the same on the ground that the petitioner having come to this Hon'ble Court again and again and in the Criminal Revision No.872 of 2016 wherein order rejecting the prayer under Section 205 Cr.P.C. as well as cognizance was challenged, petitioners having been granted bail taking note of the submission that they shall cooperate with the trial, this petition challenging the order of cognizance on the ground is nothing but to delay the matter for disposal on merit. According to the opposite parties, the dispute though arose for violation of contractual obligation but the intention to cheat from the very beginning 10 being there, the same exposed the petitioner to liability both civil and criminal. The prosecution before learned Judicial Magistrate III at Salem against the deceased complainant having been quashed by Hon'ble Madras High Court taking note of the peculiar fact of the case i.e. obtaining the PDCs that the dispute therein was purely civil in nature, the same cannot be a ground for quashment of the prosecution against the petitioners pending at Bhubaneswar more so when the facts alleged prima facie disclose the commission of offences alleged. 6. The contention of the learned counsel for the petitioner is that since the dispute relates to breach of contract and the same is the subject- matter of arbitration pending, the criminal complaint for such breach therefore the complaint is incompetent. Furthermore, it is submitted that taking note of the same when the Hon'ble Madras High Court, in dispute arising out of same transaction, quashed criminal case initiated at the instance of the petitioner against the deceased Managing Director of Sahu trust, alleging certain criminal offence on that ground, the prosecution against the petitioner at the instance of the opposite parties is also liable to be quashed on 11 that ground. To buttress his submission, he places reliance on a decision of the apex Court rendered in the case of International Advanced Research Centre for Powder Metallurgy and New Materials (Arci) and others v. Nimra Cerglass Technics Private Limited and another, (2016) 1 SCC 348 wherein the apex Court have held that when the dispute is purely civil in nature, the civil liability cannot be converted to criminal liability and as such continuance of the proceeding is vague. 7. Per contra, learned counsel appearing for the opposite parties submits that when the dispute arises out of a violation of contract, it is not the law that civil proceeding is only maintainable. The violation of agreement may expose a person to liability both civil and criminal as well in a given set of facts. When in this case the petitioner from the very inception though had received the amount revoked the authorization letter and had not acted in accordance with the agreement and also did not return the money, the very guilty intention to cheat was there from the inception. As such the aforesaid wrong committed invites the liability under both the law. The petitioners have been repeatedly playing hide and seek with the 12 order on this Hon'ble Court. They had earlier come to this Hon'ble Court to set aside the order of cognizance on that ground and since there was non-compliance of mandate of Section 202 Cr.P.C., though the accused petitioners were staying outside, this Hon'ble Court set aside the order of cognizance and remitted the matter back to the trial court for reconsideration of the same. Accordingly, after compliance of Section 202 Cr.P.C. when cognizance was taken and petitioners have been proceeded with, the petitioners in another round came to this Court wherein the prayer to quash the order of cognizance was neither pressed nor this Court allowed the same but allowed their prayer for bail on condition of their cooperating with the trial. However, without appearing and cooperating with the trial as directed, after the death of Gangadhar Sahu, they challenged the continuance of the proceeding but this Hon'ble Court referred the same to the trial court. When the trial court allowed the substitution and to continue with the prosecution to the opposite parties, they again came to this Hon'ble Court challenging the same, so also filed a criminal revision before the learned Sessions Judge. The petition from this Hon'ble 13 Court was withdrawn and the learned Sessions Judge also rejected such a prayer challenging the continuance of the prosecution on the death of the complainant by the opposite parties trustee. 8. So far as the contention that since Hon'ble Madras High Court has quashed the criminal prosecution against the deceased complainant which was pending before the learned Judicial Magistrate No.III at Salem, the same is no ground to quash the prosecution pending before the learned S.D.J.M., Bhubaneswar as the allegation in both the cases though between the same parties are distinct and different. In Hon'ble Madras High Court, the allegation of the petitioners that the PDCs were obtained by accused Gangadhar Sahu, since dead) by perpetuating extortion and cheating inasmuch as without withdrawing the arbitration proceeding the same was obtained, was held to be frivolous and the dispute was purely civil in nature as such the prosecution at the instance of the petitioners against the deceased Gangadhar Sahu was quashed. The prosecution allegation before the learned S.D.J.M., Bhubaneswar by the deceased complainant is that the petitioners trust though received huge amount of money to transfer the institution as per the agreement and gave the 14 authority to manage the institute but soon after that revoked the power and did not return the money. The same expose to the petitioners liability both civil and criminal. For civil liability, the arbitration is pending and for cheating the Sahu trust, the criminal prosecution has been launched. Therefore, learned S.D.J.M., Bhubaneswar having found a prima facie case for commission of the offence alleged, this Hon'ble Court should be loathed in to interfere with the same more so when the petitioner on the earlier occasion had come to this Hon'ble Court challenging the same in Criminal Revision No.872 of 2016 but therein submitted that they shall cooperate with the trial and got an order of bail and later on did not comply with the direction of this Hon'ble Court. Therefore, as they are yet to appear in the court below much less they have cooperated with the trial and their sole intention is to delay the matter, this criminal misc. case is devoid of merit and as such liable to be dismissed, submits the learned counsel for the opposite parties. 9. In this case the contention has been advanced that since the dispute arises out of a civil transaction, the launching of the criminal 15 prosecution is without any substance more so when the arbitration is pending between the parties and in similar facts and situations, the Madras High Court has quashed the prosecution against the deceased complainant launched at the instance of the present petitioner. According to the petitioner, the dispute is therefore purely civil in nature and hence, the continuance of the criminal prosecution is an abuse of process of the court and as such liable to be quashed. The same have been countered on the grounds stated by the learned counsel for the opposite parties. 10. In Medchl Chemicals & Pharma (P) Ltd. V. Biological E. Ltd. reported in (2000) 3 SCC 269, the apex Court have held that exercise of jurisdiction under the inherent power as envisaged in Section 482 of the Code to have the complaint or the charge-sheet quashed is an exception rather than a rule and the case for quashing at the initial stage must have to be treated as rarest of rare so as not to scuttle the prosecution. With the lodgment of First Information Report the ball is set to roll and thenceforth the law takes its own course and the investigation ensues in accordance with the provisions of law. The jurisdiction as such is rather limited and restricted and its undue 16 expansion is neither practicable nor warranted. In the event, however, the court on perusal of the complaint comes to a conclusion that the allegations levelled in the complaint or charge- sheet on the face of it does not constitute or disclose any offence as alleged, there ought not to be any hesitation to rise up to the expectation of the people and deal with the situation as is required under the law. To exercise powers under Section 482 of the Code, the complaint in its entirety will have to be examined on the basis of the allegation made in the complaint and the High Court at that stage has no authority or jurisdiction to go into the matter or examine its correctness. Whatever appears on the face of the complaint shall be taken into consideration without any critical examination of the same. But the offence ought to appear ex facie on the complaint. The truth or falsity of the allegations would not be gone into by the Court at this earliest stage. Whether or not the allegations in the complaint were true is to be decided on the basis of the evidence led at the trial. So the question is : Can it be said that the allegations in the complaint do not make out any case against the accused nor do they disclose the ingredients of 17 an offence alleged against the accused or the allegations are patently absurd and inherently improbable so that no prudent person can ever reach to such a conclusion that there is sufficient ground for proceeding against the accused. 11. In Indian Oil Corporation v. NEPC India Limited reported in (2006) 6 SCC 736, the apex Court taking note of the plethora of decisions rendered by the apex Court in this regard earlier have held that 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, 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 proceeding 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 of, 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. 12. In the case of Sau. Kamal Shivaji Pokarnekar v. the State of Maharashtra & 18 others (Criminal Appeal No.255 of 2019 arising out of SLP (Crl.) No.7513 of 2014 disposed of on 12.2.2019), the apex Court have held that at the initial stage of issuance of process it is not open to the Courts to stifle the proceedings by entering into the merits of the contentions made on behalf of the accused. Criminal complaints cannot be quashed only on the ground that the allegations made therein appear to be of a civil nature. If the ingredients of the offence alleged against the accused are prima facie made out in the complaint, the criminal proceeding shall not be interdicted. 13. As stated earlier in this case learned S.D.J.M., Bhubaneswar scanning the materials has held that there is prima facie case is there against the petitioners to proceed. The petitioners challenging the same had once come to this Court and as there was non-compliance of Section 202 Cr.P.C., this Court remitted the matter back to the trial court to address the same vide order dated 29.6.2016 passed in Criminal Revision No.49 of 2007. Then, on such remand when complying with the requirement, the learned S.D.J.M scrutinizing the materials found a case to proceed against the petitioners and refused the prayer of the 19 petitioners to dispense with their personal attendance under Section 205 Cr.P.C. the petitioners had again come to this Court vide Criminal Revision No.872 of 2016 but without challenging the order of cognizance, submits for bail on the condition that they shall cooperate with the trial. This Court though allowed the bail taking note of the same and passed the order to conclude the trial. The petitioners have not complied with the same and again came to this Court on another occasions filing petitions challenging the continuance of the prosecution and became unsuccessful. The present petition as such on the ground stated. The petitioner is therefore playing hide and seek with the count. The prosecution was launched more than 13 years before. 14. In the aforesaid factual backdrop and in view of the law laid down in the case of Medchl Chemicals & Pharma (P) Ltd, Indian Oil Corporation, and Sau. Kamal Shivaji Pokarnekar (supra), the prayer made is devoid of merit. Accordingly, criminal misc. case stands dismissed. ....................... S. Pujahari, J.
20 PKS