Karnataka High Court
Sri G Anjana Reddy vs State By Jeevan Bheemanagar Police ... on 6 December, 2021
Author: M. Nagaprasanna
Bench: M. Nagaprasanna
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 06TH DAY OF DECEMBER, 2021
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.8947 OF 2018
BETWEEN:
1. SRI G.ANJANA REDDY
S/O SRI G.LAKSHMI REDDY
AGED ABOUT 43 YEARS,
YARRAGUNTA VILLAGE,
RAPTHADU MANDALAM
ANATHAPUR DIST (AP)
2. M/S BALAJI CONSTRUCTIONS LTD.,
PLOT NO.164, NCHO, NCHO ROAD VILLA
ALIZABETHA
POST NET 738(891)
LUSAKA ZAMBIA
REPRESENTED BY ITS PROP:
MR.G. ANJAN REDDY
... PETITIONERS
(BY SRI GANGADHAR R.GURUMATH, SR.ADV. A/W
SRI CHANDRASHEKAR B.A., ADVOCATE (PHYSICAL HEARING))
AND
1. STATE BY JEEVAN
BHEEMANAGAR POLICE STATION
BENGALURU CITY
REPTD. BY S.P.P
HIGH COURT BUILDING
BENGALURU - 560 001.
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2. M/S AEROSTAR GLOBAL LOGISTICES
INDIA PVT. LTD.,
NO.5, 2ND FLOOR,
CRIMSON COURT
JEEVAN BHEEMANAGA MAIN ROAD
BENGALURU-560075
REPRESENTED BY PROPRIETOR
MR.GOPI KRISHNAN NAIR SUNDARESAN
... RESPONDENTS
(BY SMT.NAMITHA MAHESH B.G., AGA FOR R1 (PHYSICAL
HEARING),
SRI STANLEY SAM, ADVOCATE FOR R2 (PHYSICAL HEARING))
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDING IN CRIME
NO.117/2016 PENDING ON THE FILE OF 4TH ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE AT BANGALORE P/U/S 205, 500,
506, 34, 406, 120-B, 405, 416, 425, 417, 420, 409 AND 426 OF IPC.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 18.11.2021, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING
:-
ORDER
The petitioners are before this Court calling in question the proceedings in Crime No.117 of 2016 pending before the 4th Additional Chief Metropolitan Magistrate, Bangalore alleging offences punishable under Sections 205, 500, 506, 34, 406, 120-B, 405, 416, 425, 417, 420, 409 and 426 of the Indian Penal Code.
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2. Heard Sri Gangadhar R.Gurumath, learned senior counsel along with Sri B.A.Chandrashekar, learned counsel for the petitioners, Smt. B.G. Namitha Mahesh, learned Additional Government Advocate for respondent No.1 and Sri Stanley Sam, learned counsel for respondent No.2.
3. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows:-
The respondent No.2/complainant - M/s Aerostar Global Logistics India Private Limited is into the business of International Shipping and Logistics Services. It is alleged that the petitioners approached the complainant for its services through its sales executive and after several rounds of deliberations the 1st petitioner who is the owner of the 2nd petitioner nominated the complainant for a sea export of one truck with an excavator in the month of March, 2015. The said shipment was to be executed through the supplier of the accused M/s Sree Tirumala Enterprises who was the licensee for 4 such shipment. The cost of the shipment was also drawn and invoice along with export documents were also generated.
4. Against the invoice it is alleged that the petitioners made a payment of Rs.12,99,790/- which was equivalent to USD 19,000/- and the balance of USD 22,302/- was to be paid later. The complainant undertakes four shipments from India to Lusaka/Zambia through the consignee aforementioned. The shipments were marketed by the complainant's Hyderabad Branch Sales through its executive on certain mutually agreed terms and conditions between the petitioners and the complainant.
5. It is not in dispute that three shipments were marketed in terms of the contract entered into between the parties. The particular shipment moved from Chennai Port on 14-03-2015 and arrived at Port of Entry at Dar-es-Salaam on 28-03-2015. Due to some formalities the transit shipment underwent a delay for which the complainant to solve the issue with regard to 5 customs flew from Hyderabad to Tanzania on 19-04-2015. It is alleged that on an assurance that payment for the entire journey would be met by the petitioners the complainant had undertaken the journey. For solving the issue with shipping line and customs, the complainant stayed at Tanzania for about 17 days and such expenses were indicated to the petitioners.
6. The petitioners are said to have informed the complainant that they are in need of the shipment urgently as it was to be handed over to the consignee at Zambia and assured the complainant that payment as promised will be made once the delivery of shipment is done for which, again the complainant sent his representative one Mr. Gopinath to Tanzania to solve the issue who stayed there for 58 days, completed the issue and closed the same. The said expenses of stay and flight charges of the representative of the complainant was sent to the petitioners.
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7. It is alleged by the complainant that despite submission of aforesaid invoice and flight tickets, as promised, the petitioners did not pay the amount. When a demand was made for such payment, it is further alleged that the complainant was threatened. In those circumstances, the complainant caused a legal notice upon the petitioners claiming outstanding amount of USD 1,17,794/- along with interest. The notice was replied by the petitioners in denial of the claim and laid the blame on the complainant itself for having caused huge loss to the petitioners. On receipt of the reply from the hands of the petitioners, the complainant springs into action by registering a private complaint invoking Section 200 of the Cr.P.C. On the strength of the aforesaid averments the complaint is registered alleging offences punishable as aforesaid. Pursuant to the said complaint, a FIR is registered for the aforesaid offences in Crime No.117 of 2016 on 22-04-2016. On issuance of notice to the petitioners, the petitioners have knocked the doors of this Court in the subject criminal petition.
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8. The learned senior counsel representing the petitioners would contend that the very contents of the complaint would clearly indicate that it is a commercial transaction between the parties and no offence as alleged can be even found in the complaint. It was business transaction between the parties which turned out to be little difficult for execution for the reasons which are indicated in the legal notices exchanged between the petitioners and the complainant. No criminality can be attached to the act of the petitioners as the contention of the complainant is breach of promise.
9. On the other hand, the learned counsel representing the respondent No.2/complainant would submit that on the assurance given by the petitioners once the complainant traveled to Tanzania and stayed there for 17 days and thereafter, the representative of the complainant stayed there for 58 days to resolve the shipment issue between the parties and would, therefore, contend that the complainant was induced into going 8 to Tanzania or sending its representative to Tanzania, which inducement has resulted in huge loss to the complainant.
10. I have given my anxious consideration to the submissions made by the respective learned senior counsel and the learned counsel for the parties and perused the material on record.
11. The afore-narrated facts are not in dispute. The fact that the petitioners and respondent No.2/complainant entered into contract for shipment of certain material is also not in dispute. Several shipments were made by the complainant and the business transaction was an ongoing process between the petitioners and the complainant is also not in dispute. A particular shipment which had to reach Zambia or Tanzania got held up due to certain issues for which the complainant had to resolve it being the transporter or shipment agency to shift the products. The allegation is that the petitioners had promised the complainant that they would reimburse flight and stay charges 9 of both the complainant and its representative who had visited Tanzania twice and certain other incidental expenses that they had incurred for such travel. The total amount claimed by the complainant was USD 1,17,794/- . When the amount that the complainant had to get was not realized, the complainant registered a complaint invoking Section 200 of the Cr.P.C., when the legal notices sent were replied by the petitioners in denial of its claim. The relevant narrations of the complaint dated 24.02.2016 are extracted hereunder for the purpose of quick reference:
"6. That, the complainant had done 04 shipments from India to Lusakd/Zambia through the consignee referred IEC (Import Export Certificate) holder (M/s SREE TIRUMALA ENTERPRISES AND M/s MYTHRI TRADING). The said invoices bearing Nos. AGL OEX/HYD/0005/14-15 dated 14-03-2015:
AGL OEX HYD 0001/15-16 dated 02-04-2015: AGL OEX HYD 0002 14-15 dated 12-04-2015 and AGL OEX HYD 0010 15-16 dated 28-04-2015 are herewith produced as ANNEXURE 'B', B1', 'B2' & 'B3' respectively.
.. .. .. ..
8.That, these Shipments were marketed by
Complainant's Hyderabad Branch Sales Executive
Mr.Prashanth and the terms and conditions were mutually agreed upon between the accused and the complainant. The respective emails attached along with the Annexure-B series support the contention.10
9.That, the first shipment was executed in the month of March 2015 through License Holder M/s TIRUMALA ENTERPRISES via Chennai Port Shipment consisting of 01 Truck with 01 Excavator.
.. .. .. ..
11. That, the Complainant had sent all the relevant documents to the accused's handling agent who has processed all the formalities at the final stage.
12. That, the accused came back raising issues with customs to process further to take out the shipment from Tanzania Customs to move to delivery area Lusaka/ Zambia.
.. .. .. ..
14. After solving the issue with shipping line and customs with amendment of documents (TRA - Tanzania Revenue Authority) the complainant came back to India on 3-
05-2015. The complainant stayed there almost for 17 days to solve the issue and the expenses of such travel, stay and food was additional expenses incurred by the complainant which has also been communicated to the accused No.1 and 2 over phone wherein he also agreed to take care of such additional expenses which the accused No.1 and 2 has not paid trill date.
.. .. .. ..
16. In the meantime, before delivery of the shipment, the complainant has executed 03 more shipments. The payment for the same has also not been made by the accused Nos. 1 & 2.
.. .. .. ..
20. In the meantime, when the complainant was working with Tanzania Port Authority and Tanzania Road Authority to clear the issues, the A1 threatened the 11 complainant in his Bangalore Office through his Manager Ms. Manju using phone Nos. 9686215555 and 9448053888. The person who made the threatening call himself claimed to be the P.A of the then Hon'ble Home Minister (Mr. K.J. George() and insisted for the delivery of the shipment. When the complainant contacted the PA of the then Home Minister they were astonished to hear about such kind of a threat. The complainant made it clear that the shipment has been held by Tanzania Customs not by the complainant.
21. That the total outstanding balance is US $1,17,794.00 and with respect to this a legal notice has been sent to the A1 & A2 to clear the outstanding amount with interest @ 18% within three days from the receipt of this notice.
22. That, the Accused No.1 & 2 has cheated the complainant by not paying the promised amount of Rs.87,73,596/- (Rupees Eighty Seven Lakhs Seventy Three Thousand Five Hundred and Ninety Six only) [US $ 1,28,250.20 @ Rs.68.41 conversion rate] to the complainant towards the services satisfactorily performed by the complainant as per the invoice bearing No.AGL/OEX/HYD/0005/1445 dated 14-03-2015 and others (Annexure-B series).
.. .. .. ..
26. That, the accused No.1 committed the offence of cheating by personation in May 205 by falsely representing himself as 'Private Assistant (PA) to previous Hon'ble Minister of Home Affairs, Mr. K.J.George made a call to the complainant's staff named Mr. Manju from 9686215555 and 9448053888. The accused fraudulently and dishonestly did this fraudulent act for the purpose of getting the delivery of the shipment from the complainant."
(Emphasis added) 12 A perusal at the afore-extracted complaint makes it unmistakably clear that it was a contract between the petitioners and the complainant for shipping, in which business the complainant was in. Therefore, it is a case of transaction and execution that took place on mutually agreed terms and conditions. There cannot be any inducement to a particular party in mutually agreed terms and conditions. The allegation that the petitioners have breached the promise of making payment cannot be a ground to initiate criminal proceedings against the petitioners for offences alleged under Sections 406 and 420 of IPC inter alia.
12. Section 406 of IPC deals with offence of criminal breach of trust. For criminal breach of trust there must be an entrustment of property. In the case at hand, as observed hereinabove, it was a business transaction or a commercial contract between the parties for execution of such contract. There was no entrustment of property for an allegation of criminal breach of trust. For an offence under Section 420 of 13 IPC, if it has to be proved, prima facie the ingredients under Section 415 are required to be alleged. For an offence under Section 420 of IPC there must be inducement against the victim for entering into a transaction, out of which, the accused should have made a gain. The circumstances narrated hereinabove would clearly indicate that it was mutually agreed terms and conditions that had to be executed by the complainant. Once it is mutually agreed, there cannot be an element of inducement in the said transaction. Therefore, the complaint as alleged cannot link the offences punishable under Section 406 or Section 420 of IPC against the petitioners.
13. The other offences that are alleged against the petitioners are in terms of Section 205 of IPC which deals with false personation. There is no allegation of impersonation in the complaint. What is alleged is when the amount was demanded, someone spoke on phone as Private Secretary to the then Minister. This imaginary contention cannot lead to an allegation under Section 205 of the IPC. Section 500 of IPC deals with 14 criminal defamation. The complaint nowhere alleges that the complainant has been defamed in the transaction in the eyes of the public by any publication. Section 500 of IPC is recklessly included in the FIR. All other offences with regard to Section 506 and Section 120-B of IPC which deal with criminal intimidation or criminal conspiracy cannot take the complaint any further as it was breach of contract or a breach of terms as is alleged by the complainant itself.
14. If the criminal trial is permitted to be continued for the purpose of recovery of money the proceedings will result in miscarriage of justice and permitting abuse of the process of law at the behest of the complainant. This view of mine, in this regard, is fortified, by the judgment of the Apex Court in the case of ANAND KUMAR MOHANTTA AND ANOTHER v. STATE (NCT OF DELHI) DEPARTMENT OF HOME AND ANOTHER1 wherein the Apex Court holds as follows:
"21. The essence of the offence lies in the use of the property entrusted to a person by that person, in violation of any direction of law or any legal contract which he has made 1 (2019) 11 SCC 706 15 during the discharge of such trust. In the present case, the amount of rupees one crore was paid by the respondent complainant to the appellants as an interest-free deposit on the signing of the agreement. It was liable to be refunded to the complainant simultaneously on handing over of possession of the area of the owner's share to the owner in the group housing complex vide Clause 30(b) of the agreement dated 3-6-1993.
22. Two things are significant in the transaction between the parties. Firstly, that the occasion for returning the amount i.e. the developer handing over the possession of the area of the owner's share to the owner in the group housing complex, has not occurred. According to the appellants, the contract stands frustrated because no group housing can be legally built on 20, Feroz Shah Road, New Delhi since it falls in the Lutyens Bungalow Zone. Appellant 1 has therefore, terminated the contract. Further, the amount has been retained by him as a security because not only is there any handing over of constructed portion, the complainant has also got into part-possession of the property and has not handed it back. Also, the complainant has failed to get the property vacated from the tenant's possession.
23. We, thus find that it is not possible to hold that the amount of rupees one crore which was paid along with the development agreement as a deposit can be said to have been entrustment of property which has been dishonestly converted to his own use or disposed of in violation of any direction of law or contract by the appellant. The appellants have not used the amount nor misappropriated it contrary to any direction of law or contract which prescribes how the amount has to be dealt with. Going by the agreement dated 3-6-1993, the amount has to be returned upon the handing over of the constructed area to the owner which admittedly has not been done. Most significantly Respondent 2 has not demanded the return of the amount at any point of time. In fact, it is the specific contention of Respondent 16 2 that he has not demanded the amount because the agreement is still in subsistence.
24. We do not see how it can be contended by any stretch of imagination that the appellants have misappropriated the amount or dishonestly used the amount contrary to any law or contract. In any case, we find that the dispute has the contours of a dispute of civil nature and does not constitute a criminal offence.
25. Having given our anxious consideration, we are of the view that assuming that there is a security deposit of rupees one crore and that he has misappropriated the dispute between the two parties can only be a civil dispute.
26. In Indian Oil Corpn. v. NEPC (India) Ltd. [Indian Oil Corpn. v. NEPC (India) Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] , this Court observed as follows: (SCC p. 749, para
13) "13. ... 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."
The Court noticed a growing trend in business circles to convert purely civil dispute into criminal cases.
27. We find it strange that the complainant has not made any attempt for the recovery of the money of rupees one crore except by filing this criminal complaint. This action appears to be mala fide and unsustainable.
... ... ... ...
30. It is necessary here to remember the words of this Court in State of Karnataka v. L. Muniswamy [State of Karnataka v. L. Muniswamy, (1977) 2 SCC 699 : 1977 SCC (Cri) 404] which read as follows: (SCC p. 703, para 7) 17 "7. ... In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters, is designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice."
(Emphasis supplied) In a latest judgment the Apex Court in the case of ARCHANA RANA v. STATE OF UTTAR PRADESH AND ANOTHER2 holds as follows:
"7. Having heard the learned counsel appearing on behalf of the appellant and the learned counsel appearing on behalf of the respondent State and having gone through the averments in the complaint and the charge-sheet, even if the averments made in the complaint are taken on their face, they do not constitute the ingredients necessary for the offence under Sections 419 and 420 IPC. As observed and held by this Court in R.K. Vijayasarathy [R.K. Vijayasarathy v. Sudha Seetharam, (2019) 16 SCC 739 : (2020) 2 SCC (Cri) 454] , the ingredients to constitute an offence under Section 420 are as follows:
(i) a person must commit the offence of cheating under Section 415; and 2 (2021) 3 SCC 751 18
(ii) the person cheated must be dishonestly induced to
(a) deliver property to any person; or
(b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security.
Thus, cheating is an essential ingredient for an act to constitute an offence under Section 420 IPC.
8. "Cheating" is defined under Section 415 IPC. The ingredients to constitute an offence of cheating are as follows:
(i) there should be fraudulent or dishonest inducement of a person by deceiving him:
The person who was induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or the person who was induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived.
Thus, a fraudulent or dishonest inducement is an essential ingredient of the offence under Section 415 IPC. A person who dishonestly induced any person to deliver any property is liable for the offence of cheating.
9. Now, keeping in mind the relevant ingredients for the offences under Sections 419 and 420 IPC, as noted hereinabove, it is required to be considered whether the averments in the complaint taken on their face do constitute the ingredients necessary for the offences under Sections 419 and 420 IPC, as alleged.
10. Having gone through the complaint/FIR and even the charge-sheet, it cannot be said that the averments in the FIR and the allegations in the 19 complaint against the appellant constitute an offence under Sections 419 and 420 IPC. Whatever allegations are made for the offence with respect to inducement and/or even giving Rs 5,00,000 for obtaining the job, are made against the appellant's husband, co-accused. There are no allegations at all that the appellant herein induced the complainant to get the job and the amount of Rs 5,00,000 was given to the appellant herein. Therefore, even if all the allegations in the complaint taken at the face value are true, in our view, the basic essential ingredients of cheating are missing. Therefore, this was a fit case for the High Court to exercise the jurisdiction under Section 482 CrPC and to quash the criminal proceedings against the appellant herein for the offences under Sections 419 and 420 IPC. The High Court has failed to exercise the jurisdiction vested in it by not quashing the criminal proceedings against the appellant herein for the offences under Sections 419 and 420 IPC.
11. Now so far as the FIR/charge-sheet/criminal proceedings against the appellant herein for the other offences, namely, under Sections 323, 504 and 506 IPC are concerned, the High Court has rightly not quashed the criminal proceedings qua the said offences.
12. In view of the above and for the reasons stated above, the present appeal is allowed in part. The criminal proceedings against the appellant herein for the offences under Sections 419 and 420 IPC arising out of Case Crime No. 153 of 2016, registered with PS Kotwali, District Azamgarh, pending in the Court of the learned Chief Judicial Magistrate, Azamgarh are hereby quashed and set aside."
(Emphasis supplied) Therefore, on the touchstone of the law laid down by the Apex Court in the afore extracted cases, if the facts obtaining in the 20 case at hand are considered, permitting the trial against the petitioners would result in miscarriage of justice and be an abuse of the process of the Law.
15. Insofar as the judgment relied on by the learned counsel appearing for the complainant in the case of PRITI SARAF AND ANOTHER v. STATE OF NCT OF DELHI AND ANOTHER - Criminal Appeal No.296 of 2021 decided on 10- 03-2021, the same would not be applicable to the facts of the case at hand, as the Apex Court clearly holds that the material on record would indicate that the accused therein had induced the complainant to enter into a particular transaction which was the subject matter of the said dispute. It is in that light the Apex Court holds that the offence of cheating, if on the face of it is noticed, it hardly matters if it is a commercial transaction arising out of mutually agreed terms and conditions. These are not the facts in the case at hand, as afore-narrated facts clearly indicate that there was no criminal breach of trust or cheating or any other offence that could be alleged against the petitioners. 21
16. The obliteration of the criminal trial would not come in the way of the complainant taking recourse to any other proceedings in accordance with law for recovery of money, if any, from the hands of the petitioners.
17. For the aforesaid reasons, the following:
ORDER
(i) Criminal Petition is allowed.
(ii) The proceedings in Crime No.117 of 2016 pending before the 4th Additional Chief Metropolitan Magistrate, Bangalore stand quashed.
(iii) Quashing of the proceedings in Crime No.117 of 2016 will not come in the way of the complainant initiating any proceedings, in accordance with law, for recovery of money, if any.
The observations made in the course of this order are only for the purpose of a decision to be rendered under Section 482 of the Cr.P.C. Any other proceeding, if initiated by the complainant, 22 the judicial or quasi judicial fora considering the merits of the claim of the complainant would not be influenced by the observations made in the course of this order and consider such claim independently.
Sd/-
JUDGE bkp CT:MJ