Gujarat High Court
Purav Atulbhai Shah vs State Of Gujarat & on 18 August, 2017
Author: Vipul M. Pancholi
Bench: Vipul M. Pancholi
R/CR.MA/2787/2012 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 2787 of 2012
With
CRIMINAL MISC.APPLICATION NO. 2789 of 2012
In
CRIMINAL MISC.APPLICATION NO. 2789 of 2012
TO
CRIMINAL MISC.APPLICATION NO. 2790 of 2012
With
CRIMINAL MISC.APPLICATION NO. 2792 of 2012
TO
CRIMINAL MISC.APPLICATION NO. 2795 of 2012
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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PURAV ATULBHAI SHAH....Applicant(s)
Versus
STATE OF GUJARAT & 1....Respondent(s)
================================================================
Appearance:
MR C B UPADHYAYA, ADVOCATE for the Applicant(s) No. 1
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R/CR.MA/2787/2012 CAV JUDGMENT
MR ADIL MEHTA, ADVOCATE for the Respondent(s) No. 2
MR DM DEVNANI ADDL. PUBLIC PROSECUTOR for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
Date : 18/08/2017
CAV JUDGMENT
1. All these applications involve identical questions on law and facts and hence, they are decided by this common judgment.
2. These applications have been filed u/s.482 of the Code of Criminal Procedure (for short, "the Code") with the prayer to quash and set aside the impugned FIRs and also the consequential proceedings initiated in pursuance of the said FIRs. The details of the FIRs, along with the corresponding applications, are mentioned in the tabular form hereunder;
Sr. No. Criminal Misc. FIR No. Police Station
Application No.
1 2787 of 2012 & I24 of 2012 Bhavnagar 'A'
2793 of 2012 Division Police
Station
2 2789 of 2012 & I23 of 2012 Bhavnagar 'A'
2794 of 2012 Division Police
Station
3 2790 of 2012 & I06 of 2012 Alang Police
2795 of 2012 Station
4 2792 of 2012 I12 of 2012 Bhavnagar 'C'
Division Police
Station
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R/CR.MA/2787/2012 CAV JUDGMENT
For the purpose of this judgment, Criminal Misc. Application No.2787 of 2012 is taken as the lead matter;
3. Learned advocate Mr. C.B. Upadhyaya appearing for the applicants submitted that the applicants are Brokers engaged in the business of dealing in scraps arising out of the breaking of ships at Alang Ship breaking yard. It was submitted that accusedKartik Salot (viz. applicant in Cri. Misc. Application No.2793 of 2012) had purchased certain quantity of goods from the respondentcomplainants on behalf of the concerned purchasers, who are also coaccused in the FIRs. On receipt of payment from the concerned purchasers, the coaccused made payment towards said goods to the respondentcomplainant. In respect of the transaction in question, the goods were supplied by the concerned complainant through the applicants and they were received by the concerned purchasers. Similarly, insofar as accusedPurav Shah (viz. Applicant in Cri. Misc. Application No.2787 of 2012) is concerned, he worked as the main Broker. The applicantaccused purchased the goods and delivered it to the concerned purchaser. The concerned purchasers issued cheques of the requisite amount in favour of the concerned complainant, however, the same was dishonored. It was submitted that even as per the allegations made in the impugned FIRs, the applicants were not the purchasers of the goods in question and that the cheques were issued by the concerned purchasers and not the applicants. Therefore, the Page 3 of 15 HC-NIC Page 3 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT applicants cannot be held guilty of committing the offence in question. It was, therefore, prayed that the impugned FIRs be quashed and set aside.
3.1 Learned advocate Mr. Upadhyaya, thereafter, submitted that even as per the allegations made in the impugned FIRs, the concerned purchaser informed the complainant that he had received the goods sent by the complainant and that he had sold said goods to some other party. However, the amount received by him has been paid to a third party. Thus, even as per the allegations made in the FIRs, the coaccused admitted that he had sold the goods received from the complainant to a third party and that the amount received by him from such sale has been paid to some other party. Hence, the applicants cannot be held liable for the act of the coaccused persons. It was, therefore, submitted that the impugned FIR deserves to be quashed and set aside.
3.2 Learned advocate submitted that even if it is presumed that the complainant had sold the goods in question to the applicants and that the applicants had not made payment towards such goods, then also the applicants could not be held guilty for the alleged offence since the dispute is of a civil nature and the complainant has to take recourse under the civil law. It was, therefore, requested that the impugned FIRs deserves to be quashed and set aside.
3.3 Learned advocate lastly submitted that a plain Page 4 of 15 HC-NIC Page 4 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT reading of the impugned FIRs do not disclose the existence of the ingredients of the alleged offence. Therefore, the present proceedings are nothing but, a clear abuse of the process of Court. Hence, the impugned FIRs deserves to be quashed and set aside.
3.4 Learned advocate placed reliance upon a decision of the Apex Court in the case of V.Y. Jose and another v. State of Gujarat and another reported in (2009) 3 SCC 78.
4. On the other hand, learned advocate Mr. Adil Mehta appearing for the respondentoriginal complainant submitted that out of the four FIRs, chargesheet has been filed in three cases and therefore, this Court may not exercise the powers u/s.482 of the Code. He contended that accusedKartik Salot had introduced accusedPurav Shah as a Broker in the shipbreaking yard. At the initial stages, the applicants made successful dealings with the complainant and others. They assured the complainant of successful deals with all the parties. However, in the subsequent transactions, payment was made by cheques, which were dishonored. It was, therefore, alleged that the applicants had committed the offences in question. It was pointed out that sale of scrap materials was being done through Brokers and that the goods were delivered in Trucks identified by the Brokers. Thus, the applicants were involved in every stage of the dealing. It was, therefore, prayed that the present applications deserves to be dismissed.
Page 5 of 15HC-NIC Page 5 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT 4.1 It was further submitted by learned advocate Mr. Mehta that when the conspiracy came to the knowledge of the affected shipbreakers, they arranged a meeting between the applicants and the socalled traders, i.e. other coaccused persons, in which meeting, the entire conspiracy was exposed. It was submitted that the conversation that took place during the said meeting was recorded in a CD and the said CD is produced along with the affidavitin reply. It is submitted that the powers u/s.482 of the Code should not be exercised to stifle legitimate prosecution and the High Court should not assume the role of a trial Court and embark upon an enquiry as to the reliability of the evidence collected. Such power should be exercised sparingly. It was, therefore, submitted that the ingredients of the alleged offence is made out against the applicants and hence, the applicants be dismissed.
4.2 Learned advocate placed reliance upon the following decisions;
(a) Sangeetaben Mahendrabhai Patel v. State of Gujarat and another reported in (2012) 7 SCC 621.
(b) Bhaskar Lal Sharma and another v. Monica and others reported in (2014) 3 SCC 383.
(c) Vijayander Kumar and others v. State of Rajasthan and another reported in (2014) 3 SCC Page 6 of 15 HC-NIC Page 6 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT
389.
(d) Medchl Chemicals and Pharma (P) Ltd. v. Biological E. Ltd. and others reported in (2000) 3 SCC 269.
(e) State of Karnataka v. M. Devendrappa and another reported in (2002) 3 SCC 89.
(f) Radhey Shyam Khemka and another v. State of Bihar reported in (1993) 3 SCC 54.
(g) State of Orissa and another v. Saroj Kumar Sahoo reported in (2005) 13 SCC 540.
5. Having considered the submissions canvassed on behalf of learned advocates for the parties and having gone through the material on record, it has emerged that the impugned FIRs are filed u/s.406, 420, 120B and 506(2) of IPC against the applicants and other accused persons. The main allegation against the applicants is that they were Brokers in the transaction that took place between the original purchasers and the complainant and that though the original purchasers had received the goods supplied to them by the complainant through the applicants herein, the complainant had not received payment of such goods as the cheques issued by the concerned purchasers got dishonored.
6. However, it is noteworthy that in the impugned Page 7 of 15 HC-NIC Page 7 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT FIRs, it is the specific say of the complainant that the concerned purchasers have received the goods sent by the complainant and that the purchasers have, in turn, sold the said goods to some third party. It is relevant to note that the applicants had not signed the cheques issued to the complainant and which got dishonored. The applicants are mere Brokers in the entire transaction. The record shows that the cheque was issued by coaccused Nirav Patel and not the applicants. It appears that before the commission of the alleged offence, the complainant had entered into several transactions with the concerned purchasers, through the present applicants, and that, in all such transactions, the complainant received due payment. I have gone through the papers of the chargesheet filed in pursuance of the FIRs being C.R. No.I12/2012, C.R. No.I23/2012 and C.R. No.I24/2012. From the papers of the chargesheet also, this Court is of the view that the ingredients of the alleged offence are not made out qua the present applicants.
7. In the case of V.Y. Jose (supra) relied upon by learned advocate for the applicants, the Apex Court observed in Paras - 13, 14, 16, 17, 21 to 24 and 28 to 30 as under;
"13. Section 415 of the Indian Penal Code defines cheating as under :
"415. Cheating - Whoever, by receiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that Page 8 of 15 HC-NIC Page 8 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property,is said to 'cheat'."
14. An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied :
(i) Deception of a person either by making a false or misleading representation or by other action or omission;
(ii) Fraudulently or dishonestly inducing any person to deliver any property; or
(iii) To consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit."
For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out.
16. There cannot, furthermore, be any doubt that only because civil law can be taken recourse to would not necessarily mean that criminal proceedings should be barred as has been opined by this Court in Pratibha Rani v. Suraj Kumar & Anr. [(1985) 2 SCC 370].
17. We are, however, not concerned in a case of Page 9 of 15 HC-NIC Page 9 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT this nature where the allegations were clear, specific and unambiguous and, therefore, the complainant should have been given a chance to prove her case as has been noticed by the High Court in the said judgment. This Court therein also, while laying down the law that the High Court would have no jurisdiction to examine the correctness of the allegations, opined :
"59. In case no offence is committed on the allegation and the ingredients of Section 405 and 406, IPC are not made out, the High Court would be justified in quashing the proceedings."
21. There exists a distinction between pure contractual dispute of civil nature and an offence of cheating. Although breach of contract per se would not come in the way of initiation of a criminal proceeding, there cannot be any doubt whatsoever that in absence of the averments made in the complaint petition wherefrom the ingredients of an offence can be found out, the court should not hesitate to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure.
22. We may reiterate that one of the ingredients of cheating as defined in Section 415 of the Indian Penal Code is existence of an intention of making initial promise or existence thereof from the very beginning of formation of contract.
23. Section 482 of the Code of Criminal Procedure, saves the inherent power of the court. It serves a salutary purpose viz. A person should not undergo harassment of litigation for a number of years although no case has been made out against him.
24. It is one thing to say that a case has been made out for trial and as such the criminal proceedings should not be quashed but it is another thing to say that a person should undergo a criminal trial despite the fact that no case Page 10 of 15 HC-NIC Page 10 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT has been made out at all.
28. A matter which essentially involves dispute of a civil nature should not be allowed to be the subject matter of a criminal offence, the latter being not a shortcut of executing a decree which is nonexistent. The Superior Courts, with a view to maintain purity in the administration of justice, should not allow abuse of the process of court. It has a duty in terms of Section 483 of the Code of Criminal Procedure to supervise the functionings of the trial courts.
29. An offence of cheating may consist of two classes of cases :
(1) where the complainant has been induced fraudulently or dishonestly. Such is not the case here;
(2) When by reason of such deception, the complainant has not done or omitted to do anything which he would not do or omit to do if he was not deceived or induced by the accused.
30. It is in that sense, a distinction between a mere breach of contract and the offence of cheating should be borne in mind. We, having regard to the facts and circumstances of the case, are of the opinion that no case has been made out and against the appellant so as to hold that he should face the criminal trial.
7. In the case of Bhaskar Lal Sharma (supra) relied upon by learned advocate Mr. Mehta for the respondent complainant, the Apex Court observed in Para11 as under;
"11. The facts, as alleged, therefore will have to be proved which only be done in the course of a regular trial. It is wholly unnecessary for Page 11 of 15 HC-NIC Page 11 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT us to embark upon a discourse as regards the scope and ambit of the Court's power to quash a criminal proceeding. Appreciation, even in a summary manner, of the averments made in a complaint petition or FIR would not be permissible at the stage of quashing and the facts stated will have to be accepted as they appear on the very face of it. This is the core test that has to be applied before summoning the accused. Once the aforesaid stage is overcome, the facts alleged have to be proved by the complainant/prosecution on the basis of legal evidence in order to establish the penal liability of the person charged with the offence."
8. In the case of Vijayander Kumar (supra) relied upon by learned advocate Mr. Mehta, the Apex Court observed in Paras - 10 & 12, as under;
"10. Contra the submission advanced on behalf of the appellants, learned counsel for the respondent no.2 has submitted that there is no merit in the contention advanced on behalf of the appellants that the FIR discloses only a civil case or that there is no allegation or averment making out a criminal offence. For that purpose he relied upon judgment of the High Court rendered in the facts of this very case reported in 1999 Criminal Law Journal, 1849, already noted earlier.
12. Learned counsel for the respondents is correct in contending that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may also be available to the informant/complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint discloses a criminal offence or not. This proposition is supported by several judgments of this Court as noted in paragraph 16 Page 12 of 15 HC-NIC Page 12 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT of judgment in the case of Ravindra Kumar Madhanlal Goenka and Another vs. Rugmini Ram Raghav Spinners Private Limited."
9. In the case of Saroj Kumar Sahoo (supra) relied upon by learned advocate Mr. Mehta, the Apex Court laid down the guidelines for exercise of powers u/s.482 of the Code. Similarly, in the case of M. Devendrappa (supra) also, the Apex Court observed that the powers u/s.482 of the Code should not be exercised to stifle legitimate prosecution and that such power should be exercised sparingly with caution and circumspection. Similar view is taken in other decisions relied upon by learned counsel Mr. Mehta for the respondentcomplainant.
10. Keeping in view the aforesaid decisions, it can be said that for the purpose of constituting the offence of 'cheating', the complainant is required to show that the accused had a fraudulent or dishonest intention at the time of making the promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in absence of culpable intention at the time of making initial promise being absent, no offence u/s.420 can be said to have been made out.
11. If the facts of the present case are examined in light of the aforesaid decision, this Court is of the view that the applicants had played the role of Brokers only in the entire transaction. It is not in Page 13 of 15 HC-NIC Page 13 of 15 Created On Mon Aug 21 11:32:49 IST 2017 R/CR.MA/2787/2012 CAV JUDGMENT dispute that the goods supplied by the complainant was delivered to the concerned purchasers and that when the concerned purchasers issued the cheques in favour of the complainant, such cheques got dishonored. Under no circumstance, the applicants could be held responsible for the act of the concerned purchasers.
12. Insofar as the conversation recorded in the CD is concerned, the same could not be relied upon since the complainant had not produced it before the I.O. during the investigation. During the course of hearing, a specific question was put to learned APP about such CD; and under instructions of the I.O., who was present in the Court, learned APP informed that such CD was never produced by the complainant during the course of investigation. Thus, this Court is of the view that reliance placed upon such CD is misconceived.
13. From the aforesaid decisions of the Apex Court, it can also be said that when the ingredients of the alleged offences are not made out and when the impugned FIRs are a clear abuse of the process of Court, the powers u/s.482 of the Code can be exercised to secure the ends of justice. In the present case, the ingredients of the alleged offences are not made out qua the applicants. The complainant has attempted to convert a civil dispute into a criminal one. Therefore, in the facts and circumstances of the case, this Court is of the view that the impugned FIRs deserve to be quashed and set aside.
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14. For the foregoing reasons, the applications are allowed. The impugned FIRs, in each of the applications as also the consequential proceedings initiated in pursuance of the said FIRs, are quashed and set aside, qua the applicants herein. Rule is made absolute.
(VIPUL M. PANCHOLI, J.) Pravin/* Page 15 of 15 HC-NIC Page 15 of 15 Created On Mon Aug 21 11:32:49 IST 2017