Karnataka High Court
Embassy One vs Sri Neil Kapoor on 20 July, 2017
Author: Rathnakala
Bench: Rathnakala
1
®
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF JULY 2017
BEFORE
THE HON'BLE MRS.JUSTICE RATHNAKALA
CRIMINAL REVISION PETITION NO.745/2017
BETWEEN:
EMBASSY ONE DEVELOPERS PRIVATE LIMITED
INCORPORATED UNDER THE COMPANIES ACT
HAVING ITS REGISTERED OFFICE AT:
NO.150, FIRST FLOOR, EMBASSY POINT
INFANTRY ROAD,
BENGALURU - 560 001
REP. BY ITS AUTHORIZED SIGNATORY
MR.B.S.MOHAN
S/O SHIVAIAH
AGED ABOUT 50 YEARS
NO.2253, 1 FLOOR, 22ND CROSS
BSK 2ND STAGE
BENGALURU - 560 070. ...PETITIONER
(BY SRI K.G.RAGHAVAN, SENIOR ADVOCATE A/W
M/S MAHESH & CO., ADVS.)
AND:
1. SRI NEIL KAPOOR
S/O MR.VINOD KUMAR KAPOOR
AGED ABOUT 39 YEARS
RESIDING AT M-26
GREATER KAILASH PART-2,
NEW DELHI - 110 048.
2. SMT.PUNAM KAPOOR
W/O MR.VINOD KUMAR KAPOOR
AGED ABOUT 63 YEARS
RESIDING AT 10, EXECUTIVE DRIVE
2
GORMLEY, ONTARIO
LOH 160
CANADA
ALSO AT M-26
GREATER KAILASH PART-2
NEW DELHI - 110 048.
3. SRI RAKESH SHARMA
S/O SRI YASH PAL SHARMA
AGED ABOUT 60 YEARS
RESIDING AT 4391
B5 & 6 VASANT KUNJ
NEW DELHI - 110 070.
4. SRI VIVEK SOIN
RESIDING AT R-704
NEW RAJINDER NAGAR
NEW DELHI - 110 060.
5. SRI VINAY KUMAR KAPOOR
S/O MR.RAJKUMAR KAPOOR
AGED ABOUT 61 YEARS
RESIDING AT NO.18-19
JOCKEY'S FIELD
LONDON
WCIR 4BW.
ALSO AT:
NO.1/12, IRIS C-3
JASMINESTREET VATIKA CITY
SEC 49, SOHAN ROAD
GURGAON - 122 018. ...RESPONDENTS
(NOTICE TO RESPONDENTS IS DISPENSED WITH)
THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 R/W 401 OF CR.P.C., PRAYING TO SET ASIDE
THE IMPUGNED ORDER DATED 28.06.2017 PASSED BY THE IV
ADDL.C.M.M., BANGALORE IN PCR NO.7114/2017 AND
RESTORE THE COMPLAINT DIRECTING THE LEARNED
MAGISTRATE TO REFER THE COMPLAINT TO THE
JURISDICTIONAL POLICE.
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THIS CRIMINAL REVISION PETITION COMING ON FOR
ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
Notice to respondent is dispensed since no notice was issued before the Trial Court.
2. The fact is, the petitioner being a Private Limited Company, filed a private complaint against one of its Directors/accused No.1 (who was in fiduciary relationship with the Company) and others, alleging the offences under Sections 120-B, 403, 406, 408, 415, 420 and 424 of IPC.
3. The court below registered the complaint and on perusal of the same has come to the conclusion that there is an arbitration agreement to resolve the dispute between the parties. Hence, dismissed the petition as not maintainable.
4. Learned Senior Counsel for the petitioner Sri K.G.Raghavan submits that the learned JMFC could 4 not have dismissed the complaint at the threshold itself without following the procedure under section 200 to 203 Cr.P.C. Though civil remedy is available by way of arbitration clause, nothing prevents the complainant to invoke the criminal law into force in the given facts and circumstance. The arbitration application filed under Section 9 of the Act by the respondent before the Civil Court is dismissed vide order Annexure-B. The said order is not disturbed.
5. Perused the impugned order and also the complaint sought to be prosecuted. The gist of the allegation of the complainant is, it is a Private Limited Company engaged in the business of real estate and the first accused is its director. The second accused is the wife of the first accused. First accused was appointed as additional Director of the complainant and he was managing the affairs of the company and had control over its affairs. First accused entered into criminal 5 conspiracy with the co-accused who are all connected with each other and made unlawful gains, thus, causing wrongful loss to the complainant to a tune of Rs.12 crores. On coming to know the same, complainant terminated the illegal sale agreements entered into between the first accused and the co-accused. The complaint lodged to the jurisdictional Police was not entertained on the ground that same is in the nature of civil proceeding.
6. Issuance of process on a private complaint is an important stage and the court cannot mechanically summon the accused without verifying the complaint allegations. The learned Magistrate's action in dismissing the complaint as not maintainable on the ground that there is an arbitration agreement between the parties is the matter for concern for the moment.
The apex court n its judgment in M/s. Medchl 6 Chemicals & Pharma Pvt. Ltd. -vs- M/s.Biological E. Ltd. reported in 2000 CRL.L.J.1487 held thus:
". . . . . We, however, hasten to add that whether or not the allegations in the complaint are otherwise correct has to be decided on the basis of the evidence to be led at the trial in the complaint case but simply because of the fact that there is a remedy provided for breach of contract, that does not by itself clothe the Court to come to a conclusion that civil remedy is the only remedy available to the appellant herein. Both criminal law and civil law remedy can be pursued in divers situations. As a matter of fact they are not mutually exclusive but clearly co-extensive and essentially differ in their content and consequence. The object of criminal law is to punish an offender who commits an offence against a person, property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect civil remedies at all for suing the wrongdoer in cases like arson, 7 accidents etc. It is anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two types of actions are quite different in content, scope and impart [vide Pratibha Rani v. Suraj Kumar (supra)]".
Thus it is clear that the availability of civil remedy does not absolve a person of his criminal liability for his omissions and commissions and maintainability or otherwise of private complaint shall not be dismissed at the threshold without recording the evidence during trial.
7. It is evident from the impugned order that the allegation of business relationship has prevailed upon the Magistrate to reject the complaint. It is worthwhile at this stage to recite the judgment of the Apex Court in Arun Bhandari -vs- State of Uttar Pradesh and Others ((2013) 2 SCC 801), the relevant paras read thus:
8"26. At this stage, we may usefully note that some times a case may apparently look to be of civil nature or may involve a commercial transaction but such civil disputes or commercial disputes in certain circumstances may also contain ingredients of criminal offences and such disputes have to be entertained notwithstanding they are also civil disputes. In this context, we may reproduce a passage from Mohammed Ibrahim -vs- State of Bihar reported in (2009) 8 SCC 751: (SCC p.754, para 8):
"8. This Court has time and again drawn attention to the growing tendency of the complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurize parties to settle civil disputes. But at the same time, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes".
27. In this context we may also usefully refer to a paragraph from All Cargo Movers (India) (P) Ltd. V. Dhanesh Badarmal Jain reported in (2007) 14 SCC 776: (SCC pp.781-82,para 16) "16.....Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie correct, take into consideration the correspondence exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this 9 Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the court. Superior Courts while exercising this power should also strive to serve the ends of justice."
28. In Rajesh Bajaj -vs- State (NCT of Delhi) reported in 8 (1999) 3 SCC 259, while dealing with a case where the High Court had quashed an F.I.R., this Court opined that the facts narrated in the complaint petition may reveal a commercial transaction or a money transaction, but that is hardly a reason for holding that the offence of cheating would elude from such a transaction. Proceeding further, the Bench observed thus: (SCC p.263, para 11): -
"11. The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive in discerning whether there was commission of offence or not. The complainant has stated in the body of the complaint that he was induced to believe that the respondent would honour payment on receipt of invoices, and that the complainant realised later that the intentions of the respondent were not clear. He also mentioned that the respondent after receiving the goods had sold them to others and still he did not pay the money. Such averments would prima facie make out a case for investigation by the authorities."
29. We have referred to the aforesaid decisions in the field to highlight about the role of the Court while dealing with such issues. In our considered opinion the present case falls in the category which cannot be stated at this stage to be purely civil in nature on the basis of the admitted documents or the allegations made in the FIR or what has come out in the investigation or for that matter what has been stated in the protest petition. We are disposed to think 10 that prima facie there is an allegation that there was a guilty intention to induce the complainant to part with money. We may hasten to clarify that it is not a case where a promise initially made could not be lived up to subsequently. It is not a case where it could be said that even if the allegations in entirety are accepted, no case is made out. Needless to emphasise, the High Court, while exercising power under Article 226 of the Constitution or Section 482 of the Cr.P.C., has to adopt a very cautious approach".
30. In CBI -vs- Ravi Shankar Srivastava reported in (2006) 7 SCC 188, the Court, after referring to Janata Dal -vs- H.S. Chowdhary reported in (1992) 4 SCC 305 and Raghubir Saran -vs- State of Bihar reported in AIR 1964 SC 1, has observed that the powers possessed by the High Court under Section 482 of the Cr.P.C. are very wide and the very plentitude of the power requires great caution in its exercise. The court must be careful to see that its decision in exercise of this power is based on sound principles and such inherent powers should not be exercised to stifle a legitimate prosecution. This Court has further stated that it is not proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It has been further pronounced that it would be erroneous to assess the material before it and conclude that the complaint could not be proceeded with. The Bench has opined that the meticulous analysis of the case is not necessary and the complaint has to be read as a whole and if it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court".
118. In that view of the matter, the trial court is required to reconsider the matter in the light of the above principles and proceed in accordance with the provisions of Chapter XV (Sections 200 to 203) of Cr.P.C.
The revision petition is allowed. The order dated 28.6.2017 passed by the IV Addl.CMM., Bangalore, in PCR No.7114/2017 is set aside. The matter is remanded to the Trial Court to consider the complaint in the light of the above principles.
Sd/-
JUDGE KNM/-