Madras High Court
P.K.Pounraj vs State Represented By
Author: C.T. Selvam
Bench: C.T. Selvam
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: .04.2014 CORAM: THE HONOURABLE MR. JUSTICE C.T. SELVAM CRL.O.P.No.9400 of 2011 P.K.Pounraj .. Petitioner vs. 1.State represented by Inspector of Police, City Crime Branch, Coimbatore. 2.MPS Steel Casting (P) Ltd., represented by M.Paramsivam, 476, Wise Park, Palacode 678 621. .. Respondents Criminal Original Petition filed under Section 482 Cr.P.C. to call for records in Crime No.33 of 2011 on the file of the first respondent. For Petitioner : Mr.V.Gopinath, Senior counsel for Mr.M.Gopinathan For Respondents : Mr.C.Emalias, Additional Public Prosecutor (R1) Mr.A.Ramesh, Senior counsel for Mr.D.Raja (R2) ***** O R D E R
Petitioner seeks to quash proceedings in Crime No.33 of 2011 on the file of the first respondent.
2. Pursuant to direction under Section 156(3) Cr.P.C. of learned Judicial Magistrate I, Coimbatore and at the instance of the second respondent, the case in Crime No.33 of 2011 on the file of the first respondent stands registered for offences under sections 417 and 420 IPC. The case of the second respondent is that it, M/s.MPS Steel Casting (P) Ltd., is a private limited company engaged in the business of iron and steel. This petitioner, the sole accused in the case, approached its Managing Director at his previous residence at Coimbatore in June 2008 and offered supplies of iron ore at prevailing market rates, to be used at the companys sponge and power generation plant at Kanjikode, Palakkad, Kerala. Though the complainants Managing Director initially was hesitant to deal with the petitioner, the petitioner through frequent visits gained his confidence and an oral agreement for supply of iron ore was entered into in July2008. Such agreement, which was entered into at the companys Managing Directors residence at Coimbatore, was admitted in the petitioners letter dated 25.10.2008 and 26.11.2008. Having agreed to supply not less than one lakh MTS of iron ore of required quality at the prevailing market rate, the petitioner/accused suddenly demanded an advance sum of Rs.5,00,00,000/-. Trusting the petitioner/accused, the said sum was transferred by the complainant through RTGS. The petitioner/accused was liable to supply iron ore at the prevailing market rate and at mutually agreed rate of Rs.1,300/- per metric ton plus 2% Central Sales Tax for a quantity of 5000 metric tons and at Rs.1,600/- per metric ton plus 2% Central Sales Tax for quantity of 10000 metric tons, totaling a quantity of 15000 metric tons. As admitted by the petitioner/accused in his letter dated 26.12.2008, he had supplied only 10900/- metric tons and raised invoices therefor at the agreed rates as also collected Central Sales Tax payable thereupon. The complainant has alleged that a sizeable quantum of supplies were of inferior quality resulting in its suffering production losses. The complainant suffered financial loss as also loss of reputation with its customers owing to quality issues. The complainant took up the issue with the petitioner/accused under written communication dated 27.08.2008, annexing therewith the quality inspection report of its laboratory. Thereafter, the petitioner/accused failed to effect supplies and on several occasions, the trucks sent at the behest of the complainant for loading supplies, as per the very request of the accused under letter dated 25.10.2008, were returned unloaded on flimsy grounds. The communication of the Lakshmipura Nagareeka Hitharaksha Samithi dated 09.01.2009 would show that no opposition had been raised by the villagers as stated by the petitioner/accused. The complainant suffered huge losses by way of halting charges paid to truck operators. Several requests and reminders, both written and oral, towards payment of complainants advance amount, upon the accused failure to supply the agreed quantum of 100000 metric tons went unheeded despite the complainant spelling out the various difficulties faced by it. Instead of supplying the balance iron ore or returning the excess amount of advance in a sum of Rs.3.35 crores, the petitioner under letters dated 25.10.2008 and 26.12.2008 made false and untenable claims. Under letters dated 26.12.2008 and 06.01.2009, a false and imaginary price of Rs.9,990/- per metric ton for further supplies was informed. The petitioner also made a false claim of crushing charges for iron ore supplies which never was discussed or agreed to between the parties. Thus, the petitioner/accused had unjustly enriched himself in a sum of Rs.3.35 crores. Informing dishonest inducements by the petitioner/accused and that various communications between the parties, the bank transactions of the complainant, the letter received from its bankers, statement of supply and account of transactions, letter of offers issued by the area authorities of the accused operating area and letter received from the complainant's transporter, clinchingly would prove the malafide intention of the petitioner/accused from the inception of business transaction between them, offence under Sections 417 and 420 IPC were alleged.
3. Heard Mr.V.Gopinath, learned senior counsel for petitioner, learned Additional Public Prosecutor as also Mr.A.Ramesh, learned senior counsel for second respondent.
4. Though learned counsel on either side have, in support of their respective submissions, relied on typed set of papers and several decisions, this Court considers it unnecessary to deal at length there with and is of the view that this petition may be disposed of by informing the reasons why this Court considers the transaction allegedly offending to be nothing more than civil in nature.
(i)The communication of the complainant dated 21.10.2008 inter alia informs thus this is with reference to our mutual agreement for lifting 15000 MT of Iron ore from your mines. Having stated so, such communication informs of supplies of 11000 Metric tons having been effected and of the balance being due for a long time. Therefore, apparently the advance of Rs.5 crores was paid only towards supply of 15000 metric tons.
(ii) The communication of this petitioner/accused dated 25.10.2008 in reply to the letter of the complainant dated 21.10.2008, informs of the petitioner having availed permits for the whole quantity of 15000 metric tons and that lifting of material was delayed by the complainant owing to its convenience, the complainant having been engaged in marriage functions.
(iii)In response to communication of the petitioner/accused dated 25.10.2008, the complainant under communication dated 31.10.2008 inter alia informs thus: we have noted the contents. Accordingly we have arranged to place the trucks from today to lift the balance quantity of c.ore as per the rate agreed earlier, without any further delay as we had released full payment. Such letter also acknowledges further reason for delay viz., herein, we also like to mention that delay in lifting of ore was not due to our failure in placing vehicles but due to villagers strike for nearly 810 days due to stopping illegal mining, breakdown of your crusher which stopped nearly 8 days for getting imported parts and heavy rains which affected crushing/screening for long time. Apart from this some days our vehicles were also halted/returned without loading. Such communication besides informing that the prices of iron ore were falling also states that in the absence of supplies, the complainant would have no opinion but to cancel the order and ask for return of money.
(iv)For the first time, under communication dated 26.11.2008, the complainant informs of the petitioner/accused undertaking to supply minimum of 100000 metric tons and of payment of advance of Rs.5 crores therefor and further that the rate would be fixed for every 15000 metric tons, as and when the loading was done. In the further communication dated 23.12.2008 this argument was carried forward and after informing supply of 10931 metric tons at agreed rates of Rs.1,300/- and Rs.1,600/- per metric ton, a demand is made for loading the balance materials at Rs.1,500/- per metric ton within thirty days or for return of the balance advance sum with 15% interest. The petitioner/accused under communication dated 26.12.2008 informs of oral agreement for supply of 15000 metric tons at different rates and that the advance paid was only for such supply. The petitioner/accused under such communication also informs of the complainant's communication being silent about the agreed charges for crushing and loading of materials per metric ton, besides the rate for the balance quantity of 4000 metric tons to be supplied at Rs.9,990/- per metric ton as agreed. Under such communication, the petitioner/accused has informed of adjustment of a sum of Rs.1,60,51,100/- towards supplies effected and referred to the balance quantity to be supplied, the crushing and loading charges and that towards completing the transaction of supply of 15000 metric tons a further sum of Rs.1,87,95,000/- would be payable to it and made a demand therefor. Further communication dated 06.01.2009, was adressed by the petitioner/accused to the complainant seeking balance payment.
(v)After delay of more than two years, a direction under section 156(3) Cr.P.C has been obtained and the First Information Report stands registered on 26.03.2013.
5. This Court normally would not enter upon an exercise, such as above, in considering a petition for quash, particularly of a First Information Report, which only can be done in the rarest of rare cases. In this case, this Court finds that what is informed by either side is an oral agreement, one informs of excess payment held by the other and the other informs of further sums due to it towards completion of supplies. On first impressions, it would be startling to note that after agreeing to supply particular quantities at Rs.1,300/- and Rs.1,600/- per metric ton, the petitioner/accused under communication dated 26.12.2008 has informed the rate for additional supply of 4000 metric tons at Rs.9,990/- per metric ton. However, in the typed set furnished by the second respondent, this Court finds that the communication of the National Mineral Development Corporation dated 07.01.2009 informs thus:
Com/MPS Steel/2008-09 Date: 07.01.2009 M/s.M.P.S.Steel Casting (P) Limited 476-Wise Park, Kanjikode, Palakkad 678 621. Fax No.491 2568185 Sub: Supply of iron ore reg. Ref.: MPS/08-09/IO/18 dtd. 22.12.2008. Sir,
This has reference to the above referred letter and also the telephonic discussion on the subject with you regarding supply of Doni/Kumarswamy lump from our Donimalai Sector, we are pleased to allocate the following quantities up to March'09 based on the following brief terms and conditions.
1.Product :Doni Lump/Kumarswamy Lump (6-30mm)
2.Quantity :15000 tons per month
3.Physical & Chemical Specifications:
Chemical Composition Doni Lump Kumarswamy Lump Fe 65% 64.5% Alumina + Silica 5.5% max.
6.0% max.
Phosphorus 0.08% max.
0.08% max.
Sulphur 0.05% max.
0.05% max.
Size:
6-30 mm 6-30 mm Oversize:
+30 mm : 5% max.
+30 mm : 5% max.
Undersize:
-6 mm : 15% max.
-6 mm : 15% max.
Tumbler Index 78 - 82 (Average) 74 - 77 (Average) The above specifications are at FOR Ranjitpura for Doni Lump and at FOT Kumarswamy mine for Kumarswamy Lump. For the purpose of arriving at the above specifications, a unit of one-rake load for Doni Lump shall be taken. If supplies through truck, 100 truck load shall be taken for arriving the specifications. The weighted average specifications of the Unit shall conform to the specifications mentioned above.
4.Price:
Product (Doni Lump): The base price is @ Rs.2550/- (Rupees Two thousand and Five hundred and Fifty only) per WMT, FOR Ranjitpura with base Fe 65%.
Product (Kumarswamy Lump): The base price is @ Rs.2400/- (Rupees Two thousand and Four hundred only) per WMT, FOT Kumarswamy with base Fe 64.5%.
Price adjustment (Bonus/Penalty): For each 1% increase/decrease in the base Fe content for Doni Lump and Kumarswamy Lump above, the base price shall be increased/decreased as the case may be by Rs.60/- (Rupees Sixty only) per WMT fraction pro-rata.
The above price is exclusive of Royalty, Sales Tax/VAT, labour welfare cess, Forest permit fee, Forest Development Cess, other statutory duties and levies etc. All Royalty, levies, Forest Development cess, duties and taxes including labour welfare cess or any other statutory duties that are in force or that may be introduced in future are payable by the Buyer.
5.Transportation: Buyer's shall make its own, at its own cost, necessary arrangements for placement of rakes/Trucks and for transporting the product from Ranjitpura/Kumarswamy.
6.Payment: Payment shall be advance payment through DD/LC. Covering the Base price, Price adjustment, Royalty, Sales Tax/VAT, Environment Cess, labour welfare cess, Development cess, other duties etc.
7.Weightment: NMDC shall arrange for weightment through electronic belt weightometer at loading stations and the weight so determined shall be final for all-purpose for Doni Lump. NMDC shall arrange for weighment of the Kumarswamy Lump as its designated weighbridge at Kumaraswamy iron ore mine and the weight so determined shall be final for all-purpose including for payment.
8.Sampling & Analysis: NMDC shall carry out sampling and analysis as per ISI standards in its own Laboratory and furnish the weighted average analysis indicating the Fe content, Silica, Alumina, Phosphorus and Sulpher, which shall be final for all-purpose.
9.Arbitration: In the event of any dispute or difference between the parties hereto, such dispute or difference shall be resolved amicably by mutual consultation. If, however, any dispute or difference remains unresolved, the same shall be settled by arbitration by referrring the claims to the sole Arbitrator to be appointed by the Chairman-cum-Managing Director/Chief Executive (designated by any other name) of the Seller, who shall be the appointing authority of the sole Arbitrator. The venue of arbitration shall be at Hyderabad and the cost of the arbitration shall be as decided in the arbitration award. No court shall have the jurisdiction to settle any dispute in view of this arbitration clause.
10.Title and Risk of Loss: Title with respect to product in each rake/truck shall pass from Seller to Buyer when Seller has received sale proceeds with effect retrospective to the loading of such rake/truck.
Risk with respect to product in each rake/truck shall pass from Seller to Buyer when the product has been loaded into the rake/truck at Ranjitpura/Kumaraswamy by the Seller.
11.The product supplied is meant for the Buyer's internal/exclusive consumption at the Buyer' Sponge from Iron plant located at Kanjikode (Kerala) and the Buyer shall not have right to resell/loan/gift/Export nor use it for any purpose other than for its use in the Buyer's Plant. In case of any violation of the above-mentioned terms, NMDC/seller shall have a right to discontinue the supplies.
You are requested to make necessary financial arrangements and confirm the month wise schedule of off take.
Kindly acknowledge the receipt of this letter in confirmation of your acceptance to the same.
6. Leave alone the other charges, what are we to make of the admission of both sides that particular quantities were supplied at Rs.1,300/- and Rs.1,600/- per metric ton respectively as against a base price of Rs.2,550/-? The very communications of the second respondent suggest that the advance of Rs.5 crores was paid only towards supply of 15000 metric tons. The crux of the issue is what is the rate agreed upon between the parties. Unless the same is determined, an exercise which the first respondent police will be ill-equipped to do, particularly, given the admitted position of oral agreement between parties, no useful purpose would be served through pendency of criminal proceedings. Thus, this Court is of the view that what were the actual agreed terms, what were the other charges and consequently, what actually is payable by one to the other, are matters for a civil Court to decide. This Court is unable to see any case of inception at deception which when present alone would attract the offence of cheating.
7. Learned senior counsel for the second respondent has submitted that when the petitioner sought anticipatory bail, this Court had required him to effect deposit. Immediately thereafter, the petitioner has moved this quash petition. Such position, even if true, would not advance the second respondent/complainant's case.
8. Learned senior counsel for petitioner has also sought to impress upon this Court that the entire typed set of papers reveal that no transaction whatsoever had taken place at Coimbatore and only towards making out a case of Judicial Magistrate I, Coimbatore, having jurisdiction, the allegation of oral discussions having taken place between the Managing Director of the complainant and the petitioner/accused at Coimbatore, has been made in the complaint. Given the view above taken, it is not necesary to go into such aspect.
9. In the result, this Criminal Original Petition is allowed. The proceedings in Crime No.33 of 2011 on the file of the first respondent, are quashed.
.04.2014 Index:yes/no Internet:yes/no gm To
1.The Inspector of Police, City Crime Branch, Coimbatore.
2.The Public Prosecutor, High Court, Madras.
C.T. SELVAM, J.
gm Pre-delivery order in CRL.O.P.No.9400 of 2011 .04.2014