Jharkhand High Court
Mr. M.S. Unnikrishnan @ M.S. ... vs The State Of Jharkhand on 2 September, 2020
Author: Ananda Sen
Bench: Ananda Sen
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. M.P. No. 3035 of 2018
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Mr. M.S. Unnikrishnan @ M.S. Unikrishnan ... Petitioner
-versus-
1. The State of Jharkhand
2. N.K. Sinha ... Opposite Parties
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CORAM : HON'BLE MR. JUSTICE ANANDA SEN
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For the Petitioners : Mr. Ajit Kumar Sinha, Sr. Advocate
Mr. R. Sudhinder, Advocate
Mr. Indrajit Sinha, Advocate
For the State: Mr. Abhay Kumar Tiwary, A.P.P.
For the O.P. No.2 : Mr. Rajendra Krishna, Advocate
Mr. Faiz-ur-Rahman, Advocate
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ORDER
RESERVED ON 21.10.2019 PRONOUNCED ON 02.09.2020
1. Petitioner, through this criminal miscellaneous petition has prayed for quashing the entire criminal proceeding, including First Information Report of Sector 4 Police Station Case No.86 of 2018 and all subsequent proceedings thereto lodged for the offence punishable under Sections 406, 420 of the Indian Penal Code, pending in the Court of the Additional Chief Judicial Magistrate at Bokaro.
2. This case was listed under the heading "For Orders". Counsel for the parties in course of arguments, submitted that this criminal miscellaneous petition can be disposed of at the stage of 'Orders' itself, so they finally argued at length. After hearing the parties, the final order was reserved, which is being delivered today.
3. The first information report was registered on the basis of complaint case being Complaint Petition No.687 of 2018, which was forwarded by the Additional Chief Judicial Magistrate, Bokaro by order dated 07.07.2018 for registering the FIR and investigating the same in terms of Section 156(3) of the Code of Criminal Procedure. It is alleged by the complainant-opposite party No.2 that the complainant is the Managing Partner of M/s. Kaizen Growth. It is alleged that he came in contact with Senior Executive of M/s Thermax Limited for making boiler/turbines and equipments for power and steel plant installation and both companies entered into a contract under specific terms and conditions to execute installation of power plants. It is alleged that firstly an agreement was signed for the first order of M/s. Adhunik Mettalik, Jamshedpur for installation of 30 MW power plant @ Rs.98 crore and 2 the order was placed on Thermax Limited and Kaizen Growth was the consultant/Liasoning Agent for this order, which was successfully executed on the agreed terms between the two companies and was fully maintained to the best of satisfaction. It has been alleged that on the successful performance by the firm of the complainant, M/s Thermax Limited again entered into an agreement for a large power plant project of SAIL/Rourkela Steel Plant (Orissa) vide work order No. P/Proj/287(II) 79001/77 dated 06.09.2007 for a value of Rs.418 crore. The agreement value of the complainant was Rs.2 crore on prorate basis. This large project took eight years to complete, i.e., from 2007 to 2015. It has been alleged that thereafter, yet again, an agreement was done with the complainant by M/s Thermax Limited for SAIL, Bhilai Steel Plant Project, where project was of Rs.700 crore. The accused Company M/s Thermax Limited made 4th agreement with the complainant for a water treatment project contract for SAIL/ Bokaro Steel Plant, CRM Zone under Tender No. T&C(M)/B 351/042 A/Skk/231 dated 18.03.2013. It has been alleged that in the year 2013, Income Tax Department conducted a survey on M/s. Thermax Limited at its Head Office at Mumbai Pune Road, Wakdewadi; Pune. All documents relating to the accused and complainant's company were also sent to Commissioner Central Excise, Pune for detail verification. It has been alleged that the petitioner was asked by the Commissioner, Central Excise, Pune I about Thermax's business relation with the company of the complainant M/s Kaizen Growth. It has been alleged that to the great surprise and shock of the complainant, the petitioner stated on oath that M/s Thermax Limited does not hold any business relation with the company of the complainant M/s. Kaizen Growth and has not received any services from M/s. Kaizen Growth. It has been alleged that this false and fraudulent statement made by the petitioner came as a turning point in the long business relation between them and the complainant's company M/s. Kaizen Growth was issued notices by the Dy. Commisioner, Pune (Central Excise) to explain and produce all related documents/payments/vouchers etc. to establish and find out the truth. The complainant produced all the related documents as demanded by the Dy. Commissioner. The complainant visited 5 times to Pune and the statement of the complainant was duly recorded by the Commissioner Office Superintendent on the business relation with M/s. Thermax Limited. It has been alleged that special audit was deputed to find facts and figures of the complainant's company M/s Kaizen Growth's financial and business relation with M/s Thermax Limited, Pune. It has been alleged that the petitioner has 3 made false and fraudulent statement to save CENVAT of Thermax Limited to the tune of Rs.32,55,78,926/-. It has been averred that it was established by the Commissioner that the petitioner fraudulently gave false statement to the Revenue Department on the business relation with the complainant which was based on written agreement. It has been alleged that all payments from M/s. Thermax to M/s. Kaizen Growth was made properly through account payee cheques after deduction of TDS and all service taxes were paid by the complainant's company M/s. Kaizen Growth as per Rules laid down covering all agreements. It has been averred that having gone through all documents, the Commissioner Central Excise, Pune imposed a heavy fine of Rs.10 lakh on the petitioner and a penalty was imposed along with interest on M/s. Thermax for Rs.1,34,60,350/-. It has been alleged that the petitioner paid these fines/penalty charges along with Rs.10,000/- as fine imposed upon the company of the complainant M/s. Kaizen Growth. It has been alleged that due to the abovesaid activities of the accused company and petitioner, the reputation of the company of complainant, i.e., M/s. Kaizen Growth was totally damaged because of false/fraudulent statement/affidavit given by the petitioner. It has been alleged that the market image of the complainant's company was totally shattered and then after the complainant's company did not get a single contract from any company despite the clean chit given by the Central Excise Department to M/s. Kaizen Growth. It has been alleged that to the extent when M/s Thermax Limited bagged an order of SAIL, Bokaro Steel Plant recently for a contract in RMPH Zone of SAIL, Bokaro Steel Plant, but the complainant's company was refused by M/s. Thermax Limited inspite of their commitments to work together for any SAIL projects in future. It has been alleged that the complainant represented/requested the petitioner through registered letter and reminded their old relation for all SAIL projects, but the petitioner has not responded the same. It has been alleged that the complainant also approached the local officials of M/s. Thermax Limited at Bokaro, Project Manager Mr. Manoj Jha on 03.07.2019, but of no result as he did not want even to talk to the complainant on mobile inspite of their 10 years deep business relation with M/s. Thermax Limited. It has been alleged that due to the above activities of the accused company, the marketing reputation of the complainant and his company suffered a huge loss by loosing their best business and reputation in National and International arena since then. It has been alleged that due to false and fraudulent acts of the petitioner, turn over of the complainant's company came down drastically from Rs.1 crore to NIL, 4 because he lost all clients and reputations in the market, even for the job, which M/s. Kaizen Growth had executed in past for the company namely M/s. Imeco Limited, Kolkata and M/s. Magadh Engineering Works, Industrial Area, Balidih, Bokaro Steel City. It has been alleged that M/s. Kaizen Growth in past executed with M/s. Imeco Limited, Kolkata, an EPC contract for six number of ESP/RMP Bokaro, order, but, when a fresh tender dated 13.03.2016 came for the same item, in Bokaro, M/s. Imeco Ltd. even on request refused to make an agreement with M/s. Kaizen Growth because of legal complication created by M/s. Thermax Limited (accused) for no fault of the complainant's company. It has been alleged that furthermore at the instance of the employees, who were looking for M/s Thermax Project with the complainant, took nearly Rs.10 lakh from the complainant including Rs.4 lakh cash. These payments were made to them through account payee cheques. These payments were made on refundable basis but payment was never refunded to the complainant. It has been alleged that to utmost surprise, being Thermax registered vendor, having Vendor Code No.133000 with M/s. Thermax Limited, who lied before the Commissioner and gave false and fraudulent on oath that caused the complainant a serious suffering mentally, financially and socially. In the circumstances set forth above, defamation that ruined the prestige, dignity of the complainant as well as his company by the petitioner, complainant sought Rs.3 crore against defamation plus Rs.10 lakh paid to them as per bank receipts.
4. Mr. Ajit Kumar Sinha, learned Senior Counsel appearing for the petitioner, submits that even if the complaint is taken on its face value, no offence under Sections 406/420 of the Indian Penal Code is made out. He submits that the facts stated in the complaint, even if it is true, it suggests that the petitioner's company gave some false statement before the Income Tax Department with respect to the business relations of the petitioner company with the complainant. He submits that the aforesaid action cannot be said to be a criminal offence under the Indian Penal Code. Further, he submits that even if paragraph 20 of the complaint is seen, it would be evident that the fine amount, which was imposed upon the complainant company was also paid by the petitioner company, which would go to show that there was no criminal intention. He submits that if there was any act (without admitting the same), which attracts an offence, it can at best be of saving of CENVAT by giving false statement, for which the petitioner company has already been penalized by the Revenue Authorities. By no stretch of imagination, the same can attract 5 any offence under the Indian Penal Code. He submits that the claim of the complainant that his company suffered defamation, which ruined his prestige and dignity, cannot be a subject matter of criminal proceeding under Sections 406, 420 of the Indian Penal Code. He submits that even the statement made in paragraph 28 of the complaint petition to the effect that some officers of M/s Thermax Limited (company of the petitioner) had taken Rs.10,00,000/- on refundable basis, but, did not refund the same, cannot also be a subject matter of the criminal case. He lastly submits that in utter violation of the provisions of Section 154(1) and Section 154(3) of the Code of Criminal Procedure, the Court, without applying its mind, has exercised jurisdiction under Section 156(3) of the Code of Criminal Procedure and directed the police to register a First Information Report.
5. Learned counsel appearing for the opposite party opposes the prayer of the petitioner and submits that the petitioner had given a false statement before the Revenue Authorities for which the petitioner company suffered loss, as he was deprived of future business transactions. He submits that the complainant suffered mental harassment by loosing their future businesses. He submits that by making a false statement and taking CENVAT relief, is an offence, thus, offence under Section 420 of the Indian Penal Code is made out.
6. After hearing the parties, I find that the petitioner company had a business relation with the Company of the complainant. When the Income Tax Department conducted survey upon M/s Thermax Limited (petitioner's company) it is alleged that statements were given by the petitioners that they had no business relations with the company of the opposite party No.2. The complainant was called to produce all the related documents, which they had. Thereafter it was concluded by the Revenue Authorities that M/s Thermax Limited has made false statement to save CENVAT and M/s. Thermax Limited gave a false information that they had no relations with the company of the opposite party No.2. The Commissioner, Central Excise imposed a fine of Rs.10,00,000/- upon this petitioner, who is Managing Director of M/s. Thermax Limited along with interest. In paragraph 19 of the complaint petition, the complainant admits that M.S. Unikrishnan paid the fine and also the penal charges, which was imposed upon the complainant. It is the case of the complainant that because of this act, reputation of complainant's company was damaged. It is also the complainant's case that even though there was some arrangement between the complainant and the accused that the accused will 6 work together in future Government projects, but, the accused refused to do any business with the complainant. The complainant further stated that because of the aforesaid activity, the reputation of the complainant's company suffered a set-back and the turn over of the complainant's company came down from Rs.1 crore to NIL. As per the complainant, because of this act, he suffered mentally, financially and socially and thus, as per paragraph 13 of the complaint, he sought Rs.3 crore as defamation plus Rs.10 lakh as recovery amount, which, according to him, was paid to some of the officers of the petitioner's company.
7. The facts, which are narrated above, are derived from the complaint itself. These facts, by no stretch of imagination, attract the offences punishable under Sections 420 or 406 of the Indian Penal Code.
9. Section 420 of the Indian Penal Code is punishment for cheating, which reads as under: -
420. Cheating and dishonestly inducing delivery of property - Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
To attract an offence under Section 420 of the Indian Penal Code, the following requirements must be present: -
(i) Cheating;
(ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security; and
(iii) mens rea of the accused at the time of making inducement.
Section 415 of the Indian Penal Code defines cheating, which reads as follows: -
415. Cheating - Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or 7 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'.
The essential ingredients of the offence of 'cheating' are: -
(i) deception of a person either by making a false or misleading representation or by other action or omission;
(ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person 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.
9. From a conjoint reading of aforesaid sections vis-à-vis the present case, I find that there is no allegation of delivering any property to any person, nor there is any allegation of altering or destroying any security. The element of deception vis-à-vis the complainant is missing in this case. The best allegation against the petitioner is that he suppressed the business relations between the petitioner and the complainant company with the Revenue Authorities to save tax. For this the complainant cannot be said to have been cheated. The revenue authorities, which was the only appropriate authority, has already imposed punishment upon the petitioner's company as per law. Thus, there is no application of Section 420 of the Indian Penal Code in this case.
10. Section 406 is a punishment for criminal breach of trust. The word 'criminal breach of trust' is defined in Section 405 of the Indian Penal Code, which reads as under: -
405. Criminal breach of trust - Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, 8 express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits 'criminal breach of trust'.
11. From the facts narrated above, which is there in the complaint petition, I find that the petitioner was not entrusted with any property by the complainant nor did he dishonestly misappropriate or convert any property for his own use. On the facts stated above, Section 406 of the Indian Penal Code is also not applicable in this case.
12. These are the only two sections under which the first information report has been registered. Since there are no ingredients of Sections 406 and 420 of the Indian Penal Code, registering of first information report is absolutely bad.
13. Furthermore, the remedy available under Section 156(3) of the Code of Criminal Procedure is not routine in nature. It requires application of mind and a speaking order to be passed. The Hon'ble Supreme Court in the case of Priyanka Srivastava & Another versus the State of Uttar Pradesh & Others reported in (2015) 6 SCC 287, has dealt with this issue extensively. In the aforesaid judgment, the Hon'ble Court highlighted the importance of Section 154(1) and Section 154(3) of the Code of Criminal Procedure and has also dealt with the mis-use of the powers under Section 156(3) of the Code of Criminal Procedure. In paragraph 30 and 31 of the aforesaid judgment, the Hon'ble Supreme Court in detail, has held as to how the Court has to deal in this situation. Paragraphs 30 and 31 of the said judgment reads as under: -
30. In our considered opinion, a stage has come in this country where Section 156(3) CrPC applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also can verify the veracity of the allegations.
This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of the said Act or under Article 226 of the Constitution of India. But it cannot be done to take 9 undue advantage in a criminal court as if somebody is determined to settle the scores.
31. We have already indicated that there has to be prior applications under Sections 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an application under Section 156(3) be supported by an affidavit is so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already stated that the veracity of the same can also be verified by the learned Magistrate, regard being had to the nature of allegations of the case. We are compelled to say so as a number of cases pertaining to fiscal sphere, matrimonial dispute/family disputes, commercial offences, medical negligence cases, corruption cases and the cases where there is abnormal delay/laches in initiating criminal prosecution, as are illustrated in Lalita Kumari are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR.
14. This judgment in Priyanka Srivastava (supra) of the Hon'ble Supreme Court has been followed subsequently in Vikram Johar versus State of Uttar Pradesh & Another reported in (2019) SCC Online SC 609. Thus, I find that the order by which the Court had referred the complaint under Section 156(3) of the Code of Criminal Procedure is a non-speaking one and the complaint itself does not comply with the preconditions as set forth in the aforesaid judgment, which is necessary for sending the complaint under Section 156(3) of the Code of Criminal Procedure.
15. Considering the aforesaid fact and position of law, order by which complaint was sent under Section 156(3) of the Code of Criminal Procedure is absolutely bad.
16. The Hon'ble Supreme Court in the case of State of Haryana & Others versus Bhajan Lal & Others reported in (1992) Supp (1) SCC 335 at paragraph 102 of the said judgment has framed various categories of cases by way of illustration for exercise of the extraordinary power under Article 226 of 10 the Constitution of India or the exercise of inherent powers under Section 482 of the Code of Criminal Procedure, to prevent abuse of the process of any court or otherwise to secure the ends of justice. The said paragraph 102 of the said judgment reads as under: -
102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelized and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without any order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that 11 there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
17. Thus, based on the discussions as above, in the light of the guidelines laid down by the Hon'ble Supreme Court in the case of Bhajan Lal (supra), I find that this case is a fit case and falls in Category (1) and (5) of the above guidelines laid down by the Hon'ble Supreme Court for exercise of inherent powers under Section 482 of the Code of Criminal Procedure. Accordingly, I am inclined to allow this criminal miscellaneous petition. The entire criminal proceeding in Sector 4 Police Station Case No.86 of 2018, so far as it relates to the petitioner, abovenamed, is hereby quashed. All subsequent proceedings also stand quashed.
18. This criminal miscellaneous petition, accordingly, stands allowed.
(Ananda Sen, J.) Kumar/Cp-03