Telangana High Court
Sri Premal Naresh Thakar vs State Of Telangana on 12 October, 2022
Author: D.Nagarjun
Bench: D.Nagarjun
THE HON'BLE DR. JUSTICE D.NAGARJUN
CRIMINAL PETITION Nos.7676 and 11677 of 2018
COMMON ORDER:
These petitions are filed seeking quashment of C.C.No.3318 of 2018 on the file of learned XI Additional Chief Metropolitan Magistrate, Secunderabad, cognizance of which was taken against the petitioners/A1 to A4 for the offence under Sections 420 and 506 IPC.
2. The facts in brief as per the private complaint filed by respondent No.2/de-facto complainant are as under:
a. The de-facto complainant is doing business in Engineers and Contractors having its registered office at Secunderabad. As per the quotations dated 27.12.2011, the petitioner/A1 company issued work orders dated 12.01.2012 and 12.04.2012 for supply of crawler crane No. DEMAG CC 600 with a capacity of 150 MT for erection works for structural steel works at 6x660 MW Sasan ultra Mega Power Project at Sasan, Madhya Pradesh site on monthly hiring charges of Rs.7 lakhs. A1 company was also asked to supply one crawler crane Lorain L 790 having capacity of 19 MT for their KVK Nilchal Power Project at Orissa on monthly hiring charges of Rs.3,50,000/-. A1 company failed to make satisfactory services to the de-facto complainant 2 company and also stopped working from September, 2012 without informing the de-facto complainant, which is in violation of clause 7 of the work order. A1 company started demanding payment of money by way of sending e-mails to the de-facto complainant company. The de-facto complainant company has issued notice dated 08.11.2012 and 22.02.2013 to A1 company to withdraw its illegal acts. The de-facto complainant company has also gave reply to all the e-mails sent by A1 company stating that the work at KNPCL was stopped due to Government order vide W.P.No.9384 of 2012 before the High Court of Orissa at Cuttack. Even though the de-facto complainant was not liable to pay any amount to A1 company, A1 company filed a civil suit against the de-facto complainant company on the file of Bombay City Civil Court vide S.C.No.4475 of 2013 for recovery of an amount of Rs.53,96,269/- on 26.11.2013 and the same was decreed ex- parte on 06.05.2016. The de-facto complainant company has also filed an application under Order IX Rule 13 read with Section 151 C.P.C., for setting aside the ex-parte decree dated 06.05.2016 and the same is still pending. The de-facto complainant company has also preferred an appeal against the decree and judgment dated 06.05.2016 in S.C.No.4475 of 2013 before the High Court of Bombay vide RCA.No.3974 of 2017, 3 which is also still pending. A1 company has filed a company petition before the High Court of Andhra Pradesh vide Company Petition No.253 of 2015 with false and baseless allegations suppressing filing of civil suit.
b. A1 company has also filed E.P. before the I Additional Chief Judge, City Civil Court at Secunderabad vide E.P.No.160 of 2017 for attachment and sale of the property of the de-facto complainant's Director. The de-facto complainant company filed a counter in the said E.P. c. While all these matters are pending in various Courts, A1 company has issued e-mail to the Principle Contractor i.e., KVK Nilchal Power Project stating that Crane Lorain L 790 is at the working site and required to be moved for that place. A reply has been given by the Principle Contractor stating that on account of the stay orders granted by the High Court, there was no option except to move the crane from the premises. On 29.11.2017, the Principle Contractor issued e-mail to A1 company stating that the crane was left at the site for more than five years without doing any work on account of stay orders of the High Court and claimed Rs.1,02,13,888/- for safeguarding the crane during these five years. A1 company on 26.12.2017 4 issued a letter to the de-facto complainant company to release the crane.
d. A1 company has claimed false amount from the de-facto complainant company without doing any work and filed false cases against the de-facto complainant company before the High Court and other Courts, damaged the reputation and caused wrongful loss. A4 being the representation of A1 company visited the de-facto complainant office and threatened with dire consequences to settle the accounts with the instigation of A2 and A3, who are involved in the day to day activities of A1 company and therefore sought for taking cognizance against the petitioners for the offence under Sections 420, 426, 477A, 382 and 506 IPC.
3. On consideration of the said complaint, the learned Magistrate has passed orders on 09.05.2018, which read as under:
"Heard and perused the record. The sworn statement of the complainant is recorded as PW.1. The main dispute pertains to cheating the PW.1's company causing wrongful loss and threatening him with dire consequences. As seen from the sworn statement of PW.1 and the material on record, there are sufficient grounds for proceeding further against A1 to A4 considering the material available. Hence, case is taken on file against A1 to A4 for the offence under Sections 420 and 506 of IPC only. Issue summons on payment of process and call on 25.07.2018."
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4. Aggrieved by the taking of cognizance against the petitioners/A1 to A4 for the offence under Sections 420 and 506 IPC, these petition are filed seeking quashmnet of the same on the following grounds:
5. A1 company is doing business in supply of crane to various parts of India on hiring basis, A1 company has agreed to supply two cranes to the de-facto complainant company on monthly rent for a sum of Rs.7 lakhs and Rs.3,50,000/- each, A1 company has provided satisfactory services to the de-facto complainant company on both the work sites and bills were also raised in respect of the outstanding dues and payment of service tax and other Government dues to be paid by the de- facto complainant and that as no money was paid, demand was made by e-mails from time to time. A1 company has sent notice dated 12.08.2012 to the de-facto complainant company to clear the entire outstanding amount of Rs.53,96,269/-. A meeting was held on 25.09.2012 between A1 company and the de-facto complainant company representatives. The de-facto complainant has admitted that they will inform A1 company, which has replied all e-mails and cleared all the dues of the de- facto complainant company. The de-facto complainant company has failed to make payment of Rs.53,96,269/- as agreed. The de-facto complainant company has committed 6 breech of contract and failed to pay total outstanding amount of Rs.66,45,247/- including interest. In a civil suit in S.C.No.4475 of 2013 filed by A1 company, the de-facto complainant company has filed written statement. A1 company has also intimated immediately by way of notice that City Civil Court, Bombay has also passed decree against the de-facto complainant company. The transaction between the parties is a commercial transaction and therefore, the allegation that the petitioners have committed offence under Sections 420 and 506 IPC cannot be considered and therefore, prayed the Court to quash the case.
6. Heard both sides and perused the record.
7. Now, the point for determination is whether the proceedings against the petitioners/A1 to A4 in C.C.No.3318 of 2018 can be quashed?
8. There is no dispute that the de-facto complainant company has called for quotations on 27.12.2011 and also on 11.04.2012 for supply of two crawler cranes and basing on the response of A1 company, the quotation was accepted by the de- facto complainant company for which A1 company agreed to supply the cranes of the specific standards for a monthly hiring charges of Rs.7 lakhs and Rs.3,50,000/- respectively. Both the 7 cranes were shifted to the work sites, one in Madhya Pradesh and another one in Orissa.
9. According to the de-facto complainant company, A1 company stopped the work at the respective work sites and also the services were not satisfactory. It is also mentioned that on account of the stay orders granted by the High Court of Orrissa at Cuttack in W.P.No.9384 of 2012, the work at Orissa site was also stopped. Thereby, according to the de-facto complainant, the work was stalled and A1 company, without any intimation, has stopped the work.
10. On the contrary, the case of A1 company is that the work of A1 company was never to the dissatisfaction of the de-facto complainant company and there is no communication from the de-facto complainant company that the work of A1 company at both the sites is not satisfactory and as per the agreement between the parties, the bill was raised for Rs.53,96,269/- and later by adding interest @ 24% per annum as per the agreed clause, an amount of Rs.66,45,247/- was raised. A1 company has raised the bills and also sent many reminders and clarified all the dues belonging to the de-facto complainant company and in spite of it, the de-facto complainant company has failed to respond and pay the outstanding bills to be paid to A1 company 8 even as per the agreed terms. Ultimately, A1 company has filed a civil suit in S.C.No.4475 of 2013 and the same was decreed.
11. As seen from the record, the transaction between A1 company and the de-facto complainant company is purely commercial in nature. It is the de-facto complainant company, which has invited the quotations from various companies for supply of cranes. Accordingly, A1 company has given the quotation and the same was accepted by the de-facto complainant company and the terms were settled and the cranes were supplied.
12. Admittedly, the cranes of A1 company has worked at both the sites for some time. Later, both the cranes stopped working. According to the de-facto complainant company, A1 company stopped working voluntarily without there being any intimation. Even according to the de-facto complainant company, in respect of the crane installed at Orissa company site, there are interim directions from the High Court of Orissa in w.P.No.9384 of 2012. Therefore, whether the agreement between the parties stipulates payment of money even if the work is stopped on account of any circumstances beyond the control of the de-facto complainant company and whether in case if the work was not extracted at the work site by the Principle Contractor, whether 9 still the de-facto complainant company is required to pay the rent to A1 company, whether interest can be levied, are the issues, which are to be settled as per the terms of the contract.
13. In fact, on careful perusal of the contents of the complaint and also the material placed before the Court by A1 company, though the de-facto complainant company extracted the work at least for some time, no payment was made in favour of A1 company. It is not the case where from the beginning only the cranes of A1 company never deployed at the working site and the cranes were never worked at the respective sites. Admittedly, for some time, the services of the cranes were extracted by the de-facto complainant company. Therefore, leaving aside the issue whether the de-facto complainant company required to pay the rent for the period when the cranes were not doing service at the respective work sites, the de-facto complainant company is bound to pay the money for the work extracted. Therefore, the issue between the parties is purely commercial in nature in respect of recovery of money.
14. A1 company has filed a suit in S.C.No.4475 of 2013 and the same was decreed. It is submitted by the de-facto complainant company that the said suit was decreed ex-parte, but as per the contention of A1 company, the de-facto 10 complainant company has filed written statement and thereafter the suit was decreed.
15. According to the de-facto complainant, they have preferred an appeal and the same is pending. Similarly, some other litigation in respect of the same dispute is also pending in other Courts. Therefore, when the matter has already been settled in the civil Court at Bombay, all the issues, which A1 company has been raising here are the subject matter before the civil Court.
16. In Vijay Kumar Ghai and others vs. The State of West Bengal and others1 the Hon'ble Supreme Court held at paragraphs 31 to 36 as under:
"31. Section 415 IPC defines "cheating" which reads as under:
"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 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:
1. Deception of any person
2. (a) Fraudulently or dishonestly inducing that person--
1 (2022) 7 SCC 124 11
(i) to deliver any property to any person; or
(ii) to consent that any person shall retain any property; or
(b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were no 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.
32. A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating.
33. Section 420 IPC defines "cheating and dishonestly inducing delivery of property" 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."
34. Section 420 IPC is a serious form of cheating that includes inducement (to lead or move someone to happen) in terms of delivery of property as well as valuable securities. This section is also applicable to matters where the destruction of the property is caused by the way of cheating or inducement. Punishment for cheating is provided under this section which may extend to 7 years and also makes the person liable to fine.
35. To establish the offence of cheating in inducing the delivery of property, the following ingredients need to be proved:
(i) The representation made by the person was false.
(ii) The accused had prior knowledge that the representation he made was false.
(iii) The accused made false representation with dishonest intention in order to deceive the person to whom it was made.
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(iv) The act where the accused induced the person to
deliver the property or to perform or to
abstain from any act which the person would
have not done or had otherwise committed.
36. As observed and held by this Court in R.K. Vijayasarathy v. Sudha Seetharam [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
(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."
In order to fasten the liability on A1 company for the offence under Section 420 IPC, the de-facto complainant company is expected to allege and file material before the Court to show that A1 company with an intention to deceive the de- facto complainant company from the inception has induced and got the work stopped and committed loss to the de-facto complainant company.
17. In fact, on going through the respective contentions of both the parties, it is clear that it is the de-facto complainant company, which has invited the quotations, extracted some work and not paid the money even for the undisputed period of service. A1 company has not voluntarily approached the de- 13 facto complainant company. If at all any loss is sustained, it is not to the de-facto complainant company, but to A1 company itself because both the cranes are installed in the respective sites as required by the de-facto complainant company and no money was paid for the services and it is also mentioned that A1 company was also asked to pay more than one crore for keeping the cranes safely at the working site. Therefore, considering all the above, none of the ingredients of Section 420 IPC are attracted to the case on hand.
18. In order to fasten the liability under Section 506 IPC, the de-facto complainant company is expected to allege and prove that the accused have intimidated the de-facto complainant company criminally, threatened them with dire consequences and on account of such threatens, the de-facto complainant company has committed or omitted to do anything which in normal course they would not have done so. Except making a bald statement, in a generic sense, that A4 as a representative of A1 company visited the de-facto complainant company office and threatened with dire consequences to settle the amount with the instigation of A2 and A3, nothing has been mentioned. On which date A4 has come and in whose presence, he has threatened the de-facto complainant, what are the utterances he 14 has made, nothing is mentioned and it has also not mentioned as to the consequences of such utterances what he has done.
19. Therefore, considering the circumstances, the de-facto complainant company has also failed to convince the Court that there are ingredients for fastening the liability under Section 506 IPC against the petitioners.
20. In order to consider a case under Section 482 Cr.P.C., the petitioners are expected to prove that even if the contents of complaint are accepted to be true, there should not have been any case against them for the offences alleged.
21. In the case on hand, as discussed above, even the contents of the private complaint are accepted to be true, no offence is made out against the petitioners to be considered under Section 482 Cr.P.C.
22. This is also a clear case where the dispute between the parties is purely civil in nature i.e., recovery of money. The de- facto complainant company having failed in different forums, in order to arm twist the petitioners has invoked the jurisdiction of criminal Court without there being any basis.
23. In view of the above, the petitioners have made out a case that continuation of proceedings against them would amount to 15 abuse of process of law. Therefore, it is a fit case where the proceedings against the petitioners in C.C.No.3318 of 2018 can be quashed.
24. In the result, both the criminal petitions are allowed and the proceedings against the petitioners in C.C.No.3318 of 2018 on the file of the XI Additional Chief Metropolitan Magistrate, Secunderabad, are hereby quashed.
Miscellaneous applications, if any, shall stand closed.
_____________________ DR. D.NAGARJUN, J Date: 12.10.2022 ES