Patna High Court
Shruti Enterprises Ltd. vs State Of Bihar And Ors. on 18 January, 2006
Author: Rekha Kumari
Bench: Rekha Kumari
ORDER Rekha Kumari, J.
1. This is an application under Section 482 of the Code of Criminal Procedure for quashing the order dated 21 -1-2002 passed by Sri S.K. Mishra, Addl. Sessions Judge XII, Patna in Cri. Revision No. 907 of 2001 by which he has allowed the revision application of O.P. Nos. 2 and 3 and set aside the order dated 1-8-2001 passed by Sri D.N, Pandey, Judicial Magistrate, 1st Class, Patna in Complaint Case No. 1670(c)/2000, Tr. No. 810/2001 under which the learned Magistrate had taken cognisance under Section 420/34 of the Indian Penal Code and summoned O.P. Nos. 2 and 3 to stand trial.
2. Heard.
3. It appears that the petitioner had filed a complaint against O.P. Nos. 2 and 3 (accused) and their company alleging therein that O.P. No. 2 Tripurari Prasad is Managing Director of M/s. Bihar Drugs and Chemical Limited and O.P. No. 3 Daya Prasad is his brother and an employee is the Company. Both of them induced him (petitioner) to become the consignee agent of the Company for South Bihar area. On their inducement he deposited a sum of Rs. 12,50,000/- as security money, on promise of O.P. No. 2 to pay interest @ 18% per annum on half yearly basis. O.P. No. 2 further promised to pay 5% commission on total sale in South Bihar and else agreed to give commission on indirect sale made by him. He was appointed as a consignee agent of the Company for South Bihar for a period of five years on 30-10-1998. An agreement was also executed between them. Thereafter there was regular supply of medicines till October, 1999 but from November, 1999 they dishonestly stopped supplying medicines though O.P. No. 2 sold medicines worth about Rs. 40 lacs in South Bihar area through O.P. No. 3, in utter violation of the agreement, causing him a loss of Rs. 3,25,000/- on account of illegal retention of the commission and security money. O.P. No. 1 dishonestly did not give interest on the security money for wrongful gain to himself. The petitioner has also alleged that the accused persons from the very beginning had dishonest and fraudulent intention to deceive him by cheating; and that had they not made false representation, he would not have given money to them.
4. The case of the petitioner in the complaint petition also is that he sent legal notice to O.P. No. 2 to pay the aforesaid sum amounting to Rs. 11,62,377.15 paise till July, 2000 but O.P. No. 2 neither paid the amount nor sent any reply.
5. It further appears that after filing of the complaint, the complainant (petitioner) was examined on S.A. and then he examined two witnesses and filed papers. The learned Magistrate on the basis of the statements of the witnesses and documents filed found a prima facie case under Section 420/ 34, I.P.C. against O.P. Nos. 2 and 3 and by his order dated 1-8-2001 directed to issue summons against O.P. Nos. 2, 3 and the Company.
6.The accused persons (O.P. Nos. 2, 3 and Company) then preferred revision against the above order. The learned Addl. Sessions Judge, by the impugned order allowed the revision, and set aside the order of the learned Magistrate holding that the dispute was purely of civil nature.
7. Learned Counsel for the petitioner submitted that the allegations made in the complaint petition disclose an offence under Section 420, I.P.C. and the allegations have been supported by the complainant and his witnesses and therefore, there was no justification for the learned Sessions Judge to set aside the order of the learned Magistrate. The learned Addl. Sessions Judge has also meticulously scrutinised the evidence which is not permissible at this stage and in support of his submissions he has placed reliance on the decision of the Apex Court in the case of Hareram Satpathy v. T. Karan Agrawala and Ors. . He further submitted that when the facts disclose both civil and criminal wrongs, the criminal proceeding is maintainable and the facts clearly show that the intention of the O.Ps. was dishonest from the very beginning and the O.Ps. dishonestly induced the petitioner to enter into the agreement and part with his money.
8. It is apparent from the complaint petition that there was a business contract between the parties. It is well settled that mere breach of contract cannot give rise to criminal prosecution under Section 420, I.P.C. unless fraudulent or dishonest intention is shown right at the beginning of the transaction, i.e. the time when the offence is said to have been committed. Distinction between mere breach of contract and the cheating would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the very time when he made a promise and entered into a transaction with the complainant to part with his property, or money, then the liability is criminal and the accused is guilty of the offence of cheating. On the other hand, if all that is established that a representation made by the accused has subsequently hot been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is to a decree of damages for breach of contract in a Civil Court.
9. The complaint petition in this case shows that after the execution of the agreement on 30-10-1998, the opposite parties regularly supplied the medicines till October, 1999 and the petitioner, had no grievance till then. It is, hence, evident that the intention of the opposite parties was not dishonest or fraudulent at the time when the parties entered into the agreement. So, only because subsequently the opposite party did not keep their promise, their action cannot be said to be criminal and they cannot be made liable for the offence of cheating. Therefore, even if the entire facts disclosed in the complaint petition are taken to be true no offence under Section 420/34, I.P.C. is made out against the opposite parties.
10. As regards the decision of the Apex Court in the case of Hareram Satpathy (1978 Cri LJ 1687) (supra), the questions which arise for determination were (1) whether after submission of the first report by the police stating therein that there was no sufficient evidence to justify forwarding of the respondents to him, it was open to the Sub-divisional Magistrate, Balamgir to add the respondents as accused in this case and issue processes against them, (ii) whether the High Court was justified in going into the merits of the case and interfere with the order of the Sub-Divisional Magistrate impleading the respondents as accused and issuing processes against him in exercise of its powers under Section 402, Cr.P.C.
11. The Apex Court while treating the second question held that as the Magistrate was restricted to find out whether there was a prima facie case or not for proceeding against the accused and could not enter into a detailed discussions of the merits or demerits of the case and the scope of revisional Jurisdiction was very limited. The High Court could not in our opinion launch on a detailed and meticulous examination of the case on merits. But the above decision does not apply to the facts of this case. In this case, the learned Sessions Judge did not enter into the merits of the case. He has simply examined whether the allegations made in the complaint constitute a criminal offence. Therefore, on the basis of the above decision it cannot be said that the learned Addl. Sessions Judge has exceeded his limit.
12. I, therefore, do not find any infirmity in the impugned order. The application is dismissed.