Calcutta High Court (Appellete Side)
Manish Kumar & Ors vs The State Of West Bengal & Anr on 19 February, 2020
Author: Subhasis Dasgupta
Bench: Subhasis Dasgupta
In the High Court at Calcutta
Criminal Revisional Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Subhasis Dasgupta.
CRR No. 530 of 2013
Manish Kumar & Ors.
Vs.
The State of West Bengal & Anr.
For the Petitioners : Mr. Debasish Roy, Adv.
Mr. Sandipan Gangully, Adv.
Mr. Rajesh Upadhyay, Adv.
Mr. Avishek Bhandari, Adv.
For the Opposite Party No.2 : Mr. Ayan Bhattacharya, Adv.
Mr. Kunal Gangully, Adv.
Heard On : 21.06.2019, 27.06.2019, 02.08.2019,
20.11.2019
Judgement On :19.02.2020
Subhasis Dasgupta, J. :-
This revisional application has been filed by the petitioners/accused
persons to quash a criminal proceeding initiated on a complaint, filed by the
complainant/opposite party No.2 under Section 156(3) Cr.P.C., which was
registered as GR. Case No. 37/13, for the offence under Sections
420/465/468/477A/120B of the Indian Penal Code, in the court of learned
Additional Chief Judicial Magistrate, Asansol.
The allegation raised against the petitioners is that even after receiving
services from complainant/opposite party No.2 as a transport contractor for a
considerable period of time, petitioners never raised any objection about the
quality of the service rendered together with execution of work, supposed to be
discharged by the complainant/O.P. No.2, yet the petitioners withheld payments
of bills raised by complainant to the tune of Rs. 7,00,000/- (rupees seven lakhs)
approx., for the non-payment of 10% of kickback of the bill amount. That for
protest being raised by the complainant/O.P. No.2, he was asked to settle his
claim to the extent of Rs.7,88,960/- (rupees seven lakhs eighty eight thousand
nine hundred and sixty) approx., foregoing the actual bill amount.
The complainant/O.P. No.2, after being approached by the ACC Ltd.,
consented to be appointed as a transporting agent of ACC cement, for
transporting cement from the manufacturing site at Mudhukunda, Purulia to
various destinations, settling terms of agreement inclusive of the charges to be
paid by ACC Ltd. by an agreement. Since 1996, in the capacity as such, the
complainant/O.P. No.2 continued to render service to ACC Ltd. receiving
payments for the service rendered, though keeping some portion as unpaid. The
service of the complainant/O.P. No.2 reached the satisfaction level of the ACC
Ltd., and he was also entrusted with the further job of canvassing agent in July,
2007, which was supposed to be discharged in his own name, independent of the
name of firm of O.P. No. 2. The management of the ACC Ltd. faced a change in
2010 leaving impact on the administration of ACC Ltd., supposedly discharged
by petitioners No.1 to 4, who are high officials of the ACC Ltd. (accused No. 5),
and arraigned as accused persons in the petition of complainant. Commercial
transactions held between the parties were maintained with use of computer.
The non-payment of 10% kickback of bill amount, raised by the
complainant/O.P. No.2, prompted accused persons/petitioners to hatch up a
conspiracy to deceive the complainant/O.P. No. 2, and to cause wrongful loss to
him, and accordingly tampered the relevant actual electronic records regarding
transaction held between the parties, and deleted the actual records from the
software of computer, and thereby induced the high officials of ACC Ltd. to
believe that the complainant was actually entitled to get Rs. 7,00,000/- (rupees
seven lakhs) approx. only, and thus compelling the complainant/O.P. No.2 to
forego the rest of the amount. In the mean time, the accused persons issued
noticed, dated 21.08.2012 terminating transport agreement of complainant/O.P.
No. 2.
Such complaint was forwarded to P.S. under Section 156(3) Cr.P.C. for
investigation. Police held extensive investigation, and submitted charge sheet
making out a prima facie case under Section 420/465/468/477A/120B I.P.C.
Learned advocate for the petitioners submitted that the complaint lodged
against the petitioners essentially founded upon a commercial transaction arising
from a road transport agreement, dated 01.07.2010, and for the breach of terms
of the promise of such agreement, the complainant/O.P. No. 2 should have
resorted to civil action for his desired relief before a civil court of competent
jurisdiction.
It was argued that the instant criminal proceeding being essentially a
dispute of civil nature, where civil remedies are available, the same should be
quashed bearing in mind that the dispute of civil nature should not be allowed to
become subject matter of criminal proceedings, as a short cut method for
obtaining speedy relief, and taking the advantage of the criminal case, petitioners
could not be forced to settle their account giving unlawful gain to
complainant/O.P. No.2, a party to the commercial transaction.
It was contended by the learned advocate for the petitioners that at the
time of initiation of this case, the petitioners (1 to 4) just discharged their official
duties without individually performing any deliberate action on their part,
suggestive of commencement dishonest intention on their part at the beginning
of such commercial transaction, entered into between them.
Learned advocate for the petitioners proposed that the vicarious liability
could not be attracted against the petitioners, on the ground that the petitioners
were not the signatories to the original contract. Contention was further raised
by the petitioners that the investigation neither having collected any materials,
nor seized any accessories from relevant computer, indicative of tampering or
deleting the computers pointing to the petitioners' culpable intention of causing
deception on their part from the very beginning, the allegation of having cheated
the complainant/O.P. No.2 in such circumstances would not be sustainable.
It was accordingly suggested by the learned advocate for the petitioner
that in cases of long term commercial relationship between the parties, where the
commercial transaction are held frequent, the non-payment of part dues or the
immediate failure to make good certain short term liability arising out of such
long term commercial relationship, especially when payments have been
regularly made in the past, and when no other independent factors raising
apprehension of misappropriation or wrongful loss exists, such short term non-
payment of dues could not be the basis of criminal prosecution like the instant
one.
Learned advocate Mr. Debajoyti Deb, representing the State focused his
argument submitting that the charge sheet having been submitted making out a
prima facie case against the petitioners, the prayer for quashing ought not to
have been entertained, because prima facie case was sufficiently established as
against the petitioners.
Per contra, learned advocate for the complainant/O.P. No.2 submitted that
the new management of accused No. 5 only perpetrated the offence complained
of. It was thus submitted that directors and the officials of the corporation would
represent the directing mind of a company, a body corporate, and state of mind
of the officials, would be the state of mind of the company. The petitioners,
according to complainant, were not the directing minds of accused No. 5 prior to
2010, and the payment of the services rendered was put on hold illegally after the
petitioners becoming the directing mind of ACC Ltd.
The service rendered prior to 2010 by the complainant, and the payment so
made to the complainant, would be of no consequence to show the bona fide on
the part of the petitioners, as against an allegation of cheating by withholding
payment of bills, for failure to pay 10% of kickback of the bill amount leading to
issuance of a notice terminating the transport agreement after tampering and/or
deleting the relevant data in the computer revealing the transaction held between
the parties.
Learned advocate for the complainant submitted that simply because of an
offence was found to have committed during the course of commercial
transaction, the same could not be a strong ground to throttle a legitimate
prosecution at the initial stage. It was submitted accordingly that the averments
contained in the complaint sufficiently revealed materials making out a prima
facie case, and for which the inherent power of this court should not be attracted
to stifle a prosecution after embarking upon an enquiry, whether the materials
collected would be reliable or not, going to the extent of making reasonable
appreciation of the materials already collected to test the bona fide of the
prosecution.
It was further submitted that though the offence of cheating might have
originated form the commercial transaction, but it was not a case of simpliciter,
as contended to be for enforcement of a breach of promise by adopting a short
cut method for realisation of unpaid amount of service charges. The offence of
cheating having originated consequent upon the tampering and/or deleting, or
manipulating the data maintained in the software of the computer of petitioners,
there developed a significant magnitude, and upon due appreciation of which,
trial should be commenced expeditiously.
Upon hearing the learned counsel for either of the parties to this case, and
also on looking into the materials on record, it appears that the main offence
alleged by the complainant was that the petitioners committed cheating by
deleting/tampering/manipulating the data in the software of their computer in
consequence of their conspiracy to deceive the complainant so that there could
be wrongful loss to the complainant.
Deceiving is ordinarily perceived to induce a man to believe that a thing is
true which is false, and the person practising deceit knows or believes it to be
false. While claiming to have been deceived, it is for the complainant/aggrieved
party to establish that there exists a fraudulent and dishonest intention at the
time of commission of offence. Indisputably the complainant/opposite party No. 2
was appointed as transport carrier for and on behalf of ACC Ltd. (accused No. 5).
In the year 2007, complainant/opposite party was further entrusted with the job
of canvassing agent for the company accused. After the new management had
taken over charge in 2010, petitioner No. 1 to 4 assumed control in respect of
administration of ACC Ltd. revalidating an agreement held in the year of 2010
between the parties.
The bills raised being the service charges of complainant/opposite party
No. 2 rendered in favour of ACC Ltd. were put to face complication disputing with
the quality of the services rendered and the consequent impact caused to ACC
Ltd. (accused No. 5).
Contention was raised that bills raised being the service charges were put
on hold demanding 10% kickback of the actual bill amount, and failure to make
such kickback amount, complainant/opposite party in 2012 was served with a
notice terminating his transport agreement, and thus put to face immense
pressure to settle the account taking Rs.7,00,000/- (rupees seven lakhs) approx.,
as against the outstanding claimed amount of Rs.60,00,000/- (rupees sixty
lakhs), though claimed as per own estimation of complainant/opposite party
No.2. There was an arbitral clause incorporated in the transport agreement,
entered into between the parties, which however, could not be resorted to settle
the dues payable to complainant/opposite party.
It would be relevant here to reproduce relevant portion of Paragraph-12 of
complaint which may be mentioned as hereunder:
"12. That it is pertinent to mention here that before such termination of the
work several communication was made with the Higher authority of the accused
No. 5 but the accused No. 1 to 4 in pursuance of their conspiracy to deceive the
petitioner and to cause wrongful loss to the petitioner tampered the actual
electronic records regarding the transaction between the petitioner, petitioner's firm
and the accused No. 5 for transportation of cement Bags and doing the other jobs
on behalf accused No. 5 and also deleted the actual records from the software of
the computer and thereby induced the higher officials of accused No. 5 to declare
that the petitioner is entitled to get Rs. Seven Lakhs only and those higher officials
illegally asked your petitioner to settle the matter and to forego the balance
amount."
It is true that while exercising authority available under Section 482
Cr.P.C., the court is not obliged to embark upon an enquiry in respect of the
materials produced before it, but for the purpose of ascertaining a prima facie
case to have been established or not from the averments contained in the
complaint together with the materials produced, the court is obliged to look into
the averments and other materials produced subject to ascertaining a prima facie
case, and thereby limiting its vision to that extent only.
Upon perusal of the averment of complaint, shown hereinabove, it appears
that the cheating was alleged to have occasioned by reason of a conspiracy,
hatched up by the petitioners by causing/tampering in the computer data,
maintained by the petitioners for settling the accounts, being the service charges
due, payable by the petitioners to complainant/opposite party. It was further
alleged that the alleged conspiracy was to deceive the complainant for causing
wrongful loss to him.
It was also alleged that by causing such manipulation in the computer
data, the petitioners induced their higher officials to believe that the complainant
was entitled to get lesser amount, than actual amount claimed. Such averment
appears to be self-contradictory, because in one hand, the complainant figured
himself to have been deceived, so that he could be put to sustain wrongful loss,
but in other hand, higher officials of the ACC Ltd., other than the petitioners,
were alleged to have been deceived in consequence inducement, generated from
computer manipulation.
In the complaint, there was no allegation that there was fraud or dishonest
inducement on the part of the petitioners, and thereby the complainant/opposite
party No. 2 stopped providing service, though, he received a termination letter in
respect of his transport agreement some times in the year 2012.
Offence of cheating may consist of two classes of cases enumerated as
herein below:
1.Where the complainant has been induced fraudulently or dishonestly;
2. When by reason of such deception, the complainant has not done or omitted to do anything which he would not do or omit to do if he was not deceived or induced by the accused.
The averments contained in the complaint would not attract either of the two cases, shown hereinabove, to make out a case for the commission of the alleged offence justifying a trial to commence, as a ordinary consequence.
An offence of cheating focuses for making adherence to:
i. Deception of a person either by making false or misleading representation or by other action or omission;
ii. Fraudulently or dishonestly inducing any person to deliver any property; or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
The settled proposition is that for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise, or representation. Undoubtedly, the petitioners assumed control taking charge over the administration of the ACC Ltd. in the year 2010. The moment when a new transport agreement was entered into between the parties in the year 2010, there left no occasion on the part of the petitioners to give birth to their dishonest intention, what appears to be the essence of the offence under Section 420 I.P.C.
The service charge claimed by way of raising bills is contended to have been put on hold demanding 10% kickback of the actual amount claimed in the bill, and for the non-payment of which, complainant/opposite party was put on pressure to settle his account receiving some inappropriate amount, compared to his service rendered. Even in a case, where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of culpable intention at the time of making initial promise, no offence under Section 420 I.P.C. can be said to have been made out.
Such is the consistent view, as decided by the Apex Court in the case of V.Y.Jose & Anr. Vs. State of Gujarat & Anr., reported in 2009 (3) SCC 78, what was largely relied upon by the petitioners, on this issue under reference.
Upon further perusal of the complaint, it left a clear impression that it was primarily a case, where the complainant/opposite party had alleged breach of contract on the part of the petitioners in not making the entire payments in respect of the bills, the complainant submitted for the services already rendered to the petitioners, because it is found mentioned in the averments of the complaint, that after persuasion of the matter with the higher authorities of ACC Ltd., some part payment had already been made to complainant/opposite party.
Relying upon the averments contained in the complaint together with the materials produced, it is very clear that at the time of entering into the agreement, either the first agreement, or even the second agreement after the petitioners assumed controlled over the administration of ACC Ltd., there was no culpable intention on the part of the petitioners to cheat the complainant. The subsequent generation of criminal intention on the part of the petitioners, if there be any, during subsistence of long standing commercial relationship entered into between the parties, would be of no consequence, because such criminal intention was missing, when it began. No suspicion of any nature was shown or even alleged against the petitioner. It is also not the allegation of the complainant, as it is not found in the complaint, that the agreement was entered into with fraudulent or dishonest intention on the part of the petitioners inducing complainant/O.P. to enter into such a contract. For non-reliasation of the service charges, and also for the settlement of the accounts between the parties, at best the dispute between the parties could be taken to be civil in nature, for which criminal court is not permitted to be made use of, as a short cut easy and quick remedy giving entity. The case of the petitioners, as canvassed, is found to be covered by the decision reported in 2018 (13) SCC 374, delivered in the of Medmeme, LLC & Ors. Vs. IHORSE BPO Solutions Pvt. Ltd. The ratio of such decision was thus profitably attracted to, by the learned advocate for the petitioners.
The argument raised by the petitioner that for the enforcement of the breach of the promise arising out of a commercial transaction in regard to failure to pay the service charges to the extent demanded would not entangle the petitioners in a criminal prosecution, appears to carry strong force in it, in view of decisions reported in (i) 2009 (3) SCC 78 delivered in the case of V.Y.Jose & Anr. Vs. State of Gujarat & Anr., (ii) 1998 SCC Online (Cal) 247, delivered in the case of Monikanta Pal Vs. The State & Anr. (iii) 2019 (2) SCC 401, delivered in the case of Vinod Natesan Vs. State of Kerala & Ors. (iv) 2018 (13) SCC 374, delivered in the case of Medmeme, LLC & Ors. Vs. IHORSE BPO Solutions Pvt. Ltd., and (v) 2014 (10) SCC 633, delivered in the case of Binod Kumar & Ors. Vs. State of Bihar & Anr., the ratio of such decisions being reached by the Apex Court would give rise to the emergence of a settled proposition that a civil liability cannot be converted into a criminal liability.
There cannot be any divergence of opinion, as submitted by the learned advocate for the complainant/O.P. No.2 that directors and the officials of the corporation represent the directing mind, and the state of mind of this officials would be the state of mind of the company, and treated by law as such. The aforesaid submission appears to be made relying on a decision, reported in 2011 (1) SCC 74 delivered in the case of Iridium India Telecom Ltd. Vs. Motorola Incorporated and Ors. Significant aspect to be gathered from materials is that if there was any culpable dishonest intention on the part of the petitioners, while entering into transport agreement between the parties, without which the allegation of having committed cheating by manipulating the computer data is of no consequence.
Learned advocate for the O.P. No.2 while supporting continuance of the instant proceeding, pending in the court below, submitted relying upon decisions reported in 2010 (6) SCC 562 delivered in the case of S.P. Gupta Vs. Ashutosh Gupta and 2018 (2) SCALE 634 rendered in the case of State of Gujarat Vs. Afroz Mohammed Hasanfatta, that the required criminal intention on the part of the petitioners to gather, if it was since beginning the commercial transaction, would be a question of fact, which could only be gone into during trial. It was submitted accordingly, that in a case instituted on a police report, the Magistrate would be only obliged to pass an order issuing summons to the accused upon considering the police report, and the other documents submitted therewith satisfying himself that there was ground for proceeding against accused, and when learned Magistrate had taken cognizance upon receiving his satisfaction with materials produced, the instant proceeding should not be quashed.
The copy of the charge sheet subsequently enclosed with the revisional application would reveal that nothing was recovered in course of investigation from the computer maintained by the petitioners, alleged to have been manipulated to enforce a lesser amount of service charge, compared to the actual amount claimed with a view to causing wrongful loss to the complainant. It is only as many as five (5) documents, being relied upon by the prosecution, are found recovered during the course of investigation, relying upon which the settlement of accounts pertaining to the service charge claimed, was sought to be settled, so as to make out a case of cheating, for which criminal prosecution is not at all called for. As has already discussed that the moment when the agreement was entered into between the parties, there was no culpable intention to make out a case of cheating, as alleged, without which the instant prosecution is not encouraging one. Therefore, such decisions will hardly have any relevance in context with the averments contained in the complaint.
Shelter was further taken by the learned advocate for the O.P. on decisions reported in 1999 (3) SCC 259 delivered in the case of Rajesh Bajaj Vs. State NCT of Delhi & Ors. and 2018 (15) SCALE 907 rendered in the case V. Rabi Kumar Vs. State Rep. by Inspector of Police, District Crime Branch, Salem, Tamil Nadu & Ors. in order to establish that the simply because an offence was taken place during the course of commercial transaction, the same could not be ground to throttle a legitimate prosecution at its initial stage. Thus according to complainant/O.P. No.2 there were many occasions when in course of commercial and monetary transaction, the offence of cheating was taken place.
What is more important in a case of this nature was to establish the criminal intention, the presence of which to commence since beginning, when the commercial transaction entered into between the parties, without which it is very difficult to accept a case of cheating as contended. The decisions so referred are distinguishable on facts situation.
It is not the invariable proposition of law that there cannot be any criminal action alleging a case of cheating even after filing of civil suit for enforcing a civil liability. While exercising option for a criminal case on the ground of alleged cheating, with other incidental offences, without showing the basic ingredients of the offences complained of, available from the materials collected during the course of investigation, continuance of such criminal proceeding is against the spirit of law.
Since, there is some apparent anomaly as regards the person deceived in consequence of the alleged deception of the petitioner, as available from Paragraph-12 of the complaint, which is the hardcore of the offences complained of, the instant criminal prosecution will not be sustainable without proof of criminal intention on the part of the petitioner No. 1 to 4, and that too from the beginning of the transaction.
At the same time, it is also not the invariable rule that when there is civil suit pending between the parties, there cannot be any criminal prosecution for a rightful case of cheating having been established prima facie in course of the investigation.
Learned advocate for the complainant/opposite party No. 2 thus rightly referred decision reported in 2019 (19) SCALE 79, rendered in the case of Dr. Lakshman Vs. The State of Karnataka & Ors., reported in 2019 (14) SCALE 79, wherein it was propounded that mere filing of suit for recovery of money and the complaint filed under Section 138 of the Negotiable Instruments Act, by itself will be no ground to quash the criminal proceedings.
It is very significant to note that the complainant/opposite party neither invoked jurisdiction of civil court for making enforcement of an alleged breach of promise pertaining to the service charges remaining unpaid on the ground of demand of 10% kickback of actual amount claimed in the bill, nor taken recourse to arbitral proceeding for resolving the dispute surfacing over the settlement of accounts with regard to the service charges uptill now.
Institution of the instant criminal case, thus would neither estop the complainant/opposite party from taking recourse to the arbitration as per arbitral clause contained in the transport agreement, nor would prevent from filing appropriate civil litigation for the enforcement of the breach of promise of an agreement, subject to the fulfillment of the conditions of law.
The document being relied upon by the complainant may be of useful assistance to make out an alleged case of breach of promise in regard to the transport agreement entered between the parties.
While advocating continuance of the instant proceedings before the court below, learned advocate for the complainant/opposite party submitted that inherent jurisdiction under Section 482 of the High Court though wide enough, but would have to be exercised sparingly, carefully and with caution, the sole object being not to stifle a legitimate prosecution at its initial stage.
Reference was accordingly placed by complainant/opposite party on decisions reported in AIR 2019 SC 847, delivered in the case of Sau. Kamal Shivaji Pokarnekar Vs. State of Maharashtra & Ors. and AIR 2017 SC 724, delivered in the case of Alka Bapu Gund Vs. Prakash Kanhaiyalal Kankaria & Ors., to establish that without requiring the materials collected during the course of investigation to be tested in trial, it would be premature for the court to quash the proceeding.
The settled proposition is that a person should not undergo harassment and litigation in the absence of prima facie case being made out against him. The unwanted harassment, the agony, anxiety of the person unnecessarily charged with criminal offence are matters of strong consideration in a case where prima facie case, complained of, is not made out. As has already discussed that the very ingredients of the offence complained of under Section 420 were found missing in the instant case, so it would be an abuse of the process of court for the continuance of the instant criminal proceedings.
The decisions so referred in this issue, in the given set of facts and circumstances would be without any consequence.
Since in this case the offence of cheating with other offences was alleged to have been committed in consequence of manipulation of computer data of the petitioners' with a view to causing wrongful loss to complainant/opposite party No. 2 without proof of fraudulent or dishonest intention, the commencement of which from beginning the transaction on the part of the petitioners with respect to commercial transaction held between the parties, it would not be justified to go for a trial.
Accordingly, the instant criminal proceeding deserves to be quashed for the decision made above.
The instant criminal prosecution being registered as G.R. Case No. 37 of 2013, of learned A.C.J.M., Asansol thus stands quashed.
The petitioners are accordingly discharged.
The criminal revisional application succeeds, and accordingly disposed of. Urgent certified copy of this order if applied for, be made available to the parties upon compliance with requisite formalities.
(Subhasis Dasgupta, J.)