TMI Blog2017 (7) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... minal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction. Apart from the fact that the complaint lacks necessary ingredients of Sections 405, 406, 420 read with Section 34 IPC, it is to be noted that the concept of `vicarious liability' is unknown to criminal law. As observed earlier, there is no specific allegation made against any person but the members of the Board and senior executives are joined as the persons looking after the management and business of the appellant-Company. Time limitation - Held that: - The Courts below failed to appreciate an important aspect that the complaint came to be filed in the year 2002 when the alleged disputes pertain to the period from 1993-1995. As rightly pointed out, the Courts below ought to have appreciated that respondent No.1 was trying to circumvent the jurisdiction of the Civil Courts which estopped him from proceeding on account of the law of limitation. The entire analysis of the complaints with reference to the principles enunciated above and the ingredients of Sections 405, 406, 420 read with Section 34 IPC clearly show that there was inordinate delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent No. 1 and submitted a report stating that Respondent No. 1 had carried out certain work using the material purchased from the appellant-Company. It was also pointed out in the report that Respondent No.1 agreed that they would send the material to M/s Bureau Veritas for checking. The report also stated that Respondent No. 1 had not ordered for consumables and no rectification and drawings had been carried out. (d) By letter dated 10.08.1995, the Consultants informed the appellant-Company that there was no progress in the work status for the last 45 days and it was observed that Respondent No. 1 was not interested in executing the assignment. In pursuance of the same, a meeting was held between the officials of both the Companies and the Respondent No. 1 agreed to complete the job by all means by 22.09.1995. Since Respondent No. 1 failed to carry out the work as per the Schedule, the appellant-Company, vide letter dated 13.09.1995 cancelled the order placed and it was made effective from 26.05.1995 i.e., from the date when the order was placed. (e) On 06.05.2000, Respondent No.1 filed a complaint with the Crime Branch, Pune alleging that they had carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing to both the sides. Pursuant to the same, the appellant Company preferred an application dated 16.07.2003 under Section 91 of the Code before the Judicial Magistrate praying that the Assistant Commissioner of Police, Crime Branch, Pune City be directed to produce all the records and proceedings of the complaint dated 06.05.2000. After hearing the respective parties, the Judicial Magistrate, vide order dated 11.08.2003 rejected the said application. (g) Aggrieved by the same, the appellant-Company preferred Criminal Application No.3666 of 2003 before the High Court. The High Court, vide order dated 18.10.2006, issued rule and interim relief by directing the Assistant Commissioner of Police, Crime Branch-II, Pune city to produce the documents within six weeks in the Court of Judicial Magistrate, Pimpri. Pursuant to the said direction, Shri S.B Oahal, Inspector of Police, submitted a reply dated 12.03.2007 stating that the records and proceedings in respect of Crime Register No. 11 of 2000 were destroyed. Pursuant to the same, the Judicial Magistrate, vide order dated 20.08.2007, called for a report under Section 156(3) of the Code from the Respondent No.2. (h) Being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hidden principle of vicarious liability is untenable. Mr. C.S. Vaidyanathan, learned senior counsel for the appellant also reiterated the same contentions. 6) On the other hand, Mr. K.T.S. Tulsi, learned senior counsel for the Respondent No.1/complainant submitted that interference by the court at the stage of passing orders under Section 156 (3) of the Code is not warranted. He further pointed out that the accused has no right to address at this stage and the High Court is right in refusing to entertain the petition filed under Section 482 of the Code. Discussion: 7) In order to understand the rival contentions, it is useful to refer the complaint of the Respondent No. 1 dated 30.05.2002 which was made before the Judicial Magistrate, First Class, Pimpri in Regular Criminal Case No.12 of 2002. Respondent No. 1 herein is the complainant and all the appellants herein have been shown as accused. The said criminal complaint was made for the offences under Sections 420, 406 read with 34 IPC. The complaint proceeds that complainant is the Proprietor of M/s Rini Engineers and M/s Sherly Engineers which are small-scale industries doing fabrication job work for various indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 8,00,000/- for the fabrication and erection of Tower Support Structural etc. for the Mehasana (Gujarat) Project. The accused also represented that they will hire the machinery of the complainant for the said job at the rate of ₹ 2,400/- per day. Believing the same, the complainant purchased brand new machinery of ₹ 5,80,000/- specially for the said project and dispatched the same to Mehasana site. The complainant has completed the said job according to schedule and to the satisfaction of the accused. The complainant also carried out additional work at the site as per the request of the accused. The balance outstanding for the said work is ₹ 2,47,570/- and is still receivable from the accused. The amount towards the hiring charges for the machinery is ₹ 58,32,000/- is yet to be paid by the accused. The accused have not returned the machinery of the complainant till the date and have been using the same for their other jobs also. Thus the accused owe the complainant ₹ 68,79,750/- and the same is not paid till the date. d) The complainant states that he has carried out several fabrication job for the accused and huge amount of ₹ 91,95,054 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived 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. Acts done by several persons in furtherance of common intention.- When a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone. 9) Now, we have to find out whether the ingredients of Sections 405, 420 read with Section 34 have been made out from the complaint and whether the Magistrate is justified in calling for a report under Section 156(3) of the Code from the Crime Branch, Pune. Simultaneously, we have to see whether the High Court is justified in confirming the action of the Magistrate and failed to exercise its power and jurisdiction under Section 482 of the Code. 10) Before considering the validity or acceptability of the complaint and the consequential action taken by the Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of alleged criminal offence under Section 420 IPC. After finding that inasmuch as the police has given a clean chit to Accused Nos. 2-4, this Court concluded that the Magistrate ought not to have taken cognizance of the alleged offence against Accused No.1 and that the complaint has been made to harass him to come to terms by resorting to criminal process. Regarding the delay, this Court pointed out that the complaint was filed on 17.05.1999, after a lapse of 10= years and, therefore, the private complaint filed by respondent No.1 therein is not at all maintainable at this distance of time. It was further observed that it is also not clearly proved that to hold a person guilty of cheating, it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise and finding that the order of the Magistrate and of the High Court requiring Accused No.1/appellant therein to face trial would not be in the interest of justice, set aside the order of the High Court and of the Magistrate. It is clear that in view of inordinate delay and laches on the part of the complainant and of the fact that the complaint does not disclose any ingredients of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght, title and interest in the dental chairs supplied till the entire hire-purchase amount was paid. In accordance with the agreement, the appellant made payments to M/s United Medico Dental Equipments and they delivered the dental chairs to the respondents. The appellant-Company alleged that the respondents were not regular in making the payments and committed default in payment of the instalments and that the bank had dishonoured certain cheques issued by the respondents. The appellant-Company also alleged that on physical verification, certain chairs were found missing from the premises of the respondents and thus they have committed cheating and caused misappropriation of the property belonging to the appellant. The appellant-Company filed a private complaint under Section 200 of the Code before the Chief Metropolitan Magistrate, Bangalore alleging that the respondents had committed offences under Sections 420, 406 and 423 read with Section 120-B IPC. In that proceeding, the appellant-Company moved an application under Section 93 of the Code to issue a search warrant to seize the property in dispute and also to hand over these items to the complainant. The Magistrate took cogni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are both of a civil wrong and a criminal offence, there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. That was a case relating to a trust. There were three trustees including the settlor. A large house constituted part of the trust property. The respondent and the complainant were acting as Secretary and Manager of the Trust and the house owned by the Trust was in the possession of a tenant. The tenant vacated the building and the allegation in the complaint was that two officers of the Trust, in conspiracy with one of the trustees and his wife, created documents showing tenancy in respect of that house in favour of the wife of the trustee. Another trustee filed a criminal complaint alleging that there was commission of the offence under Sections 406, 467 read with Sections 34 and 120-B of the Indian Penal Code. The accused persons challenged the proceedings before the High Court under Section 482 of the Code of Criminal Procedure and the High Court quashed the proceedings in respect of two of the accused persons. It was under those circumstances that this Court observed: (SCC Headnote) Though a case of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception. After finding so, this Court concluded that the learned Judge of the High Court was perfectly justified in quashing the proceedings and disinclined to interfere in such matters dismissed the appeal. 13) In Anil Mahajan Vs. Bhor Industries Ltd. Anr., (2005) 10 SCC 228 , again, a three-Judge Bench of this Court considered the issuance of process by a Magistrate for an offence under Sections 415, 418 and 420 IPC. This Court also analysed the difference between breach of contract and cheating. The appellant therein was the accused in a complaint filed against him by the respondent-Company for offence under Sections 415, 418 and 420 IPC. Based on the averments in the complaint, the Magistrate, by order dated 25.06.2001, issued the process against the accused. The order of the Magistrate notices that the complainant has filed the documents on record in which the accused promised to pay the amount but has not paid with the intent to deceive the complainant and, therefore, the complainant has made out a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that the respondents committed the offence under Section 420 IPC and the case of the appellant is that the respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practising the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any wilful misrepresentation. Even according to the appellant, the parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a prior concert or meeting of minds, and though it is not necessary that the existence of a distinct previous plan must be proved, as such common intention may develop on the spur of the moment, yet the meeting of minds must be prior to the commission of offence suggesting the existence of a prearranged plan. Therefore, in order to attract Section 34 IPC, the complaint must, prima facie, reflect a common prior concert or planning amongst all the accused. After saying so, verifying the complaint, this Court concluded that the complaint does not indicate the existence of any prearranged plan whereby Appellant No. 2 had, in collusion with the other accused decided to fabricate the document in question and adduce it in evidence before the Arbitral Tribunal. This Court further concluded that there is not even a whisper in the complaint indicating any participation of Appellant No.2 in the acts constituting the offence, and that being the case, concluded that Section 34 IPC is not attracted. After saying so, allowed the appeal in relation to Appellant No.2 and quashed the order of the Magistrate taking cognizance against appellant No.2 in Complaint No. 476 of 2004. 16) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no such dishonest intention can be seen or even inferred inasmuch as the entire dispute pertains to contractual obligations between the parties. Since the very ingredients of Section 420 are not attracted, the prosecution initiated is wholly untenable. Even if we admit that allegations in the complaint do make out a dispute, still it ought to be considered that the same is merely a breach of contract and the same cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction. Inasmuch as there are number of documents to show that appellant-Company had acted in terms of the agreement and in a bona fide manner, it cannot be said that the act of the appellant-Company amounts to a breach of contract. 20) Though Respondent No.1 has roped all the appellants in a criminal case without their specific role or participation in the alleged offence with the sole purpose of settling his dispute with appellant-Company by initiating the criminal prosecution, it is pointed out that appellant Nos. 2 to 8 are the Ex-Chairperson, Ex-Directors and Senior Managerial Personnel of appellant No.1-Company, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee complaints which were concluded after exhaustive enquiry with the respective police authorities. The first complaint was on 06.05.2000 being Javak No.974/2000 with the Crime Branch-II, Pune which registered the same in its Criminal Register No.11/2000. Pursuant thereto, the appellants were summoned and exhaustive enquiry was conducted by the Crime Branch-II and after recording the statements and perusal of documents and after undertaking an extensive interrogation, the Crime Branch-II closed the case. The said closure of the case was informed to respondent No.1 by the police authorities by their letter dated 28.07.2000. 25) The materials placed further show that notwithstanding the complaint dated 06.05.2000 which was closed by the Crime Branch-II, another complaint on the same facts, was filed by respondent No.1 at the Bhosari Police Station being Javak No. 3142/2001. It is pointed out that the appellant and its officers attended the Bhosari Police Station, thereafter the said complaint was also closed after the facts were placed before the officers of the Bhosari Police Station. 26) Apart from these complaints, respondent No.1 once again filed a third complaint at the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
