TMI Blog2020 (2) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... e Code of Criminal Procedure, the High Courts should not assume the jurisdiction and function of the Trial Court and delve deep into the disputed facts. It cannot be denied that the offence of cheating may take place in the course of commercial and civil transaction. Nature of transaction and the intention of the person against whom the allegation is made that he induced the victim/complainant are to be construed to see whether there was alleged commission of the offence of the cheating or not. In the instant case, there are specific averments in the petition of complaint which prima facie indicate that the commission of the alleged offences. As such the contention of the Learned Advocate for the petitioners that the averments of the petition of complaint reveal the factum of loan transaction which is purely civil in nature cannot be accepted at this stage. Territorial Jurisdiction - HELD THAT:- It appears that the petitioners are residing outside the territorial jurisdiction of the Learned Magistrate who issued the process. It is true that at the time of issuance of process under Section 204 of the Code of Criminal Procedure, Learned Magistrate did not make necessary inquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Criminal Procedure, thereafter, the Learned Magistrate opined that there was prima facie case for proceeding against the petitioners for commission of the alleged offences punishable under Sections 420,406 and 120B of the Indian Penal Code. Learned Magistrate, vide order dated July 15, 2013, issued process against the present petitioners to face trial for commission of alleged offences. The petition of complaint has been annexed to the present revisional application. Annexure P-1 at pages 37 to 104 are the copies of the petition of complaint, summons addressed to the present petitioners and the annexed documents. It was alleged in the said petition of complaint that the petitioners and the complainant were known to each other since long and the complainant was in urgent need of financial accommodation. Accused no.1, Sprite Investment Private Limited is a company incorporated under the provisions of Companies Act and accused no.2 and 3 are the Directors of accused no.1 Company. The complainant approached accused no.1 to renew an Inter Corporate Deposit (hereinafter referred to as ICD) of ₹ 5 Crores. Accused no.1 agreed to provide such financial accommodation of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Limited were pledged with the accused company. A letter dated August 20, 2011, was sent to the accused no.1 avowing volatile market condition and requested the accused not to sell any shares and to wait till the market was stabilized. The complainant had caused to be pledged further shares in favour of the accused no.1 again towards its commitment in favour of the accused no.1. The complainant had assured to pledge further shares in favour of the accused no.1 again towards its commitment. On August 20, 2011, the accused without the knowledge and consent, and without prior intimation to the complainant and with ulterior motive, malafide intention invoked the entire pledged shares entrusted with them viz one being 19,50,000 shares of Dunlop India Limited and another being 12,78,000 shares of Dunlop India Limited before expiry of the date for repayment and misappropriated the entire proceeds for its own benefit. It has been alleged in the petition of complaint, the total realized value of such entire pledged shares was of ₹ 9,60,33,000/- (Rupees Nine Crores Sixty Lakhs Thirty Three Thousand) which is much more of the total amount of ICD and interest payable thereon. The accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submissions in favour of quashing of the criminal proceedings pending against the petitioners has submitted that the continuance of the present proceedings against the petitioners would be a gross abuse of the process of the Court. The proceedings pending before the Learned Magistrate have been assailed by the Learned Counsel for the petitioners on various grounds. Learned Counsel for the petitioners has argued that the allegations contained in the petition of complaint do not prima facie disclose the commission of any offence. In support of his contention, he has submitted that admittedly there was a loan transaction between the parties and on the basis of that loan agreement the accused company gave an ICD of ₹ 5 Crores for the period from 06.04.2011 to 11.10.2011 and the rate of interest was fixed at 16.50% per annum. He has further submitted that the said loan agreement was executed on 06.04.2011 and on the same date, the complainant pledged shares of its group companies namely Dunlop India Ltd. to the tune of ₹ 10 Crores as per the loan agreement. It is the specific contention of the Learned Counsel for the petitioners that in the month of August, 2011 the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of his submissions, the Learned Counsel for the petitioners has drawn the attention of the Court to the cause title of the petition of complaint and specifically contended that all the accused reside outside the territorial jurisdiction of Learned Magistrate and the Learned Magistrate issued process against them without complying with the mandatory provisions as contained in Section 202(1) of the Code of Criminal Procedure. In support of his submissions, the Learned Counsel for the petitioners has placed his reliance on the following decisions:- 1) Sunil Kumar Vs. Escorts Yamaha Motors Ltd Ors. reported in (1999)8 SCC 468, (1999) SCC (Cri)1466, 2) Mahindra Mahindra Financial Services Ltd Anr. Vs. Rajiv Dubey reported in (2009)1 SCC 706, (2009) 1 SCC (Cri) 321, 3) Eicher Tractor Ltd Ors. Vs. Harihar Singh Anr. reported in (2008) 16 SCC 763, (2010) 4 SCC (Cri) 425, 4) Sunrise Sports India Pvt. Ltd. Anr. Vs State of West Bengal Anr. reported in (2008) SCC Online Cal 339, (2008) 4 CHN 400, 5) S.K. Alagh Vs State of Uttar Pradesh Ors. reported in (2008) 5 SCC 662, (2008) 2 SCC (Cri) 686, 6) Maharashtra State Electricity Distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Bureau of Investigation Vs. Ravi Shankar Srivastava, IAS and Anr. reported in 2006 (7) SCC 188, 4) Rajesh Bajaj Vs State NCT of Delhi Anr. reported in 1999 (3) SCC 259, 5) Gurudas Purakait Vs State of West Bengal Anr. reported in 2009 SCC Online CAL 2795, 6) Mahavir Prashad Gupta Anr. Vs. State of National Capital Territory of Delhi Anr. reported in 2000 (8) SCC 115, 7) State of M.P. Vs. Awadh Kishore Gupta Ors. reported in 2004(1) SCC 691, 8) State of Karnataka Vs. M.Devendrappa Anr. reported in 2002 (3) SCC 89, 9) Royal Medical Trust Anr. Vs. Union of India Anr. reported in 2017 (16) SCC 605, 10) State of Orissa Vs. Sudhansu Sekhar Misra Ors. reported in AIR 1968 SC 647. The petitioners being the accused company and its Directors have approached under Section 482 of the Code of Criminal Procedure for quashing of the criminal proceedings pending against them. From the materials placed on record as well as from the submissions made by Learned Counsel for the parties, it appears that on the basis of the petition of complaint filed by the complainant Learned Magistrate issued process against the present peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma facie constitute any offence or make out a case against the petitioners/accused then the question of quashment of proceedings comes. In the present case, the complainant narrated the entire situation how the complainant suffered wrongful loss due to the acts of omission and commission on the part of the accused. It was also alleged that the accused had invoked the pledged shares of Dunlop India Limited even before expiry of the due date for repayment and misappropriated the entire sale proceeds of ₹ 9,60,33,000/- (Rupees Nine Crore Sixty Lakh Thirty Three Thousand) which was in far excess of the total amount of ICD of ₹ 5,00,00,000/- (Rupees Five Crores) and interest payable thereon. It was the specific allegation in the petition of complaint that in spite of realization of the entire pledged share to the tune of ₹ 9,60,33,000/-, the accused presented the cheques of ₹ 19,73,219/- lying in their custody for encashment with its banker though the accused realized the entire loan amount along with interest on August 20, 2011. From paragraph 13 of the petition of complaint, it appears that the accused presented the cheques for encashment on 19th October, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complaint against the present petitioners/accused persons does not ipso facto prove or establish that the subsequent proceedings is a counterblast to the earlier proceedings initiated under Section 138 of the Negotiable Instruments Act. Each case has to be judged on its own merit. In the present case, the opposite party/complainant has described how the complainant company was cheated and suffered loss. The essential elements of the alleged offences under Sections 420/406 of the Indian Penal Code are prima facie present in the allegations contained in the petition of complaint. While dealing with an application under Section 482 of the Code of Criminal Procedure, the High Courts should not assume the jurisdiction and function of the Trial Court and delve deep into the disputed facts. A specific plea has been taken on behalf of the petitioners that petitioners no.2 and 3 being the Directors of the company cannot be held responsible for the acts of the company. In support of this contention, Learned Counsel for the petitioners has cited the decisions of S.K. Alagh Vs State of Uttar Pradesh Ors. (Supra), Maharashtra State Electricity Distribution Company Ltd Anr. Vs Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Learned Advocate for the petitioners that the averments of the petition of complaint reveal the factum of loan transaction which is purely civil in nature cannot be accepted at this stage. The last contention of the Learned Counsel for the petitioners is that all the petitioners reside beyond the territorial jurisdiction of the Learned Magistrate and issuance of process by the Learned Magistrate without complying with the provision of Section 202 of the Code of Criminal Procedure is not lawful. In support of the above contention, the Learned Counsel for the petitioners has placed his reliance on the decision of S.S. Binu and Ors Vs State of West Bengal Ors (Supra). In paragraph 100(III) of the said judgment has been held as under:- III. When an order of issuing summon is issued by a learned Magistrate against an accused who is residing at a place beyond the area in which he exercises his jurisdiction without conducting an enquiry under Section 202 Cr.P.C., the matter is required to be remitted to the learned Magistrate concerned for passing fresh orders uninfluenced by the prima facie conclusion reached by the Appellate Court. Again in paragraph 100(I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, it will not amount to the ratio of the judgment. Lord Halsbury in Quinn v. Leathem [Quinn v. Leathem, 1901 AC 495 : (1900-03) All ER Rep 1 (HL)] has ruled: (AC p. 506) every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. 29. A three-Judge Bench in Union of India v. Dhanwanti Devi [Union of India v. Dhanwanti Devi, (1996) 6 SCC 44] , while adverting to the concept of precedent under Article 141 of the Constitution, has opined thus: (SCC pp. 51-52, paras 9-10) 9. Before adverting to and considering whether solatium and interest would be payable under the Act, at the outset, we will dispose of the objection raised by Shri Vaidyanathan that Hari Krishan Khosla case [Union of India v. Hari Krishan Khosla, 1993 Supp (2) SCC 149] is not a binding precedent nor does it operate as ratio decidendi to be followed as a precedent and is per se per incuriam. It is not everything said by a Judge whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and therefore, Judges are to employ an intelligent technique in the use of precedents. Learned Counsel for the petitioners has also cited the decision of State of Orissa Vs. Sudhansu Sekhar Misra Ors. (Supra) and has forcefully contended that the decision of S.S. Binu and Ors Vs State of West Bengal Ors. (Supra) has no manner of application in the present case. I have gone through the provisions of Section 202(1) of the Code of Criminal Procedure as well as the decisions relied on by the Learned Counsel for the parties. It appears that the petitioners are residing outside the territorial jurisdiction of the Learned Magistrate who issued the process. It is true that at the time of issuance of process under Section 204 of the Code of Criminal Procedure, Learned Magistrate did not make necessary inquiry as con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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