TMI Blog2018 (11) TMI 1846X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant No. 1 and there was therefore no question of Appellants having been entrusted with their own property, and that too by the complainant, who had merely entered into a development agreement in respect of the property. Whether an offence Under Section 406 made out? - HELD THAT:- It is not possible to hold that the amount of Rs. One crore which was paid along with the development agreement as a deposit can be said to have been entrustment of property which has been dishonestly converted to his own use or disposed of in violation of any direction of law or contract by the Appellant. The Appellants have not used the amount nor misappropriated it contrary to any direction of law or contract which prescribes how the amount has to be dealt with - there is a security deposit of Rs. One Crore and that he has misappropriated the dispute between the two parties can only be a civil dispute. There are no no hesitation in quashing the FIR and the charge sheet filed against the Appellants - appeal allowed. - Criminal Appeal No. 1395 of 2018 (Arising out of SLP (Crl.) No. 3730 of 2016) - - - Dated:- 15-11-2018 - S.A. BOBDE AND L. NAGESWARA RAO, JJ. For the Appellant : Mahes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es agreed to develop the said property by constructing a high-rise building comprising of fats. Respondent No. 2 paid a sum of Rs. One crore as contemplated by Clause 38 of the agreement. The agreement could not be fulfilled as the new building Regulations which were introduced prohibited the construction of high-rise building in the Lutyens Bungalow Zone, where the property is situated. (See New Delhi Municipal Council v. Tanvi Trading and Credit Private Limited) 2008 (8) SCC 765. 5. Thereafter, on 14.03.2011, the Appellant No. 1 wrote a letter stating that he does not wish to develop the property. The Appellants did not take any further action neither did they return the amount advanced by the Respondent No. 2. 6. Apparently, since the Appellant had declined all alternate offers made by the complainant but ostensibly on the ground that this security amount of Rs. One crore had not been refunded, Respondent No. 2 on 19.11.2011 filed a Criminal Complaint before the SHO, Police Station Barakhamba Road, New Delhi complaining of offences Under Section 406 and 420 followed by a complaint dated 10.09.2012 with the Additional Commissioner of Police. On refusal of police authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has filed a report Under Section 173 of the Code of Criminal Procedure in the Court of Metropolitan Magistrate, Patiala House Court, Delhi. Since, the police have now submitted a charge sheet, Appellants have additionally filed amendment application seeking to incorporate prayer for quashing of charge sheet in addition to prayer for quashing of the FIR. Contentions 10. Shri Mahesh Jethmalani, Senior Counsel appearing for the Appellants submitted that the transactions in the present case which are set to constitute the offence Under Section 406 cannot under any circumstances be said to constitute an offence under that section. Assuming that the Respondent No. 2 have a grievance about the alleged wrongful retention of the amount of Rs. One crore, the dispute could at best be a civil dispute. 11. The learned Counsel further submitted that the amount of Rs. One crore advanced to the Appellants was liable to be refunded under Clause 30 (b) which is as follows: Developer handing over possession of the areas of the Owner's share to the Owner in the said Group Housing Complex. Since this contingency did not arise the amount has not been refunded. In addition, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 482 of Code of Criminal Procedure Section 482 of Code of Criminal Procedure reads as follows: 482. Saving of inherent power of the High Court.-Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. 17. There is nothing in the words of this Section which restricts the exercise of the power of the Court to prevent the abuse of process of court or miscarriage of justice only to the stage of the FIR. It is settled principle of law that the High court can exercise jurisdiction Under Section 482 of Code of Criminal Procedure even when the discharge application is pending with the trial court G. Sagar Suri and Anr. v. State of U.P and Ors. (2000) 2 SCC 636 (Para 7). Umesh Kumar v. State of Andhra Pradesh and Anr. (2013) 10 SCC 591 (Para 20). Indeed, it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced, and the allegations have materialized into a charge sheet. On the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), or not] who deducts the employee's contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.] [Explanation 2.--A person, being an employer, who deducts the employees' contribution from the wages payable to the employee for credit to the Employees' State Insurance Fund held and administered by the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent No. 2 has not demanded the return of the amount at any point of time. In fact, it is the specific contention of the Respondent No. 2 that he has not demanded the amount because the agreement is still in subsistence. We do not see how it can be contended by any stretch of imagination that the Appellants have misappropriated the amount or dishonestly used the amount contrary to any law or contract. In any case, we find that the dispute has the contours of a dispute of civil nature and does not constitute a criminal offence. 24. Having given our anxious consideration, we are of the view that assuming that there is a security deposit of Rs. One Crore and that he has misappropriated the dispute between the two parties can only be a civil dispute. 25. In Indian Oil Corporation v. NEPC India Ltd. and Ors. 2006 (6) SCC 736, this Court observed as follows: 13. ... Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged.... The Court noticed a growing trend in business circles to convert purely civil dispute into criminal cases. We find it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the Accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the Accused and with a view to spite him due to private and personal grudge. 27. We are of the opinion that the present case falls under the 1st, 3rd and 5th category set out in the para 102 of the judgment in the case of Bhajan Lal (supra). In such a situation, the High Court erred in dismissing the petition of the Appellants filed Under Section 482 of Code of Criminal Procedure This was a fit case for the High Court to exercise its inherent power Under Section 482 of Code of Criminal Procedure to quash the FIR. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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