TMI Blog2017 (11) TMI 1980X X X X Extracts X X X X X X X X Extracts X X X X ..... very of money due on a commercial transaction, the police cannot be transformed into a collection agent by spicing a criminal colour to the complaint. There are no justification to permit the first respondent police to continue with the investigation - petition allowed. - Crl. O.P. Nos. 18099, 19020 of 2016 and Crl. M.P. Nos. 8600, 8946, 9161 of 2016 - - - Dated:- 20-11-2017 - M.S. Ramesh, J. For Appellant: A.L. Somaiyaji, Sr. Counsel for Nithyaesh Vaibhav For Respondents: C. Iyyapparaj, Additional Public Prosecutor ORDER M.S. Ramesh, J. 1. These petitions have been filed by the petitioners challenging the FIR registered in Cr. No. 180 of 2016 dated 13.07.2016 on the file of the first respondent police (in both the petitions) and to quash the same. 2. The case of the prosecution is as follows: The second respondent herein, got acquainted with the petitioners 1 2 herein when they were earlier engaged for an interior design work of her apartment. When she intended to purchase a property for investment purpose, she had approached the petitioners 1 2 herein, along with one Mr. Premsai Chundur/third petitioner herein, who was the director of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the complaint does not disclose the basic ingredients of the offence and in the absence of any criminal acts, the FIR needs to be quashed. In support of his submissions, the learned Senior counsel relied on various judgments of the Hon'ble Apex Court as well as this Court. I have referred to these judgments in the later part of my order. 5. Mr. AR.L. Sunderasan, learned Senior counsel on the other hand vehemently opposed the arguments and submitted that the offences of cheating, criminal breach of trust and misappropriation have been clearly made out from the statements made in the complaint. It is the submission of the learned Senior counsel that if at all, the petitioners are of the view that the ingredients of criminal offence has not been made out, it can only be elicited after a fair and impartial investigation and therefore, the present petition filed under Section 482 Cr.P.C., seeking to quash the criminal complaint is pre-mature. By placing strong reliance on the judgment of the Hon'ble Apex Court in Indian Oil Corporation V. NEPC India Ltd., and others in 2006 (4) CTC 60, the learned Senior counsel submitted that the powers under Section 482 Cr.P.C., should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat . 10. The corresponding punishment Section 420 is as follows: 420. Cheating and dishonestly inducing delivery of property: Whoever cheats and thereby dishonestly induces the person deceived 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. In the light of the sections and the judgment of the Hon'ble Apex Court, the second respondent's complaint was examined. 11. According to the second respondent, she and the petitioners 1 2 were friends for the past five years, prior to entering into the construction agreement. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into a contractual terms with the petitioners was done by and between all the parties, with an intention of concluding the terms of the contract. 14. Pursuant to the execution of the construction agreement, it is alleged by the second respondent that the proposed purchase of the property was dropped on the advice of the petitioners herein. I am unable to comprehend as to how this act would again constitute a criminal offence. What needs to be kept in mind at this point of time when the decision was taken to drop the proposed purchase of property, is that, the petitioners 1 2 and the second respondent were good friends and the earlier interior design work was also completed by the second petitioner, admittedly to the satisfaction of the second respondent herein. When the parties were in a cordial relationship, there could have been a possibility that such an advice to drop the deal could have been suggested with a good and bona-fide intention. It is not the case of the second respondent that the purchase of proposed property for construction was advised to be dropped by the petitioners 1 2, was for the purpose of misappropriation of the advance amount. None of the averments i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go into the averments made in the notices exchanged between the parties. 17. It is made clear that I have not expressed any of my views with regard to the validity of the claims and counter claims made therein. What would be relevant for the purpose of this case is that, the liability and the quantum is under dispute. I am unable to appreciate as to how the investigating officer can go into this mixed set of facts over claims and counter claims and file a final report based on the statements of witnesses or other evidences. It would be pertinent to mention here that the petitioners herein had also sent an e-mail on 11.08.2015 to the second respondent informing her that their cheque for ₹ 1.35 Crores would no longer be valid in the light of the earlier cheques issued to her. After the e-mail, the cheque came to be deposited on 22.09.2015 and the notice of dishonour was sent on 05.10.2015. Incidentally, no complaint under Section 138 of the Negotiable Instruments Act was filed. Subsequently, the second respondent had chosen to wait for almost one year and thereafter preferred the present criminal complaint before the first respondent police. These facts needs to be necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liabilities, it may not amount to misappropriation as such. What was required in the construction agreement was that the petitioners had to complete the construction within the agreed time-frame. Hence there is no illegality amounting to a criminal offence from the alleged conduct of the petitioners herein. In the absence of the ingredients of dishonest intention and misappropriation, the offence of misappropriation punishable under Section 403 cannot be made out. 21. Likewise, in order to constitute the offence of criminal breach of trust, one of the ingredients is that the person should be entrusted with the property or any dominion over the property. The contract agreement does not speak about refundable advance. On the other hand, since the amount of ₹ 1.5 Crores has been termed as an advance, it can only be deemed to be an advance paid. While that being so, the payment of this advance amount cannot be said to have been entrusted with the petitioners herein. 22. The other ingredients to constitute an offence of criminal breach of trust is again dishonest intention and misappropriation. I have elaborately discussed that the complaint does not make out the ingredient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant that a representation was made by the respondents to him at or before the time he paid the money to them and that at the time the representation was made, the respondents knew the same to be false. The fact that the respondents subsequently did not abide by their commitment that they would show the appellant to be the proprietor of Drang Transport Corporation and would also render accounts to him in the month of December might create civil liability for them, but this fact would not be sufficient to fasten criminal liability on the respondents for the offence of cheating. b) The same proposition has been reiterated in the following judgments also: i) In Hridaya Ranjan Prasad Verma and others v. State of Bihar and another reported in 2000 (4) SCC 168, the relevant portion of the judgment is as under: 15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying 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. iii) In Indian Oil Corporation v. NEPC India Ltd., and others reported in 2006 (6) SCC 736, wherein it has held as under: 13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged. In G. Sagar Suri v. State of UP [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o relied on the judgment of the Hon'ble Supreme Court reported in (2000) 4 SCC 168 (Hridaya Ranjan Prasad Verma and others v. State of Bihar and another), wherein, the Apex Court is pleased to hold that there is fine distinction between mere breach of contract and the offence of cheating and it depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct and mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time, when the offence is said to have been committed and therefore, it is the intention, which is the gist of the offence and to hold a person guilty of cheating, it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning that is, when he made the promise cannot be presumed. 11. Such observation of the Hon'ble Supreme Court is squarely applicable to the facts of the present case, wherein, there is nothing to show that the petitioners have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not. The aforesaid extract is a portion of the principles laid down by the Hon'ble Supreme Court in various judgments which came to be considered in the judgment cited by the learned Senior counsel for the respondent. When these principles that came to be analysed in the said judgments is read in toto, it may not be of much help to the respondent since these principles also indicates that when the complaint does not prima facie constitute any offence or where it is the clear abuse of process of Court or it is a purely a civil wrong, the same can be quashed. What is applicable to a complaint will also be equally applicable to an FIR. The following paragraphs of the said judgment of the Hon'ble Supreme Court is extracted hereunder: 9. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few - Madhavrao Jiwaji Rao Scindia v. Sambhajirao Chandrojirao Angre [1988 (1) SCC 692], St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not. 24. In the light of the aforesaid judgments, it can only be held that whenever there are sufficient materials to indicate that a complaint manifestly discloses a civil dispute, the inherent powers of this Court under Section 482 Cr.P.C., can be invoked. Likewise, when the complaint prima-facie discloses that the transaction is for recovery of money due on a commercial transaction, the police cannot be transformed into a collection agent by spicing a criminal colour to the complaint. 25. In view of the foregoing reasonings, I do not find any justification to permit the first respondent police to continue with the investigation. In the result, the Criminal Original Petitions stand allowed. Consequently, the investigation in Cr. No. 180 of 2016 dated 13.07.2016 on the file ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
