Criminal P.C. 1973 - S.482 - Penal Code, 1860 - Ss. 420, 406, 506, 294 & 34 - Criminal Proceedings cannot be resorted to settle the civil claims.
SB :- Hon'ble Shri Justice G. S. Ahluwalia
(Passed on 16/07/2018)
MCRC 10333/2016
Jagdish Valecha vs. State of MP & Others
Shri Yash Sharma,
counsel for the applicant. Shri Pramod Pachauri, Public Prosecutor for the respondent Nos. 1 to
4. Shri Atul Sharma, counsel for the respondent No.5/complainant.
O R D E R
This petition under Section 482 of CrPC has been filed for quashing
the FIR in Crime No.154/2016 registered at Police Station Maharajpura, District
Gwalior for offence under Sections 420, 406, 506, 294 and 34 of IPC.
(2) The undisputed fact is that the
applicant is one of the Directors of the Company i.e. M/s. Valecha Engineering
Limited [in short ''VEL''], registered under the Indian Companies Act listed in
Bombay Stock Exchange and is in the business of construction and infrastructure.
(3) The necessary facts for the disposal
of the present petition, in short, are that the complainant/respondent No.5
Vinod Sharma lodged a FIR against the applicant and one Dinesh Valecha on the allegation
that an offer was given by the applicant and another coaccused for purchase of
''crushed stone aggregate'' in large quantity and it was assured by them that
''crushed stone aggregate'' may be supplied on regular basis and the payment shall
be made regularly. Relying on the assurance given by the applicant and the
co-accused, the complainant supplied ''crushed stone aggregate'' on regular
basis. The receipts were also issued by the applicant and the co-accused. The
''crushed stone aggregate'' was delivered to the Company at the site. It is
further alleged that the Company has made payment of certain materials, but did
not make payment of Rs.1,09,95,257/- and in spite of repeated requests, the
applicant and the co-accused were always avoiding the payment and when instead
of repeated requests the applicant and the co-accused did not make payment,
therefore, the complainant/respondent No.5 went to Mumbai on 15/04/2015 and met
with the applicant and the co-accused at their registered address. In a meeting
between the applicant and the co-accused Dinesh Valecha, the co-accused
accepted his liability to make the payment and assured that half of the
remaining outstanding amount shall be paid by 12/05/2015 and the remaining
amount shall be paid by 30/05/2015 and accordingly, a written document was
executed. However, the applicant and the co-accused did not make the payment as
assured by them and, therefore, the respondent No.5/complainant went to the
registered Office of the Company at Mumbai on 13/07/2015 and then, he came to
know that the applicant and the co-accused have also not made payment of the
amount of the material purchased by them to different various persons.
Therefore, on 13/07/2015, the respondent No.5 made a complaint at Police
Station Amboli, Andheri, Mumbai and the co-accused was summoned in the Police Station
where co-accused Dinesh Valecha gave in writing accepting his liability and an
assurance was given that the outstanding amount shall be paid within four
months. However, in spite of that written assurance, the applicant and the
co-accused have not made the payment of outstanding amount. The complainant/respondent
No.5 has come to know that the applicant and the co-accused have also cheated
the other suppliers and accordingly, the FIRs have been registered against the
applicant and the co-accused, which are still pending. The other persons have
also filed criminal complaints under Section 138 of the Negotiable Instruments
Act, which are also pending. It was also mentioned that the intention of the
Directors of M/s.VEL was to cheat the complainant from the very inception of
transaction and their intention was not to make the payment for the materials, which
were supplied. If respondent No.5/ complainant had any inclination about the
intention of the applicant and the coaccused, then he would not have entered
into such type of transaction. Now, the applicant and the co-accused have
refused to make the payment and on making the demand, they are abusing the
complainant and they are also extending a threat to the life of the
complainant/respondent No.5, as a result of which the complainant is deeply
frightened and the applicant and coaccused have misappropriated the materials
supplied by the complainant. On this report, the police has registered Crime No.154/2016
at Police Station Maharajpura, District Gwalior for offence under Sections 420,
406, 506, 294 and 34 of IPC.
(4) Challenging the FIR lodged by the
complainant, it is contended by the counsel for the applicant that the
investigation is still in progress and no charge sheet has been filed. It is
further submitted that the Company i.e. M/s.VEL had got the contract/work of
construction of four-way lane between Itawah- Mainpuri(UP) and accordingly, the
Company entered into a contract with the complainant respondent No.5, for the
supply of ''crushed stone aggregate'' to work site at Four- Laning of Etawah- Mainpuri-
Kurawali Road Project. It is further submitted that accordingly, an agreement
was executed between the Company and the respondent No.5 on 20/06/2014. As per
the contract, the payment was to be made on monthly basis. Clause(D) of the agreement
provides for the ascertainment of quality and quantity. Clause(D) of the agreement reads as under:-
''D). Quality and
quantity.
1) The payment will be made as actual measurement taken by out
site supervisor/weight bridge operator (VEL).''
Clause G contained provision
for ''Termination of the Work Order and reads as under:-
''G) Termination of
the Work Order:- 1) The company reserves the right to cancel or terminate the
order any time material supplied do not conform the specification, delay in
supply, or on account of whatsoever without any notice and such case no claim
will be entertained.''
(5) It is further submitted that as per the allegations,
the complainant had supplied the materials worth Rs.2,99,30,867/- to the
Company out of which an amount of Rs.1,09,95,257/- has not been paid by the
Company and is still outstanding against the Company. It was also submitted
that the complainant/respondent No.5 had supplied certain materials of inferior
quality and also supplied insufficient quantity as a result of which there was
a delay in supply of materials and as a result of which, substantial loss has
been caused to the complainant and accordingly, on 31/01/2015, the Company
issued a notice to the complainant about the supply of inferior
quality/substandard materials. It was also submitted by the counsel for the
applicant that it is a growing tendency in business circles to convert the
civil disputes into criminal cases with an obvious impression that the civil
remedies are time-consuming remedies and do not adequately protect the interest
of creditors/lenders. It was further submitted that now, an impression has
developed in the mind of the complainant that in case, if a person somehow
succeeds in entangling in a criminal prosecution, then there is a possibility
of imminent settlement. It is further submitted that it is well settled
principle of law that the civil dispute should not be given the colour of
criminal dispute. To buttress his contention, the counsel for the applicant has
relied upon the judgments passed by the Supreme Court in the cases of Uma Shankar Gopalika vs. State of Bihar and Ors. reported in (2005) 10 SCC 336, B. Suresh Yadav vs. Sharifa Bee
and Ors. reported in (2007) 13 SCC 107, Paramjeet Batra vs. State of Uttarakhand and Ors. reported in (2013) 11 SCC 673, International Advanced Research Centre for
Power Metallurgy and New Materials (ARCI) and Other vs. Nimra Cerglass Technics
Private Limited and Another, reported in (2016)
1 SCC 348 and the
judgment passed by this Court in the case of Shyam Sunder Banka and Others vs. State of MP and Others, reported in 1983 MPLJ 869. It is further submitted that it is well-established principle of
law that when the complaint discloses the breach of commercial transaction, the
police before registering the FIR, must conduct a preliminary enquiry. To buttress
his contention, the counsel for the applicant has relied upon the judgment
passed by the Supreme Court in the case of Lalita Kumari vs. Government of Uttar Pradesh and Ors, reported in (2014) 2 SCC 1. It is further submitted that in order to attract the provisions
of Section 420 of IPC, there has to be the dishonest intention at the very
inception of contract/transaction and mere subsequent failure to fulfil the
promise or commercial issues would not bring the offence within the purview of
Section 420 of IPC. In order to buttress his contention, the counsel for the applicant
has relied upon the judgment passed by the Delhi High Court in the case of Wolfgang
Reim and Others vs. State and Anr. [Criminal MC No. 1942 of 2004 decided on 2nd July, 2012]. The counsel for the applicant has also placed reliance on the
judgment passed by the Supreme Court in the case of State of Haryana and Others vs. Ch. Bhajan Lal and
Others, reported in AIR 1992 SC 604.
(6) Per contra, it is submitted by the counsel for the respondent No.5 that on the
similar allegations various different persons have lodged the FIR against the
applicant and other co-accused persons, on the allegation that although the
applicant and other co-accused persons had received the supply of ''crushed
stone aggregate'' but they did not make payment of the same and accordingly,
various cases for offence under Sections 420, 406, 506, 34 of IPC have been
registered against the applicant and other persons. The present applicant had
challenged the FIR in Crime No.98/2016 before this Court by filing a petition
under Section 482 of CrPC which was registered as MCRC 8307/2016. This Court by a detailed order dated 27/04/2017 passed in MCRC 8307
of 2016, has dismissed the petition filed by the applicant under Section 482 of
CrPC and all the arguments, which have been advanced by the applicant, were
taken into consideration including the nature of offence [whether it is civil
or criminal] as well as the requirement of holding the preliminary enquiry,
etc. as well as the fact that whether an offence under Section 420 of IPC is
made out or not. It is further submitted that it is well established principle
of law that merely because the dispute may involve civil transaction, would not
ipso facto mean that the dispute is
predominantly of civil in nature and the prosecution cannot be quashed merely
on the said ground.
(7) To buttress his contention, the
counsel for the applicant has relied upon the judgments passed by the Supreme
Court in the case of Vijayander
Kumar and Ors. vs. State of Rajasthan and Others reported in 2014(1) Crimes 240(SC), Mosiruddin Munshi vs. Md.
Siraj and Another reported
in 2014(3) Crimes 213(SC), Arun
Bhandari vs. State of Uttar Pradesh and Others, reported in (2013) 2 SCC 801 and Ganga
Dhar Kalita vs. State of Assam and Others reported in 2015(2) Crimes 333(SC). It is further submitted that while
exercising the power under Section 482 of CrPC, the High is not supposed to
embark upon the enquiry whether the allegation in the FIR/charge-sheet is reliable
or not and thereupon to give definite finding about the truthfulness or
veracity of the allegations. The High Court can interfere with the prosecution
or investigation only when the allegations made in the FIR and the charge sheet
are taken on their face value and accepted in its entirety, even then no prima facie
offence would be made against the applicant. The counsel for the respondent
No.5 has relied upon the judgment passed by the Supreme Court in the case of Central Bureau of Investigation vs. K.M.Sharan reported in (2008) 2 SCC (Cri) 430.
(8) Heard the learned counsel for the
parties.
(9) Before considering the submissions
made by the Counsel for the parties, it would be appropriate to consider the
scope of powers under Section 482 of Cr.P.C.
(10) The Supreme Court in the case of K.M. Sharan (supra) has held as under:-
''24.
In Bhajan Lal case (supra), this court in the backdrop of interpretation of
various relevant provisions of the Cr.P.C. under Chapter XIV and of the principles
of law enunciated by this court in a series of decisions relating to the
exercise of the extraordinary power under Article 226 of the Constitution of
India or the inherent powers under Section 482 of CrPC gave the following
categories of cases by way of illustration wherein such power could be
exercised either to prevent abuse of the process of the court or otherwise to
secure the ends of justice. This court in the said judgment made it clear that it may not be
possible to lay down any precise, clearly defined and sufficiently channelised
and inflexible guidelines or rigid formulae and to give an exhaustive list to
myriad kinds of cases wherein such power should be exercised. According to this
judgment, the High Court would be justified in exercising its power in cases of
following categories:-
"102. (1) Where the allegations made in the first information
report or the complaint, even if they are taken at their face value and
accepted in their entirety do not prima facie constitute any offence or make
out a case against the accused.
(2) Where the allegations in the first
information report and other materials, if any, accompanying the FIR do not
disclose a cognizable offence, justifying an investigation by police officers
under Section 156(1) of the Code except under an order of a Magistrate within
the purview of Section 155 (2) of the Code.
(3) Where the uncontroverted allegations
made in the FIR or complaint and the evidence collected in support of the same
do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do
not constitute a cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer without an order of
a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the
allegations made in the FIR or complaint are so absurd and inherently
improbable on the 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 Codeor 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."
25. This
court in Janata Dal v. H. S. Chowdhary & Ors. (1992) 4 SCC 305 observed
thus:
"132. The criminal courts are clothed with inherent power to make
such orders as may be necessary for the ends of justice. Such power though unrestricted
and undefined should not be capriciously or arbitrarily exercised, but should
be exercised in appropriate cases, ex debito justitiae to do real and substantial
justice for the administration of which alone the courts exist. The powers
possessed by the High Court under section 482 of the Code are very wide and the
very plentitude of the power requires great caution in its exercise. Courts
must be careful to see that its decision in exercise of this power is based on
sound principles."
26. This court in Roy V.D. v. State of
Kerala (2000) 8 SCC 590 observed thus:-
"18. It is well settled that the
power under Section 482Cr.P.C has to be exercised by the High Court, inter
alia, to prevent abuse of the process of any court or otherwise to secure the
ends of justice. Where criminal proceedings are initiated based on illicit material
collected on search and arrest which are per se illegal and vitiate not only a
conviction and sentence based on such material but also the trial itself, the
proceedings cannot be allowed to go on as it cannot but amount to abuse of the
process of the court; in such a case not quashing the proceedings would
perpetuate abuse of the process of the court resulting in great hardship and injustice
to the accused. In our opinion, exercise of power under section 482Cr.P.C.to
quash proceedings in a case like the one on hand, would indeed secure the ends
of justice."
27. This court in Zandu Pharmaceutical
Works Ltd. & Orss. vs. Mohd. Sharaful Haque & Anr. (2005) 1 SCC 122
observed thus:-
''8.......it would be an abuse of process of the court to allow
any action which would result in injustice and prevent promotion of justice. In
exercise of the powers, court would be justified to quash any proceeding if it
finds that initiation/continuance of it amounts to abuse of the process of
court or quashing of these proceedings would otherwise serve the ends of
justice.When no offence is disclosed by the complaint, the court may examine
the question of fact. When a complaint is sought to be quashed, it is
permissible to look into the materials to assess what the complainant has alleged
and whether any offence is made out even if the allegations are accepted in
toto."
28. In Indian Oil Corporation vs. NEPC
India Ltd. & Ors. (2006) 6 SCC 736, this court again cautioned about a
growing tendency in business circles to convert purely civil disputes into
criminal cases. The court noticed the prevalent impression that civil law remedies
are time consuming and do not adequately protect the interests of
lenders/creditors. The court further observed that "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."
29. This Court in the case of Central
Bureau of Investigation v. Ravi Shankar Srivastava, IAS & Anr. (2006) 7 SCC 188 has reiterated the legal position. The Court observed that the powers possessed by the High Court
under Section 482 of CrPC are very wide and the very plenitude of the power
requires great caution in its exercise. The Court must be careful to see that
the decision in exercise of this power is based on sound principles. The
inherent power should not be exercised to stifle a legitimate prosecution.
30. Now,
the crucial question which arises for our adjudication is whether the case of
the respondent falls under any of the categories as enumerated in the
celebrated case of Bhajan Lal (supra). On the basis of the material available
on record and the allegations levelled against the respondent in the FIR and
the charge-sheet, it cannot be concluded that no ingredients of offence under
section 120B read with section 193 IPC are present in the instant case.
31. At
this stage, the High Court in its jurisdiction under section 482 Cr.P.C. was
not called upon to embark upon the enquiry whether the allegations in the FIR
and the charge-sheet were reliable or not and thereupon to render definite
finding about truthfulness or veracity of the allegations. These are matters
which can be examined only by the concerned court after the entire material is
produced before it on a thorough investigation and evidence is led.
32. In
the impugned judgment, according to the settled legal position, the High Court
ought to have critically examined whether the allegations made in the First
Information Report and the charge-sheet taken on their face value and accepted
in their entirety would prima facie constitute an offence for making out a case
against the accused (respondent herein).''
The Supreme Court in the case of Padal Venkata Rama Reddy Vs. Koveuri Satyanarayana Reddy reported in (2011) 12 SCC 437 has held as under:
“8. Section
482 of the Code deals with inherent power of the High Court. It is under
Chapter 37 of the Code titled “Miscellaneous” which reads as under:
“482. Saving of inherent powers of 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.” This section* was added by the Code of Criminal Procedure
(Amendment) Act of 1923 as the High Courts were unable to render complete
justice even if in a given case the illegality was palpable and apparent. This
section envisages three circumstances in which the inherent jurisdiction may be
exercised, namely:
1. to give effect to any order under
CrPC,
2. to prevent abuse of the process of
any court,
3. to secure the ends of justice.
9. In
R.P. Kapur v. State of Punjab AIR 1960 SC 866 this Court laid down the following principles:
(i) Where institution/continuance of criminal proceedings against an
accused may amount to the abuse of the process of the court or that the quashing
of the impugned proceedings would secure the ends of justice;
(ii) where it manifestly appears that there is a legal bar against
the institution or continuance of the said proceeding e.g. want of sanction;
(iii) where the allegations in the first information report or the
complaint taken at their face value and accepted in their entirety, do not
constitute the offence alleged; and
(iv)
where the allegations constitute an offence alleged but there is either no
legal evidence adduced or evidence adduced clearly or manifestly fails to prove
the charge.
10. In
State of Karnataka v. L. Muniswamy (1977) 2 SCC 699 this Court has held as under: (SCC p. 703, para 7)
“7. … In the exercise of this wholesome
power, the High Court is entitled to quash a proceeding if it comes to the
conclusion that allowing the proceeding to continue would be an abuse of the process
of the Court or that the ends of justice require that the proceeding ought to
be quashed. The saving of the High Court’s inherent powers, both in civil and
criminal matters, is designed to achieve a salutary public purpose which is
that a court proceeding ought not to be permitted to degenerate into a weapon
of harassment or persecution. In a criminal case, the veiled object behind a
lame prosecution, the very nature of the material on which the structure of the
prosecution rests and the like would justify the High Court in quashing the
proceeding in the interest of justice. The ends of justice are higher than the ends of mere law though
justice has got to be administered according to laws made by the legislature.
The compelling necessity for making these observations is that without a proper
realisation of the object and purpose of the provision which seeks to save the inherent
powers of the High Court to do justice between the State and its subjects, it
would be impossible to appreciate the width and contours of that salient
jurisdiction.”
11. Though the High Court has inherent
power and its scope is very wide, it is a rule of practice that it will only be
exercised in exceptional cases. Section 482 is a sort of reminder to the High
Courts that they are not merely courts of law, but also courts of justice and
possess inherent powers to remove injustice. The inherent power of the High
Court is an inalienable attribute of the position it holds with respect to the
courts subordinate to it. These powers are partly administrative and partly
judicial. They are necessarily judicial when they are exercisable with
respect to a judicial order and for securing the ends of justice. The
jurisdiction under Section 482 is discretionary, therefore the High Court may
refuse to exercise the discretion if a party has not approached it with clean
hands.
12. In
a proceeding under Section 482, the High Court will not enter into any finding
of facts, particularly, when the matter has been concluded by concurrent
finding of facts of the two courts below. Inherent powers under Section 482 include powers to quash FIR,
investigation or any criminal proceedings pending before the High Court or any court
subordinate to it and are of wide magnitude and ramification. Such powers can
be exercised to secure ends of justice, prevent abuse of the process of any
court and to make such orders as may be necessary to give effect to any order
under this Code, depending upon the facts of a given case. The Court can always
take note of any miscarriage of justice and prevent the same by exercising its powers
under Section 482 of the Code. These powers are neither limited nor curtailed
by any other provisions of the Code. However, such inherent powers are to be
exercised sparingly, carefully and with caution.
13. It
is well settled that the inherent powers under Section 482 can be exercised
only when no other remedy is available to the litigant and not in a situation
where a specific remedy is provided by the statute. It cannot be used if it is
inconsistent with specific provisions provided under the Code (vide Kavita v. State
2000 Cri LJ 315 and
B.S. Joshi v.
State of Haryana (2003) 4 SCC 675). If an effective alternative remedy
is available, the High Court will not exercise its powers under this section,
specially when the applicant may not have availed of that remedy.
14. The
inherent power is to be exercised ex debito justitiae, to do real and substantial justice, for administration of which
alone courts exist. Wherever any attempt is made to abuse that authority so as
to produce injustice, the Court has power to prevent the abuse. It is, however,
not necessary that at this stage there should be a meticulous analysis of the case
before the trial to find out whether the case ends in conviction or acquittal.
(Vide Dhanalakshmi v. R. Prasanna Kumar 1990 Supp SCC 686; Ganesh Narayan Hegde v. S.
Bangarappa (1995) 4 SCC 41 and Zandu
Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque (2005) 1 SCC 122.)
15.
It is neither feasible nor practicable
to lay down exhaustively as to on what ground the jurisdiction of the High
Court under Section 482 of the Code should be exercised. But some attempts have
been made in that behalf in some of the decisions of this Court vide State of Haryana v. Bhajan
Lal 1992 Supp (1) SCC 335, Janata
Dal v. H.S. Chowdhary (1992) 4 SCC 305, Rupan
Deol Bajaj v.
Kanwar Pal Singh Gill (1995) 6
SCC 194 and Indian Oil Corpn. v. NEPC India Ltd. (2006) 6 SCC 736.
* * * * * *
18.
In State of Orissa v. Saroj
Kumar Sahoo (2005) 13 SCC 540 it has been held that probabilities of the prosecution version
cannot be analysed at this stage.
Likewise, the allegations of mala fides of the informant are of
secondary importance. The relevant passage reads thus: (SCC p. 550, para 11)
“11. … It would not be proper for the High Court to analyse the case
of the complainant in the light of all probabilities in order to determine
whether a conviction would be sustainable and on such premises arrive at a conclusion
that the proceedings are to be quashed. It would be erroneous to assess the
material before it and conclude that the complaint cannot be proceeded with.”
19. In Madhavrao
Jiwajirao Scindia v.
Sambhajirao Chandrojirao Angre
(1988) 1 SCC 692 this
Court held as under: (SCC p. 695, para 7)
“7.
The legal position is well settled that when a prosecution at the initial stage
is asked to be quashed, the test to be applied by the court is as to whether
the uncontroverted allegations as made prima facie establish the offence. It is
also for the court to take into consideration any special features which appear
in a particular case to consider whether it is expedient and in the interest of
justice to permit a prosecution to continue. This is so on the basis that the
court cannot be utilised for any oblique purpose and where in the opinion of
the court chances of an ultimate conviction is bleak and, therefore, no useful
purpose is likely to be served by allowing a criminal prosecution to continue,
the court may while taking into consideration the special facts of a case also
quash the proceeding even though it may be at a preliminary stage.”
20. This Court, while reconsidering the judgment in Madhavrao Jiwajirao Scindia (1988) 1 SCC 692, has consistently observed that
where matters are also of civil nature i.e. matrimonial, family disputes, etc.,
the Court may consider “special facts”, “special features” and quash the
criminal proceedings to encourage genuine settlement of disputes between the
parties.
21. The
said judgment in Madhavrao
case (1988) 1 SCC 692 was reconsidered and explained by this Court in State of Bihar v. P.P.
Sharma 1992 Supp (1) SCC 222 which reads as under: (SCC p. 271, para 70) “70. Madhavrao Jiwajirao Scindia v.
Sambhajirao Chandrojirao Angre (1988) 1 SCC 692 also does not help the respondents.
In that case the allegations constituted civil wrong as the trustees created
tenancy of trust property to favour the third party. A private complaint was
laid for the offence under Section 467 read with Section 34 and Section 120-B
IPC which the High Court refused to quash under Section 482. This Court allowed
the appeal and quashed the proceedings on the ground that even on its own
contentions in the complaint, it would be a case of breach of trust or a civil
wrong but no ingredients of criminal offence were made out.
On those facts and also due to the relation of the settler, the
mother, the appellant and his wife, as the son and daughter-in-law, this Court interfered
and allowed the appeal. … Therefore, the ratio therein is of no assistance to
the facts in this case. It cannot be considered that this Court laid down as a
proposition of law that in every case the court would examine at the preliminary
stage whether there would be ultimate chances of conviction on the basis of allegation
and exercise of the power under Section 482 or Article 226 to quash the proceedings
or the charge-sheet.”
22. Thus, the judgment in Madhavrao Jiwajirao Scindia (1988) 1 SCC 692 does not lay down a law of universal
application. Even as per the law laid down therein, the Court cannot examine
the facts/evidence, etc. in every case to find out as to whether there is
sufficient material on the basis of which the case would end in conviction. The
ratio of Madhavrao
Jiwajirao Scindia (1988) 1 SCC 692 is applicable in cases where the Court finds that the dispute
involved therein is predominantly civil in nature and that the parties should
be given a chance to reach a compromise e.g. matrimonial, property and family
disputes, etc. etc. The superior courts have been given inherent powers to
prevent the abuse of the process of court; where the Court finds that the ends
of justice may be met by quashing the proceedings, it may quash the
proceedings, as the end of achieving justice is higher than the end of merely
following the law. It is not necessary for the Court to hold a full-fledged
inquiry or to appreciate the evidence, collected by the investigating agency to
find out whether the case would end in conviction or acquittal”.
The Supreme Court in the case of State of Orissa v. Ujjal Kumar Burdhan reported in (2012) 4 SCC 547 has held as under :
“8. It
is true that the inherent powers vested in the High Court under Section 482 of
the Code are very wide. Nevertheless, inherent powers do not confer arbitrary
jurisdiction on the High Court to act according to whims or caprice. This
extraordinary power has to be exercised sparingly with circumspection and as
far as possible, for extraordinary cases, where allegations in the complaint or
the first information report, taken on its face value and accepted in their
entirety do not constitute the offence alleged. It needs little emphasis that
unless a case of gross abuse of power is made out against those in charge of
investigation, the High Court should be loath to interfere at the early/premature
stage of investigation.
9. In
State of W.B. v. Swapan Kumar Guha, emphasising that the Court will not normally interfere with an
investigation and will permit the inquiry into the alleged offence, to be
completed, this Court highlighted the necessity of a proper investigation
observing thus: (SCC pp. 597-98, paras 65-66)
“65. … An
investigation is carried on for the purpose of gathering necessary materials
for establishing and proving an offence which is disclosed. When an offence is
disclosed, a proper investigation in the interests of justice becomes necessary
to collect materials for establishing the offence, and for bringing the
offender to book. In the absence of a proper investigation in a case where an
offence is disclosed, the offender may succeed in escaping from the
consequences and the offender may go unpunished to the detriment of the cause
of justice and the society at large. Justice requires that a person who commits an offence has to be
brought to book and must be punished for the same. If the court interferes with the proper
investigation in a case where an offence has been disclosed, the offence will go
unpunished to the serious detriment of the welfare of the society and the cause
of the justice suffers. It is on the basis of this principle that the court
normally does not interfere with the investigation of a case where an offence
has been disclosed.
…
66. Whether an offence has been
disclosed or not must necessarily depend on the facts and circumstances of each
particular case. … If
on a consideration of the relevant materials, the court is satisfied that an
offence is disclosed, the court will normally not interfere with the
investigation into the offence and will generally allow the investigation into the
offence to be completed for collecting materials for proving the offence.” (emphasis supplied)
10. On a similar issue under consideration, in Jeffrey J. Diermeier v. State of W.B.4, while
explaining the scope and ambit of the inherent powers of the High Court under
Section 482 of the Code, one of us (D.K. Jain, J.) speaking for the Bench, has observed as follows: (SCC p.
251, para 20)
“20. … The section itself envisages
three circumstances under which the inherent jurisdiction may be exercised,
namely, (i) to give effect to an order under
the Code; (ii) to prevent abuse of the process of
court; and (iii) to otherwise secure the ends of
justice. Nevertheless, it is neither possible nor desirable to lay down any
inflexible rule which would govern the exercise of inherent jurisdiction of the
court. Undoubtedly, the power possessed by the High Court under the said
provision is very wide but it is not unlimited. It has to be exercised
sparingly, carefully and cautiously, ex debito justitiae to do real and
substantial justice for which alone the court exists. It needs little emphasis
that the inherent jurisdiction does not confer an arbitrary power on the High
Court to act according to whim or caprice. The power exists to prevent abuse of
authority and not to produce injustice.”
The Supreme Court in the case of Vinod Raghuvanshi Vs. Ajay Arora, reported in (2013)
10 SCC 581 has
held as under :
“30. It is a settled legal proposition
that while considering the case for quashing of the criminal proceedings the
court should not “kill a stillborn child”, and appropriate prosecution should
not be stifled unless there are compelling circumstances to do so. An
investigation should not be shut out at the threshold if the allegations have
some substance. When a prosecution at the initial stage is to be quashed, the test
to be applied by the court is whether the uncontroverted allegations as made, prima
facie establish the offence. At this stage neither can the court embark upon an
inquiry, whether the allegations in the complaint are likely to be established
by evidence nor should the court judge the probability, reliability or
genuineness of the allegations made therein.”
(11) Similarly, it is not out of place to mention here
that the investigation is still pending and the charge sheet has not been filed,
as there is an interim order dated 14/10/2016 for not taking any coercive step
against the applicant.
(12) The undisputed facts of this case are
that the V.E.L. got a contract for construction of four lane road from Etawah
-Mainpuri- Kurawali. Accordingly, the V.E.L. was in need of “crushed stone aggregate”
for the purposes of construction of road, therefore, the V.E.L. entered into a
contract with the complainant and all the directors as well as the Manager of
V.E.L. persuaded the complainant to supply “crushed stone aggregate” and
accordingly a purchase order was also executed.
(13) The basic allegation in the present
case is that in spite of receipt of full quantity of agreed material, the
V.E.L. has not made payment of Rs.1,09,95,257/-. Now, the centripetal question
for determination is that whether the allegations made in the FIR discloses the
commission of offence under Section 406, 420, 506, 34 of IPC or not or it is
merely a case of failure to fulfill the contractual obligation.
(14) Before adverting to the facts of the
case, it would be appropriate to consider the purchase order dated 20/06/2014 issued
by the V.E.L. which reads as under:-
“PURCHASE ORDER REF PO/VEL/MNP/QQMPL/34/ 14-15 Date 20.06.2014 To M/S Suryansh
Stone Bellua Crusher Plant Gwalior-(MP) TIN 23359069460 Kind Attn: Mr. Vinod
Sharma Dear Sir, Sub Purchase order of ''CRUSHED STONE AGGREGATE'' for Twenty
Thousand Ton for our work site at Four Laning of Etawah- Mainpuri- Kurawali
Road Project.
With reference to your quotation dated 01-07-2014 and subsequent
negotiations with our General Manager, we are pleased to place this order on
you of ''CRUSHED STONE AGGREGATE'' for Twenty Thousand Metric Ton for our work
four Lanning of Etawah- Mainpuri- Kurawali Road Project, as per terms and conditions
as detailed above: A Sr.
No.
ITEM DESCRIPTION Quantity (MT) Rate (Rs.) Amount (Rs.) 1 G.S.B.
10000 200/- Per MT 2000000.00 2 Dust (0 to 6 mm) 3500 200 /- Per Per MT 700000.00
3 20 mm Aggregate 3000 200/- Per MT 600000.00 4 10 mm Aggregate 3500 200/ Per MT
700000.00 TOTAL 10500 MT 4000000 B. Terms & Conditions 1) Loading charges of material will
be borne by the supplier.
2) Vat 5% will be extra.
3) Further we will require more Quantity then quantity to be
extended for same terms and conditions.
C. Payment terms and condition.
1) Payment will be made after 30 days from the date of submission
of monthly bill along with material receipt challan and weighing slip which
issued from VEL Weigh Bridge and without receipt challan quantity will not be entertained.
Remaining 50% payment will be made next 30 days.
2) TDS will be deduced from your running bills if applicable as
per company norms.
3) You should be submitted valid pan card copy to your account
section.
4) Clause No.C(2) procedure is applicable for every months.
D) Quality and quantity: 1) The material should be supplied as per specifications given by
the site Engineer/Lab Technician. The payment will be made as per actual
measurement taken by our site supervisor/weigh bridge operator.
2) Moister content will not be accepted above 2%. If the moisture
content above 2% then excess moisture will be deducting from your bill.
E) Time Period of Work Order.
1) The work order will be valid for Six months from the date of
issue of work order for the supply of 20000 (Twenty Thousand only) MT, however
the total quantity of material should be supplied within the stipulated period beyond
that no supply is liable to be entertained. The material will be lifting as per
our requirement.
F) Liability: 1) As per policy of the company, you have to manage all other
issues if any, pertaining to local or, any other person or by any unseen means
occur.
G) Termination of the Work order: 1) The company reserves the right to
cancel or terminate the order any time material supplied do not confirm the
specification, delay in supply, or on account of whatsoever without any notice
and such case no claim will be entertained. H) Disputes: 1) All disputes are subject to mutual understanding.
I) OUR SALES TAX REGISTRATION NUMBER IS: 09865712830(UP)
23094006404(M.P.) Please
sign (with date and stamp) the duplicate copy of this order in token of your
acceptance of the same and return it to us under your covering letter.
Thanking you, Yours truly, For Valecha Engineering Limited. For
Suryansh Stone General Manager Authorized Signatory (M.H. Mehta) (15) From the
plain reading of the purchase order, it is clear that the payment was to be
made after 30 days from the date of submission of monthly bill along with
material receipt challan and weighing slip issued by V.E.L. Weigh Bridge and
the payment were to be released through account payee cheque. With regard to
the quality and quantity of the material, it is provided that the materials
should be supplied as per specifications given by the Site Engineer/Lab
Technician. The payment was to be made as per actual measurement taken by the
Site Supervisor/Weigh Bridge Operator. It is also provided that the company
reserves the right to cancel or terminate the order at any time if the material
supplied do not confirm with the specification and all disputes shall be
subject to mutual understanding. Thus, it is clear that as far as the quality
and quantity of the material is concerned, it was to be supplied as per the
specifications given by the Site Engineer/Lab Technician and the payment was to
be released by V.E.L. as per actual measurement taken by the Site Supervisor/Weigh
Bridge Operator. Further, it was mentioned that the payment shall be made after
30 days from the date of submission of monthly bill. It is the case of the
applicant that some of the material supplied by the complainant was of
substandard quality. It is not the case of the applicant that after the receipt
of the material supplied by the complainant the payment of the said consignment
was stopped because of sub-standard quality. In the purchase order, it was
specifically mentioned that the payment will be made after 30 days from the
date of submission of monthly bill along with material receipt challan and weighing
slip issued from V.E.L. Weight Bridge. Undisputedly, the material was supplied
in different phases at different point of time. If the applicant/V.E.L. was of the view that the quality of the material
which has been supplied by the complainant is of substandard quality then
before accepting the next consignment and without utilizing the said material,
the V.E.L. should have stopped the payment and should have directed the
complainant to take back the material as it is not in conformity with the
specifications as given by the Site Engineer/Lab Technician. Undisputedly, the applicant/V.E.L.
continued to accept the consignments of “crushed stone aggregate” sent by the
complainant without taking any objection with regard to its quality. Thus, it
is clear that the intention of the applicant appeared to be to receive the
entire consignment without taking any objection with regard to the quality of
the material and then to stop the payment on the basis of sub-standard quality.
Had the V.E.L./applicant restrained the complainant from sending the another
consignment without replacing the earlier sub-standard consignment then at
least the complainant would not have suffered such a huge loss. At the most
there could have been some dispute between the applicant/V.E.L. and the complainant
over the sub-standard quality of a particular consignment. Even during
arguments it is not alleged by the applicant that the entire material worth Rs.1,09,95,257/-
was of sub-standard quality. Further in case of sub-standard quality, the
applicant/V.E.L. was well within its right to terminate the order at any time
but no such action was ever taken by the V.E.L./applicant. If the complainant
was informed about the sub-standard quality of the material and if he had not improved
the quality of the material in spite of the objection raised by the
applicant/V.E.L. then it could have been said that as the applicant had raised
a dispute with regard to the sub-standard quality of the material, therefore,
the dispute between the applicant and the complainant is of civil in nature.
But where the applicant/V.E.L. had accepted the entire supply without raising
any dispute with regard to its quality and had also consumed the entire
material, then it cannot be said that the dispute is purely of civil in nature.
If the material was of sub-standard then the applicant should not have accepted
the consignment and should not have utilized the same. If the site Manager or
the Lab Technician of the V.E.L. did not raise any objection with regard to the
quality of the material supplied by the complainant then it cannot be said that
as some of the material supplied by the complainant was of substandard quality,
therefore, the remaining outstanding amount of Rs.1,09,95,257/- was rightly
stopped. The another submission made by the counsel for the applicant is that as
his client had stopped certain payments and, therefore, they in turn has
stopped the payment to the complainant. So far as the non-payment of money by
the Principal of V.E.L. is concerned, in the present case there is a written
document available on record pointing out terms and conditions of the
agreement. In the entire purchase order dated 20/06/2014 there is not a single
whisper of the fact that the payments to the complainant were to be released only
after the work is approved by the Principal of V.E.L. and only after the
payment is made by the Principal of the V.E.L. Non mentioning of this condition
in the purchase order clearly shows that it was not the intention of the
parties at the time of the agreement that the payments to the complainant will
be released only after the receipt of payment by V.E.L. from its Principal.
(16) The counsel for the respondent No.5
is right in saying that had this condition of non-payment of money to the complainant
till the payment is released by the Principal of V.E.L. was disclosed at the
time of agreement then he would not have agreed for the same. The suppression
of this condition which was going in the mind of the applicant or other
Directors of V.E.L. clearly shows that the intention of the applicant right
from very inception was not to make payment for the material received by them
but the intention was only to release the payment after the V.E.L. receives the
payment from its Principal or the intention was not to release the payment at
all. The counsel for the respondent is also right in saying that if the quality
of any of the consignment was not in accordance with the specifications, then
the applicant/Site Engineer of V.E.L. should have rejected the same then and
there and once they have accepted the consignment and had utilized the same
then it cannot be said that the quality was of substandard. From the facts and circumstances of the case, prima facie it
appears that the non-rejection of a consignment by the applicant/V.E.L. and
continuous acceptance of the same by the applicant/V.E.L. and utilization of
the same clearly shows that their intention was to receive the entire quantity,
to utilize the same and thereafter to raise objection with regard to its
quality. It is submitted by the counsel for the applicant that if the intention
of the applicant/V.E.L. was to cheat the complainant at the very beginning of
the contract, then they would not have made part payment out of
Rs.2,99,30,867/- and the fact that initially they made the payment of
approximately Rs. 1 Crores Ninty Lakhs clearly shows that their intention was
bona fide and only because of subsequent supply of sub-standard “crushed stone
aggregate”, the applicant/V.E.L. was forced to stop the payments.
(17) The submission made by the counsel
for the applicant cannot be accepted for the simple reason that if the applicant/V.E.L.
had not made the payment at the initial stage then the complainant would have
stopped the supply of “crushed stone aggregate” which the applicant/V.E.L. did
not want. The sole intention of the applicant/V.E.L. in making payment of the
earlier supply made by the complainant appears to continue to receive the
supply of “crushed stone aggregate”. Therefore, prima facie it appears that the
intention of the applicant/V.E.L. right from very inception was to cheat the
complainant and, therefore, they deliberately did not make the provision in the
purchase order with regard to making payment only after receipt of the same
from its Principal. Further in order to keep the complainant under confidence
that timely payments shall be made for the goods supply by it, the
applicant/V.E.L. made the payment at the initial stage but stopped the payment
towards the end of the supply. If the stand taken by the applicant/V.E.L. in
the present case that the payment was not made because of sub-standard quality
of “crushed stone aggregate” is considered then first of all there is nothing
on record to support the contention of the applicant that the supplied material
was of sub-standard quality. Secondly, there is no explanation by the applicant
that why its Site Manager/Site Supervisor accepted the consignment of “crushed
stone aggregate” without getting it verified/checked that whether the same is
in conformity with the specifications as agreed upon between the parties or
not. If the applicant/V.E.L. chose to accept the supply and utilized the same
for carrying out its project then it is not open for the applicant/V.E.L. to
stop the payment on the ground of supply of sub-standard quality of “crushed
stone aggregate”. Further, it is well established principle of law that when
the highly disputed questions of fact are involved in the case requiring
adjudication then this Court in exercise of powers under Section 482 of Cr.P.C.
should not consider the defence of the applicant as well as should not
adjudicate upon the highly disputed questions of fact.
(18) It is next contended by the counsel
for the applicant that in fact the complainant has tried to convert the civil
litigation into a criminal litigation, which cannot be permitted. It is
submitted by the Counsel for the applicant that even if the entire allegations
as made in the complaint are taken on their face value, then it would be clear
that the case is predominantly of Civil in nature and the respondent no. 5 has
tried to give colour of criminal case which is not permissible. It is further
submitted that the respondent no.5 has an efficacious remedy of filing money
suit and in a case of mere breach of contract, criminal proceedings should not
be allowed to continue. To buttress his contentions, the Counsel for the
applicants has relied upon Nimra
Cerglass Technics (supra), V.Y.Jose v. State of Gujarat, (2009) 3 SCC 78 and Sharon Michael v. State of T.N., (2009) 3 SCC 375 and submitted that mere failure on
the part of the applicant and the co-accused to keep their promise at a later
stage would not bring the case within the meaning of Cheating. Further, it was
submitted that unless and until, there is an intention to cheat the complainant
on the day one, no offence can be said to be made against the applicant.
(19) The Supreme Court in the case of Bhajan Lal & Ors. (supra) has
held as under:-
“102. In the backdrop of the
interpretation of the various relevant provisions of the Code under Chapter XIV
and of the principles of law enunciated by this Court in a series of decisions relating
to the exercise of the extraordinary power under Article 226 or the inherent
powers under Section 482 of the Code which we have extracted and reproduced
above, we give the following categories of cases by way of illustration wherein
such power could be exercised either to prevent abuse of the process of any
court or otherwise to secure the ends of justice, though it may not be possible
to lay down any precise, clearly defined and sufficiently channelised and
inflexible guidelines or rigid formulate and to give an exhaustive list of
myriad kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the
first information report or the complaint, even if they are taken at their face
value and accepted in their entirety do not prima facie constitute any offence or
make out a case against the accused.
(2) Where the allegations in the first
information report and other materials, if any, accompanying the FIR do not
disclose a cognizable offence, justifying an investigation by police officers
under Section 156(1) of the Code except under an order of a Magistrate within
the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations
made in the FIR or complaint and the evidence collected in support of the same
do not disclose the commission of any offence and make out a case against the
accused.
(4) Where the allegations in the FIR do
not constitute a cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer without an order of a
Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR
or complaint are so absurd and inherently improbable on the 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.”
The submission
made by the counsel for the applicant cannot be accepted. The Supreme Court in the case of Sesami Chemicals (P) Ltd. Vs. State of Meghalaya reported in (2014) 16 SCC 711 has held as under :
''10. The
case of the contesting respondent-accused is as follows: the contesting
respondent-accused admit the fact that on 2-3-2008 they purchased ferrosilicon
worth Rs 46,79,890 from the appellant Company and paid Rs 10,00,000. On receipt
of the goods, they found that the goods were substandard and informed the same
to the appellant and demanded their money back.
11. According
to the contesting respondent-accused, the appellant initially agreed to return
their money and to take back its goods but later the appellant instructed the accused
to sell off the goods in the open market and appropriate the same. But
subsequently the signatures of the contesting respondent-accused were taken on
certain blank papers at gunpoint at the instance of the appellant. The cheque which is the subject-matter of Crime Case No. 87(S) of
2012 is one such document obtained at gunpoint.
12. It
is in the background of the abovementioned disputed question of fact, the
learned Judge of the High Court thought it fit to quash the FIRs i.e. Case No. 43(10) of 2011 dated 12-10-2011 with a cryptic order. The only relevant portion for the present purpose reads as
follows: (Sanjay Kabra
case1, SCC OnLine Megh para 8)
“8.
After hearing the submissions advanced by the learned counsel at Bar,
considering the fact and circumstances of the case, I am of the considered view
that, the matter of disputes is purely covered by civil law and not by criminal
law, therefore, I do not see any reason that FIR dated 12-10-2011 has any stand
in the eye of the law, so it needs to be quashed.”
13. We are of the opinion that the petition filed by the contesting
respondents under Section 482 of the Code of Criminal Procedure, 1973 is an
abuse of the process of the Court. As already noticed, the facts are seriously
in dispute. The truth or otherwise of such facts can only be established by
evidence at the trial. We are, therefore, of the opinion that the High Court
erred in quashing FIR No. 43(10) of 2011 dated 12-10-2011. We, therefore, set
aside the order1 of the High Court. The first respondent
is directed to proceed with FIR No. 43(10) of 2011 dated 12-10-2011 in
accordance with law.”
The
Supreme Court in the case of Mosiruddin Munshi (supra) has held as under :
“10.The
High Court has adopted a strictly hypertechnical approach and such an endeavour
may be justified during a trial, but certainly not during the stage of investigation.
At any rate it is too premature a stage for the High Court to step in and stall
the investigation by declaring that it is a civil transaction wherein no semblance
of criminal offence is involved.”
The Supreme Court in the case of Ganga Dhar Kalita (supra) has held as under :
''9. In
Arun Bhandari v. State of U.P. this Court has held that if the allegations in the first
information report are not frivolous, mala fide or vexatious, it cannot be simply
quashed for the reason that civil suit is also pending in the matter. Paras 2,
3 and 33 of the said case are reproduced below: (SCC pp. 804-805 & 816)
“2. The factual score as depicted is that the appellant is a
non-resident Indian (NRI) living in Germany and while looking for a property in
Greater Noida, he came in contact with Respondent 2 and her husband, Raghuvendra
Singh, who claimed to be the owner of the property in question and offered to
sell the same. On 24- 3-2008, as alleged, both the husband and wife agreed to sell
the residential plot bearing No. 131, Block Cassia Fistula Estate, Sector
Chi-4, Greater Noida, U.P. for a consideration of Rs 2,43,97,880 and an
agreement to that effect was executed by Respondent 3, both the husband and
wife jointly received a sum of Rs 1,05,00,000 from the appellant towards
part-payment of the sale consideration. It was further agreed that Respondents
2 and 3 would obtain permission from the Greater Noida Authority to transfer
the property in his favour and execute the deed of transfer within 45 days from
the grant of such permission.
3. As the factual antecedents would further reveal, the said
agreement was executed on the basis of a registered agreement executed in
favour of Respondent 3 by the original allottee, Smt Vandana Bhardwaj to sell the
said plot. After expiry of a month or so, the appellant enquired from
Respondent 3 about the progress of delivery of possession from the original
allottee, but he received conflicting and contradictory replies which created
doubt in his mind and impelled him to rush to Noida and find out the real facts
from the Greater Noida Authority. On due enquiry, he came to know that there was
a registered agreement in favour of the third respondent by Smt Vandana Bhardwaj;
that a power of attorney had been executed by the original allottee in favour
of Respondent 2, the wife of Respondent 3; that the original allottee, to avoid
any kind of litigation, had also executed a will in favour of Respondent 3; and
that Respondent 2 by virtue of the power of attorney, executed in her favour by
the original allottee, had transferred the said property in favour of one
Monika Goel who had got her name mutated in the record of the Greater Noida
Authority. Coming to know about the aforesaid factual score, he demanded refund
of the money from the respondents, but a total indifferent attitude was
exhibited, which compelled him to lodge an FIR at Police Station Kasna, which
gave rise to Criminal Case No. 563 of 2009.
* * *
33. Applying the aforesaid parameters
we have no hesitation in coming to hold that neither the FIR nor the protest
petition was mala fide, frivolous or vexatious. It is also not a case where
there is no substance in the complaint. The manner in which the investigation
was conducted by the officer who eventually filed the final report and the
transfer of the investigation earlier to another officer who had almost
completed the investigation and the entire case diary which has been adverted
to in detail in the protest petition prima facie makes out a case against the
husband and the wife regarding collusion and the intention to cheat from the very
beginning, inducing the appellant to hand over a huge sum of money to both of
them. Their conduct of not stating so many aspects, namely, the power of attorney
executed by the original owner, the will and also the sale effected by the wife
in the name of Monika Singh on 28-7-2008 cannot be brushed aside at this stage.”
10. No doubt, where the criminal
complaints are filed in respect of property disputes civil in nature only to
harass the accused, and to pressurise him in the civil litigation pending, and
there is prima facie abuse of process of law, it is well within the
jurisdiction of the High Court to exercise its powers under Section 482 of the
Code to quash the criminal proceedings. However, the powers under the section
are required to be exercised sparingly.
In Kamaladevi
Agarwal v. State of W.B. this Court has observed as under: (SCC pp. 559-60, para 7)
“7. This Court has consistently held
that the revisional or inherent powers of quashing the proceedings at the
initial stage should be exercised sparingly and only where the allegations made
in the complaint or the FIR, even if taken at their face value and accepted in
entirety, do not prima facie disclose the commission of an offence. Disputed
and controversial facts cannot be made the basis for the exercise of the jurisdiction.”
The Supreme Court in the case of State of Punjab Vs. Inder Mohan Chopra and others reported in AIR 2009 SC (Supp) 198 has held as under :
''10. As
noted above, the powers possessed by the High Court under Section 482 of the
Code are very wide and the very plenitude of the power requires great caution
in its exercise. Court must be careful to see that its decision in exercise of
this power is based on sound principles. The inherent power should not be
exercised to stifle a legitimate prosecution. High Court being the highest
Court of a State should normally refrain from giving a prima facie decision in a
case where the entire facts are incomplete and hazy, more so when the evidence
has not been collected and produced before the Court and the issues involved,
whether factual or legal, are of magnitude and cannot be seen in their true perspective
without sufficient material. Of course, no hard and fast rule can be laid down
in regard to cases in which the High Court will exercise its extraordinary jurisdiction
of quashing the proceeding at any stage.
(See : The Janata Dal etc. v. H.S. Chowdhary and others, etc. (AIR
1993 SC 892); Dr. Raghubir Saran v. State of Bihar and another (AIR 1964 SC
1)). It would not be proper for the High Court to analyse the case of the
complainant in the light of all probabilities in order to determine whether a
conviction would be sustainable and on such premises, arrive at a conclusion
that the proceedings are to be quashed. It would be erroneous to assess the
material before it and conclude that the complaint cannot be proceeded with. In
proceeding instituted on complaint, exercise of the inherent powers to quash
the proceedings is called for only in a case where the complaint does not
disclose any offence or is frivolous, vexatious or oppressive. If the
allegations set out in the complaint do not constitute the offence of which
cognizance has been taken by the Magistrate, it is open to the High Court to
quash the same in exercise of the inherent powers under Section 482 of the
Code. It is not, however, necessary that there should be meticulous analysis of
the case before the trial to find out whether the case would end in conviction
or acquittal. The complaint/F.I.R. has to be read as a whole. If it appears
that on consideration of the allegations in the light of the statement made on oath
of the complainant or disclosed in the F.I.R. that the ingredients of the
offence or offences are disclosed and there is no material to show that the complaint/F.I.R.
is mala fide, frivolous or vexatious, in that event there would be no
justification for interference by the High Court. When an information is lodged
at the police station and an offence is registered, then the mala fides of the
informant would be of secondary importance. It is the material collected during
the investigation and evidence led in Court which decides the fate of the
accused person. The allegations of mala fides against the informant are of no
consequence and cannot by itself be the basis for quashing the proceeding. (See
: Mrs. Dhanalakshmi v. R. Prasanna Kumar and others (AIR 1990 SC 494);
State of Bihar and another v. P. P. Sharma, I.A.S. and another (1992 Suppl (1) SCC 222); Rupan Deol
Bajaj (Mrs.) and another v. Kanwar Pal Singh Gill and another (1995 (6) SCC
194); State of Kerala and others v. O.C. Kuttan and others (1999 (2) SCC 651);
State of U.P. v. O. P. Sharma (1996 (7) SCC 705); Rashmi Kumar (Smt.) v. Mahesh
Kumar Bhada (1997 (2) SCC 397); Satvinder Kaur v. State (Govt. of NCT of Delhi)
and another (1999 (8) SCC 728); Rajesh Bajaj v. State NCT of Delhi and others AIR
1999 SC 1216); State of Karnataka v. M. Devendrappa and another (2002 (3) SCC 89) and State of Andhra
Pradesh v. Bajjoori Kanthaiah and Anr. [2008 (11) JT 574].''
The Supreme Court in the case of Amit Kapoor Vs. Ramesh Chander, reported in (2012)
9 SCC 460 has held as under
:
“27. Having
discussed the scope of jurisdiction under these two provisions i.e. Section 397
and Section 482 of the Code and the fine line of jurisdictional distinction,
now it will be appropriate for us to enlist the principles with reference to
which the courts should exercise such jurisdiction. However, it is not only
difficult but is inherently impossible to state with precision such principles.
At best and upon objective analysis of various judgments of this Court, we are able
to cull out some of the principles to be considered for proper exercise of
jurisdiction, particularly, with regard to quashing of charge either in
exercise of jurisdiction under Section 397 or Section 482 of the Code or
together, as the case may be:
27.1. Though
there are no limits of the powers of the Court under Section 482 of the Code
but the more the power, the more due care and caution is to be exercised in
invoking these powers. The power of quashing criminal proceedings,
particularly, the charge framed in terms of Section 228 of the Code should be
exercised very sparingly and with circumspection and that too in the rarest of
rare cases.
27.2. The
Court should apply the test as to whether the uncontroverted allegations as
made from the record of the case and the documents submitted therewith prima
facie establish the offence or not. If the allegations are so patently absurd
and inherently improbable that no prudent person can ever reach such a conclusion
and where the basic ingredients of a criminal offence are not satisfied then
the Court may interfere.
27.3. The
High Court should not unduly interfere. No meticulous examination of the
evidence is needed for considering whether the case would end in conviction or
not at the stage of framing of charge or quashing of charge.
27.4. Where
the exercise of such power is absolutely essential to prevent patent
miscarriage of justice and for correcting some grave error that might be committed
by the subordinate courts even in such cases, the High Court should be loath to
interfere, at the threshold, to throttle the prosecution in exercise of its
inherent powers.
27.5. Where
there is an express legal bar enacted in any of the provisions of the Code or
any specific law in force to the very initiation or institution and continuance
of such criminal proceedings, such a bar is intended to provide specific
protection to an accused.
27.6.
The Court has a duty to balance the
freedom of a person and the right of the complainant or prosecution to
investigate and prosecute the offender.
27.7. The
process of the court cannot be permitted to be used for an oblique or
ultimate/ulterior purpose.
27.8. Where
the allegations made and as they appeared from the record and documents annexed
therewith to predominantly give rise and constitute a “civil wrong” with no
“element of criminality” and does not satisfy the basic ingredients of a
criminal offence, the court may be justified in quashing the charge. Even in such cases, the court would not embark upon the critical
analysis of the evidence.
27.9. Another
very significant caution that the courts have to observe is that it cannot
examine the facts, evidence and materials on record to determine whether there
is sufficient material on the basis of which the case would end in a
conviction; the court is concerned primarily with the allegations taken as a whole
whether they will constitute an offence and, if so, is it an abuse of the
process of court leading to injustice.
27.10. It
is neither necessary nor is the court called upon to hold a full-fledged
enquiry or to appreciate evidence collected by the investigating agencies to find
out whether it is a case of acquittal or conviction.
27.11. Where
allegations give rise to a civil claim and also amount to an offence, merely
because a civil claim is maintainable, does not mean that a criminal complaint
cannot be maintained.
27.12. In
exercise of its jurisdiction under Section 228 and/or under Section 482, the
Court cannot take into consideration external materials given by an accused for
reaching the conclusion that no offence was disclosed or that there was
possibility of his acquittal. The Court has to consider the record and documents
annexed therewith by the prosecution.
27.13. Quashing
of a charge is an exception to the rule of continuous prosecution. Where the
offence is even broadly satisfied, the Court should be more inclined to permit
continuation of prosecution rather than its quashing at that initial stage. The
Court is not expected to marshal the records with a view to decide
admissibility and reliability of the documents or records but is an opinion
formed prima facie.
27.14. Where
the charge-sheet, report under Section 173(2) of the Code, suffers from fundamental
legal defects, the Court may be well within its jurisdiction to frame a charge.
27.15. Coupled
with any or all of the above, where the Court finds that it would amount to
abuse of process of the Code or that the interest of justice favours, otherwise
it may quash the charge. The power is to be exercised ex debito justitiae i.e.
to do real and substantial justice for administration of which alone, the
courts exist.
27.16. These are the principles which individually and preferably
cumulatively (one or more) be taken into consideration as precepts to exercise
of extraordinary and wide plenitude and jurisdiction under Section 482 of the
Code by the High Court. Where the factual foundation for an offence has been
laid down, the courts should be reluctant and should not hasten to quash the proceedings
even on the premise that one or two ingredients have not been stated or do not
appear to be satisfied if there is substantial compliance with the requirements
of the offence.”
The
Supreme Court in the case of Indian Oil Corporation v. NEPC India Ltd., reported in (2006) 6 SCC 736, held as under :
“12. 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 Jiwajirao Scindia v. Sambhajirao
Chandrojirao Angre [(1988) 1 SCC 692], State of Haryana vs. Bhajanlal [1992
Supp (1) SCC 335], Rupan Deol Bajaj vs. Kanwar Pal Singh Gill [(1995) 6 SCC
194], Central Bureau of Investigation v. Duncans Agro Industries Ltd., [(1996) 5
SCC 591], State of Bihar vs. Rajendra Agrawalla [(1996) 8 SCC 164], Rajesh
Bajaj v. State NCT of Delhi, [(1999) 3 SCC 259], Medchl Chemicals & Pharma
(P) Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269], Hridaya Ranjan Prasad Verma
v. State of Bihar [(2000) 4 SCC 168], M. Krishnan vs Vijay Singh [(2001) 8 SCC 645],
and Zandu Phamaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005) 1 SCC 122]. The principles, relevant to our
purpose are : (i) A complaint can be quashed where the allegations made in the
complaint, even if they are taken at their face value and accepted in their
entirety, do not prima facie constitute any offence or make out the case
alleged against the accused.
For this purpose, the complaint has to be examined as a whole, but
without examining the merits of the allegations. Neither a detailed inquiry nor
a meticulous analysis of the material nor an assessment of the reliability or
genuineness of the allegations in the complaint, is warranted while examining
prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of
the process of the court, as when the criminal proceeding is found to have been
initiated with malafides/malice for wreaking vengeance or to cause harm, or
where the allegations are absurd and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or
scuttle a legitimate prosecution. The power should be used sparingly and with
abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal
ingredients of the offence alleged.
If the necessary factual foundation is laid in the complaint,
merely on the ground that a few ingredients have not been stated in detail, the
proceedings should not be quashed. Quashing of the complaint is warranted only
where the complaint is so bereft of even the basic facts which are absolutely necessary
for making out the offence.
(v) A given set of facts may make out : (a) purely a civil wrong;
or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence.
A commercial transaction or a contractual dispute, apart from furnishing a
cause of action for seeking remedy in civil law, may also involve 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.
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 through criminal
prosecution should be deprecated and discouraged. In G. Sagar Suri vs. State of UP [(2000) 2 SCC 636], this Court observed :
"It is
to be seen if a matter, which is essentially of a civil nature, has been given
a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies
available in law. Before issuing process a criminal court has to exercise a
great deal of caution. For the accused it is a serious matter. This Court has laid
certain principles on the basis of which the High Court is to exercise its
jurisdiction under Section 482 of the Code. Jurisdiction under this Section has
to be exercised to prevent abuse of the process of any court or otherwise to
secure the ends of justice."
14. While no one with a legitimate cause or grievance
should be prevented from seeking remedies available in criminal law, a
complainant who initiates or persists with a prosecution, being fully aware
that the criminal proceedings are unwarranted and his remedy lies only in civil
law, should himself be made accountable, at the end of such misconceived
criminal proceedings, in accordance with law. One positive step that can be
taken by the courts, to curb unnecessary prosecutions and harassment of
innocent parties, is to exercise their power under section 250 Cr.P.C. more frequently,
where they discern malice or frivolousness or ulterior motives on the part of
the complainant. Be that as it may.”
The Supreme Court in the case of Vijayander Kumar (supra) has held as under :
''11. No
doubt, the views of the High Court in respect of averments and allegations in
the FIR were in the context of a prayer to quash the FIR itself but in the facts
of this case those findings and observations are still relevant and they do not
support the contentions on behalf of the appellants. At the present stage when the
informant and witnesses have supported the allegations made in the FIR, it
would not be proper for this Court to evaluate the merit of the allegations on the
basis of documents annexed with the memo of appeal. Such materials can be
produced by the appellants in their defence in accordance with law for due
consideration at appropriate stage.
12. The learned counsel for the
respondents is correct in contending that a given set of facts may make out a
civil wrong as also a criminal offence and only because a civil remedy may also
be available to the informant/ complainant that itself cannot be a ground to
quash a criminal proceeding. The real test is whether the allegations in the
complaint disclose a criminal offence or not. This proposition is supported by several
judgments of this Court as noted in para 16 of the judgment in Ravindra Kumar Madhanlal Goenka v.
Rugmini Ram Raghav Spinners (P) Ltd.'' The Supreme Court in the case of Lee Kun Hee Vs. State of U.P. reported in AIR
2012 SC 1007 has
held as under :
''26.We have given our thoughtful consideration to the last contention
advanced at the hands of the learned counsel for the appellants. We are of the
considered view, that in offences of the nature contemplated under the
summoning order, there can be civil liability coupled with criminal
culpability. What a party has been deprived of by an act of cheating, can be
claimed through a civil action. The same deprivation based on denial by way of
deception, emerging from an act of cheating, would also attract criminal
liability. In the course of criminal prosecution, a complainant cannot seek a
reciprocal relief, for the actions of the accused. As in the instant case, the monetary consideration under the bill
of exchange dated 1.2.2001, cannot be claimed in the criminal proceedings, for
that relief the remedy would be only through a civil suit. It is therefore not
possible for us to accept, that since a civil claim has been raised by the
complainant-JCE Consultancy, based on the alleged breach of the agreement dated
1.12.2001, it can be prevented from initiating proceedings for penal
consequences for the alleged offences committed by the accused under the Indian
Penal Code. It would not be appropriate for us, to delve into the culpability
of the appellants at the present juncture, on the basis of the factual position
projected by the rival parties before us.The culpability (if at all) would
emerge only after evidence is adduced by the rival parties before the trial
court. The only conclusion that needs to be drawn, at the present juncture is,
that even on the basis of the last submission canvassed on behalf of the
appellants, it is not possible to quash the summoning order at this stage. In
the aforesaid view of the matter, it is left open to the appellants to raise
their objections, if they are so advised, before the trial court. The trial
court shall, as it ought to, adjudicate upon the same in consonance with law,
after allowing the rival parties to lead evidence to substantiate their
respective positions.''
The
Supreme Court in the case of M/s Suryalakshmi Cotton Mills Ltd. Vs. M/s Rajvir Industries Ltd
and others reported
in AIR 2008 SC 1683 has held as under :
''18.Ordinarily,
a defence of an accused although appears to be plausible should not be taken
into consideration for exercise of the said jurisdiction. Yet again, the High
Court at that stage would not ordinarily enter into a disputed question of
fact. It, however, does not mean that documents of unimpeachable character
should not be taken into consideration at any cost for the purpose of finding out
as to whether continuance of the criminal proceedings would amount to an abuse
of the process of Court or that the complaint petition is filed for causing
mere harassment to the accused. While we are not oblivious of the fact that
although a large number of disputes should ordinarily be determined only by the
civil courts, but criminal cases are filed only for achieving the ultimate goal
namely to force the accused to pay the amount due to the complainant
immediately. The Courts on the one hand should not encourage such a practice;
but, on the other, cannot also travel beyond its jurisdiction to interfere with
the proceeding which is otherwise genuine. The Courts cannot also lose sight of
the fact that in certain matters, both civil proceedings and criminal
proceedings would be maintainable.''
(20) Thus, it is clear that where the complaint discloses the criminal
ingredients also, then the criminal prosecution cannot be quashed only because
of the fact that civil dispute is also involved and the transactions are
business transactions. Only a case which is predominantly of civil in nature
cannot be allowed to be given a color of criminal nature. This Court in previous paragraphs have already held that right
from very inception the intention of applicant/V.E.L. was to cheat the
complainant and, therefore, it cannot be said that the present case is
predominantly of civil in nature without there being any criminal intent. Thus,
the FIR made against the applicant cannot be quashed.
(21) It is next contended by the Counsel
for the applicant that although there is no provision in the purchase order
dated 20/06/2014 (Annexure P2) providing that the payments to the complainant
shall be released only after the work is approved by the Principal, but as the
complainant was aware of the fact that as the “crushed stone aggregate” is
being purchased for utilizing the same for the purposes of carrying out Road
Project, therefore, the intentions of the parties were writ large and now the
complainant cannot say that the payment cannot be withheld by the applicant. The submission made by the counsel for the applicant is misconceived
and cannot be accepted.
(22) The Supreme Court in the case of Bank Of India Vs. K. Mohandas reported in (2009)
5 SCC 313 has held as
under :
“28. The true construction of a contract
must depend upon the import of the words used and not upon what the parties
choose to say afterwards. Nor does subsequent conduct of the parties in the performance of
the contract affect the true effect of the clear and unambiguous words used in
the contract. The intention of the parties must be ascertained from the
language they have used, considered in the light of the surrounding circumstances
and the object of the contract. The nature and purpose of the contract is an
important guide in ascertaining the intention of the parties.
29. In
Ottoman Bank of Nicosia v. Ohanes Chakarian AIR 1938 PC 26, Lord Wright made these weighty observations: (AIR p. 29)
“… that if the contract is clear and unambiguous, its true effect cannot be
changed merely by the course of conduct adopted by the parties in acting under
it.”
30. In Ganga Saran v. Firm
Ram Charan Ram Gopal AIR 1952 SC 9 a four-Judge Bench of this Court stated: (AIR p. 11, para 6) “6. … Since the true construction of an agreement must depend upon
the import of the words used and not upon what the parties choose to say afterwards,
it is unnecessary to refer to what the parties have said about it.”
31. It is also a well-recognised principle of construction of a
contract that it must be read as a whole in order to ascertain the true meaning
of its several clauses and the words of each clause should be interpreted so as
to bring them into harmony with the other provisions if that interpretation
does no violence to the meaning of which they are naturally susceptible. (North Eastern Railway Co. v. Lord Hastings 1900 AC 260)
32. The fundamental position is that it
is the banks who were responsible for formulation of the terms in the
contractual Scheme that the optees of voluntary retirement under that Scheme
will be eligible to pension under the Pension Regulations, 1995, and,
therefore, they bear the risk of lack of clarity, if any. It is a well-known
principle of construction of a contract that if the terms applied by one party
are unclear, an interpretation against that party is preferred (verba chartarum fortius accipiuntur contra
proferentem).
33. What was, in respect of pension, the intention
of the banks at the time of bringing out VRS 2000? Was it not made expressly
clear therein that the employees seeking voluntary retirement will be eligible
for pension as per the Pension Regulations? If the intention was not to give pension
as provided in Regulation 29 and particularly sub-regulation (5) thereof, they
could have said so in the Scheme itself. After all much thought had gone into
the formulation of VRS 2000 and it came to be framed after great deliberations.
The only provision that could have been in mind while providing
for pension as per the Pension Regulations was Regulation 29. Obviously, the employees,
too, had the benefit of Regulation 29(5) in mind when they offered for
voluntary retirement as admittedly Regulation 28, as was existing at that time,
was not applicable at all.
None of Regulations 30 to 34 was attracted.”
(23) Thus, it is clear that where the
contents of a document/contract are clear and unambiguous, then its true effect
cannot be changed by the course of conduct adopted by the parties. Even
otherwise, Section 92 of Evidence Act prohibits the oral evidence in respect of
contents of the documents. The intention of the parties are to be gathered from
the contents of the documents and not from their subsequent conduct. Even otherwise,
one party to the contract cannot unilaterally change the terms and conditions
of the contract. Thus the applicant cannot get advantage of the letter dated
31-1-2015 for interpreting the terms and conditions of purchase order dated 20/06/2014.
(24) Lastly, it was contended by the
Counsel for the applicant that in a case of commercial transactions, it was
compulsory on the part of the investigating officer to conduct a preliminary enquiry
before registering the F.I.R. To buttress his contentions, the Counsel for the
applicant has relied upon the judgment passed by the Supreme Court in the case
of Lalita Kumari (supra) in which it is held as under :
“120. In view of the aforesaid discussion, we hold:
120.1. The registration of FIR is mandatory under Section 154 of the
Code, if the information discloses commission of a cognizable offence and no preliminary
inquiry is permissible in such a situation.
120.2. If
the information received does not disclose a cognizable offence but indicates
the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain
whether cognizable offence is disclosed or not.
120.3. If
the inquiry discloses the commission of a cognizable offence, the FIR must be
registered. In cases where preliminary inquiry ends in closing the complaint, a
copy of the entry of such closure must be supplied to the first informant
forthwith and not later than one week. It must disclose reasons in brief for
closing the complaint and not proceeding further.
120.4. The
police officer cannot avoid his duty of registering offence if cognizable offence
is disclosed. Action must be taken against erring officers who do not register
the FIR if information received by him discloses a cognizable offence.
120.5. The
scope of preliminary inquiry is not to verify the veracity or otherwise of the
information received but only to ascertain whether the information reveals any
cognizable offence.
120.6. As
to what type and in which cases preliminary inquiry is to be conducted will
depend on the facts and circumstances of each case. The category of cases in
which preliminary inquiry may be made are as under:
(a) Matrimonial disputes/family disputes
(b) Commercial offences
(c)
Medical negligence cases
(d) Corruption cases
(e) Cases where there is abnormal delay/laches in initiating criminal
prosecution, for example, over 3 months’ delay in reporting the matter without satisfactorily
explaining the reasons for delay.
The aforesaid are only illustrations and not exhaustive of all
conditions which may warrant preliminary inquiry.”
(25) By referring to para 120.6, it
is submitted by the Counsel for the applicant that where the dispute is with
regard to commercial transactions, then a preliminary enquiry must be conducted
and in absence of any preliminary enquiry, the F.I.R. cannot be registered and therefore, the F.I.R. in question is
liable to be quashed on the ground that no preliminary enquiry was conducted.
It is further submitted by the Counsel for the applicant that the word “may”
used in Para 120.6 of the judgment passed in Lalita Kumari (Supra) must be read as “shall” and therefore, in absence preliminary
enquiry, the F.I.R. is liable to be quashed on that ground only.
(26) The
submission made by the Counsel for the applicant cannot be accepted. The use of
word “may” by Supreme Court in para 120 of the judgment passed in Lalita Kumari (Supra) makes it clear that preliminary
enquiry may be done. It is not mandatory on the part of the investigating
officer to conduct a preliminary enquiry before registering the F.I.R. Although
in a case where the business transactions are involved, the investigating
officer may conduct a preliminary enquiry before registering the F.I.R., but
the F.I.R. cannot be quashed only on the ground that the same is bad as no
preliminary enquiry was conducted.
(27) It is next contended by the Counsel
for the applicant, that the parties have compounded the offence and
accordingly, an application under Section 320(2) of Cr.P.C. which has been registered
as I.A. No.7586/2017 has been filed. The compromise between the parties has
been verified and as per the order dated 25-9-2017 passed by a co-ordinate
bench of this Court, the applicant has already deposited the Demand Draft with
Shri S.K. Shrivastava, Advocate, therefore, the criminal proceedings may be quashed
on the ground of compounding of offences.
(28) The submissions made by the Counsel
for the applicant cannot be accepted for the following reasons :-
1. That all
the offences which have been alleged against the applicant are compoundable.
2. Section 320(2) of Cr.P.C., provides that only that Court can
grant permission to compound the offence, before which the prosecution of a
party is pending.
3. That the investigation is pending and the charge sheet has
not been filed and there is a specific provision in Criminal Procedure Code for
acquittal of the accused on compounding of offences.
4. That when there is a specific provision in Cr.P.C., then the
application under Section 482 of Cr.P.C. cannot be accepted.
(29) Section
320(2) of Cr.P.C. reads as under :
''(2)The offences punishable under the sections of the Indian
Penal Code (45 of 1860) specified in the first two columns of the Table next
following may, with the permission of the Court before which any prosecution
for such offence is pending, be compounded by the persons mentioned in the third
column of that Table:—
(30)
From the plain reading of Section 320(2) of Cr.P.C., it is clear that only that
Court can grant permission to compound the offence, before which any
prosecution for such offence is pending. Undisputedly, no prosecution is pending before this Court for any such
offence. Thus, in view of specific provision of Section 320(2) of Cr.P.C., this
Court cannot grant permission to the parties to compound the offence. This Court in the case of Monu alias Ranu Kushwah & Ors. vs. State of MP & Anr.reported in I.LR.[2017]
M.P.489 has held as
under:-
“21...........Further the applicants
have filed an application under Section 320(2) of CrPC for compromise. The
offences as specified in Section 320(2) of CrPC, can be compounded with the permission
of the Court before which any prosecution for such offences is pending. Admittedly in the present case, even investigation is not complete
and no charge-sheet has been filed. No case is pending before this Court, therefore, the application
under Section 320(2) of CrPC is otherwise not maintainable.''
(31) It is next
contended by the Counsel for the applicant, that the present application under
Section 320(2) of Cr.P.C. may be treated as an application under Section 482 of
Cr.P.C. for quashment of the proceedings on the basis of compromise. In support
of this contentions, the Counsel for the applicant has relied upon the
judgments passed by the Supreme Court in the case of Gian Singh Vs. State of Punjab, reported in (2012) 10 SCC 303, Narinder
Singh Vs. State of Punjab, reported in (2014)
6 SCC 466, Parbatbhai Aahir vs. State of Gujarat and Another, reported in (2017) 9 SCC 641 and Anita
Maria Das Vs. State of Maharashtra reported in (2018)
3 SCC 209.
(32) So far as the submission of the
Counsel for the applicant, that the High Court in exercise of power under
Section 482 of Cr.P.C. can quash the proceedings is concerned, the legal
position is very clear. Had there been any non-compoundable offence registered
against the applicant, the High Court could have certainly entertained the
application filed by the applicant for quashment of the proceedings on the
basis of compromise, but in the present case, all the offences which have been
registered against the applicant are compoundable, therefore, the moot question
for determination is that when there is a specific provision in Cr.P.C., then
by-passing the said specific provisions, whether the High Court should
entertain the application for quashment of the proceedings on the ground of
compromise or not?
(33) The Supreme Court in the case of Girish Kumar Suneja Vs. C.B.I. Reported in (2017) 14 SCC 809 has held as under :-
''38. The
Criminal Procedure Code is undoubtedly a complete code in itself. As has
already been discussed by us, the discretionary jurisdiction under Section
397(2) CrPC is to be exercised only in respect of final orders and intermediate
orders. The power under Section 482 CrPC is to be exercised only in respect of
interlocutory orders to give effect to an order passed under the Criminal
Procedure Code or to prevent abuse of the process of any court or otherwise to
serve the ends of justice. As indicated above, this power has to be exercised
only in the rarest of rare cases and not otherwise. If that is the position,
and we are of the view that it is so, resort to Articles 226 and 227 of the
Constitution would be permissible perhaps only in the most extraordinary case.
To invoke the constitutional jurisdiction of the High Court when the Criminal
Procedure Code restricts it in the interest of a fair and expeditious trial for
the benefit of the accused person, we find it difficult to accept the
proposition that since Articles 226 and 227 of the Constitution are available
to an accused person, these provisions should be resorted to in cases that are
not the rarest of rare but for trifling issues.''
The Supreme Court in the case
of Madhu Limaye Vs. State of Maharashtra
reported in (1977) 4 SCC 551 has held as under :-
''8. Under
Section 435 of the 1898 Code the High Court had the power to “call for and
examine the record of any proceeding before any inferior criminal court situate
within the local limits of its .… jurisdiction for the purpose of satisfying
itself ... as to the correctness, legality or propriety of any finding, sentence
or order recorded or passed, and as to the regularity of any proceedings of
such inferior Court”, and then to pass the necessary orders in accordance with
the law engrafted in any of the sections following Section 435. Apart from the
revisional power, the High Court possessed and possesses the inherent powers to
be exercised ex
debito justitiae to
do the real and the substantial justice for the administration of which alone
Courts exist. In express language this power was recognized and saved in
Section 561-A of the old Code. Under Section 397(1) of the 1973 Code,
revisional power has been conferred on the High Court in terms which are
identical to those found in Section 435 of the 1898 Code. Similar is the
position apropos the inherent powers of the High Court. We may read the language
of Section 482 (corresponding to Section 561-A of the old Code) of the 1973
Code. It says:
“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. At the outset the following principles may be noticed in relation
to the exercise of the inherent power of the High Court which have been
followed ordinarily and generally, almost invariably, barring a few exceptions:
“(1) That the power is not to be
resorted to if there is a specific provision in the Code for the redress of the
grievance of the aggrieved party;
(2) That it should be exercised very sparingly
to prevent abuse of process of any Court or otherwise to secure the ends of justice;
(3) That it should not be exercised as against the express bar of law engrafted
in any other provision of the Code.”
The Supreme Court in the case of Punjab State Warehousing Corporation, Faridkot Vs. M/s Shri
Durgaji and others reported
in AIR 2012 SC 700 has held as under :
''8.It is trite law that the inherent power of the High Court ought
to be exercised to prevent miscarriage of justice or to prevent the abuse of
the process of the Court or to otherwise secure the ends of justice. The Court
possesses wide discretionary powers under the Section to secure these ends.In
this behalf it would be profitable to refer to the decision of this Court in Jeffrey
J. Diermeier and Anr. v. State of West Bengal and Anr.[(2010) 6 SCC 243 ],
wherein one of us (D. K. Jain, J.), speaking for the Bench, explained the scope and
ambit of inherent powers of the High Court under Section 482 of the Code as
follows:
"20...................................The Section itself envisages
three circumstances under which the inherent jurisdiction may be exercised,
namely, (i) to give effect to an order under the Code; (ii) to prevent abuse of
the process of Court; and (iii) to otherwise secure the ends of justice.
Nevertheless, it is neither possible nor desirable to lay down any inflexible
rule which would govern the exercise of inherent jurisdiction of the Court.
Undoubtedly, the power possessed by the High Court under the said provision is
very wide but it is not unlimited. It has to be exercised sparingly, carefully
and cautiously, ex debito justitiae to do real and substantial justice for which
alone the court exists. It needs little emphasis that the inherent jurisdiction
does not confer an arbitrary power on the High Court to act according to whim
or caprice. The power exists to prevent abuse of authority and not to produce
injustice.
22. In Dinesh Dutt Joshi v. State of
Rajasthan [(2001) 8 SCC 570 : (2001 AIR SCW 4068)], while dealing with the
inherent powers of the High Court, this Court has observed thus (SCC p. 573,
para 6):
"6. ...The principle embodied in the section is based upon the
maxim: quando lex aliquid alicui concedit, concedere videtur et id sine quo res
ipsae esse non potest i.e. when the law gives anything to anyone, it gives also
all those things without which the thing itself would be unavailable. The
section does not confer any new power, but only declares that the High Court
possesses inherent powers for the purposes specified in the section. As lacunae
are sometimes found in procedural law, the section has been embodied to cover
such lacunae wherever they are discovered. The use of extraordinary powers conferred
upon the High Court under this section are, however, required to be reserved,
as far as possible, for extraordinary cases."
(34) Thus, it is clear that the
powers under Section 482 of Cr.P.C. can be exercised in order to (i) prevent
abuse of process of Court (ii) to give effect to an order under the Code and
(iii) to secure the ends of justice. If a case does not fall within any of the above
mentioned categories, then the exercise of power under Section 482 of Cr.P.C.
may be declined by the High Court.
(35) In the present case, although the
parties may have decided to compromise the dispute, but in the light of the
I.A. No. 5588/2018, it cannot be said that the present case fall within any
of the above mentioned three categories. The applicant had handed over a demand
draft to the receiver Shri S.K. Shrivastava, Advocate so that the same can be
handed over to the respondent no.5, in case the compromise takes place between
the parties. After the case was reserved for judgment, with the permission of the
Court, the applicant has filed I.A. No.5588/2018 on 12-7- 2018, and in the said
application it has been mentioned as under :
''4. That, Petitioner as well as respondent No.5 undertakes
in case the compromise would be effected by this Hon'ble Court, then demand
draft would be handed over to the complainant and in case the compromise would
not be effected, then same be return to the petitioner.
4. That, respondent no.5 also undertakes that if compromise
would be effected and matter be quashed in lieu of the same, then the
grievances of the complainant is settled once complainant/ respondent No. 5
received the demand drafts.
5. That it is further submitted that during the course of
argument, the Counsel of petitioner also touches the merits of the case and in
case the matter is quashed on the basis of the merits, then petitioner undertakes
to handed over the aforesaid demand draft(s) to the respondent No.
5/complainant. It is further submitted that parties also undertakes in case matter
not quashed, the drafts would be handed over to the Petitioner. ''
(36) Thus, it is clear that the
applicant is of the view that unless and until the proceedings are quashed, he
would not make payment to the applicant, although by handing over the demand draft
to the receiver, the applicant, prima facie appears to have admitted his liability. The Supreme Court in the
case of Lee Kun Hee (Supra)
has already held that Monetary considerations cannot be claimed in the
criminal proceedings and for that relief, the remedy would be civil dispute. Thus, the criminal proceedings cannot
be resorted to settle the civil claims. In I.A. No. 5588/2018, the claim of the applicant is that only in case, the proceedings
are quashed either on the basis of the compromise or on merits, only then he
would make the payment to the respondent no.5. This conditional offer made by
the applicant, cannot be accepted. Thus, it is clear that while exercising the powers
under Section 482 of Cr.P.C., this Court cannot bypass the specific provisions
of Section 320 and 320(2) of Cr.P.C. It is contended by the Counsel for the
applicant, that since, there was an interim order in the present case,
therefore, the prosecution has not filed the charge sheet so far. For filing an
application under Section 320(2) of Cr.P.C., the applicant would be required to
appear before the Trial Court and would be required to undergo the entire
process under which a person, arrayed as an accused has to go. Thus, in
nutshell, the submission of the applicant is that in order to avoid arrest, the
applicant does not want to file an application under Section 320 of Cr.P.C. for
compounding.
(37) This submission made by the Counsel
for the applicant, cannot be a good ground for bypassing the specific
provisions of Section 320 of Cr.P.C.
(38) However, it is made clear that
refusal by this Court, to exercise the powers under Section 482 of Cr.P.C., in
view of the specific provisions of Section 320 and 320(2) of Cr.P.C., would not
mean that the Trial Court should not decide the applications under Section 320
and 320(2) of Cr.P.C. on its own merits. In case, the applications under
Section 320 and 320(2) of Cr.P.C. are filed before the Trial Court, then the
Trial Court is requested to decide the said applications, in accordance with
law, without getting prejudiced by refusal of this Court, to entertain the
application under Section 482 of Cr.P.C.
(39) Considering the totality of the facts
and circumstances of the case, this Court is of the considered opinion, that
the F.I.R. lodged by the respondent no.5, prima facie discloses the commission of offence under Sections 420,406,506,294
and 34 of I.P.C. and therefore, the F.I.R. in crime No. 154/2016, cannot be quashed
either on merits, or on the basis of compromise.
(40) Before parting with this order, this
Court feels it appropriate to issue a word of caution, that the observations in
this order, have been made by the Court, considering the limited scope of interference.
The Trial Court is expected to decide the Trial, strictly in accordance with
the evidence, which would come on record, without getting prejudiced by any of
the observations.
(41) The interim order dated 14-10-2016,
is hereby vacated.
(42) Since the applicant has submitted an
application giving a conditional offer that he would make the payment to the respondent
No.5 only in case if the proceedings are quashed and since the application
filed by the applicant under Section 482 of CrPC has been dismissed, therefore,
the applicant shall be free to receive back the Demand Draft from Shri
S.K.Shrivastava, Advocate.
(43) Accordingly, this application fails
and is hereby dismissed.