* HIGH COURT OF DELHI AT NEW DELHI
+ CRL. M.C. No. 4994-96/2005
Date of Decision : 26.03.2012
RAMESH CHANDRA PARIDA & ORS. ...... Petitioners
Through: Mr. P.N. Misra, Sr. Adv. with Mr. S.
Mohanty, Adv.
Versus
SACHDEVA COLLEGE LTD. & ORS. ...... Respondents
Through: None
CORAM :
HON'BLE MR. JUSTICE V.K. SHALI
V.K. SHALI, J. (Oral)
1. This is a petition under Section 482 Cr.P.C. for quashing of the proceedings arising out of the complaint titled Sachdeva College Ltd. - vs- Sachdeva New P.T. College & Ors. bearing No.185/99 and the order dated 5.7.2000 passed by the learned Magistrate, Tis Hazari Courts, Delhi, taking cognizance against the petitioners for an offence under Section 403/406/420/34 read with Section 120B of the Indian Penal Code (IPC).
2. Briefly stated, the facts of the case are that a Franchise Agreement, having an Arbitration Clause, was entered into between the respondent no.1 and the petitioner no.1 on 7.5.1992 for running a tutorial centre at Cuttack, Orissa under the name and style of Sachdeva New P.T. College which was renewed from time to time which continued uninterrupted upto 10.4.1997. On account of Crl.M.C.4994-96/2005 Page 1 of 9 differences and disputes between the parties having arisen as well as because of the alleged poor health condition of the petitioner no.1., he informed the respondent no.1, vide letter dated 25.3.1999, that he wanted to withdraw from the said Franchise Agreement. He stated that he is prepared to surrender the said Centre to the respondent no.1. The respondent no.1 accepted the withdrawal request of the petitioner no.1 with effect from 31.3.1999. It is alleged that the petitioner no.1 wrote letters dated 29.4.1999 and 31.5.1999 for the settlement of accounts and requested the respondent no.1 to take back the study materials, stationery etc. from the Cuttack Centre in terms of the Agreement. It is alleged that the respondent no.1, instead of acceding to the request of the petitioner no.1, insisted that the latter should come down to Delhi and return the study materials at Delhi and also settle the accounts. Since this was not done by the petitioner no.1, the respondent no.1 chose to file a suit for declaration and permanent injunction against the petitioner nos.1 to 3 and others for allegedly running a tutorial centre in the name of N.M. Tutorial at Cuttack, alleging that they were using the study materials and the stationery of Sachdeva New P.T. College. It is alleged that during the pendency of the said suit, a petition was filed on 16.9.1999, alleging that the petitioners were playing fraud upon the public and the complainant by misrepresenting to the public at large that the Sachdeva New P.T. Crl.M.C.4994-96/2005 Page 2 of 9 College is being managed by PERT Pvt. Ltd. It is alleged that this was being done in violation of Clause 21 of the Franchise Agreement and accordingly, feeling aggrieved, the respondent no.1 chose to file a complainant under Section 403/406/420/34 read with Section 120B of the IPC. It is alleged that after the recording of pre-summoning evidence, the petitioners were summoned for the aforesaid offences.
3. Feeling aggrieved by the said summoning order, the petitioners have preferred the present petition seeking quashing of the complaint as well as the summoning order dated 5.7.2000 on various grounds.
4. I have heard Mr. P.N. Misra, the learned Senior Counsel on behalf of the petitioners.
5. It has been contended by him that the complaint, on the basis of which the petitioners had been summoned, could not be entertained by the Delhi Courts on account of lack of jurisdiction, inasmuch as the entire alleged offence, even if it is assumed to have been committed, was committed in Cuttack, Orissa. It was contended that Section 177 of the Cr.P.C. confers the jurisdiction to try a criminal offence at a Court only where the said offence has been committed and this being so, the Delhi Courts did not have the jurisdiction.
6. The second submission which has been urged by the learned Senior Counsel is that the dispute between the petitioners and the Crl.M.C.4994-96/2005 Page 3 of 9 respondents was essentially a civil dispute pertaining to the settlement of accounts and this is evident from the fact that the Agreement was entered into in the year 1992 and it worked well for a period of nearly five years whereupon the petitioners wanted to terminate the Agreement and settle the accounts. It was urged that one of the essential ingredients for an offence of breach of trust or even cheating is that there should be dishonest intention at the threshold when the transaction has taken place. Therefore, it was contended that this was essentially a civil dispute pertaining to the settlement of accounts for which an arbitration clause was also provided in the Agreement but it is alleged that the petitioner, in addition to the invoking the jurisdiction of the Civil Court by filing a suit for declaration and permanent injunction, had also chosen to use criminal proceedings only with a view to bring to bear pressure on the petitioners. It has been contended that this practice of converting the civil disputes into criminal disputes has been also deprecated by the Hon'ble Supreme Court in a number of cases. In this regard, the learned Senior Counsel has placed reliance on Indermohan Goswami -vs- State of Uttarakhand, 2007(12) SCC 1, Sharon Michael -vs- State of Tamilnadu, 2009(3) SCC 375 and Joseph Salvaraj -vs- State of Gujarat, 2011(7) SCC 59.
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7. It has also been contended by the learned Senior Counsel, Mr. Mishra that such a continuance of the proceedings is a gross abuse of the process of law and if it be so, the Court should not feel powerless to quash the proceedings, including the order of summoning in order to stop the action of the respondent no.1/complainant in witch-hunting the petitioners.
8. There was no appearance on behalf of the respondent no.1 despite the case having been passed-over three times. The order sheets show that on the previous two occasions also, there was no appearance on behalf of the respondent no.1. So far as the State is concerned, it did not contest the proceedings and left it to the Court to decide for itself as to whether any order is to be passed by this Court or not.
9. I have carefully considered the submissions made by the learned Senior Counsel for the petitioners and have also gone through the record carefully.
10. Section 177 Cr.P.C. lays down as under:-
Section 177.-- Ordinary place of inquiry & trial- Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed.
11. In the instant case, admittedly, the Franchise Agreement is stated to have been signed in Cuttack. It envisaged that the tutorial classes to be run by the petitioners were at Cuttack. A Notice of Termination of that Franchise Agreement was sent by the petitioners from Cuttack. Crl.M.C.4994-96/2005 Page 5 of 9 Even the respondents had claimed that the petitioners were allegedly using their study materials for the purpose of running their unauthorized tutorial classes after termination of the Franchise Agreement at Cuttack. Therefore, it could be very safely said that the entire cause of action in respect of the alleged commission of offence of cheating or the breach of offence of trust arose at Cuttack and it was only the Cuttack Courts which had the jurisdiction, while as the respondents had chosen to file the complaint in Delhi.
12. Keeping in view the aforesaid facts, this filing of the complaint by the respondents in Delhi was, in my view, done purposely so as to put the petitioners to inconvenience of coming to Delhi and facing the prosecution and thus bring them to a negotiating table. This cannot be permitted to be done. Therefore, so far as this submission, which has been made by the learned Senior Counsel, Mr. Mishra is concerned, it has merit and on this ground itself, the complaint filed by the respondents deserves to be quashed.
13. There are a catena of judgments expressing concern that there has been a growing tendency on the part of the litigants to convert civil proceedings into criminal disputes only with a view to do arm twisting of the opposite side so as to bring them to negotiating table or compel them to settle the matter. In all such cases, not only the High Court has come to the rescue of such unfortunate parties by quashing the Crl.M.C.4994-96/2005 Page 6 of 9 proceedings, but also even the Apex Court has clearly demarcated the areas or cases where it can be conveniently said that a civil dispute was sought to be converted into criminal dispute. (See : Joseph Salvaraj (supra), Indian Oil Corporation Vs. NEPC India Ltd. & Ors., AIR 2006 SC 2780, Sharon Michael (supra), Kishan Singh Vs. Gurpal Singh & Ors., 2010 (10) SCC 775) and Indermohan Goswami (supra).
14. A perusal of the aforesaid judgments would clearly show that one of the important ingredients in respect of an offence of cheating is that at the time of entering into an agreement, there must be dishonest intention on the part of the persons who are intending to cheat. In the instant case, admittedly, the Franchise Agreement was entered into between the petitioners and the respondents in the year 1992. This Franchise Agreement had admittedly worked well between the parties for the purpose of running the New Sachdeva P.T. College at Cuttack till 1997. It was only in 1997 that the petitioners are purported to have issued notice to the respondents to terminate the Agreement which had culminated into differences/disputes between the parties regarding the settlement of their accounts which further resulted in filing of a suit for declaration and permanent injunction by the respondents against the petitioners at Delhi, alleging that the petitioners are using their study materials for the purpose of advancing their own interests. If such be the conspectus of the facts, Crl.M.C.4994-96/2005 Page 7 of 9 then in such a case it can clearly be stated that in 1992, when the Franchise Agreement was entered into, the petitioners did not have a dishonest intention and accordingly, the petitioners could not have been summoned for the offence of cheating. Moreover, this is further fortified by the fact that the petitioners had already chosen to file a suit for declaration and permanent injunction against the respondents in Delhi in the first instance and it is only after filing of the said suit and obtaining an injunction that the petitioners had woken up to file a complaint under various offences of the IPC. This clearly shows the contemporaneous conduct of the respondents and that they had full knowledge that the case against the petitioners was essentially a civil dispute and it had to be settled in a Civil Court.
15. In view of the aforesaid facts, I am of the considered opinion that the continuation of the proceedings against the present petitioners, being civil proceedings, is a gross abuse of the processes of law as the dispute between the parties is essentially a civil dispute. Therefore, in exercise of its powers under Section 482 Cr.P.C., the Court needs to cut short the agony and the harassment of the petitioners by putting an end to their trial in Delhi.
16. I, accordingly, quash the complaint and set aside the order of summoning dated 5.7.2000 against the petitioners filed under Section 482 Cr.P.C.
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17. File be consigned to the Record Room.
V.K. SHALI, J.
MARCH 26, 2012 tp Crl.M.C.4994-96/2005 Page 9 of 9