Jiteshbhai Rameshbhai Gajeria vs State Of Gujarat

                                                                                              NEUTRAL CITATION




      R/SCR.A/1241/2015                                      ORDER DATED: 16/10/2023

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             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

     R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 1241 of 2015

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                 JITESHBHAI RAMESHBHAI GAJERIA & 1 other(s)
                                 Versus
                       STATE OF GUJARAT & 1 other(s)
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Appearance:
MR JM BAROT(143) for the Applicant(s) No. 1,2
MR JAY H PATEL(11511) for the Respondent(s) No. 2
MS MONALI BHATT, APP for the Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT

                                  Date : 16/10/2023

                                    ORAL ORDER

1. Present petition is filed with a prayer to quash and set aside FIR being C.R.No.I-11 of 2015 registered with Rajula Police Station, District-Amreli, for the offences punishable under Sections 406, 420, 120-B and 34 of the Indian Penal Code.

2. Brief facts leading to the present petition are that the petitioners-original accused are the directors of Vallabh Exim Pvt. Ltd., a registered company duly registered before the Registrar of Companies, Ahmedabad. The names of the petitioners are also reflected in the form no. 32 of the company submitted before the Registrar of Companies.

NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined 2.1 The petitioners respectfully submit that the complainant is the director of "Dwarkadish Ginning and Pressing Pvt.

Ltd." at Khakhvai, Tal. Rajula, Dist. Amreli. The company of the petitioners i.e. "Vallabh Exim Pvt. Ltd." and the company of the complainant i.e. "Dwarkadish Ginning and Pressing Pvt. Ltd." had decided to do the business of supply of cotton.

This business was commenced from the year 2012, the cotton was supplied at regular interval to the company of the petitioners and the company of the petitioners, in turn had also made payment at regular interval. There was a transaction of almost Rs.67 crores in the year 2012.

2.2 The petitioners respectfully submit that later on there was a dispute of quality of cotton and therefore, Vallabh Exim Pvt. Ltd. had returned the cotton to "Dwarkadish Ginning and Pressing Pvt. Ltd.". Thus, Vallabh Exim was not liable to make any payment to the company of the complainant i.e. "Dwarkadish Ginning and Pressing Pvt. Ltd.".

Later on the dispute was settled between the parties on account of intervention of business people and friends. The memorandum of understanding is entered into between the parties in the month of February, 2013, wherein, it was decided that the goods was returned back and was received by the complainant and therefore, the misunderstanding of outstanding payment was also removed.

NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined 2.3 The petitioners respectfully submit that the petitioners had shifted to Mumbai and had started the business of Cotton in the name and style of Global Cotton Corporation, 402, Arcedia Building, 4 th Floor, Nariman Point, Mumbai. The complainant continued the business with the petitioners i.e. Global Cotton Corporation. The goods was supplied at regular internal and the payment was also made at regular interval.

The business continued for considerable long time. Later on, there was some dispute about the quality of goods and payment. According to last statement of books of account between the parties, the company of the petitioner i.e. Global Cotton Corporation has to receive the amount of Rs.55 lakhs from the company of the complainant.

2.4 The petitioners respectfully submit that the complainant had forcefully obtained the signatures of both accused persons on plain papers, on one of the paper, special power of attorney was allegedly executed by the petitioners in favour of the complainant for transfer of residential house of the petitioners at Bhavnagar. This power of attorney was used by the complainant and the residential house of the petitioners was transferred in favour of brother-in- law of the complainant through registered sale deed.

NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined 2.5 The petitioners respectfully submit that the petitioners had filed Special Civil Suit No.8/2014 in the court of the Ld.

Civil Judge, Bhavnagar for cancellation of the registration of sale deed against the complainant and his brother-in-law.

This civil suit is pending between the parties.

2.6 The petitioners respectfully submit that the petitioners had also submitted an application in writing to the Police Inspector, "B" Division Police Station, Bhavnagar, wherein, it was stated that the complainant and his brother-in-law had broken the lock and had illegally entered in the residential house of the petitioners. However, no steps are taken by the Police till date against the complainant.

2.7 The petitioners respectfully submit that there was danger to the life of the petitioners and there was a marriage ceremony of brother-in-law of the petitioner and therefore, the wife of petitioner had submitted an application dated 25.1.2015 in writing to the Police Inspector, "B"

Division Police Station against the complainant and his associates.

2.8 The petitioners respectfully submit that the original complainant has filed the impugned FIR in the month of February, 2015 for the transaction that had happened in the Page 4 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined year 2013. From the above stated facts and circumstances, it is clear that the dispute between the parties a purely commercial and civil dispute of supply of goods and non-

payment. It is also stated that no criminal offence as alleged in the FIR is set out in entire transaction. It is also stated that dispute is between two companies. It is also stated that there is a gross delay of almost two years in lodging the FIR. Under the above facts and circumstances, the petitioners have prayed for quashing the FIR.

3. Heard learned advocate Mr.J.M.Barot for the petitioners Mr.Jay Patel for the complainant and learned APP, Ms.Monali Bhatt for the respondent-State.

4. Learned advocate, Mr.Barot has submitted that initially the petition was filed in view of settlement arrived at between the parties, however, thereafter due to the circumstances beyond control of the petitioner, settlement could not be acted upon. He has submitted that on bare reading of FIR, no offence is made out and, considering provisions of Sections 406, 420, 120-B and 34 of IPC, no ingredients of these provisions are satisfied in the facts of present case. He has submitted that, at the best, it can be said to be a civil dispute as there is breach of contract, and the petition is required to be allowed. He has also submitted Page 5 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined that offence is committed during the period from 7 th April 2013 to 21 st May 2013 and FIR is registered on 16 th February 2015, therefore, it cannot be said that there is delay in lodging the complaint. Essentially, the dispute is regarding payment of cotton purchased by the petitioner and, therefore, it is a dispute arising out of contract. He has submitted that the complainant has tried to give the colour of a criminal dispute to a dispute which is essentially civil in nature. He has relied upon decision in the case of State of Haryana V/s Bhajan Lal reported in AIR 1992 SC 604, wherein it is observed as under:-

"In the backdrop of the interpretation of the various relevant provisions of the Code under Ch.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 Art.226 or the inherent powers under sec.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 formulae and to give an exhaustive list of myriad kinds of cases wherein such Page 6 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined 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 sec.156(1) of the Code except under an order of a Magistrate within the purview of sec.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 sec.156(2) of the Code.

(5) Where the allegations made in the FIR or Page 7 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined 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."

4.1 In view of above, he has prayed that present petition may be allowed.

5. Per contra, Mr.Jay Patel, learned advocate for the complainant has strongly opposed prayers made in this petition and has submitted that dues of Rs.6,53,60,971/- is Page 8 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined outstanding since 2013. He has submitted that initially the petitioner has developed relation with the complainant by purchasing cotton for his firm viz. Vallabh Exim Private Limited and Anjani Synthetics Limited. Thereafter, with a view to defraud the complainant, the petitioner has not paid outstanding amount towards purchase of cotton. He has also submitted that petitioner has also entered into an MOU with present complainant and pursuant to that also, the petitioner has not paid any amount. Therefore, the petitioner has an intention to dupe the complainant with huge amount. He has submitted that, therefore, offences under Sections 406, 420 120-B and 34 of IPC are made out, as the petitioner has entered into an MOU with the complainant and did not pay the amount. He has also submitted that for the transaction of 2013, complaint is filed in 2015, therefore, it cannot be said that there is delay in lodging FIR. He has submitted that in view of the judgment in the case of Neeharika Infrastructure Pvt. Ltd. versus State of Maharashtra and Others reported in 2021 SCC OnLine SC 315, the petitioners are required to face trial as prima facie case is made out against them and present petition may be dismissed.

6. Learned APP, Ms.Monali Bhatt for the State has supported the submissions made by the complainant and has further submitted that this Court should not exercise powers Page 9 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined under Section 482 of Criminal Procedure Code, when prima facie case is made out against the petitioners. She has submitted that powers under Section 482 should be exercise very sparingly in view of various decisions of Honourable Apex Court. She has submitted that considering the impugned complaint, it cannot be said that there is abuse of process of law, on the quantity, the petitioner has made promises by way of MOU to pay the amount and therefore, the petitioner has admitted the dues and not paid any amount. She has also submitted that there are criminal antecedents against the present petitioners. In view of all these, she has prayed to dismiss present petition.

7. I have considered rival submissions. I have also considered the provisions under which the offences are alleged against the petitioner, which are as under:-

"34. Acts done by several persons in furtherance of common intention.--When a criminal act is done by several persons in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone.] .........

120-B. Punishment of criminal conspiracy.--(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, [imprisonment for life] or rigorous Page 10 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.] ...........

405. Criminal breach of trust.

Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust".

Section 406. Punishment for criminal breach of trust. Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. ...........

NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined Section 415. Cheating.

Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".

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Section 420. Cheating and dishonestly inducing delivery of property.

Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."

8. Considering facts of the case, the petitioners have not paid huge amount of above Rs.6 Crores to the complainant.

Thereafter also, the petitioners have entered into an MOU with the complainant, whereby the liability to pay the Page 12 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined amount is admitted but no amount is paid. This shows that the petitioner is not willing to pay any amount. Considering the allegations made in the FIR and the material available on record prima facie ingredients of offences under Sections 406, 420, 120-B and 34 of IPC are satisfied against the present petitioners. Considering the facts of the case and material available on record, I am of the opinion that this is not a case wherein this Court should exercise powers under Section 482 of Criminal Procedure Code. It is always open for the petitioners to raise their defence during the course of trial before competent Court. At this stage, it is appropriate to refer to the judgment of the Hon'ble Apex Court in the case of Neeharika Infrastructure Pvt. Ltd. versus State of Maharashtra and Others reported in 2021 SCC OnLine SC 315, and more particularly para 80 is relevant, which is as under:-

"80. In view of the above and for the reasons stated above, our final conclusions on the principal/core issue, whether the High Court would be justified in passing an interim order of stay of investigation and/ or "no coercive steps to be adopted", during the pendency of the quashing petition under Section 482 Cr.P.C and/or under Article 226 of the Constitution of India and in what circumstances and whether the High Court would be justified in passing the order of Page 13 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined not to arrest the accused or "no coercive steps to be adopted" during the investigation or till the final report/chargesheet is filed under Section 173 Cr.P.C., while dismissing/disposing of/not entertaining/not quashing the criminal proceedings/complaint/FIR in exercise of powers under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India, our final conclusions are as under:

i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into a cognizable offence;

ii) Courts would not thwart any investigation into the cognizable offences;

iii) It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on;

iv) The power of quashing should be exercised sparingly with circumspection, as it has been observed, in the 'rarest of rare cases (not to be confused with the formation in the context of death penalty).

NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined

v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;

vi) Criminal proceedings ought not to be scuttled at the initial stage;

vii) Quashing of a complaint/FIR should be an exception rather than an ordinary rule;

viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities and one ought not to tread over the other sphere;

ix) The functions of the judiciary and the police are complementary, not overlapping;

x) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;

xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;

NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined

xii) The first information report is not an encyclopedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;

xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be more cautious. It casts an onerous and more diligent duty on the court;

xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal Page 16 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined (supra), has the jurisdiction to quash the FIR/complaint;

xv) When a prayer for quashing the FIR is made by the alleged accused and the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegations in the FIR;

xvi) The aforesaid parameters would be applicable and/or the aforesaid aspects are required to be considered by the High Court while passing an interim order in a quashing petition in exercise of powers under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India. However, an interim order of stay of investigation during the pendency of the quashing petition can be passed with circumspection. Such an interim order should not require to be passed routinely, casually and/or mechanically. Normally, when the investigation is in progress and the facts are hazy and the entire evidence/material is not before the High Court, the High Court should restrain itself from passing the Page 17 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined interim order of not to arrest or "no coercive steps to be adopted" and the accused should be relegated to apply for anticipatory bail under Section 438 Cr.P.C. before the competent court. The High Court shall not and as such is not justified in passing the order of not to arrest and/or "no coercive steps" either during the investigation or till the investigation is completed and/or till the final report/chargesheet is filed under Section 173 Cr.P.C., while dismissing/disposing of the quashing petition under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India. xvii) Even in a case where the High Court is prima facie of the opinion that an exceptional case is made out for grant of interim stay of further investigation, after considering the broad parameters while exercising the powers under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India referred to herein above, the High Court has to give brief reasons why such an interim order is warranted and/or is required to be passed so that it can demonstrate the application of mind by the Court and the higher forum can consider what was weighed with the High Court while passing such an interim order.

xviii) Whenever an interim order is passed by the High Court of "no coercive steps to be adopted" within the Page 18 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023 NEUTRAL CITATION R/SCR.A/1241/2015 ORDER DATED: 16/10/2023 undefined aforesaid parameters, the High Court must clarify what does it mean by "no coercive steps to be adopted" as the term "no coercive steps to be adopted" can be said to be too vague and/or broad which can be misunderstood and/or misapplied."

9. Considering the facts of present case as well as material available on record and settled legal position as per above decision, present petition is required to be dismissed.

Accordingly, this petition is dismissed. Notice is discharged.

Interim relief granted earlier stands vacated.

(SANDEEP N. BHATT,J) R.S. MALEK Page 19 of 19 Downloaded on : Tue Oct 17 20:46:18 IST 2023