Crl.O.P.No.17651 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 05.09.2022
CORAM
THE HONOURABLE Mr.JUSTICE G.K.ILANTHIRAIYAN
Crl.O.P.No.17651 of 2022
and Crl.M.P.No.11029 of 2022
D.Ishaan Bhatia ... Petitioner
Vs
1.The State rep by
The Inspector of Police,
EDF-I, Team II,
Central Crime Branch,
Chennai 600 007. (Crime No.55 of 2021)
2.P.Rahul Chhajer ... Respondents
PRAYER: Criminal Original Petitions filed under Section 482 of Cr.P.C,
praying to cal for the records in C.C.No.1619 of 2022 pending on the file of
the learned Metropolitan Magistrate for exclusive trial of CCB and CBCID
Metro Wing Cases, Egmore, Chennai and quash the same.
For Petitioners : Mr.R.Vivekananthan
For Respondents : Mr.E.Raj Thilak
Additional Public Prosecutor for R1
No appearance for R2
Page 1 of 9
https://www.mhc.tn.gov.in/judis
Crl.O.P.No.17651 of 2022
ORDER
This petition has been filed to quash the proceedings in C.C.No.1619 of 2022 pending on the file of the learned Metropolitan Magistrate for exclusive trial of CCB and CBCID Metro Wing Cases, Egmore, Chennai, thereby taking cognizance for the offences under Sections 406 and 420 IPC, as against the petitioner.
2.The case of the prosecution is that M/s.MGK International DWC- LLC is a Private Limited Company is indulged in international trade of buying and selling Metal scrap around the globe, whereas M/s.MTC Business Private Limited Company is a concern/ Company of M/s. MGK International and the said company runs through the subsidiary received from M/s.MGK International. The further allegation is that through a business agent, one Rajiv Kumar Gupta, the petitioner's Company had approached the defacto complainant's Company for purchase of MS Turning Scrap. After initial negotiations, the defacto complainant had agreed to proceed with the business transactions with the petitioner's Company and in continuation of the said business transactions, a high valued transaction was entered into between them. Subsequent to the shipment of goods from Page 2 of 9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.17651 of 2022 Brazil, the petitioner had informed his inability to make the whole payment for the goods under shipment and refused to collect the export douments to be presented before the Customs. It is further alleged that in furtherance of the business transactions, the petitioner had refused to give 'No objection' to the defacto complainant's company to sell the shipment to others and made him to accept the terms of his contract and made him to sell the goods to him. Due to the acts of the petitioner, the defacto complainant's Company had sustained loss to the tune of Rs.47,00,000/- and in this regard, the defacto complainant had lodged the present complaint. After registration of the complaint in Crime No.55 of 2021, the first respondent / Police has filed the final report and the same has been taken on file in C.C.No.1619 of 2022 pending on the file of the learned Metropolitan Magistrate for exclusive trial of CCB and CBCID Metro Wing Cases, Egmore, Chennai.
3.The learned counsel for the petitioner submitted that even before completion of investigation, the petitioner has filed Crl.O.P.No.5537 of 2021 before this Court seeking to quash the First Information Report in Crime No.55 of 2021. This Court admitted the quash petition and granted an Page 3 of 9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.17651 of 2022 interim order that the first respondent/ Police shall not file a final report. Pending the quash petition, the first respondent filed the final report and the same has been taken cognizance. He further submitted that the entire allegations are commercial business transaction, which are governed by a Special Act i.e., Commercial Courts Act, 2015. Therefore, no offence is made out as against the petitioner as alleged by the 2nd respondent herein for the offences under Sections 406 and 420 IPC. He further submitted that to attract the ingredients of offence under Section 406 IPC, it is necessary to show that the defacto complainant, in a fiduciary capacity, had entrusted the property to the petitioner and the petitioner has disposed the same for their personal use or in violation of contractual agreements. Under the transaction of sale, once the properties were delivered by the defacto complainant to the petitioner, his ownership over the properties is being ceased out. After the sale, the defacto complainant has neither any right nor dominion over the property and after the delivery of the properties by the defacto complaiant, he cannot claim that he has entrusted the same to the petitioner.
4.The learned counsel for the petitioner further submitted that mere Page 4 of 9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.17651 of 2022 business transaction involving buying and selling of goods with an intent to obtain monetary consideration would amount only to transactions which are commercial in nature and the same does not amount to entrustment of property. That apart, for the offence under Section 420 IPC, it must be shown that the petitioner, with a mala-fide intention, had deceived the defacto complainant to deliver the goods to them. It is necessary to consider the state of mind of the petitioner at the very inception of entering into a contract with the defacto complainant and as per the case of the prosecution, the petitioner has paid the amount to the goods delivered by the defacto complainant on earlier occasions and obtained his confidence over the business transactions which evidently shows that the petitioner had no intention to cheat the defacto complainant. Mere breach of contract and subsequent non-fulfillment of a promise does not amount to cheat, unless it is shown that there was dishonest intention that had existed in the mind of the petitioner. A dishonest intention cannot be inferred from a mere fact of subsequent breach of promise. When there is a regular business dealing between the petitioner and the defacto complainant, non-performance of a promise at a future date, does not attract the ingredients of cheating. Page 5 of 9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.17651 of 2022 Therefore, the offences under Sections 406 and 420 IPC would not come together for a single transaction.
5.Heard the learned counsel for the petitioner as well as the learned Additional Public Prosecutor and perused the entire materials available on record. Though notice has been served on the second respondent, he has not appeared in person or through counsel.
6.On a perusal of the impugned charge sheet, it reveals that it amounts to only about single transaction, whereas the statement of accounts produced by the petitioner reveals that from the year 2018 onwards, there has been transaction between them. That apart, a bare perusal of the commercial agreement entered into between the defacto complainant and the petitioner, it is seen that the settlement of disputes has to be done through Arbitration. It is relevant to extract the relevant clause of the agreement, which reads as follows, by the agreement dated 19.07.2019:
“ARBITRATION: Arbitration in New Jersey under auspices of New Jersey maritime arbitrators association and Page 6 of 9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.17651 of 2022 controversy or claim arising out of or relating to this contract or the breach thereof, shall be selected by arbitration in new jersey by there arbitrators in accordance with the provisions of the Arbitration act, 1963 and subsequent amendments, under the auspices of the New Jersey maritime arbitrators association. The arbitrators shall issue a reasoned award in writing judgment upon the award rendered by the arbitrators be entered in any court having jurisdiction thereof.”
6.Thus, it is made clear that any violation of the said clause and non- compliance of the same would amount to viodable agreement and it is open to the parties to settle their issue through Arbitration proceedings.
7.It is made clear that any claim arising out of or relating to this contract or the breach thereof, shall be selected by Arbitration in New Jersey by three arbitrators in accordance with the provisions of the Arbitration Act, 1963. Therefore, the violation of the said clause and non- compliance of the same would amount to voidable agreement and a Page 7 of 9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.17651 of 2022 commercial dispute was over and again labeled as a criminal transaction. In view of the above, no offence is made out under Sections 406 and 420 IPC as against the petitioner and entire charge sheet is nothing but an abuse of process of Court and it cannot be sustained as against the petitioner.
8.In view of the above discussion, this Criminal Original Petition is allowed. Consequently, connected Miscellaneous Petition is closed.
05.09.2022 Internet:Yes Index:Yes/no Speaking/non speaking order vkr To
1.The Inspector of Police, EDF-I, Team II, Central Crime Branch, Chennai 600 007.
2.The Public Prosecutor, Madras High Court, Chennai.
G.K.ILANTHIRAIYAN. J, Page 8 of 9 https://www.mhc.tn.gov.in/judis Crl.O.P.No.17651 of 2022 vkr Crl.O.P.No.17651 of 2022 and Crl.M.P.No.11029 of 2022 05.09.2022 Page 9 of 9 https://www.mhc.tn.gov.in/judis