Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 13.09.2022
CORAM:
THE HONOURABLE MR. JUSTICE N.ANAND VENKATESH
Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019
and
Crl.M.P(MD).Nos.7988 of 2018
6682 and 380 of 2019
Crl.O.P(MD).No.17989 of 2019
1.Azhagu Chitra
2.C.Palpandi
3.P.Murugeshan
4.M.Rasaiah
5.R.Palpandian : Petitioners/Accused 2 to 4
7&9
Vs.,
1.State rep., by by
The Inspector of Police,
District Crime Branch,
Theni District.
(Crime No.42 of 2018) : 1st Respondent/Complainant
2.R.Raja : 2nd Respondent/Defacto
Complainant
PRAYER: Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, to call for the records in FIR in Crime No.42 of 2018 on the file of the first respondent dated 28.09.2018 quash the same as against these petitioners. 1/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 Crl.O.P(MD).No.882 of 2019
1.Lakshmanan
2.Karuppasamy
3.Balamurugan
4.Thangapandian
5.Ganesan : Petitioners/Accused 1,5,8,10 & 11 Vs.,
1.State rep., by The Inspector of Police, District Crime Branch, Theni District.
(Crime No.42 of 2018) : 1st Respondent/Complainant
2.R.Raja : 2nd Respondent/Defacto
Complainant
PRAYER: Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, to call for the records in FIR in Crime No.42 of 2018 on the file of the first respondent dated 28.09.2018 quash the same as against these petitioners. In Both Petitions For Petitioners : Mr.R.Maheswaran For Respondents : Mr.A.Thiravadi Kumar (for R1) Additional Public Prosecutor Mr.M.Jagadees Pandian (for R2) 2/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 COMMON ORDER These petitions were filed to quash the FIR registered in Crime No. 42 of 2018 and pending investigation on the file of District Crime Branch, Theni District.
2.The sum and substance of the complaint given by the second respondent, namely, Sakthi Finance Company Limited, is that A1,A5 and A8 borrowed money for the purchase of vehicles and A2, A3, A4, A6,A7 and A9 stood as guarantors for the repayment of the amount and A10 and A11 were the persons, who introduced A1, A5 and A8 to the second respondent company at the time of securing the loan from the company. The further case of the second respondent is that the borrowers repaid 9-10/10-11 installments and thereafter, failed to repay the amount. Thereafter, they entered into a conspiracy with the other accused persons and sold the vehicles to third parties. Thus, according to the second respondent, the petitioners committed offence under Sections 120 B, 406, 420 and 506(i) of IPC.
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3.The learned counsel for the petitioners would submit that it is a case where the parties were governed by a contract. Even according to the second respondent, installments were paid initially and there was default subsequently and at the best will only amount to a breach of agreement and hence, by no stretch, offence of cheating has been made out in the present case. The learned counsel further submitted that the second respondent had initiated three independent arbitration proceedings against A1, A5, A8 and the guarantors and the properties that were given as security was attached and final award was also passed and presently, the matter is pending by way of execution proceedings. In view of the same, the learned counsel submitted that the criminal proceedings initiated by the second respondent is an abuse of process of law, apart from the fact that no offence has been made out against the petitioners.
4.The learned counsel in order to substantiate his submission relied upon the judgments of the Hon'ble Supreme Court (1)In the case of Alpic Finance Ltd., Vs., P.Sadasivan and another reported in (2001) 3 SCC 4/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 513, (2)In the case of V.P.Shrivastava Vs., Indian Explosives Limited and others reported in (2010) 10 SCC 361 and (3)In the case of Thermax Limited and others Vs., K.M.Johny and others reported in (2011) 13 SCC 412.
5.The learned Additional Public Prosecutor appearing on behalf of the respondent Police submitted that immediately after the FIR was registered, investigation commenced and statements were recorded from the witnesses. On going through the same, the learned Additional public Prosecutor submitted that the fact that the borrowers had alienated the vehicles even without repaying back the entire amount shows the culpable mind of the accused persons and the same definitely requires investigation on the part of the respondent Police. The learned Additional Public Prosecutor relying upon the judgment of the Hon'ble Supreme Court in the case of Neeharika Infrastructure Private Limited Vs., State of Maharastra and other reported in 2021 (2) Madras Weekly Notes(Crl.,) 90 submitted that this Court must be very slow in interfering with the investigation, more particularly, where there is scope for 5/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 investigation in the present case with respect to the alienation of the vehicles made by the accused persons even without repaying back the loan borrowed from the second respondent.
6.The learned counsel appearing on behalf of the defacto complainant submitted that sufficient allegations have been made in the complaint and this case involve d conspiracy between the accused persons, which will get finally established, only if the respondent Police is permitted to complete the investigation. The learned counsel submitted that the initiation of Arbitration proceedings will have nothing to do with the initiation of a criminal case, since the culpable mind of the accused persons is apparent with the very fact that the vehicles were alienated even without repaying the amount borrowed from the defacto complainant. The learned counsel therefore submitted that these petitions are liable to be dismissed and a direction may be given to the respondent Police to complete the investigation within a stipulated time. 6/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019
7.This Court has carefully considered the submissions made on either side and perused the materials on record.
8.This Court bears in mind the caution given by the Hon'ble Apex Court in the judgment cited by the learned Additional Public Prosecutor, wherein it has been categorically held that this Court must be very slow in interfering with investigation in a case, while dealing with a petition seeking to quash the FIR. The Hon'ble Apex Court has made it clear that the investigation agency must be given a free hand to proceed further with the investigation even if there is some element of culpability involved in a given case. In short, the Hon'ble Apex Court has held that allowing investigation must be the Rule and interference with the same must be an exception.
9.In the present case, the element of cheating has been brought out by the defacto complainant by pointing out two factors. The first factor is that the borrowers did not repay back the entire loan amount and they paid only the initial installments. The second factor that has been 7/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 pressed into service by the defacto complainant is that the borrowers even without repaying back the loan amount, had proceeded to sell the vehicle to the third parties and that clearly shows the culpable mind. According to the defacto complainant, the borrowers had done this in conspiracy with all the other accused persons.
10.In the considered view of this Court, even if the allegations made in the complaint are taken as it is, there will be nothing against the guarantors that requires any investigation irrespective of the vehicles are sold or not, by the principal borrowers. Ultimately, when it comes to recovery of the amount, the guarantors will have to fulfill the liability. Hence, the alienation of the vehicles by itself does not take the guarantors to any advantageous position. Even while reading the complaint, except general allegations, there is absolutely no material to show that the guarantors will have to be prosecuted in this case. In view of the same, this Court is inclined to interfere with the investigation insofar as A2, A3, A4, A7 and A9 are concerned. A6 was also a guarantor and since he died during the pendency of this case, the proceedings abated as against A6 automatically. 8/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019
11.Insofar as the principal borrowers, namely, A1,A5,A8 and the role played by A10 and A11, the allegations made in the complaint requires investigation by the respondent Police. Initiation of Arbitration proceedings by itself will not be a bar for the Police to investigate the case in order to find out if there was any criminal intent on the part of the accused persons to cheat the defacto complainant.
12.In view of the above discussion, this Court is inclined to quash the FIR in Crime No.42 of 2018, on the file of the first respondent, insofar as A2,A3,A4,A7 and A9 are concerned. Insofar as A1,A5,A8,A10 and A11 are concerned, there will be a direction to the respondent Police to continue with the investigation. The investigation shall be completed and final report or closure report as the case may be, shall be filed before the concerned jurisdictional Court within a period of three (3) months from the date of receipt of a copy of this order.
13.It is made clear that any observation made by this Court in this order shall not have any bearing on the respondent Police and it is left 9/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 open to the Investigating Officer to independently proceed further strictly in accordance with law and come to a conclusion.
14.In the result, Crl.O.P(MD)No.17989 of 2018 is allowed and Crl.O.P(MD)No.882 of 2019 is dismissed. Consequently, connected Miscellaneous Petitions are closed.
13.09.2022 Index:Yes/No Internet: Yes/No Rmk To
1.The Inspector of Police, District Crime Branch, Theni District.
2.The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai.
10/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 11/12 https://www.mhc.tn.gov.in/judis Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 N.ANAND VENKATESH, J., Rmk Crl.O.P.(MD)Nos.17989 of 2018 and 882 of 2019 and Crl.M.P(MD).Nos.7988 of 2018 6682 and 380 of 2019 13.09.2022 12/12 https://www.mhc.tn.gov.in/judis