THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No. 8624 OF 2019
O R D E R:
This Criminal Petition under Section 482 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.'), is filed seeking to quash the charge sheet filed in CC.No.1521 of 2019 in Crime No.406 of 2019 dt.05.06.2019, pending on the file of the VI Metropolitan Magistrate at Medchal, Cyberabad. The petitioners herein are accused in the said crime. The offences alleged against them are under Sections 406, 420, 506 read with 34 of the Indian Penal Code.
2. Heard Sri Pratap Narayan Sanghi, learned Senior Counsel appearing for the petitioners, learned Assistant Public Prosecutor appearing for the State and defacto complainant/2nd respondent and perused the record.
3. The case of the 2nd respondent/defacto complainant is that he was running a business dealing with welding and safety materials at Ranigunj, Secunderabad and sustained losses in the year 2017. He has taken permission from the petitioners for storing material in the factory premises of the petitioners/accused, located at IDA Jeedimetla, for safe custody. However, when the 2nd respondent and his son visited the premises they found that the material worth Rs.43,62,455/- which was kept in the factory premises of the petitioners missing. When questioned, the defacto complainant was threatened. In the said 2 circumstances, the petitioners have committed the offences of cheating, misappropriation and criminal intimidation.
4. The learned Senior Counsel Sri Pratap Narayan Sanghi argued that the defacto complainant/2nd respondent suffered financial losses and to overcome the said situation filed an insolvency petition which is pending adjudication. The said petition was filed seeking to declare the 2nd respondent insolvent to an extent of Rs.46,74,035/-.
5. He further argued that the petitioners have given a hand loan of Rs.18 lakhs and the 2nd respondent handed over the articles to the petitioners who in turn sold to third parties and recovered an amount of Rs.12 lakhs out of the said 18 lakhs which was due. He further submits that to attract an offence under Section 420 of Indian Penal Code there has to be element of inducement pursuant to misrepresentation and such inducement should have resulted in delivery of property. Since all the ingredients of Section 420 of the IPC are missing, the prosecution cannot be proceeded with. Since the question of entrustment as required under Section 406 of the IPC is not proved by the complainant, the question of committing an offence under Section 406 of the IPC is not made out and any transactions in between the petitioners and defacto complainant are business transactions which are purely civil in nature. In the said background, the petitioners cannot be prosecuted for criminal offences and sought interference of this Court in quashing the proceedings.
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6. He also relied upon the Judgments of Honourable Supreme Court in Wyeth Limited and others v. State of Bihar and another1 in Criminal Appeal No.1224 of 2022 (Special Leave Petition (Crl.) No.10730 of 2018), wherein the Honourable Supreme Court held that when the transactions discloses a commercial relationship, merely adding the language to make out the ingredients of criminal offences, is incorrect and consequently the Honourable Supreme Court quashed the FIR.
7. The other Judgment relied upon by the petitioners in Vijay Kumar Ghai and others v. State of West Bengal and others2 was also a case wherein the Honourable Supreme Court was pleased to quash the proceedings, finding on facts that the transactions would not sustain criminal prosecution.
8. He also relied upon the Judgment of Honourable Supreme Court in Ashok Chaturvedi and others v. Shitul H.Chanchani and another 3 wherein the Honourable Supreme Court found fault with taking cognizance of the charge sheet when none of the ingredients were made out.
9. Finally, the learned Senior Counsel also relied upon the Judgment of Honourable Supreme Court in Kartik Chandra Majee v. 1 2022 Live Law (SC) 721 2 (2022) 7 SCC 124 3 AIR 1998 Supreme Court 2796 4 State of Jharkahand 4 wherein since there were no specific allegations, the Honourable Supreme Court quashed the proceedings.
10. On the basis of the said Judgments, the learned Senior Counsel submits that they are squarely applicable to the facts of the present case and the case against the petitioners has to be quashed.
11. As evident from the record, it is an admitted fact that there are transactions in between the petitioners and the defacto complainant. In course of commercial transactions, any acts deliberately committed may also amount to criminal offences. In the present case, admittedly, the goods were entrusted to the petitioners herein. However, it is the case of the petitioners that the goods were given towards an outstanding and the petitioners have sold the goods as they were given to repay the outstanding amount.
12. The 2nd respondent has specifically stated that the goods were entrusted to the petitioners to be taken back subsequently. It is further stated that the said goods were kept in the premises of the factory of the petitioners to safeguard the material for the reason of the 2nd respondent being indebted to several others during business transactions and that they may take it away.
13. To attract an offence under Section 420 of the Indian Penal Code, it has to be proved that there was a false statement pursuant to which a 4 AIR 2017 Supreme Court 3096 5 person is induced. Pursuant to such inducement there should be delivery of property. In the present facts of the case, there are no such ingredients which are fulfilled to make out a case for cheating under Section 420 of the Indian Penal Code. Consequently, the charge under Section 420 of IPC is hereby quashed.
14. However, since the goods being entrusted to the petitioners is admitted, whether the said goods were given towards the outstanding or whether the petitioners have misappropriated the said amounts, have to be decided by the trial Court during the course of trial. This Court in quash proceedings cannot decide rival claims.
15. Accordingly, the Criminal Petition is partly allowed quashing the criminal proceedings under Section 420 of the IPC. The trial Court is directed to proceed with the case under Section 406 and 506 read with 34 of the Indian Penal Code and shall decide the case on the basis of the evidence adduced, without being influenced by any of the observations or findings made in this order.
Miscellaneous applications pending, if any, in this criminal petition, shall stand closed.
________________ K.SURENDER, J 19.10.2022 tk 6 THE HON'BLE SRI JUSTICE K.SURENDER CRIMINAL PETITION NO. 8624 OF 2019 Dt. 19.10.2022 tk