Suneel Kumar Mehta And Another vs State Of U.P. & Another
2013 Latest Caselaw 6271 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

COURT NO. 50
 

 
APPLICATION U/s 482 Cr.P.C No. 1159 of 2010
 

 
Applicants - Suneel Kumar Mehta & another
 

 
Respondents - 1.  State of U. P. 
 
		    2.  M/s Ravi Malleable through its Proprietor Jyoti
 
                               Prakash
 

 
Counsel for the applicants : Sri K. K. Srivastava
 

 
Counsel for respondent no. 1 : AGA
 

 
Counsel for respondent no. 2 : Sri Vatsal Srivastava
 

 
CORAM:
 
HON'BLE ANIL KUMAR SHARMA, J.

I have heard the learned counsel for the applicants and the learned counsel for the respondents and perused the papers filed along with the application.

2. This application seeks to quash the proceedings of Complaint case no. 319/08 M/s Ravi Malleable Vs. Suneel Kumar Mehtra and another u/s 420 IPC pending in the Court of Special Chief Judicial Magistrate. Meerut.

3 Facts germane to the instant application are that the respondent no. 2 filed a criminal complaint on 17.1.2008 in the Court of Special Chief Judicial Magistrate, Meerut against the applicants for commission of offences punishable u/s 420 IPC alleging that the respondent no. 2 deals in manufacturing and supply of galvanized malleable circular boxes and the applicants made the firm to believe that they require the aforesaid goods for export. The applicants approached the respondent no. 2 on 17.3.2003 at Meerut and approved the boxes manufactured by them. They assured that the payment would be made within 30 days from the date of the bill and no sales-tax was to be paid on the goods supplied to them, as they would send Form-H on the bill of lading. The complaint further stated that on this assurance the respondent no. 2 agreed to supply the goods and an order was placed on 29.3.2003. They supplied ordered items as per followings details:

i) Bill no. 39 dated 13.10.2003 for Rs. 1,95,402/-,

ii) Bill no. 42 dated 24.10.2003 for Rs. 1,96,260/-,

iii) Bill no. 45 dated 10.11.2003 for Rs. 1,49,940/-,

iv) Bill no. 48 dated 30.11.2003 for Rs. 2,03,400/-,

v) Bill no. 54 dated 27.12.2003 for Rs. 2,89,560/-,

vi) Bill no. 59 dated 15.1.2004 for Rs. 1,59,480/-,

vii) Bill no. 60 dated 29.1.2004 for Rs. 1,96,800/-,

viii) Bill n o. 67 dated 28.2.2004 for Rs. 4,47,600/-,

ix) Bill no. 71 dated 22.3.2004 for Rs. 2,55,990/-, and

x) Bill no. 73 dated 31.3.2004 for Rs. 2,81,900/-.

The applicants have sold the items covered under these bills, but did not send Form-H along with bill of lading to respondent no. 2. Many times they were contacted, but of no avail. On account of non-availability of Form-H, the Trade Tax Officer sent notice dated 31.1.2006 to respondent no. 2 imposing penalty of Rs. 2,35,083.00 on them. Information in this regard was sent to applicants, but they did not pay any heed. Thereafter a legal notice dated 14.5.2007 was sent to the applicants, but neither they sent Form-H nor paid the penalty nor they sent any reply. The complaint concluded that the applicants have fraudulently with intention to cheat and in order to cause wrongful loss to respondent no. 2 and wrongful gain for themselves have committed the offence of cheating punishable u/s 420 IPC. After enquiry under XV Cr. P.C., the learned Magistrate has taken cognizance against applicants for the offence punishable u/s 420 IPC vide order dated 7.3.2008.

4. Learned counsel for the applicants have vehemently argued that indisputably the applicants and respondent no. 2 were carrying on business, so the transactions in question are commercial and as such no criminal liability can be fastened on the applicants and the proceedings of complaint are misuse of process of the Court. Per contra learned counsel for the respondent no. 2 has contended that the documentary evidence available on record clearly show that the intention of the applicants was dishonest at the time of making promise and representation to the complainant at Meerut on 17.3.2003 and they have cheated him by not issuing Form 'H' pertaining to the sales made to them from 13.10.2003 to 31.3.2004, whereby penalty of Rs. 2,35,083.00 had been imposed by the Trade Tax Department on respondent no. 2.

5. Cheating with reference to Section 420 Indian Penal Code is defined in Section 415 of the Code, which reads as under :-

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".

Explanation.- A dishonest concealment of facts is a deception within the meaning of this section."

The above definition of cheating makes it abundantly clear that following elements need to be satisfied to make out a case of 'cheating':

1) Deception of any person:

2) (a) Fraudulently or dishonestly inducing that person:

i) to deliver any property to any person, or

ii) to consent that any person shall retain any property, or

(b) 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.

Following illustrations given in section 415 IPC are also relevant for the instant case -

(b) A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy and pay for the article. A cheats.

(c) A, by exhibiting to Z a false sample of an article intentionally deceives Z into believing that the article corresponds with the sample, and thereby dishonestly induces Z to buy and pay for the article. A cheats.

(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats.

All the above illustrations do reasonably make one to believe that the transactions made between the parties were commercial or business, so as to make out case of civil nature and not a criminal act. Thus, it cannot be said that cheating cannot take place in business or commercial transactions.

6. In the instant case the bills sent by the respondent no. 2 clearly show that the sale of the articles was made against Form-H for export by the applicants and as such no trade tax was payable thereon. The letter dated 17.3.2003 sent by the applicants to respondent no. 2 show that they have exported the trial order and were confident that they would be able to get good orders from the overseas market. The letter dated 29.3.2003 spells out the terms and conditions for the supply of goods to be followed by the parties. As regards payment of Tax, the applicants have noted that no tax would be levied against Form 'H' as it is meant for export. In the instant case the dispute is not with regard to the payment of price of the goods supplied/sold by respondent no. 2 to the applicants, but on account of inducement of the applicants, the respondent no. 2 had been slapped with a penalty of Rs. 2,35,083.00 by the Asstt. Commissioner of Trade Tax, Meerut vide order dated 31.1.2006. The respondent no. 2 served the applicants with a notice dated 14.5.2007, which had not been replied or complied by the applicants. The bills in question are from the period 13.10.2003 to 31.3.2004. Along with counter-affidavit the respondent no. 2 has appended 'Annexure-E for the Assessment Year 2003-04 pertaining Central Sales against Form 'H', which indicates that for the transactions in question with the applicants Form 'H' were not furnished. After the order dated 30.1.2006, the respondent no. 2 submitted an application for grant of one year's time to furnish Form 'H' pertaining to the sales made to the applicants for the aforesaid period. The fraudulent intention of the applicants is crystal clear from their averment made in para-6 of the rejoinder affidavit, wherein they have stated - "If the applicant duly paid the sale consideration after receiving goods it was matter of his concern whether to export the same or retain in the stock. That being the fact position it does not stand to reason as to how the offence of 'cheating' was made out.' However, the disputed questions of fact or defence of the applicants cannot be adjudicated by this Court in these proceedings.

7. Learned counsel for the respondent no. 2 has placed reliance on the case of Rajesh Bajaj Vs. State of NCT of Delhi and others [(1999) 3 SCC 259], to contend that the allegations made in the complaint do prima facie show commission of offence punishable u/s 420 I.P.C. against the applicants and the proceedings cannot be quashed simply on the ground that it is a commercial or business transaction. It was observed as under:

"12. The High Court seems to have adopted a strictly hyper-technical approach and sieved the complaint through a calendar of finest gauzes for testing the ingredients under Section 415, IPC. Such an endeavour may be justified during trial, but certainly not during the stage of investigation. At any rate, it is too premature a stage for the High Court to step in and stall the investigation by declaring that it is a commercial transaction simplicitor wherein no semblance of criminal offence is involved."

It was further observed by the Hon'ble Court that -

"It may be It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions".

"......The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive in discerning whether there was commission of offence or not."

It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test.

8. In the recent case of Arun Bhandari Vs. State of U. P. and others (Criminal appeal no. 78 of 2013 ) decided on January 10, 2013, the Apex Court has observed as under:

24. At this stage, we may usefully note that some times a case may apparently look to be of civil nature or may involve a commercial transaction but such civil disputes or commercial disputes in certain circumstances may also contain ingredients of criminal offences and such disputes have to be entertained notwithstanding they are also civil disputes. In this context, we may reproduce a passage from Mohammed Ibrahim and others v. State of Bihar and another (2009) 8 SCC 751 :

"8. This Court has time and again drawn attention to the growing tendency of the complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurize parties to settle civil disputes. But at the same time, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes (See G. Sagar Suri Vs. State of U. P. (20000 2 SCC 636 and Indian Oil Corpn. Vs. NEPC India Ltd. (2006) 6 SCC 736."

9. Learned counsel for the applicants has placed strong reliance on the case of Ravi B. Jadeja and others Vs. State of U. P. and another 2001 (2) JIC 157 (All), wherein this Court quashed the proceedings of the complaint case exercising powers u/s 482 Cr. P. C., which was apparently filed to wield pressure upon the accused to hand over Forms 'H' at the door of the complainant and succeeded in his ploy when the accused yielded and delivered the forms at his place of business. On account of distinct facts, this case does not help the applicants at all. In this case the accused informed the complainant to collect Forms 'H' personally, but the complainant insisted to send the Forms and in case they are not sent they would be liable to pay Central Sales Tax. The Company intimated the complainant firm that Forms 'H' are ready with them and requested to collect them personally so as to close this transaction once for all. However, in the instant case, the applicants have not even bothered to acknowledge the notice dated 14.5.2007 sent by respondent no. 2 and then the complaint in the Court had to be filed on 17.1.2008.

10. In view of the above discussion, we find that the averments made in the complaint filed by respondent no. 2 ingredients of the offence of cheating by applicants are prima facie made out. However, these observations are limited for the purpose of the instant application u/s 482 Cr. P. C. for quashing the proceedings and nothing more than that. The trial Court would consider and decide the case on the basis of evidence adduced by the parties in the case irrespective of observations in this order.

11. Now as regards inherent powers of the High Court u/s 482 Cr. P. C. to quash the proceedings of criminal case pending before the Magistrate at initial statge, it is trite that exercise of such jurisdiction to have the complaint or the charge sheet quashed is an exception rather a rule and the case for quashing at the initial stage must have to be treated as rarest of rare so as not to scuttle the prosecution. The complaint or the First information report sets the ball to roll and then the law takes its own course and the investigation ensues in accordance with the provisions of the Code. The jurisdiction as such is rather limited and restricted and its undue expansion is neither practicable nor warranted. However, if on perusal of the complaint or the charge sheet the Court is able to conclude that the allegations contained therein on the face of it does not constitute or disclose any offence, there ought not to be any hesitation to deal with the situation as is required under the law. Generally criminal proceedings in the normal course of event ought not to be scuttled at the initial stage unless the same amount to an abuse of the process of law.

12. In R. Kalyani Vs. Janak C. Mehta and others (2009) 1 SCC 516 after referring to the decisions in Hamida Vs. Rashid (2008) 1 SCC 474 and State of Orissa Vs. Saroj Kumar Sahoo (2005) 13 SCC 540 the Apex Court culled out the following propositions with respect to the powers of the High Court u/s 482 Cr. P. C.: -

"15. Propositions of law which emerge from the said decisions are:

a. The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizable offence.

b. For the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence.

c. Such a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the Court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus.

d. If the allegation discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue."

Thus applying the above tests to the facts of the instant case, it is clearly borne out that the instant complaint of respondent no. 2 is not in any manner abuse of process of the Court.

13. In view of the above observations as well, the instant application u/s 482 Cr. P. C. lacks merits. Thus, the prayer for quashing the proceedings of the criminal case pending in the Court of Special CJM, Meerut is refused.

14. However, considering the facts and circumstances of the case, the applicants are directed to appear before the Court concerned within 4-weeks from today and their bail application be disposed of expeditiously in accordance with law irrespective of the nature of the process issued against them. If the applicants fail to comply with these directions, the learned Magistrate would ensure their presence through coercive process in accordance with law and try to dispose of the case expeditiously.

15. With the above observations, the application is finally disposed of. Interim order dated 18.1.2010 stands vacated.

(Anil Kumar Sharma, J)

October 4, 2013

Imroz/-