Rakesh Kapoor And Another vs State Of U.P. And Another
2018 Latest Caselaw 3878 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Reserved on 24.08.2018
 
Delivered on 22.11.2018
 
Court No. - 54
 
Case :- APPLICATION U/S 482 No. - 28134 of 2015
 
Applicant :- Rakesh Kapoor And Another
 
Opposite Party :- State Of U.P. And Another
 
Counsel for Applicant :- Manoj Kumar Tiwari,Manoj Ranjan Sinha
 
Counsel for Opposite Party :- Govt. Advocate
 
Hon'ble Rajeev Misra,J.

1. This application under Section 482 Cr.P.C. has been filed challenging the Charge-sheet No. 461 of 2014 dated 6th September, 2014 submitted in Case Crime No. 847 of 2014, under Sections 419, 420, 468, 471, 506 and 120-B I.P.C., Police Station Sector-20, Noida, District Gautam Budha Nagar and the Congnizance Taking Order dated 18th August, 2015 passed by the Chief Judicial Magistrate, Gautam Budh Nagar.

2. Heard Mr. Manoj Ranjan Sinha, Advocate along with Mr. Manoj Kumar Tiwari, the learned counsel for the applicants, the learned A.G.A. for the State and Mr. Deeraj Singh Bohra, the learned counsel for the opposite party no.2.

3. From the record, it appears that the opposite party no.2 lodged a first information report dated 30th June, 2014, which was registered as Case Crime No. 847 of 2014, under Sections 419, 420, 468, 471, 506 and 120-B I.P.C. Police Station Sector-20, Noida, District Gautam Budha Nagar against the applicants. In the aforesaid first information report, it was alleged that the applicant no.1 Rakesh Kapoor has manipulated in the amount of claim payable to the opposite party no.2 for the loss suffered by the first informant i.e. the opposite party no.2 herein on account of accidental fire in the Consent Letter submitted by the opposite party no.2. Aggrieved by the aforesaid first information report, the present applicants filed Criminal Misc. Writ Petition No. 11777 of 2014 (Rakesh Kapoor & Others vs. State of U.P. & 2 Others). The aforesaid criminal misc. writ petition came up for admission on 15th July, 2014 and a Division Bench of this Court passed the following interim order:

"Learned A.G.A. has accepted notice on behalf of respondent no.1 & 2.

Issue notice to respondent no.3.

Six weeks' time is accorded to the respondents to file counter affidavit. Two weeks' thereafter time is accorded to file rejoinder affidavit. List after eight weeks.

It has been contended on behalf of petitioner that respondent no.3 Ashok Gupta is proprietor of M/s Digital World, D-21, Sector 6, Noida, Gautam Budh Nagar, U.P. and the said company is engaged in computerised digital fabric printing. It has also been contended that respondent no.3 had taken Standard Fire and Perils Policy for building, plant and machinery, furniture, fixtures and fittings and for stocks of fabrics and others items and it has also sought to be contended that a fire broke down and thereafter as per the terms and conditions of the policy that has been so taken, the claims has to be settled. Petitioner no.1 claims that he is surveyor of the insurance company and petitioner no.2 is the Divisional Manager of the insurance company. Petitioners submit that in the direction of settling claims, survey was undertaken, and survey cum assessment report has been submitted and pursuant to said survey report, respondent no. has been asked to complete formalities for release of assessed amount.

Petitioners are contending before this Court that opposite party no.3 is not satisfied with the amount that has been so settled and only to exert pressure on the petitioners criminal forum has been choosen. Petitioners submission is that in case an incumbent is not satisfied with the insurance claim that has been so settled, then he can always approach the Ambudsman at Lucknow for redressal of his grievance, but certainly choice of criminal forum is not warranted in the facts of case.

Prima facie, the arguments advanced appears to have some substance, accordingly pursuant to impugned FIR dated 30.6.2014 registered as Case Crime No.847/2014 under Sections 419/420/468/471/506/120B I.P.C. at P.S. Sector-20, Noida, the investigation may go on but the petitioners may not be arrested till submission of the police report under section 173(2) Cr.P.C., and the petitioners shall extend full cooperation in the investigation and shall not interfere with the ongoing investigation."

4. Pursuant to the aforesaid first information report, the investigation of the aforesaid case crime number proceeded in terms of Chapter XII Cr.P.C. The Investigating Officer, on the basis of the material collected during the course of investigation, formed an opinion that a charge-sheet should be submitted. Accordingly, a charge-sheet dated 6th September, 2014 was submitted against Rakesh Kapoor the Surveyor and Naresh Morwal, the Divisional Manager of the Insurance Company, the applicants herein, under Sections 419, 420, 468, 471, 506, 120-B I.P.C. As many as six witnesses were nominated i.e. Ashok Kumar Gupta the first informant, Manish Kumar witness, Harsh Vardhan witness, Babar Ali, the Scriber of the first information report, Gajendra Singh and Rajendra Kumar Verma the Investigating Officers. Upon submission of the charge-sheet dated 6th September, 2014, cognizance was taken by the Chief Judicial Magistrate, Gautam Budha Nagar vide Cognizance Taking Order dated 18th August, 2015. As a consequence of the aforesaid, Case No. 14579 of 2015 (State Versus Rakesh Kapoor & Others), under Sections 419, 420, 468, 471, 506, 120-B I.P.C., Police Station- Sector-20 Noida, District Gautam Budh Nagar came to be registered in the Court of the Chief Judicial Magistrate, Gautam Budh Nagar.

5. Mr. Manoj Ranjan Sinha, the learned counsel for the applicants along with Mr. Manoj Kumar Tiwari, Advocate submits that the opposite party no.2 had taken an Standard Fire and Perils Policy for building, plant and machinery, furniture, fixtures, fittings, stocks of fabrics and other items for the period 30th September, 2011 to 29th September, 2012, in respect of the goods and premises of M/s Digital World, D-21, Sector-6, Noida, Guatam Budha Nagar, which is engaged in Computerized Digital Fabric Printing from the National Insurance Company. A fire broke out in the factory premises of the opposite party no.2, which was insured under the aforesaid Policy and effective for the period 30th September, 2011 to 29th September, 2012, when in the Heat Transfer Machine, some short circuit took place leading to fire in thermionic oil and explosion of tank containing oil and heaters. The opposite party no.2 being the Insured under the above mentioned policy immediately informed the Insurer i.e. the Manager of the Insurance Company regarding the aforesaid occurrence. Accordingly, the Insurance Company sent Mr. Rakesh Kapoor, the Surveyor i.e. the applicant no.1 to conduct the survey of the damaged premises and also assess the loss suffered by the Insured on account of the aforesaid accidental fire. The applicant no.1 submitted the survey-cum-assessment report dated 7th January, 2014, whereby it was stated that the total loss suffered by the Insured was to the tune of Rs. 13,75,392/- (Rupees thirteen lacs, seventy five thousand and three hundred ninety two only) including the client's stocks, which was to the tune of Rs. 12,55,279/- (Rupees Twelve lacs fifty five thousand and two hundred seventy nine only). The settlement was arrived at Rs. 13,75,395/- (Rupees thirteen lacs, seventy five thousand and three hundred ninety five only) . It is the case of the applicants that the opposite party no.2 vide his letter dated Nil under the Right to Information Act, 2005 submitted an application in the office of the applicant no.2, who is the Divisional Manager of the Insurance Company demanding the complete copy of the survey-cum-assessment report submitted by the applicant no.1 Rakesh Kapoor. It is further stated that the said report was supplied to the opposite party no.2 vide Reply dated 11th March, 2014. It is also the case of the applicants that the amount payable to the opposite party no.2 i.e. the Insured under the Standard Fire and Perils Policy is to be released by the Industrial Development Bank of India (for short "I.D.B.I."). Consequently, various communications were sent by the Insurance Company requesting the I.D.B.I. Bank to release the amount payable to the opposite party no.2. During the pendency of the aforesaid proceedings, the opposite party no.2 filed a complaint before the National Consumer Dispute Rederessal Commission (for short "N.C.D.R.C."), which was registered as C.C. No. 214 of 2014 (M/s Digital World Versus M/s. National Insurance Company Ltd. & Another), whereby the opposite party no.2 claimed Rs. 3.50 crores towards compensation on account of unfair trade practice and deficiency in service. During the pendency of the aforesaid complaint, a joint application was filed on behalf of the complainant as well as the opposite parties therein for disposal of the complaint in accordance with the terms of the joint application. Paragraph-4 of the joint application is relevant for the issue in hand and is accordingly, quoted herein-below:

"The complainant withdraws the allegations made in the complaint against the opposite party no.3 and hereby withdraws the complaint qua opposite party no. 3."

6. It is worthwhile to note that the opposite party no.3 in the complaint was Rakesh Kapoor (Surveyor) the applicant no.1 herein.

7. In view of the agreement arrived at between the parties, the N.C.D.R.C. concluded that since the parties have arrived at a consensus, the complaint is dismissed but since the Insurance Contract between the parties contains an arbitration clause, accordingly, the dispute regarding the quantum of the claim payable to the claimant was referred to the Sole Arbitrator i.e. Hon'ble Mr. Justice A.K. Patnaik (Former Judge, Supreme Court of India), and accordingly, the complaint filed by the opposite party no.2 was disposed of vide order dated 8th April, 2016.

8. As consequence of the aforesaid, the opposite party no.2 raised an arbitral dispute before the Sole Arbitrator, who gave an interim award dated 10th March, 2017, whereby the opposite party no.2 was held entitled to the interim payment of Rs. 12,55,279/- (Rupees twelve lacs fifty five thousand and two hundred seventy nine only). The aforesaid arbitration proceedings are still said to be pending.

9. It is, thus, urged by the learned counsel for the applicants that since the applicants and the Insurance Company have mutually agreed to have the dispute resolved by an Arbitral Tribunal, the present criminal proceedings initiated by the opposite party no.2 are not only malicious but also amount to an abuse of the process of the Court.

10. On the aforesaid factual premise, it is, vehemently, contended that the present criminal proceedings initiated by the opposite party no.2 cannot be allowed to continue, as the issue whether there should be or not be an order of enhancement in favour of the Insured is the subject matter of the arbitration proceedings pending before the Sole Arbitrator, and secondly the claimant i.e. the opposite party no.2 has withdrawn all the allegations made against the applicant no.1 i.e. Rakesh Kapoor the Surveyor as per paragraph-4 of the joint affidavit filed before the National Consumer Commission, New Delhi.

11. According to the learned counsel for the applicants, in the light of the facts as stated herein- above, the present criminal proceedings initiated by the opposite party no.2 qua the amount of compensation payable to the opposite party no.2 could be looked into appropriately by the Arbitrator. The issue whether criminality was committed by the applicants in the finalization of the settlement amount payable to the opposite party no.2 has now become irrelevant as the same is to be decided by the Arbitrator subject to the conditions of the Insurance Contract and the evidence that may be adduced by the parties. The factum regarding the alleged interpolation in the Consent Letter submitted by the opposite party no.2 has now become irrelevant as no benefit can be derived by either of the parties from the same. As such, in view of the pendency of the arbitration proceedings between the parties regarding the dispute arising out of the Insurance Contract relating to the Insured Premises, the present criminal proceedings engineered by the opposite party no.2 are wholly unsustainable and therefore, liable to be quashed by this Court.

12. Inviting the attention of the Court to the relevant extract of the case diary, copy of which is on the record as Annexure-6 to the affidavit accompanying the present application, the learned counsel for the applicants submits that the Investigating Officer has categorically recorded in the case diary that no documentary proof could be found against the Surveyor Rakesh Kapoor and the Manager M. K. Morwal. No document was given by the complainant to the Investigating Officer. The documents given by the accused persons are in their favour but this is not clear as to what benefit will flow in favour of the accused persons by deficiently showing the amount of compensation payable is also not discernable. During the course of investigation, no documentary evidence could be collected against the applicants. The disputed handwriting in the Consent Letter is neither in the handwriting of the complainant nor in the handwriting of the applicants. The case of the complainant that the place for mentioning the amount of compensation was left blank creates a doubt regarding the bona fide of the complainant as the Insurance Company to process an incomplete Consent Letter. Irrespective of the Consent Letter submitted by the opposite party no.2 the proceedings for indemnifying the loss and damages suffered by the opposite party no.2 would have proceeded in accordance with the survey-cum-assessment report. Therefore, in light of the facts as noted above, the validity of the submission of the charge-sheet by the previous Investigating Officer only on the basis of the oral statement of the complainant was doubted and legal opinion was obtained. However, the submission of the charge-sheet was said to be justified as ultimately it is the jurisdiction of the Court to frame the charge. Thus, it is urged that the case in hand falls in the third category of cases in which proceedings can be quashed as per the judgment of the Apex Court in the case of R.P. Kapur Versus State of Punjab reported in AIR 1960 SC 866.

13. Mr. Dheeraj Singh Bohra, the learned counsel for the opposite party no.2 has supported the impugned proceedings. He has invited the attention of the Court to the various averments made in the counter affidavit filed by the opposite party no.2. However, it may be noted that except for the bald pleadings raised in the counter affidavit filed by the opposite party no.2, no document has been appended thereto, on the basis of which, the allegations made in the complaint can be said to have been substantiated or evidenced. Even the photo copy of the Consent Letter in which interpolation is alleged to have been made has also not been annexed along with the counter-affidavit.

14. At this stage, reference may be made to the judgment of the Apex Court in the case of Bharat Singh Versus State of Harynana, reported in AIR 1988 SC 2181, wherein the following has been observed in Paragraph nos. 12 & 13:

"12. The "public purpose" in question, already noticed, is development and industrialisation of the acquired land. The appellants have not challenged the said "public purpose". In the absence of any such challenge, it does not lie in the mouth of the appellants to contend that the acquisition was merely a profiteering venture by the State Government through HUDA. The appellants will be awarded the market value of the land as compensation by the Collector. If they are dissatisfied with the award they may ask for references to the District Judge under section 18 of the Act. If they are still aggrieved, they can file appeals to the High Court and, ultimately, may also come to this Court regarding the amount of compensation. The appellants cannot claim compensation beyond the market value of the land. In such circumstances, we fail to understand how does the question of profiteering come in. Even assuming that HUDA has made some profit, that will not in any way affect the public purpose for which the land was acquired and the acquisition will not be liable for any challenge on that ground.

13.As has been already noticed, although the point as to profiteering by the State was pleaded in the writ petitions before the High Court as an abstract point of law, there was no reference to any material in support thereof nor was the point argued at the hearing of the writ petitions. Before us also, no particulars and no facts have been given in the special leave petitions or in the writ petitions or in any affidavit, but the point has been sought to be substantiated at the time of hearing by referring to certain facts stated in the said application by HSIDC. In our opinion, when a point which is ostensibly a point of law is required to be substantiated by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evidence which must appear from the writ petition and if he is the respondent, from the counter-affidavit. If the facts are not pleaded or the evidence in support of such facts is not annexed to the writ petition or to the counter, affidavit, as the case may be, the court will not entertain the point. In this context, it will not be out of place to point out that in this regard there is a distinction between a pleading under the Code of Civil Procedure and a writ petition or a counter-affidavit. While in a pleading, that is, a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or in the counter-affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it. So, the point that has been raised before us PG NO 1060 by the appellants is not entertainable. But, in spite of that, we have entertained it to show that it is devoid of any merit."

15. The aforesaid principle can be made applicable to the proceedings under Section 482 Cr.P.C. also as the Courts can now look into the matter on the basis of impeccable evidence filed by the accused or the material brought on record by the complainant which forms part of the case diary.

16. Thus, the issue, which is up for consideration before this Court is that whether even during the pendency of the arbitral proceedings arising out of arbitration clause in the Insurance Contract entered into between the parties, the present criminal proceedings initiated by the opposite party no.2 can be allowed to continue or not.

17. In the case of Kamla Devi Agarwal vs. State of West Bengal, reported in 2002 (1) SCC 555, the Apex Court held that the civil and criminal proceedings can continue simultaneously. Similar view has been affirmed in the case of Devendra & Others vs. State of U.P. & Another reported in 2009 (7) SCC 495. However, the aforesaid proposition laid down by the Apex Court shall be applicable only when the action complained of involves a civil as well as criminal liability.

18. The Apex Court has considered the question as to whether during the pendency of the arbitral proceedings, the criminal proceedings should be allowed to continue or not. The said question has been answered by the Apex Court by observing that the Arbitrator can only decide the claims and counter-claims of the parties but cannot decide the question of fraud committed by either of the parties as the same is primarily a criminal offence.

19. The Apex Court in the case of A. Ayyasamy Vs. A Paramasivam & Others reported in (2016) 10 SCC 386 considered the said question and held that irrespective of the arbitration clause, the criminal proceedings shall continue. For ready reference, paragraph nos. 15 to 20 of the said judgment, which are relevant for the controversy in hand and applicable in the present case, are quoted herein-under:

" 15.'Fraud' is a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. Fraud can be of diffeent forms and hues. Its ingredients are an intention to deceive, use of unfair means, deliberate concealment of material facts, or abuse of position of confidence. The Black's Law Dictionary defines 'fraud' as a concealment or false representation through a statement or conduct that injures another who relies on it[5]. However, the moot question here which has to be addressed would be as to whether mere allegation of fraud by one party against the other would be sufficient to exclude the subject matter of dispute from arbitration and decision thereof necessary by the civil court.

16. In Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak[6], serious allegations of fraud were held by the Court to be a sufficient ground for not making a reference to arbitration. Reliance in that regard was placed by the Court on a decision of the Chancery Division in Russell v. Russell[7]. That was a case where a notice for the dissolution of a partnership was issued by one of the partners, upon which the other partner brought an action alleging various charges of fraud, and sought a declaration that the notice of dissolution was void. The partner who was charged with fraud sought reference of the disputes to arbitration. The Court held that in a case where fraud is charged, the Court will in general refuse to send the dispute to arbitration. But where the objection to arbitration is by a party charging the fraud, the Court will not necessarily accede to it and would never do so unless a prima facie case of fraud is proved.

17.The aforesaid judgment was followed by this Court in N. Radhakrishnan while considering the matter under the present Act. In that case, the respondent had instituted a suit against the appellant, upon which the appellant filed an application under Section 8 of the Act. The applicant made serious allegations against the respondents of having committed malpractices in the account books, and manipulation of the finances of the partnership firm. This Court held that such a case cannot be properly dealt with by the arbitrator, and ought to be settled by the Court, through detailed evidence led by both parties.

18.When the case involves serious allegations of fraud, the dicta contained in the aforesaid judgments would be understandable. However, at the same time, mere allegation of fraud in the pleadings by one party against the other cannot be a ground to hold that the matter is incapable of settlement by arbitration and should be decided by the civil court. The allegations of fraud should be such that not only these allegations are serious that in normal course these may even constitute criminal offence, they are also complex in nature and the decision on these issues demand extensive evidence for which civil court should appear to be more appropriate forum than the Arbitral Tribunal. Otherwise, it may become a convenient mode of avoiding the process of arbitration by simply using the device of making allegations of fraud and pleading that issue of fraud needs to be decided by the civil court. The judgment in N. Radhakrishnan does not touch upon this aspect and said decision is rendered after finding that allegations of fraud were of serious nature.

19.As noted above, in Swiss Timing Ltd. case, single Judge of this Court while dealing with the same issue in an application under Section 11 of the Act treated the judgment in N. Radhakrishnan as per incuriam by referring to the other judgments in the case of P. Anand Gajapathi Raju v. P.V.G. Raju[8] and Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums[9]. Two reasons were given in support which can be found in para 21 of the judgment which makes the following reading:

"21. This judgment was not even brought to the note of the Court in N. Radhakrishnan's case. In my opinion, judgment in N. Radhakrishnan's case is per incuriam on two grounds; Firstly, the judgment in Hindustan Petroleum Corpn. Ltd., though referred has not been distinguished but at the same time is not followed also. The judgment in P. Anand Gajapathi Raju & Ors. Was not even brought to the notice of this Court. Therefore, the same has neither been followed nor considered. Secondly, the provision contained in Section 16 of the Arbitration Act, 1996 were also not brought to the notice by this Court. Therefore, in my opinion, the judgment in N. Radhakrishnan does not lay down the correct law and cannot be relied upon."

20. We shall revert to the question of per incuriam at a later stage. At this juncture, we may point out that the issue has been revisited by another Division Bench of this Court in Booz Allen & Hamilton Inc. v. SBI Home Finance Limited and others[10]. In this case, one of the questions that had arisen for determination was, in the context of Section 8 of the Act, as to whether the subject matter of the suit was 'arbitrable' i.e. capable of being adjudicated by a private forum (Arbitral Tribunal). In this context, the Court carried out detailed discussion on the term 'arbitrability' by pointing out three facets thereof, viz.:

1) whether the disputes are capable of adjudication and settlement by arbitration?

2) whether the disputes are covered by the arbitration agreement?

3) whether the parties have referred the disputes to arbitration? "

20. In the case in hand, from the perusal of the first information report, the Court finds that the applicant no.1 Rakesh Kapoor the Surveyor is alleged to have manipulated in the fixation of the amount of damages liable to be made good by the Insurance Company in the Consent Letter submitted by the opposite party no.2. The documents appended along with the present criminal misc. application, which are not disputed by the opposite party no.2, clearly support the amount of damages fixed by the Surveyor i.e. the applicant no.1 in the survey-cum-assessment report dated 7th January, 2014. The opposite party no.2 has not made any allegation in the first information report regarding the survey-cum-assessment report submitted by the applicant no.1 Rakesh Kapoor the Surveyor. Therefore, the case in hand is a case of pure and simple civil liability arising out of an Insurance Contract. From the perusal of the relevant extract of the Case Diary which is on the record at page-95 of the paper book, the Investigating Officer clearly expressed his anxiety that there is no documentary evidence against the present applicants. The said allegation has originated as according to the opposite party no.2 the applicants are alleged to have orally agreed to settle the claim of the opposite party no.2 at 2.20 crores. It has also come in the investigation that the alleged interpolation in the Consent Letter is not in the handwriting of the present applicants. According to the applicants, the Consent Letter was submitted with the amount of damages/compensation agreed upon being specifically written therein. It is the case of the applicants that an incomplete Consent Letter could not have been accepted to process the amount of damages/compensation payable to the opposite party no.2 by way of consent. No documentary evidence was given by the complainant i.e. the first informant to the Investigating Officer of the above mentioned case crime number on the basis of which it could be presumed that on account of the assessment of the lesser amount of damages payable to the opposite party no.2, the present applicants could have benefited.

21. At this stage, the observations made by the Apex Court in the case of Indian Oil Corporation Vs. N.E.P.C. India Ltd. reported in 2006 (6) SCC 736 become relevant,wherein the Apex Court considered the question regarding the quashing of the criminal proceedings on account of pendency of the civil proceedings. Paragraph Nos. 13 to 17 of the aforesaid judgment, which are relevant to the issue in hand are quoted herein-under:

"13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged. In G.Sagar Suri vs. State of U.P. [2000 (2) SCC 636], this Court observed: :

"It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice."

14. While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may.

15. Coming to the facts of this case, it is no doubt true that IOC has initiated several civil proceedings to safeguard its interests and recover the amounts due. It has filed C.S. No.425/1997 in the Madras High Court and O.S. No.3327/1998 in the City Civil Court, Chennai seeking injunctive reliefs to restrain the NEPC India from removing its aircrafts so that it can exercise its right to possess the Aircrafts. It has also filed two more suits for recovery of the amounts due to it for the supplies made, that is CS No.998/1999 against NEPC India (for recovery of Rs.5,28,23,501/90) and CS No.11/2000 against Skyline (for recovery of Rs.13,12,76,421/25), in the Madras High Court. IOC has also initiated proceedings for winding up NEPC India and filed a petition seeking initiation of proceedings for contempt for alleged disobedience of the orders of temporary injunction. These acts show that civil remedies were and are available in law and IOC has taken recourse to such remedies. But it does not follow therefrom that criminal law remedy is barred or IOC is estopped from seeking such remedy.

16. The respondents, no doubt, have stated that they had no intention to cheat or dishonestly divert or misappropriate the hypothecated aircraft or any parts thereof. They have taken pains to point out that the aircrafts are continued to be stationed at Chennai and Coimbatore Airports; that the two engines of VT-NEK though removed from the aircraft, are still lying at Madras Airport; that the two DART 552 TR engines of VT-NEJ were dismantled for the purpose of overhauling/repairing; that they were fitted to another Aircraft (VT- NEH) which had been taken on lease from 'M/s Aircraft Financing and Trading BV' and that the said Aircraft (VT-NEH) has been detained by the lessor for its dues; that the two engines which were meant to be fitted to VT-NEJ (in places of the removed engines), when sent for overhauling to M/s Hunting Aeromotive, U.K., were detained by them on account of a dispute relating to their bills; and that in these peculiar circumstances beyond their control, no dishonest intent could be attributed to them. But these are defences that will have to be put forth and considered during the trial. Defences that may be available, or facts/aspects when established during the trial, may lead to acquittal, are not grounds for quashing the complaint at the threshold. At this stage, we are only concerned with the question whether the averments in the complaint spell out the ingredients of a criminal offence or not.

17. The High Court was, therefore, justified in rejecting the contention of the respondents that the criminal proceedings should be quashed in view of the pendency of several civil proceedings."

22. As already noted above, the Investigating Officer in the case diary has clearly recorded that during the course of investigation, there is no documentary evidence could be collected against the applicants nor the disputed handwriting in the Consent Letter submitted by the opposite party no.2 is in the handwriting of the present applicants. He, therefore, submits that the case in hand is squarely covered by the third category of cases in which the proceedings can be quashed as held by the Apex Court in the case of R.P. Kapur (Supra), wherein the following has been observed in paragraph-6:

"6. Before dealing with the merits of the appeal it is necessary to consider the nature and scope of the inherent power of the High Court under s. 561 -A of the Code. The said section saves the inherent power of the High Court to make such orders as may be necessary to give effect to any order under this Code or to prevent abuse of the process of any court or otherwise to secure the ends of justice. There is no doubt that this inherent power cannot be exercised in regard to matters specifically covered by the other provisions of the Code. In the present case the magistrate before whom the police report has been filed under s. 173 of the Code has yet not applied his mind to the merits of the said report and it may be assumed in favour of the appellant that his request for the quashing of the .proceedings is not at the present stage covered by any specific provision of the Code. It is well-established that the inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice. Ordinarily criminal proceedings instituted against an accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage. It is not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise of this inherent jurisdiction. However, we may indicate some categories of cases where the inherent jurisdiction can and should be exercised for quashing the proceedings. There may be cases where it may be possible for the High Court to take the view that the institution or continuance of criminal proceedings against an accused person may amount to the abuse of the process of the court or that the quashing of the impugned proceedings would secure the ends of justice. If the criminal proceeding in question is in respect of an offence alleged to have been committed by an accused person and it manifestly appears that there is a legal bar against the institution or continuance of the said proceeding the High Court would be justified in quashing the proceeding on that ground. Absence of the requisite sanction may, for instance, furnish cases under this category. Cases may also arise where the a11egations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no ques- tion of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not. In such cases it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the criminal court to be issued against the accused person. A third category of cases in which the inherent jurisdiction of the High Court can be successfully invoked may also arise. In cases falling under this category the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or evidence adduced clearly or manifestly fails to prove the charge. In dealing with this class of cases it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is manifestly and clearly inconsistent with the accusation made and cases where there is legal evidence which on its appreciation may or may not support the accusation in question. In exercising its jurisdiction under s. 561-A the High Court would not embark upon an enquiry as to whether the evidence in question is reliable or not. That is the function of the trial magis- trate, and ordinarily it would not be open to any party to invoke the High Court's inherent jurisdiction and' contend that on a reasonable appreciation of the evidence the accusation made against the accused would not be sustained. Broadly stated that is the nature and scope of the inherent jurisdiction of the High Court under s. 561-A in the matter of quashing criminal proceedings, and that is the effect of the judicial decisions on the point (Vide: In Re: Shripad G. Chandavarkar (1), Jagat Ohandra Mozumdar v. Queen Empress (2), Dr. Shanker Singh v. The State of Punjab (3 ), Nripendra Bhusan Ray v. Govind Bandhu Majumdar(4 ) and Ramanathan Chettiyar v. K. Sivarama Subrahmanya Ayyar (5)"

23 The Apex Court in the case of State of Haryana & Others Versus Bhajan Lal & Others reported in 1992 Suppl. (1) SCC 335, laid down as follows in paragraph-102:

"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter 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 Article 226 or the inherent powers under Section 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 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 Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 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 Section 155(2) of the Code. (5) Where the allegations made in the FIR or 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."

The case in hand clearly falls under category (7).

24. Here also the Court finds that the present criminal proceedings initiated by the opposite party no.2 are in complete derogation of the mandate of law laid down by the Apex Court in category 7 formulated in the case of State of Haryana Versus Bhajan Lal (Supra). As such, the present criminal proceedings cannot be allowed to be continued and are therefore, liable to be quashed by this Court.

25. There is an another aspect of the matter, which needs to be considered. Admittedly, the opposite party no.2 in respect of his claim under the Insurance Contract has already raised an arbitral dispute which is said to be pending. The claim of the claimant i.e. the opposite party no.2 herein is to be decided by the Sole Arbitrator on the basis of the conditions of the Insurance Contract and the evidence that may be adduced by the parties. In such a situation, the Consent Letter submitted by the opposite party no.2 in which interpolation is alleged to have been made has become meaningless. Such a situation was came to be considered by the Apex Court in the case of Paramjeet Batra Vs. State of Uttarakhand & Others, reported in 2013 (11) SC 673, wherein the following has been observed in paragraph nos. 8 to 12:

"8. Though the complaint attributes forgery and fabrication of documents to the appellant and other accused and states that the appellant has grabbed the profit of the running business and threatened respondent 2, it appears to us to be essentially a civil dispute. Basic grievance of respondent 2 is that the appellant has not given him accounts of the business. Respondent 2 has made a reference to the written agreement under which the appellant was appointed as Manager to manage his business. The appellant has annexed a copy of the agreement dated 1/1/2002 to the appeal. The agreement discloses that the appellant was to receive 25% of the net profit as salary. The agreement also notes that the appellant received Rs.10,000/- in cash for the purchase of raw materials.

9. Admittedly, the appellant has filed Civil Suit No. 23/2002 against respondent 2 in the court of Civil Judge, (Jr. Div.), Khatima for permanent injunction claiming that he is a tenant of the shop in question. In that suit, he filed an application for temporary injunction. Copy of order dated 22/12/2004 passed on that application ordering status quo is also annexed to the appeal. The order indicates that the appellant and respondent 2 have filed documents in the said suit. While granting status quo order, the trial court has observed that the said documents will have to be proved by the appellant and respondent 2 and, hence, it is necessary to maintain status quo during pendency of the suit.

10. In the complaint, it is the case of respondent 2 that this suit has been filed on the basis of fabricated documents. It is categorically stated on affidavit by the appellant that the said suit is still pending. If the said suit is still pending, then the grievance made by respondent 2 that the documents on which reliance is placed by the appellant are not genuine and are forged and fabricated, will be considered by the Civil Court.

11. It is also significant to note that prior to the filing of this complaint, respondent 2 tried to lodge an FIR against the appellant by moving an application under Section 156(3) of the Code. But the said application was dismissed on 6/5/2004. We notice from the impugned order that a separate case under Section 406 of the IPC was filed by respondent 2 against the appellant in which the appellant was acquitted on 9/2/2009. It is further significant to note that statement was made on behalf of the appellant before the High Court that the appellant has vacated the shop in question and handed over possession to respondent 2. In the peculiar facts of the case, therefore, we are of the opinion that in the interest of justice, the pending criminal proceedings need to be quashed. We have taken serious note of the fact that respondent 2 did not appear before the High Court to refute the case of the appellant. He has also not chosen to appear before us though served. Probably because the possession of the shop is handed over to him, he is not interested in prosecuting the appellant and others.

12. While exercising its jurisdiction under Section 482 of the Code the High Court has to be cautious. This power is to be used sparingly and only for the purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. Whether a complaint discloses a criminal offence or not depends upon the nature of facts alleged therein. Whether essential ingredients of criminal offence are present or not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash criminal proceedings to prevent abuse of process of court."

26. For the reasons given herein-above, the present criminal misc. application succeeds and is allowed. The entire proceedings of Case No. 14574 of 2015 (State Versus Rakesh Kapoor), under Sections 420, 467, 471, 506, 120-B I.P.C., Police Station Sector-20, Noida, District Gautam Budh Nagar arising of Case Crime No. 847 of 2014, under Sections 419, 420, 468, 471, 506 and 120-B I.P.C., Police Station Sector-20, Noida, District Gautam Budha Nagar pending in the court the Chief Judicial Magistrate, Gautam Budh Nagar are hereby quashed. However, there shall be no order as to costs.

(Rajeev Misra, J.)

Order Date :- 22.11.2018

Sushil/-