Allahabad High Court
Nitin Agarwal And Another vs State Of U.P. And Another on 22 December, 2022
Bench: Saurabh Shyam Shamshery
HIGH COURT OF JUDICATURE AT ALLAHABAD
Judgment reserved on 01.12.2022
Judgment delivered on 22.12.2022
Court No. - 84
Case :- APPLICATION U/S 482 No. - 21126 of 2021
Applicant :- Nitin Agarwal And Another
Opposite Party :- State of U.P. and Another
Counsel for Applicant :- Anand Kumar Singh
Counsel for Opposite Party :- G.A.,Ritvik Upadhya
Hon'ble Saurabh Shyam Shamshery,J.
1. Sri Sanjeev Agrawal holding brief of Sri Anand Kumar Singh, learned counsel for applicants has opened this case with an argument that allegations contained in F.I.R. are purely of commercial transactions between applicants and complainant which is a dispute of civil nature but complainant has launched criminal proceedings only with intention to give it a criminal colour and that even contents of F.I.R. and evidence collected during investigation if taken as a gospel truth, ingredients of alleged offence under Section 406 I.P.C. are not made out and he placed reliance on a judgment of Supreme Court in Vijay Kumar Ghai and others vs. State of West Bengal and others, (2022) 7 SCC 124 as well as judgment of Madras High Court in Rajan Taneja vs. T. Ram Naresh Tripathi, 2004 SCC Online Mad 36 : 2004 (1) MWN (Cr.) 199.
2. Learned counsel for applicants has referred to contents of F.I.R. as well as statement of complainant that there was a commercial transaction between applicants and complainant in regard to stainless steel materials in which complainant was vendor and applicants were vendee. Initially money was duly paid, however, later on it was not duly paid within time prescribed as well as interest of delayed payment was also not paid and finally outstanding amount was more than Rs. 1.83 crores.
3. Learned counsel also submitted that essential ingredients of Section 405 I.P.C. i.e. Criminal Breach of Trust are ;
(1) The accused must be entrusted with the property or with dominion over it,
(2) The person so entrusted must use that property, or;
(3) The accused must dishonestly use or dispose of that property or wilfully suffer any other person to do so in violation,
(a) of any direction of law prescribing the mode in which such trust is to be discharged, or;
(b) of any legal contract made touching the discharge of such trust.
4. However, in present case, there was no entrustment of any property. Dispute was in regard to payment of material supplied and in case there is violation of condition of mutual agreement, remedy would lie by filing a civil suit not in launching a criminal proceedings.
5. Above submissions have been opposed by Sri Paritosh Kumar Malviya, learned A.G.A.-I for State and Sri V.K. Upadhyay, Senior Advocate assisted by Sri Ritvik Upadhyay for opposite party no.2/complainant and submitted that in similar circumstance, Division Bench of this Court in case of Premchandra Singhal and 3 others vs. State of U.P. and 3 others, Criminal Misc. Writ Petition No. 7006 of 2017 decided on 09.03.2022 has rejected similar arguments that there were specific allegations that with a criminal intent, that accused has availed supply of goods or material on credit and have misappropriated it by utilising goods without paying amount and that there is no bar that criminal proceedings may go on simultaneously or if ingredients are present of alleged offence, criminal proceedings may not be quashed.
6. Learned Senior Advocate also placed reliance on Kamla Devi Agarwal vs. State of West Bengal and others, (2002) 1 SCC 555 that High Court should be slow in interfering with proceedings at initial stage and that merely because the nature of dispute is primarily of civil nature, the criminal prosecution cannot be quashed because in cases of forgery or fraud, there is always some element of civil nature. Further reliance was placed on R. Kalyani vs. Janak Mehta and others, (2009) 1 SCC 516; Kamlesh Kumari and others vs. State of U.P. and another, (2015) 13 SCC 689; V. Ravikumar vs. State, (2019) 14 SCC 568; Devendra Kumar Singla vs. Baldev Krishan Singla, (2005) 9 SCC 15; Rama Shankar Mishra vs. State of U.P. and 6 others, 2021 (8) ADJ 374 and Calicut Engineering Works (P) Ltd vs. Batlibol Ltd., 2007 (1) ICC 573.
7. It is well settled that given set of facts may make out a civil wrong as well a criminal offence also and only because a civil remedy may be available to complainant that it cannot be a ground to quash criminal proceedings. The relevant test would show whether allegations in complaint as well as evidence recorded during investigation discloses alleged criminal offence or not. (see Vesa Holdings Pvt. Ltd. and another vs. State of Kerala and others, (2015) 8 SCC 293 as well as Vijay Kumar Ghai (supra))
8. In above background on law and facts, I have carefully perused contents of F.I.R. as well as statement recorded during investigation. It was a consistent case of complainant that there were commercial transactions between complainant firm with prior condition that if payment is not made within 15 days of supply of goods by applicants' firm, the applicants' firm is to pay amount with 24% interest. Initially, transactions were smooth, however, it was alleged that with dishonest intention, material was procured by applicants' firm but neither amount was paid within 15 days nor 24% interest was paid after expiry of 15 days. During proceedings before this Court, a proposal was given to settle dispute by paying accepted amount by applicants, however, it was not materialized.
9. In order to consider whether basic ingredients of Section 406 I.P.C. as referred above are made out or not, the Court has to scrutinize whether any property was entrusted upon applicants by complainant. It is not seriously disputed that stainless steel material was supplied by complainant firm which was received by applicants firm.
10. During investigation, ledger has been brought on record in order to show outstanding amount to be paid by applicants firm to complainant firm. Word used in Section 405 I.P.C. includes that "in any manner entrustment with property" which may include a property given in commercial transaction especially when it was on basis of credit and ownership will be transferred only when amount of property is paid in accordance with terms of agreement, as in present case, with 24% interest in case amount is not paid within time prescribed.
11. Facts also disclose that material has not been returned to complainant and it has been used by applicants firm. Applicants have dishonestly used property in violation of legal contract between parties, therefore, essential ingredients of Section 405 I.P.C. i.e. "there is enstrustment of property, a person so entrusted has used property in violation of legal contract" and since essential ingredients are made out prima facie, therefore, present case would not fall under category of a case where it does not disclose any criminal offence.
12. The inherent powers of this Court are very wide, however, it can be exercised in sparingly and it cannot be used to cause sudden death of a criminal proceedings, especially when ingredients of offence alleged are prima facie made out. Inherent powers cannot be used to throttle any legitimate prosecution.
13. In these circumstances, I do not find any merit in argument of learned counsel for applicants, hence, application stands rejected.
Order Date -: December 22, 2022
Nirmal Sinha
[Saurabh Shyam Shamshery, J.]
