Bhajan S/O Jagu Malkam And Another vs State Of Maharashtra Thr. Its ...
2021 Latest Caselaw 4503 Bom

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                        NAGPUR BENCH : NAGPUR.


                     CRIMINAL WRIT PETITION NO.352/2020


 1.       Bhajan S/o Jagu Malkam,
          aged about 50 Yrs., Occ. Agricultural,
          R/o Tultuli, Armori, Post Bhakrundi,
          Taluka Armori, Dist. Gadchiroli,
          Maharashtra 441 208.

 2.       Patiram S/o Zigu Hichami,
          aged about 45 Yrs., Occ. Agricultural,
          R/o Tultuli, Armori, Post Bhakrundi,
          Taluka Armori, Dist. Gadchiroli,
          Maharashtra 441 208.                                    ..Petitioners.

          ..Vs..

 1.       The State of Maharashtra,
          through its Secretary to Home
          Department, Mantralaya,
          Mumbai 32.

 2.       L & T Finance Ltd.,
          having its registered office at
          L & T House, Ballard Estate
          Mumbai 400 001.

          Second Alternate Address:
          8th Floor, C-25/C-26, E Block,
          Bandra Kurla Complex Bandra (E),
          Mumbai 400 051.

          Third Alternate Address:
          L & T Finance Ltd., 2/1 Russel
          Street, 4th Floor, Kankaria Center,
          Kolkata - 700 071.

 3.       The State of West Bengal,
          through its Secretary to Home
          Department, Nabanna, HRBC Building


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          14th Floor, 325, Sarat Chatterjee
          Road, Mandirtala Shibpur,
          Howrah - 711 102.                                                   ..Respondents.

 ------------------------------------------------------------------------------------------------
 Shri D.H. Sharma, Advocate for the petitioners.
 Shri A.S. Fulzele, Additional Public Prosecutor for respondent No.1.
 Shri Anand Deshpande, Advocate for respondent No.2.
 ------------------------------------------------------------------------------------------------
                           CORAM :- SUNIL B. SHUKRE AND
                                            AVINASH G. GHAROTE , JJ.

DATED :- 11.3.2021

ORAL JUDGMENT (Per Sunil B. Shukre, J.)

1. Heard. Rule. Rule made returnable forthwith. Heard

finally by consent of the parties present before the Court.

2. Learned counsel appearing for respondent No.2 has taken

an objection to the maintainability of this petition before this Court as

the writ sought by the petitioners is to be directed against a Court of

Metropolitan Magistrate situated at Kolkata. Learned counsel for the

petitioners submits that the issue has been settled by the Apex Court

in it's decision in the case of Navinchandra N. Majithia V/s. State of

Maharashtra and others reported in (2000) 7 SCC 640. Shri Fulzele,

learned Additional Public Prosecutor agrees. He submits that this

Court would have to decide the objection as to the maintainability of

the petition on the parameters set out in the case of Navinchandra N.

Majithia (supra). In the case of Navinchandra N. Majithia (supra),

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the Supreme Court considered the effect of clause (2) of Article 226

which was inserted in the Constitution through 15 th Amendment.

The Apex Court observed that the power conferred upon the High

Courts under Article 226 could be exercised by any High Court

exercising jurisdiction in relation to the territories within which the

cause of action, wholly or in part, arises and it is no matter that the

seat of the authority concerned is outside the territorial limits of the

jurisdiction of that High Court. The relevant paragraphs in which

these observations appear, for the sake of convenience, are reproduced

as under:-

"36. It was the said decision of the Constitution Bench which necessitated Parliament to bring the Fifteenth Amendment to the Constitution by which clause (1-A) was added to Article 226. That clause was subsequently renumbered as clause (2) by the Constitution Forty-Second Amendment. Now clause (2) of Article 226 read thus:

"226(2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories."

37. The object of the amendment by inserting clause (2) in the article was to supersede the decision of the Supreme Court in Election Commission v. Saka Venkata Subba Rao and to

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restore the view held by the High Courts in the decisions cited above. Thus the power conferred on the High Courts under Article 226 could as well be exercised by any High Court exercising jurisdiction in relation to the territories within which "the cause of action, wholly or in part, arises" and it is no matter that the seat of the authority concerned is outside the territorial limits of the jurisdiction of that High Court. The amendment is thus aimed at widening the width of the area for reaching the writs issued by different High Courts."

3. The Supreme Court then went on to lay down the criteria

on the basis of which the issues of maintainability of such a petition be

decided. It was held that mere fact that F.I.R. was registered in a

particular State would not be a sole criteria to decide that no cause of

action has arisen within parts of territorial limits of another Court. It

further held that place of residence of the person moving the Court is

not the criteria to determine the cause of action in that particular

petition. Then, the Apex Court observed that High Court before which

the writ petition is filed must ascertain whether any part of the cause

of action has arisen within the territorial limits of it's jurisdiction and

this would depend upon facts of each case. It also found that where

part of the investigation is carried out, the High Court having

territorial jurisdiction over that place would also have the jurisdiction

in such matters. It would be useful for us to reproduce these

observations made in paragraphs 43, 44 and 45 so that the issue

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becomes clear to us. They go as under:-

"43. We make it clear that the mere fact that FIR was registered in an particular State is not the sole criterion to decide that no cause of action has arisen even partly within the territorial limits of jurisdiction of another State. Nor are we to be understood that any person can create a fake cause of action or even concoct one by simply jutting into the territorial limits of another State or by making a sojourn or even a permanent residence therein. The place of residence of the person moving a High Court is not the criterion to determine the contours of the cause of action in that particular writ petition. The High Court before which the writ petition is filed must ascertain whether any part of the cause of action has arisen within the territorial limits of its jurisdiction. It depends upon the facts in each case.

44. In the present case, a large number of events have taken place at Bombay in respect of the allegations contained in the FIR registered at Shillong. If the averments in the writ petition are correct then the major portion of the facts which led to the registering of the FIR have taken place at the Bombay. It is unnecessary to repeat those events over again as Mohapartra, J. has adverted to them with precision and the needed details.

45. In the aforesaid situation it is almost impossible to hold that not even a part of the cause of action has arisen at Bombay so as to deprive the High Court of Bombay of total jurisdiction to entertain the writ petition filed by the petitioner. Even the very fact that a major portion of the investigation of the case under the FIR has to be conducted at Bombay itself, shows that the cause of action cannot escape from the territorial limits of the Bombay High Court."

4. It is thus clear that a High Court of one State would have

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jurisdiction over the authority situated in another State if the part of

the cause of action has arisen within the territorial limits of that High

Court. In the present case, as could be seen from the complaint filed

before the Court of Metropolitan Magistrate, part of the cause of

action had arisen within the district Gadchiroli as the alleged loan was

disbursed to the petitioners at Gadchiroli and that the vehicle which

was hypothecated to respondent No.2 was being plied at Gadchiroli

with it's registration having been done at Gadchiroli. It is also seen

that some of the loan instalments were admittedly paid by the

petitioners to respondent No.2 and this transaction occurred at

Gadchiroli. Then, for recovery of loan, respondent No.2 had initiated

arbitration proceedings bearing FARM/642/2016 LOT No.199/2219 of

2016 before the Arbitrator having seat at Mumbai. The award

determining the liability of the petitioner to be at Rs.6,62,664/- and

giving a direction to pay the amount to respondent No.2 was

pronounced on 23.1.2017 at Mumbai. The hypothecated vehicle was

directed to be repossessed in the arbitration proceedings by interim

order passed on 4.10.2016, at Mumbai. All these facts and

circumstances of the case would show that major portion of the

bundle of facts constituting the cause of action had taken place within

the territorial limits of State of Maharashtra and in particular within

the limits of district Gadchiroli falling under the jurisdiction of Nagpur

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Bench of Bombay High Court. Therefore, we are of the view that this

case fits in the criterion set out in the case of Navinchandra N.

Majithia (supra) and accordingly we hold that there is no substance in

the preliminary objection regarding maintainability of this petition.

We find that this petition is indeed maintainable and the objection is

rejected.

5. Now, if we consider the averments made in the complaint,

we find that the complaint does not prima facie disclose commission

of any cognizable offence in the present case. The complaint only

discloses that the dispute between the parties is nothing but a civil

dispute based upon the recovery of loan granted to the borrowers like

the petitioners. The allegations made in the complaint show that

after the grant of loan to the petitioners, the petitioners had

admittedly paid some loan instalments. If this is an admitted fact, we

do not think that any inference about presence of dishonest intention

since the inception of the loan transaction could be made by any

stretch of imagination.

6. The complaint before the Metropolitan Magistrate has

been filed on 7.2.2018 and it's cognizance was taken by the

Metropolitan Magistrate, Kolkata on 26.3.2018 when order for

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issuance of summons under Sections 420, 406 read with Section 120B

of the Indian Penal Code was passed. In this complaint, the material

fact of passing of the arbitration award much before filing of the

complaint has been suppressed. As stated above, the arbitration

award was pronounced on 23.1.2017. Copy of the arbitration award

has been filed along with the petition. It shows that the loan

transaction involved in the arbitration proceedings was the same as

the one involved in the criminal complaint filed before the Court of

Metropolitan Magistrate, Kolkata. The complaint categorically avers

that the accused persons have availed of commercial loan of

Rs.6,12,000/- being Loan No.OKG002067R1300731295 and then goes

on to say that it were this loan account in respect of which various

defaults as regards repayment of loan were committed by the

petitioners subsequently. In the arbitration award also, the loan

account number was same and the allegations were also same except

for the allegations relating to dishonest intention since inception of

the loan transaction, as could be seen from the summary of facts

stated in the award. After giving opportunity of hearing to both sides

the learned Arbitrator passed the award to determine the liability of

the petitioners as regards the repayment of the loan. The liability was

determined at Rs.6,62,664/- and it was also held that respondent No.2

was entitled to repossession of the hypothecated vehicle. The

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permission was granted to respondent No.2 to dispose of the vehicle

for recovery of it's dues under the award. All these facts are not

mentioned in any manner in the complaint filed before the

Metropolitan Magistrate and, therefore, we have to say that

respondent No.2 approached the Metropolitan Magistrate with

unclean hands and the Metropolitan Magistrate ought not to have

taken any cognizance of the complaint so filed before him.

7. Then, there is another angle to the whole dispute. In the

present case arbitration award determining the liability of the

petitioners as regards the repayment of loan to respondent No.2 and

also a declaration regarding entitlement to seize hypothecated vehicle

and permission to sell the hypothecated vehicle for recovery of the

loan dues was passed much before filing of the complaint. Once civil

dispute has been determined by passing an award in arbitration

proceedings, which is nothing but a decree, no criminal Court on the

basis of the same cause of action would have any jurisdiction to take

cognizance of the so-called offences claimed to have been committed

by the borrower. That apart, as stated earlier, in the present case, it is

an admitted fact that after availing of the loan, the petitioners made

the repayment of some of the instalments and this fact would itself

show that there was no dishonest intention on the part of the

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petitioners at the beginning of the transaction of loan. All these facts,

have not been considered in any manner by the learned Metropolitan

Magistrate.

8. The learned Metropolitan Magistrate not only issued

process under Section 420 of the Indian Penal Code but also issued it

under Section 406 of the Indian Penal Code. The offence punishable

under Section 406 of the Indian Penal Code is an offence of criminal

breach of trust. The essential ingredients of such an offence is

entrustment of the property or transfer of dominion over the property

and it's misuse against the expressed or implied direction of the

person entrusting the property. Both these ingredients are

conspicuously absent in the present case. It is an admitted fact that

hypothecated vehicle was repossessed by respondent No.2 on

18.9.2016 (see communication dated 24.9.2016 issued on behalf of

respondent No.2, page 25). If the hypothecated vehicle was

repossessed by respondent No.2, there was basically no entrustment or

handing over of dominion of property to the petitioners. Then, it is

also not the case of respondent No.2 that the petitioners when they

were having dominion over the hypothecated vehicle had dishonestly

transferred the vehicle to somebody else. So, the essential ingredients

of the offence punishable under Section 406 of the Indian Penal Code

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are absent in this case and it appears to us that these material facts

have gone unnoticed by the learned Metropolitan Magistrate when he

took cognizance of the complaint filed by respondent No.2. In fact,

respondent No.2 did not mention all these facts in the complaint itself

though he ought to have mentioned them, they being material facts.

If these facts had been disclosed in the complaint, perhaps the result

of taking cognizance by learned Metropolitan Magistrate would have

been different and perhaps the complaint would have been dismissed

by the learned Metropolitan Magistrate.

9. In the circumstances, we find that this is a case wherein

by no stretch of imagination offence punishable under Section 420, or

under Section 406 of the Indian Penal Code could be seen as

constituted even remotely. If this is so, it will follow that offence

punishable under Section 120B of the Indian Penal Code could also

not be constituted. This case, we must say, goes beyond absence of any

cognizable offence being disclosed by the complaint and it reflects

upon the conduct of respondent No.2. The conduct of respondent

No.2, we must say, appears to be not in good faith. Respondent No.2

has suppressed the material facts and made false allegations in the

complaint filed before the learned Metropolitan Magistrate, Kolkata.

Whenever there is suppression of truth and propounding of falsehood,

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the whole proceeding initiated at the behest of the person indulging in

falsehood, gets vitiated on the principle of Suppressio veri, suggestio

falsi as held in the case of Moti Lal Songara V/s. Prem Prakash alias

Pappu and Anr. reported in AIR 2013 SC 2078.

10. In the result, the petition is allowed.

Criminal Complaint Case No.C.S./28163/2018 (L. & T.

Finance Ltd. V/s. Bhajan Jagu Malkam & another) pending before the

16th Court of Metropolitan Magistrate at Kolkata is hereby quashed

and set aside.

Rule is made absolute in the above terms.

                               JUDGE                                    JUDGE




 Tambaskar.