Bombay High Court
Karan Mansukh Jain And Anr vs The State Of Maharashtra And Anr on 3 September, 2024
Author: Bharati Dangre
Bench: Bharati Dangre
2024:BHC-AS:37662-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO.1733 OF 2018
1. Karan Mansukh Jain
Age: 45 years, Occ: Business
2. Swapnila Karan Jain
Age: 40 years, Occ: Business
Both residing at C-3/701, Petitioners
Lok-Milan CHS Ltd., Near ICICI
Bank, Chandivali, Andheri (E),
Mumbai
Versus
1. State of Maharashtra
Through Economic Offence
Wing, CBD Belapur, Navi
Mumbai. In Connection with
CR No. 17/2018
Respondents
2. Nariyan N. Hingorani
Age: 57 years, Occ: Business,
Having Offce at B-14, Jeevan
Satyakam CHS Ltd. Dr.
Ambedkar Road, Bandra (W),
Mumbai - 50.
...
Dr. Abhinav Chandrachud a/w Mr.Datta Mane, for the
Petitioners.
Mr. S. V. Gavand, APP, for the Respondent - State.
Ms Zenobia Irani/Nair, for Respondent No. 2.
...
CORAM: BHARATI DANGRE &
MANJUSHA DESHPANDE, JJ.
DATED : 3rd SEPTEMBER, 2024
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Judgment : (Per Manjusha Deshpande, J.):-
1. The petitioners herein are invoking powers of this Court
under Section 226 of the Constitution of India alongwith
Section 482 of the Code of Criminal Procedure seeking
direction to quash and set aside FIR No. 17 of 2018, registered
with Turbhe MIDC Police Station, Navi Mumbai (presently
investigated by EOW, CBD Belapur, Navi Mumbai) at the
instance of respondent No. 2 (the complainant), for the
offences punishable under Sections 406, 420 r/w 34 of the
Indian Penal Code, on the ground that, the complaint fled by
respondent No. 2 under Section 156(3) before the learned
Judicial Magistrate First Class (J.M.F.C.), Vashi is not
maintainable, since the subject of dispute between the
petitioners and respondent No. 2 is a dispute of a civil nature
and the complaint before the Magistrate was fled by
suppressing about the earlier complaint fled by respondent
No. 2, in which detailed investigation was made and report is
submitted by the ACP to the Addl. CP on 02.12.2017, wherein it
was stated that the dispute is of civil nature. In suppression of
the said proceedings, respondent No. 2 has fled a fresh
complaint to the JMFC, Vashi, hence, the complaint being fled
by suppression of material fact, is neither sustainable nor
maintainable.
2. The background of the dispute between the petitioners
and respondent No. 2 can be encapsulated as under:
The gist of the complaint fled by respondent No. 2 is
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that, the present petitioners were introduced to the
complainant as the owner of frm M/s. Hridaant Clothing in
July 2016. Their frm was engaged in business of production of
garments. They were having large number of orders for
manufacturing garments, but they were not in a position to
fulfll the orders, as they were lacking the necessary
infrastructure. The petitioners therefore gave proposal to the
complainant that the infrastructure available with the
complainant should be made available to them to manufacture
garments for completion of orders. The profts received would
be shared by the petitioners with the complainant after
deducting all the costs and expenses in the ratio of 50:50. It
was also decided that since the garments were to be
manufactured in the factory of the complainant, petitioner No.
2 would supervise the manufacturing, for which she would be
paid a remuneration of Rs.1 Lakh per month. It was assured
by the petitioners that payment of manufactured garments
and completed orders would be received within a period of 90
days from the delivery of the manufactured garments to their
clients. Considering their past experience, the complainant
entered in an MOU between the company of the petitioners M/
s. Hridaant Clothing and company of the complainant M/s.
Ceenik Export (India) Ltd. During the period October 2016 to
August 2017, the petitioners completed their order of
manufacturing in the factory of the complainant of which total
worth was Rs.2.6 crores.
According to the complainant, he has incurred Rs.72
lakhs for a period of 12 months towards the maintenance
costs, labour payment, electricity bills etc. It is the allegation
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of the complainant that, though order worth Rs.2.6 crores was
completed in his factory, however the petitioners have paid
only Rs.47 lakhs to the complainant. He was given to
understand by the petitioners that, only Rs.47 lakhs have been
received and an amount of Rs.1.8 crores was due and payable
from a company namely Trent Ltd. When the complainant
made inquiries, he was shocked to know that the said company
i.e. Trent Ltd. has already made payment of Rs.1.6 crores out
of Rs.1.8 crores to the petitioner and only Rs.20 lakhs was
outstanding. When the complainant confronted with the
petitioners, the petitioners have refused to give details of the
account. In spite of receiving payments of balance amount, the
petitioners have not cleared the dues though the petitioners
have received all the amounts due and payable from their
vendors. The petitioners have refused to share the profts
according to the MOU. It is therefore alleged by the
complainant that the petitioners have caused wrongful loss to
him for a sum of Rs.2,04,50,000/-plus 50% of the profts
earned by the joint venture and have caused wrongful gains to
themselves and thus have committed an offence.
3. In view of being duped by the petitioners, respondent No.
2, the complainant lodged written complaint to the Joint
Commissioner of Police, Navi Mumbai and the Assistant
Commissioner of Police, Turbhe Division, Navi Mumbai on
06.11.2017 against both the petitioners. Despite providing all
the relevant documents and frequently visiting the offce of the
ACP, Turbhe, since no cognizance was taken by registering FIR
the complaint was fled in the Court of J.M.F.C, Vashi, under
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Section 156(3) of the Cr.P.C. The said complaint was fled on
28.12.2017. After fling of the said complaint, the learned
J.M.F.C., Vashi passed an order posting the matter for
argument by order dated 29.12.2017. The learned Magistrate
has passed the impugned order on 15.01.2018 directing the P.I.
to investigate the case under Section 156(3) of Cr.P.C. and
submit the report to the court at the earliest.
4. In furtherance of the said order passed by the learned
Magistrate, FIR No. 17 of 2018, has been registered on
19.01.2018. It is the contention of the petitioners that, after
registration of FIR No.17 of 2018, the matter is being
investigated by the EOW, Belapur. The petitioners were called
by the EOW on 14.03.2018. Considering the serious
apprehension that they might be arrested by the EOW and put
behind the bars, the petitioners have immediately fled an
Anticipatory Bail Application before the Sessions Court, Thane
and could secure protection order on 15.03.2018. After
securing the protection order the petitioners have approached
this Court for quashing of the said FIR.
According to the petitioners, the said FIR fled by
respondent No. 2 is totally false and bogus without any
supporting material. There is no material in support of the
allegations attracting Sections 406 and 420 of the IPC. The
petitioners have contended that, respondent No. 2 has fled the
complaint on the basis of misleading facts. In fact, there is a
suppression of facts by respondent No. 2, and on that count
alone, the FIR deserves to be quashed and set aside. The
petitioners have contended that, in fact prior to fling of the
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complaint under Section 156(3) of the Cr.P.C. which is
impugned in the present Petition, respondent No. 2 had fled
police complaint on 06.11.2017 to the Additional
Commissioner of Police, Navi Mumbai and the said complaint
was assigned to the Assistant Commissioner of Police, Turbhe
by the Additional Commissioner.
The statements of the respective parties was recorded by
the Investigating Offcer (I.O.) on 23.11.2017 and 25.11.2017.
Respondent No. 2 himself had admitted in his statement that,
dispute is of civil nature. The statement of petitioner No. 1
was also recorded on 25.11.2017, who had submitted all the the
relevant documents to the Assistant Commissioner of Police
(ACP). After detailed investigation, a report was submitted by
the Assistant Commissioner of Police to the Additional
Commissioner of Police on 02.12.2017, which indicates that the
dispute is of civil nature, hence the matter was fled.
5. Though respondent No. 2 was aware that the complaint
is closed on the ground that the dispute is of civil nature,
suppressing the said fact, he has fled a complaint under
Section 156(3) before the Court of J.M.F.C., Vashi on the same
facts with the same allegations. The learned J.M.F.C. has
issued directions to the concerned offcer for investigation on
15.01.2018, therefore, the said FIR needs to be quashed and set
aside.
The report submitted by the ACP dated 02.12.2017 is
placed on record by the petitioners, received by him under the
Right to Information Act. It discloses that, after recording
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fndings that the dispute is of civil nature, the report has been
placed before the Joint Police Commissioner, Mumbai for
appropriate orders alongwith relevant documents. The said
report clearly refers to the application given by respondent No.
2 and also the investigation made by the ACP. In the
documents which are forwarded alongwith the report dated
2.12.2017, the statement of respondent No. 2 has been
recorded on 23.11.2017, wherein he has given details about the
business transactions between the petitioners and himself. In
the statements so recorded, he has admitted in the last para of
his statement that, since he has not received outstanding
amount of Rs.2,04,00,000/- he has fled the complaint praying
for justice and also admitted that he is aware that the subject
matter of dispute is of civil nature. Similarly, the statements
of petitioner No. 1 was obtained on 25.11.2017, which is
accompanied with the said report.
6. It is thus the contention of the petitioner that respondent
No. 2 has fled the complaint under Section 156(3) by
suppressing his earlier complaint dated 06.11.2017, which was
taken to its logical end. The petitioners have challenged the
order of the learned J.M.F.C., Vashi on two grounds, frstly that
the order is passed by the learned Magistrate without
application of mind and without adhering to the guidelines
issued by the Hon'ble Apex Court in case of Priyanka
Srivastava and Anr. V/s. State of U.P. and Ors.1
The other ground raised by the petitioner is about
suppression of facts by respondent No. 2. As far as the frst
1 (2015) 6 SCC 287
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ground raised by the petitioners about non-adherence to the
law laid down by the Hon'ble Apex Court in case of Priyanka
Srivastava is concerned, admittedly, there is no affdavit fled
by respondent No. 2 alongwith his complaint. The complaint is
not supported by an affdavit as contemplated by the judgment
as referred above. The two necessary conditions required to be
fulflled by the complainant are that the remedy of fling a
complaint under Section 154(3) should have been exhausted
by the complainant before fling a complaint under Section
156(3). This position has been reiterated in para 27 of the
judgment in case of Priyanka Srivastava (supra) by observing
that:
"We have already indicated that there has to be prior
applications under Section 154(1) and 154(3) while
fling a petition under Section 156(3). Both the aspects
should be clearly spelt out in the application and
necessary documents to that effect shall be fled. The
warrant for giving a direction that an the application
under Section 156(3) be supported by an affdavit so
that the person making the application should be
conscious and also endeavour to see that no false
affdavit is made. It is because once an affdavit is
found to be false, he will be liable for prosecution in
accordance with law. This will deter him to casually
invoke the authority of the Magistrate under Section
156(3). That apart, we have already stated that the
veracity of the same can also be verifed by the learned
Magistrate, regard being had to the nature of
allegations of the case. We are compelled to say so as a
number of cases pertaining to fscal sphere,
matrimonial dispute/family disputes, commercial
offences, medical negligence cases, corruption cases
and the cases where there is abnormal delay/laches in
initiating criminal prosecution, as are illustrated in
Lalita Kumari are being fled."
The above observations are fully applicable to the
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present case. Though respondent No. 2 the complainant had
fled the written complaint to the Commissioner of Police on
06.11.2017 and after recording the statements of the
petitioners as well as respondent No. 2, a report came to be
fled by the ACP to the Joint Commissioner of Police with a
remark that the dispute is of civil nature, the complaint has
been closed. The complainant was aware about the same
which is clear from his statement recorded on 23.11.2017 by
the ACP which bears his signature. In the said statement the
admission given by the complainant that the dispute is of civil
nature has been recorded. It is thus evident that the
respondent was aware that the dispute is of civil nature, in
spite of that, the complainant has fled a fresh complaint before
the J.M.F.C. Vashi contending that no steps have been taken by
the police machinery, therefore, he constrained to fle the
complaint under Section 156(3).
The said complaint is not supported by the affdavit of
the complainant, therefore, the contents of the said complaint
are not verifed to be truthful and genuine. Since the
complaint fled by respondent No. 2 is not supported with an
affdavit of the complainant about its cotnents, it is contrary to
the guidelines laid down in case of Priyanka Srivastava
(supra), which is required to be mandatorily followed in each
and every complaint fled under Section 156(3). The complaint
of respondent No. 2 which is fled without following due
procedure of law becomes unsustainable. Even the order of
J.M.F.C., Vashi which is passed without application of mind
and in mechanical manner is an erroneous order, which is
passed without verifying whether the complaint has been fled
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by due adherence to the procedure of law, the order passed by
the learned J.M.F.C. being erroneous and unsustainable is
required to be quashed and set aside.
7. The petitioners are invoking powers of this Court under
Article 226 of the Constitution and Section 482 of the Cr.P.C.
for quashing of the FIR. We are aware that the powers under
Section 482 are to be sparingly exercised only in deserving
cases and this position of law has been reiterated by the
Hon'ble Apex Court in many of its reported judgments. At the
same time it is also held by the Hon'ble Apex Court in case of
Naresh Kumar and Another V/s. State of Karnataka and
Another 2 by referring to the case of Paramjeet Batra V/s.
State of Uttarakhand3 and many other judgments that though
the powers under Section 482 are to be sparingly exercised,
yet the High Court must not hesitate in quashing criminal
proceedings which are essentially of a civil nature. The
Hon'ble Apex Court has observed in para 6 which reads thus:
"6. In the case of Paramjeet Batra V. State of
Uttarakhand, (2013) 11 SCC 673, this Court recognized
that although the inherent powers of a High Court
under Section 482 of the Code of Criminal Procedure
should be exercised sparingly, yet the High Court must
not hesitate in quashing such criminal proceedings
which are essentially of a civil nature. This is what was
held:
"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
2 2024 SCC OnLine SC 268
3 (2013) 11 SCC 673
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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 the criminal proceedings
to prevent abuse of process of the court."
It is clearly observed that, though the complaint
disclosing civil transaction may also have a criminal texture,
but the High Court must see whether the dispute which is
essentially of a civil nature is given a cloak of criminal offence.
If a civil remedy is available in order to prevent abuse of
process of the court, the High Court should exercise its powers
and quash the criminal proceedings. This view is also
expressed in the reported Judgment of Usha Chakraborty V/s.
State of West Bengal4.
The present case also being one of such cases of breach of
contractual obligations is necessarily a civil dispute, and it
would not attract the offence of cheating. It is thus evident
from the documents placed on record and the pleadings of
parties that, respondent No. 2 (complainant) had already fled
a complaint about the subject matter, to the Additional
Commissioner of Police, Navi Mumbai. The statement of
respondent No. 2 has been recorded in the said complaint, in
which the complainant has categorically stated that he is
aware that the dispute is of civil nature. In spite admitting
that dispute is civil, the complainant has fled proceeding
4 2023 SCC OnLine SC 90
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under Section 156(3) of the Cr.P.C without supporting it with
affdavit. The learned J.M.F.C. unmindful of the trite position of
law, has proceeded to pass an order directing investigation and
fling of FIR against the petitioners. Hence, the order passed by
the learned J.M.F.C., Vashi suffers from legal error as well as
non-application of mind together with suppression of facts by
respondent No. 2. The learned J.M.F.C. has failed to appreciate
that, the contents of application fled under Section 156(3) of
the Cr.P.C. are not supported by affdavit, which is
indispensible. At the same time respondent No. 2 has
suppressed about recording of his statement in his complaint
fled to the Additional Commissioner of Police, Navi Mumbai,
admitting the nature of dispute to be of civil nature.
Considering these two issues, the order passed by the learned
J.M.F.C., Vashi being unsustainable deserves to be quashed
and set aside.
In view of the aforesaid observations, in exercise of our
powers under Section 482 of Cr.P.C. and Article 226 of the
Constitution of India, FIR No. 17 of 2018, registered with
Turbhe MIDC Police Station (presently investigated by EOW,
Belapur), for the offence punishable under Sections 406, 420
r/w 34 of the IPC is quashed and set aside.
(MANJUSHA DESHPANDE, J.) (BHARATI DANGRE, J.)
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