Bombay High Court
Narayan Chhaganlal Gadodia And Others vs The State Of Maharashtra And Another on 10 February, 2025
Author: Vibha Kankanwadi
Bench: Vibha Kankanwadi
2025:BHC-AUG:4244-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD.
CRIMINAL APPLICATION NO. 2296 OF 2021
1. Narayan S/o Chhaganlal Gadodia
Age : 70 years, Occ : Business,
R/o Hans Cotton Compound,
Khamgaon, Dist. Buldhana.
2. Vijay S/o Ramniwas Gadodia
Age : 64 years, Occ : Business,
R/o 36/3, Shnehalataganj, Indore
3. Meena W/o Rajendra Gadodia
Age : 57 years, Occ : Housewife,
R/o Hans Catton Compound,
Khamgaon, Dist. Buldhana.
4. Seema W/o Santosh Gadodia
Age : 52 years, Occ : Housewife,
R/o Hans Cotton Compound,
Khamgaon, Dist. Buldhana.
..APPLICANTS
-VERSUS-
1. The State of Maharashtra
Through Police Inspector,
Vedant Nagar Police Station,
Aurangabad.
2. Suresh Zumbarlal Gandhi
Age : 54 years, Occ : Business,
R/o Flat No.D-4, plot No.3,
Ashtavinayak Enclave,
Station Road, Aurangabad.
..RESPONDENTS
...
Mr. Rajendra Deshmukh, Senior Advocate a/w Mr.Rahul Joshi i/b
Mr.Devang R. Deshumukh, Advocate for applicants.
APP for Respondent- State : Mr. A.M. Phule
Advocate for respondent No.2 : Mr. Devdatta P. Palodkar
...
2
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CORAM : SMT. VIBHA KANKANWADI AND
ROHIT W. JOSHI, JJ.
RESERVED ON : 15th JANUARY, 2025.
PRONOUNCED ON : 10th FEBRUARY, 2025.
JUDGMENT (PER ROHIT W. JOSHI, J.) :
. Respondent No.2 in the present application has lodged FIR
against the applicants with Police Station Vedantnagar, Aurangabad
City on 18.08.2021, vide FIR No.229/2021, for the offences punishable
under Sections 406, 420 read with Section 34 of the Indian Penal Code
and Sections 3 and 4 of the Maharashtra Protection of Interest of
Depositors (In Financial Establishments) Act, 1999 (Hereinafter
referred to as "IPC" and "MPID" respectively for brevity).
2. Respondent No.2 - Informant has lodged the FIR on behalf
of two business entities i.e. Kisan Agro Industries and Anand Cotgin
Pvt. Ltd. He states that the partners of Kisan Agro Industries, namely,
Annasaheb Mane Patil and Sharad Gandhi have authorized him to look
after the affairs of the said firm, vide registered power of attorney
dated 05.06.2008. He further states that he and his son are Directors of
the other entity Anand Cotgin Pvt. Ltd. The aforesaid two business
entities are engaged in business of sale and purchase of cotton yarn.
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Respondent No.2 has stated that applicant no.1 had approached the
aforesaid two business entities through a broker from Indore named
Arpit Jain for purchasing cotton yarn. Applicant No.1 had a meeting
with informant in the office of Anand Cotgin Pvt. Ltd. where
discussions and deliberations were held with respect to quality and rate
of yarn. He states that applicant no.1 had agreed to make payment
within a period of 8 days from the delivery of consignment. He then
states that M.C.G. Spinners, partnership firm of the applicants had
purchased cotton yarn from the aforesaid two business undertakings,
the details whereof are as under :-
Kisan Agro to M.C.G. Spinners :-
Sr. Date Bill Weight Amount Date of Deposited Balance
No. receive
1. 15.10.2020 55 136.08 26,56,776 23/10/2020 26,56,776 ---
2. 23/10/2020 56 90.72 18,11,221 --- --- 18,11,221
3. 24/10/2020 57 67.73 14,07,897 24/10/2020 14,07,897 ---
4. 24/10/2020 58 68.34 14,20,468 24/10/2020 14,20,468 ---
5. 16/11/2020 81 136.08 28,56,964 --- --- 28,56,964
Total 46,68,185
Anand Cotgin to M.C.G. Spinners :-
Sr. Date Bill Weight Amount Date of Deposited Balance
No. receive
1. 09/10/2020 157 136.08 25,47,621 22/10/2020 25,47,621 ---
2. 22/10/2020 159 136.08 27,97,668 --- --- 27,97,668
Total 27,97,668
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3. Out of seven consignments, payments have been received
for four consignments only. A sum of Rs.46,68,185/- is not paid to
Kisan Agro Industries for two consignments of cotton yarn and a sum of
Rs.27,97,668/- is not paid to Kisan Agro Industries for one
consignment. Respondent No.2 states that applicant no.1 had expressed
inability to make immediate payment of the outstanding amount and
requested for some time to make a payment stating that some property
was put up for sale and accordingly, the amount will be arranged. He
further states that applicant nos.1 and 2 had discussion with Annasaheb
Mane, partner of Kisan Agro Industries and himself with respect to
repayment of amount. He states that applicant nos.1 and 2 suggested
that outstanding amount should be treated as a deposit made by
aforesaid two undertakings with M.C.G. Spinners, firm of the
applicants, and that, the said amount would be refunded within a
period of two months with interest at the rate of 2% p.a. Accordingly,
two documents titled as "Thevpatra/Deposit Receipt" dated 16.03.2021
were executed by applicant nos.1 and 2 as partners of M.C.G. Spinners,
are in favour of partners of Kisan Agro Industries namely Annasaheb
Mane Patil and Sharad Gandhi and another in favour of respondent
no.2 - Suresh Gandhi, Director of Anand Cotgin Pvt. Ltd. The cheques
issued by the applicants for payment as per terms of deposit receipts
were dishonoured. In these circumstances, the aforesaid FIR has been
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lodged for the offence punishable under Sections 406, 420 read with
Section 34 of the IPC and under Sections 3 and 4 of the MPID.
4. Based on the said FIR, respondent no.1 started
investigation and after completion of the same filed Final
Report/Charge-Sheet under Section 173 of the Code of Criminal
Procedure on 08.07.2023, vide Charge-Sheet No.52/2023, pursuant to
which, Special Case No.239/2023 came to be registered against the
present applicants and the said case is pending on the file of the
learned Special Judge under MPID at Aurangabad.
5. It will be pertinent to mention here that the business
Concern of the applicants M.C.G. Spinners is referred as a company and
as also a partnership firm in the FIR. However, in the documents dated
16.03.2021, the names of applicant nos.1 and 2 are mentioned as
partners of M.C.G. Spinners. Learned Senior Counsel Shri Rajendra
Deshmukh appearing on behalf of the applicants also confirmed that
M.C.G. Spinners is a partnership firm.
6. Learned Senior Counsel Shri Rajendra Deshmukh
appearing for the applicants initially contended that applicant nos.3
and 4 had tendered resignation as partners of the firm on 21.01.2020,
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vide deed of retirement dated 21.01.2020 with effect from said date.
He states that the transactions are subsequent to the date of retirement
of applicant nos.3 and 4, and therefore, the prosecution against
applicant nos.3 and 4 needs to be quashed. Having regard to the scope
of present proceeding, which is filed under Section 482 of the Cr.P.C.,
we are afraid, such disputed questions of facts will be beyond our
province while entertaining application for quashing of FIR under the
said provision. The said contention is therefore rejected.
7. As regards merits, learned Senior Counsel contends that
out of seven consignments payment is made with respect to four
consignments. He states that due to genuine financial difficulties
payment for three consignments could not be made. He refers to the
FIR to demonstrate that applicant no.1 had himself approached
respondent no.2 and one of the partners of Kisan Agro Industries to
discuss the modalities for payments. He contends that the conduct of
the applicants will demonstrate that there was absolutely no mens rea
to attract offence under Sections 406 and 420 of the IPC. As regards
MPID, his contention is that the provisions of the said Act are not
attracted. He states that the two documents dated 16.10.2021 cannot
be treated to be deposits within the meaning of Section 2(c) of the
MPID. He further contends that the partnership firm of the applicants
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also does not fall within the definition of term "Financial
Establishment" as defined under Section 2(d) of MPID. His contention
is that the provisions of MPID will not be attracted in case of regular
business transaction between a buyer and seller. He states that since the
applicants could not make payment of sale consideration of the goods
purchased by them, they had requested the seller to grant further
accommodation on the condition that they will pay interest on the
outstanding amount of sale consideration. Such amount according to
him will not be covered under definition of deposit under Section 2(c)
of MPID and having regard to the nature of transaction, the provisions
of MPID shall not be attracted. Learned Senior Counsel further argued
that the agreements titled as deposit receipts are in fact in the nature of
agreements for extension of margin/time frame granted by seller to the
purchaser, subject to payment of interest. According to him, the said
documents only demonstrate that he parties had agreed upon
deferment of payment due and payable by the firm of the applicants
(purchaser)to Kisan Agro Industries and Anand Cotgin Pvt. Ltd. (sellers
of cotton yarn). He argues that such transaction cannot be said to be
covered by the provisions of MPID. Shri Rajendra Deshmukh, learned
Senior Counsel also further submitted that in view of dishonour of
cheques, the holders of the cheques could have filed civil suit for
recovery of amount or could have initiated criminal prosecution as
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contemplated under Section 138 of the Negotiable Instruments Act. He
argues that filing of FIR alleging offence under Sections 406, 420 of the
IPC and Section 3 of the MPID is not permissible.
8. Per-contra, Shri Devdatta Palodkar, learned counsel for
respondent no.2 contends that the term deposit as defined under
Section 2(c) of MPID is definition of a very wide connotation. He points
out that the definition includes receipt of money in any form except the
deposits which are specifically excluded under clause (i) to (v) of
clause (c). He contends that the transaction between the parties is not
covered by any of the exceptions to clause 2(c), and therefore, the
amount promised to be paid by the applicants falls within the definition
of deposit under Section 2(c) of the MPID. As regards section 2(d) his
contention is that any person, who accepts any deposit, except a
Corporation or Co-operative Society owned or controlled by the State
or Central Government or Banking Company, is covered under the
definition of financial establishment. He states that the applicants have
failed to keep their promise of making repayment of deposit as per
terms and conditions recorded in two documents dated 16.03.2021,
offence under Section 3 of the MPID is clearly made out. As regards
Sections 406 and 420 of the IPC, his contention is that whether the
failure to pay is on account of genuine financial difficulty or a
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deliberate act can be decided only upon a full-dressed trial, and
therefore, the FIR should not be quashed with respect to the said
provisions as well.
9. Shri. A.M. Phule, learned APP appearing for respondent
no.1 has advanced submissions supporting the contentions raised by
respondent no.2.
10. The matter was heard on 15.01.2025 and was closed for
orders. Thereafter, on 17.01.2025, learned counsel for respondent no.2
sought leave to file judgment dated 10.12.2018 passed by this Court in
Criminal Writ Petition No.1489/2018. This motion was made in
presence of learned counsel on record for the applicants, who had
assisted the learned Senior Counsel during the course of hearing. Copy
of the judgment was also handed over to the learned counsel for the
applicants in our presence. However, learned counsel for the applicants
did not make any request to advance further submissions on the said
judgment.
11. As regards the provisions of MPID, the facts of the present
case and those in Criminal Writ Petition No.1489/2018 bear a close
resemblance. The arguments advanced in the said matter with respect
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to MPID were also similar in nature. This Court had then refused to
quash the FIR expressing that registration of offence under MPID was
possible in the facts of that case. We may, however, immediately
observe that final opinion as regards applicability of MPID is not
recorded in the said judgment dated 10.12.2018. The observations in
paragraph nos.10 and 11 of the judgment demonstrate that a tentative
opinion was formed that the provisions of MPID may be attracted in
the facts of that case, which has close resemblance with the facts of the
present case. In view of the said judgment dated 10.12.2018, we are
also of the opinion that we should not interfere with this matter in
exercise of our inherent jurisdiction under Section 482 of the Cr.P.C. to
quash the FIR. The contention of learned counsel for respondent no.2 is
that the controversy in the matter is fully covered by the Division Bench
judgment relied upon by the petitioner. We are unable to agree with the
said contention. Careful reading of the judgment indicates that it was
held that it is possible that the transaction may be covered under the
MPID. However, the judgment does not deliver any final opinion viz-a-
viz applicability of MPID to the transaction involved in the said matter.
Transaction involved in the present proceeding is also similar in nature.
We are of the opinion that the judgment does not foreclose the
arguments of the learned Senior Counsel for the applicants that the
transaction is not covered by the provisions of MPID. We keep the point
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open. The parties may address learned trial Court on this aspect at the
appropriate stage.
12. Since we have refrained in view of disputed questions of
facts, basically from quashing the FIR with respect to offence under the
MPID, we deem it appropriate not to show any indulgence with respect
to offences under the IPC sections as well.
13. In the result, the criminal application stands rejected.
[ROHIT W. JOSHI] [ SMT. VIBHA KANKANWADI]
JUDGE JUDGE
sga/
