Calcutta High Court (Appellete Side)
Great Eastern Energy Corporation ... vs Srmb Srijan Ltd on 8 December, 2022
IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
APPELLATE SIDE
PRESENT:
THE HON'BLE JUSTICE TIRTHANKAR GHOSH
CRR 1408 of 2019
Great Eastern Energy Corporation Limited
-vs.-
SRMB Srijan Ltd.
With
CRR 3329 of 2019
with
CRAN 1 of 2021
Yogendra Kumar Modi & Ors.
-vs.-
SRMB Srijan Ltd.
Mr. Debasish Roy,
Mr. Kaushik Gupta,
Ms. Debdatta Ray Chowdhury.
For the Petitioners in CRR 1408 of 2019
and CRR 3329 of 2019
Mr. Sekhar Basu, Ld. Sr. Adv.,
Mr. Sourav Chatterjee,
Mr. Arnab Das,
Ms. Paromita Purkait Ram,
Mr. Rabindra Kumar Pathak.
For the Opposite Party in CRR 1408 of 2019
and CRR 3329 of 2019
Mr. Swapan Banerjee,
Mr. Suman De.
For the State in CRR 1408 of 2019
and CRR 3329 of 2019
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Reserved on : 22.08.2022
Judgment on : 08.12.2022
Tirthankar Ghosh, J:-
In these two revisional applications the subject matter relates to
complaint case being C. Case No. CNS/124/2019 under Sections
384/406/420/467/468/120B/34 of the Indian Penal Code pending before the
Learned Metropolitan Magistrate, 9 th Court, Kolkata. In CRR 1408/2019 the
petitioner happens to be the company namely, Great Eastern Energy
Corporation Limited and in CRR 3329 of 2019 the petitioner no.1 happens to
be Executive Chairman of the Company, petitioner no.2 is the Managing
Director and CEO of the Company, petitioner no.3 is the Non-Executive
Independent Director of the Company, petitioner no.4 is Non-Executive
Independent Director of the Company, petitioner no.5 is Non-Executive
Director of the Company, petitioner no.6 is the Company Secretary & Head
(Legal) of the company, petitioner no.7 is the Chief Financial Officer of the
company and petitioner no.8 is the DGM-Marketing of the company.
The subject matter of both the revisional applications relate to quashing
of the complaint being C. Case No. CNS/124/2019 pending before the Learned
Metropolitan Magistrate, 9th Court, Kolkata and the orders passed therein. The
allegations/averments made in the petition of complaint are as follows:
1) SRMB Srijan Limited (hereinafter referred to as the 'complainant
Company') is engaged in the business of Rolling Mill and deals with
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manufacturing of Steel Rods, Bars, Angels, Channels etc. of
various specifications in the name and style of 'SRMB'. The
company is represented by Rajib Ghosh, Senior General Manager
(Projects & Purchase) of SRMB Srijan Private Limited who was
empowered to file complaint by the Board Resolution passed by the
Company.
2) Great Eastern Energy Corporation Limited (hereinafter referred to
as the 'accused Company) is engaged in the business of CBM (Coal
Bed Methane) gas exploration and distribution awarded by
Government of India to cater CBM gas. The accused Company is
located at Raniganj (South Block) and encourages use of gas as an
alternative source of fuel to ensure a proper supply of CBM gas in
and around Raniganj-Asansol-Durgapur industrial areas. The
individual accused persons named are associated with the
Company either as Board of Directors or responsible for day to day
conduct of the business of the Company and are involved in the
offence.
3) On or about February, 2010 the accused persons representing the
accused Company approached the complainant company at its
registered office requesting them to shift its furnace fuel from Coal
gasification process to Coal Bed Methane gas. In the month of
April, 2011 the complainant company decided to shift to CBM gas
from conventional fuel and accordingly the draft format agreement
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being 'Gas Sale and Purchase Agreement' was sent to the
complainant company for its perusal and approval. After exchange
of several drafts through e-mail two identical agreement dated
11.05.2011 were finally signed for a period of 25 years and the first
pricing of the Coal Bed Methane Gas was valid till 11.05.2012,
subject to revision thereafter. The said agreement was duly signed
by both the sides wherein Mr. Suriyanarayanan, Mr. Monik Parmar
and Mr. Sridhar Vishwanath were signatories on behalf of the
accused company.
4) The salient feature of the agreement dated May 11, 2011 as set out
in the complaint were as follows:
(a) The said agreement shall remain in force till twenty five (25)
years subject to revision of terms and conditions including
price and the accused persons reserve the right to review and
may revise the terms and conditions of the said agreement
including price of GAS after expiry of fixed price period. The
accused persons shall consider the request for extension of
period of Contract subject to the availability of GAS and may
offer fresh terms and conditions for such extended contract.
(b) The floor price of CBM GAS, from the date of start of supply
shall be Rs 15.58 per SCM. This said price is excluding Sales
Tax/VAT as per applicable rates, which will be charged in
addition to above price.
(c) The said price was valid till May 11, 2012, (i.e. one year only)
start of supply and after fixed period increment of floor price
shall be finalized at least forty five days before the expiry of
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the fixed period and in case of any disagreement beyond the
above stipulated period either party may exit the contract.
(d) The accused persons is able to supply the contracted quantity
of Gas but if the complainant purchases Gas less than the
contracted quantity or on account of stoppage of supply by the
accused persons, then the complainant shall have to pay to
the accused persons for quarterly minimum quantity (referred
to as 'Minimum Guaranteed Offtake i.e. MGO") of contracted
quantity."
5) It has been alleged that the accused company was in a dominant
position as at the time of entering into the agreement they had
monopoly in respect of supply of CBM gas in the area where the
complainant's factory was situated and they abused their position
to compel the complainant company to agree to their terms which
were unfair. In fact the agreement dated 11 th May, 2011 was
amended from time to time and lastly on 7 th March, 2012 pursuant
to which the accused company started raising bills for minimum
guaranteed offtake and as a result of which the complainant
company found it absolutely unviable to continue with the
contract. Under such circumstances the complainant company by
its letter dated 22nd April, 2014 requested the accused company to
waive the minimum guaranteed offtake clause, however, the
accused company unethically refused to withdraw the same which
sparked the dispute in between the complainant company and the
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accused company. The complainant company as such had no
other option but to approach the Court of law and during such
period the accused company illegally suspended gas supply on
permanent basis from 6th July, 2014. The complainant company
thereafter by a notice dated 7th July, 2014 terminated the contract
with effect from 15th July, 2014. The complainant company in fact,
on the basis of the agreement entered, furnished Bank Guarantee
to the accused company to the tune of Rs.1,75,80,472/- and
another Bank Guarantee to the tune of Rs.93,18,728/-. The
accused persons referred the said dispute to Arbitration claiming
minimum guaranteed offtake commencing from January 2015 till
the tenure of the agreement being April 30, 2034.
6) The complainant company after the dispute arose on enquiry came
to learn that:
i) The accused company was granted Petroleum mining lease
from Government of West Bengal by a Circular No.480-
CI/O/Coal/016/02/MI Pt. Dated 4th September, 2008. The
said lease was valid for a period of 20 years from the effective
date i.e. 4th September, 2008 to 3rd September, 2028. The
accused company in order to cheat the complainant
company unauthorizedly modified the government circular to
its own terms and published that the said license may be
extended for an additional 10 years which was untrue, false
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and frivolous. The accused persons accordingly, entered into
the mining lease agreement with the West Bengal
Government and the said agreement got signed on 5 th June,
2014 which is valid for a period of 20 years with effect from
4th September, 2008.
ii) The accused company with malafide intent induced the
complainant company by exhibiting unauthorized
publication modifying the government circular on its own
terms in order to cheat the complainant company wherein it
was published that the said license may be extended for an
additional 10 years which is untrue, false and frivolous.
iii) The price of the gas charged by the accused persons was
illegal to the extent that it was contrary to the price notified
by the Government of India by its letter dated 14 th February,
2008. The accused/company unjustly enriched itself by the
rates charged by it and made unlawful profit by utilizing the
natural resources of the country disregarding the terms and
conditions of price basis/formula for valuation of CBM gas
as approved by Ministry of Petroleum and Natural Gas, as is
revealed from the letter dated 14th February, 2008 addressed
to Sri Praveen Arora, Assistant Vice President-Legal &
Company Secretary, Great Eastern Energy Corporation
Limited.
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iv) As per agreement entered between Government of India and
the accused company, it is entitled to sell the gas as per
price approved by the Government of India prior to the sale
of CBM Consumers/buyers and Government of India issued
price approval letter of 14th February, 2008 where sale price
at the rate 6.79/MMBTU was the price fixed for CBM gas
produced and sold from the gas field of the accused
company. Complainant Company was unaware of the same
until the recent past and as such made excess payment.
v) That in TRI Query No. DGH/RTI/72/2015-16 dated March
07, 2016 filed on behalf of the complainant company, the
Director General of Hydrocarbons replied that Ministry of
Petroleum and Natural Gas, vide its letter no. O-
19024/1/2002-OMG(v)(pt) dated 14 th February, 2008 has
approved USD 6.79/MMBTU as CBM gas price for Raniganj
(South Block) as such it is palpably clear that the accused
persons unauthorizedly and fraudulently increased the said
price of gas and thus extorted from the complainant
company a huge amount.
7) The fraudulent act of the accused company came to the notice of
the complainant company in course of arbitration proceedings and
after extensive enquiry from where they came to learn that the
accused company mis-represented the facts in the said GSPA
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agreement dated 11.05.2011 and cheated the company to the tune
of Rs.20,16,05,831/-, misappropriating the same thereby
committing criminal breach of trust, cheating and forgery having
used the said document i.e. agreement dated 11.05.2011 as
genuine. The accused not being authorised by Government of West
Bengal after 3rd September, 2028 increased the number of years in
the GSPA agreement dated 11th May, 2011 to 10 May, 2036 which
resulted in, the complainant company having sustained huge
financial loss. The accused company also increased the price of
CBM gas causing wrongful loss to the tune of Rs.20,16,05,831/-
for the period dated 11.05.2011 to 11.07.2014.
8) The complainant company states that since July, 2014 the gas
supply was disrupted by the accused persons and thereafter
several litigations cropped up which are pending in various forum
and as such there was delay to initiate the complaint against the
accused company/accused persons. Further after exhaustive
inquiry and verification the complainant company took
considerable time for initiating the instant proceedings against the
accused persons as they approached with a written complaint to
Bowbazar Police Station on 14th March, 2019 and the police
authorities till the date of filing of the complaint did not register
any FIR which was intimated to the Deputy Commissioner of
Police, Central Division but no action was taken.
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9) The complainant company therefore prayed for taking cognizance
of the offence under Sections
420/406/465/467/468/471/120B/114/34 of the Indian Penal
Code.
Learned ACMM-II, Calcutta on receipt of petition of complaint by an
order dated 18.04.2019 was pleased to take cognizance of the offence and
transfereed the case to the Learned Metropolitan Magistrate, 9 th Court,
Calcutta for inquiry, trial and disposal. Learned Metropolitan Magistrate, 9 th
Court, Calcutta after examination of the complainant and one Ashoke Kumar
Agarwal, Vice President of the complainant company was pleased to issue
process by an order dated 31.05.2019 under Section
384/406/420/467/468/120B/34 of Indian Penal Code, fixing 10.07.2019 for
service return and appearance. The accused company and the persons who are
responsible for the business of the accused company (as described above)
thereafter, challenged the continuance of the proceedings before this Court in
these two revisional applications.
Mr. Debasish Roy, learned Advocate appearing for the petitioner in both
the revisional applications by referring to documents downloaded from the
official Website of Ministry of Corporate Affairs initially submitted that the
petitioner no.3 Sushil Kumar Roongta, petitioner no.5 Sundareshan
Sthanunathan and petitioner no.6 Amit Sharma in CRR 3329/2019 were not
responsible for the business of the company and its affairs at the relevant
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period of time and joined the accused company on 15 th July, 2017, 10th
January, 2015 and 1st April, 2016 which are dates subsequent to the period of
alleged offence as narrated in the complaint. Thus the proceedings against
them should not be allowed to be continued without going into the merits of
the allegations made in the petition of complaint.
Learned Advocate appearing for the petitioner/petitioners submitted that
the complaint clearly states that the complainant had entered into an
agreement pursuant to discussions held by and between the parties for more
than a year. It was also contended that the plea/allegations taken up in the
petition of complaint was also addressed before the Competition Commission of
India, in case no. 63 of 2014 under Section 19(1)(a) of Competition Act, 2002
pursuant to which an investigation was made by the Director General who held
the petitioners to have violated the provisions of Section 4(2)(a)(i) read with
Section 4(1) of the Competition Act, 2002. The said report of the Director
General was placed before the Commission and after hearing the respective
parties the Commission dismissed the contention of the complainant and the
aforesaid order was assailed before the Hon'ble Delhi High Court, and the
Hon'ble Delhi High Court was pleased to affirm the order of Competition
Commission of India. A reading of the judgment delivered by the Competition
Commission of India which was affirmed by the Hon'ble Delhi High Court
would reflect that the complainant was at liberty to exit from the contract after
a period of one year. The dispute relating to Minimum Guaranteed Offtake
according to the Hon'ble High Court was because of the fact that the
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complainant company entered into an agreement with ESSAR for supply of
CBM Gas and thereafter raised the dispute relating to Minimum Guaranteed
Offtake which is an integral part of the GSPA Agreement and it has been held
by the Competition Commission of India that the accused company had the
authority to insert such clause in view of the fact that once the company digs a
well it has to ensure that there is a continuous supply of the same.
Petitioner contends arbitration proceedings are also pending between the
parties which is admitted in the petition of complaint and the very nature of
dispute would reflect that there is a breach of agreement as the point of dispute
relate to minimum guaranteed offtake which was a clause available in the
agreement and the price charged for purchase of CBM gas. It has been
emphasized that a business transaction which continued for a considerable
period of time as is admitted in the complaint and the foundation of a Civil
dispute has been converted into a criminal proceedings with the purpose of
harassing the company and its official who are catering the main business
house. The fact that the complainant tried to portray that they had suffered
loss of Rs.20 crores (approximately) because of certain terms of the agreement
and the price of the CBM gas which was charged has already been adjudicated
and there cannot be a case of any extortion, cheating, criminal breach of trust
in the background of the fact that for a period of about 3 years the business
relationship continued between the parties and it was only after the business of
the complainant company shrinked they picked up frivolous issue for nailing
down petitioner/accused company and its official.
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Mr. Sekhar Basu, learned Senior Advocate appearing for the complainant
company/opposite party submitted that the petitioner/petitioners approached
this Court at a very initial stage, immediately after summons were issued
against them and any interference at this stage would debar the complainant
from adducing its evidence before the Court of Law. Elaborating on such issue
it was submitted that the present case would follow the procedure of a warrant
case instituted otherwise than on a police report and a pre-charge evidence is
to be recorded under Section 244 of the Code of Criminal Procedure for prima
facie establishing a case against the accused persons. Any interference at this
stage, therefore, would take away the right of the complainant, to this effect
learned Advocate relied upon paragraph 5, 6 and 9 of Kamal Shivaji
Pokarnekar -Vs. - State of Maharashtra reported in (2019) 14 SCC 350 which
are set out as follows:
"5. Quashing the criminal proceedings is called for only in a case
where the complaint does not disclose any offence, or is frivolous,
vexatious, or oppressive. If the allegations set out in the complaint
do not constitute the offence of which cognizance has been taken by
the Magistrate, it is open to the High Court to quash the same. It is
not necessary that a meticulous analysis of the case should be done
before the trial to find out whether the case would end in conviction
or acquittal. If it appears on a reading of the complaint and
consideration of the allegations therein, in the light of the statement
made on oath that the ingredients of the offence are disclosed, there
would be no justification for the High Court to interfere [State of
Karnataka v. M. Devendrappa, (2002) 3 SCC 89 : 2002 SCC (Cri)
539] .
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6. Defences that may be available, or facts/aspects which when
established during the trial, may lead to acquittal, are not grounds
for quashing the complaint at the threshold. At that stage, the only
question relevant is whether the averments in the complaint spell out
the ingredients of a criminal offence or not [Indian Oil
Corpn. v. NEPC (India) Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri)
188] .
9. Having heard the learned Senior Counsel and examined the
material on record, we are of the considered view that the High
Court ought not to have set aside the order passed by the trial court
issuing summons to the respondents. A perusal of the complaint
discloses prima facie, offences that are alleged against the
respondents. The correctness or otherwise of the said allegations
has to be decided only in the trial. At the initial stage of issuance of
process it is not open to the courts to stifle the proceedings by
entering into the merits of the contentions made on behalf of the
accused. Criminal complaints cannot be quashed only on the ground
that the allegations made therein appear to be of a civil nature. If the
ingredients of the offence alleged against the accused are prima
facie made out in the complaint, the criminal proceeding shall not be
interdicted."
Relying upon State of Karnataka -Vs. - M. Devendrappa reported in
(2002) 3 SCC 89 it was submitted that the inherent powers of the High Court
under Section 482 of the Code of Criminal Procedure is exception in nature
and not the rule, as such one should bear in mind the distinction between a
case where there is no legal evidence or where there is evidence which is clearly
inconsistent with the accusations made and a case where there is legal
evidence which on appreciation may or may not support the accusation. By
referring to a relevant part of the referred judgment the opposite party
contended that Section 482 of the Code of Criminal Procedure was never
intended to be an instrument handed over to an accused to short-circuit a
prosecution and bring about its sudden death. Learned Senior Advocate also
referred to the celebrated judgment of the Hon'ble Supreme Court in State of
Haryana -Vs. Bhajan Lal reported in 1992 Supp (1) SCC 335 and submitted
that the present case do not fall within the seven categories referred to in
paragraph 102 of the said judgment. The complainant/opposite party further
contended that the petition of complaint, the initial deposition of Rajib Ghosh
and Ashoke Kumar Agarwal and the documents taken as a whole make out
triable offence and the learned Magistrate after prima facie being satisfied was
pleased to issue process against the accused persons. By referring to the
provisions of Section 415 of the Indian Penal Code it was submitted that
dishonest concealment of facts amounts to the offence of cheating and the
explanation to Section 415 of the Indian Penal Code provides that "A dishonest
concealment of facts is a deception within the meaning of this section." By
referring to Section 24 of the Indian Penal Code learned Senior Advocate
submitted that the word 'dishonestly' is defined in the Indian Penal Code as
"Whoever does anything with the intention of causing wrongful gain to one
person or wrongful loss to another person, is said to do that thing
"dishonestly". It was contended by referring to the above definition of the
Indian Penal Code that the accused company and its Directors/employees
induced the complainant company to enter into the Gas sale and Purchase
Agreement dated 11.05.2011 for a period of 25 years, meaning thereby that
such agreement would be valid till April, 2034. The complainant company
relying upon such representation shifted from its traditional furnace fuel to
CBM gas and the accused company having monopoly in the supply of CBM gas
adopted unfair means. It later transpired to the complainant company that the
accused company did not have the authority to enter into an agreement for a
period of 25 years and in its prospectus falsely claimed and published that the
mining lease granted by the Government of West Bengal can be extended for a
further period of 10 years. Such claim is contrary to the license granted by the
Government of West Bengal and concealing such facts the accused company
had the intention of wrongful gain by entering into an agreement with the
complainant company for a period of 25 years. The complainant opposite party
by referring different clauses of the GSPA Agreement and other documents
claimed that by concealing relevant facts the accused company entered into the
agreement dated 11.05.2011 and committed wrongful loss to the complainant
company and as such the decision of the Hon'ble Supreme Court in the case of
Iridium India Telecom Ltd. -Vs. - Motorola Inc. Reported in (2011) 1 SCC 74 is
relevant for proper appreciation of the present case as has been held by the
Hon'ble Supreme Court "the complaint in its entirety will have to be examined on
the basis of the allegations made therein. But the High Court has no authority or
jurisdiction to go into the matter or examine its correctness. The allegations in the
complaint will have to be accepted on the face of it and the truth or falsity cannot
be entered into by the Court at this stage." The aforesaid judgment was also
relied upon by this High Court in Sushil Mohata & Ors. -Vs. - The State of
West Bengal & Anr. reported in 2014 SCC OnLine Cal 17385.
The complainant opposite party further submitted that the price of gas
charged by the accused company was much higher than the price notified by
the Government of India and by entering into the Gas Sale and Purchase
Agreement the accused company made excess billing which resulted in
wrongful loss to the complainant company. Learned Senior Advocate by
referring to the relevant part of the complaint tried to draw the attention of this
Court and submitted that the excess price charged also caused a wrongful loss
to the complainant company to the tune of Rs.20,16,05,831/-. By referring to
Rajesh Bajaj -Vs. - State of NCT of Delhi reported in (1999) 3 SCC 259 it was
submitted that a cause of cheating has been made out and the contentions
advanced by the accused company at this stage cannot be considered. The
complainant/opposite party also relied upon the judgment of this Hon'ble
Court in Sri Aurobinda Seva Kendra & Ors. -Vs. - State of West Bengal & Anr.
reported in 2017 SCC OnLine Cal 9198 wherein it was held that the allegations
against the Hospital Authority for raising inflated bills for medicines claiming to
have been administered for treatment and unused medicines, if any, not
returned to the complainant constitutes an offence under Section 406/420 of
the Indian Penal Code. The further contention which was advanced by the
complainant opposite party is that the order dated 16.02.2017 passed by the
Competition Commission of India do not have any relevance in view of the fact
that it is a settled proposition of law that merely because a Civil claim is
maintainable it does not mean that a Criminal complaint cannot be
maintained. Reliance was made on Amit Kapoor -Vs. _ Ramesh Chander
reported in (2012) 9 SCC 460.
Additionally it was contended that it is also a settled proposition of law
that if the allegations give rise to a civil claim and also amounts to an offence
under the Criminal Law, merely because a civil claim is maintainable do not
mean that a criminal complaint cannot be maintained. Attention of the Court
was drawn to Indian Oil Corporation -Vs. - NEPC India Ltd. & Ors. reported in
(2006) 6 SCC 736, Paragraph 12(v) is relevant which is as follows:
12. (v) A given set of facts may make out: (a) purely a civil wrong; or
(b) purely a criminal offence; or (c) a civil wrong as also a criminal
offence. A commercial transaction or a contractual dispute, apart
from furnishing a cause of action for seeking remedy in civil law,
may also involve a criminal offence. As the nature and scope of a
civil proceeding are different from a criminal proceeding, the mere
fact that the complaint relates to a commercial transaction or breach
of contract, for which a civil remedy is available or has been availed,
is not by itself a ground to quash the criminal proceedings. The test
is whether the allegations in the complaint disclose a criminal
offence or not."
Mr. Debasish Roy, learned Advocate replying to the relevant judgment
cited on behalf of the complainant/opposite party submitted that in Iridium
India Telecom Ltd. (supra) the specific allegation was that the complainant
company was induced to part with a sum of Rs.126 crores for the purpose of
setting up a gateway when it was within the knowledge of the accused
company that no such gateway was necessary and that the necessity for
installation of a gateway was a complete fraud which was dishonestly created
to get a license to operate the system in it. Such information was withheld by
the accused company from the complainant company and as such the same
amounted to cheating. In the instant case according to him the agreement with
the Government of India dated 31 st May, 2011 and from the agreement with the
State of West Bengal dated 5th June, 2014, it would clearly transpire that the
petitioner company had the lease for a period of 25 years with the option of
extension for another 5 years.
Distinguishing the judgment of the High Court, Calcutta in Sri
Aurobinda Seva Kendra & Ors. (supra) learned Advocate submitted that the
facts in the said case relate to a nursing home authority raising a bill of
Rs.2,08,424/- which were the cost of the medicines used for the treatment of
the wife of the complainant/opposite party no.2 which were reflected in the
cash memo and the vouchers. However, from the treatment-sheet supplied by
the Nursing Home Authority it was found that the list of medicines
administered to the patient were around Rs.1,09,800/- and as such the
hospital authority realised excess sum of Rs.98,624/- as costs of medicines.
Neither the unused medicines were returned to the complainant nor any
amount was refunded. As such it was held that a prima facie case of cheating
was made out against the accused persons. Referring to the cited decision of
the Hon'ble Supreme Court in State of Karnataka -Vs.- M. Devendrapa & Anr.
(supra) and also State of M.P. -Vs. - Awadh Kishore Gupta Ors. reported in
(2004) 1 SCC 691 it was emphasised that the cases relate to police
investigation wherein the exercise of inherent powers of the High Court were
discussed. Replying to the decision as relied upon by the complainant/opposite
party in respect of Kamal Shivaji Pokernekar -Vs. State of Maharashtra & Ors.
reported in (2019) 14 SCC 350 it was submitted that the petitioners never
contended that the dispute referred above is civil in nature and as such the
proceeding should be automatically quashed. It was submitted that the nature
of dispute in the instant case arises out of a purely commercial dispute and
there is no ingredient of culpability involved as alleged by the complainant.
Distinguishing the judgment of the Hon'ble Supreme Court in Rajesh Bajaj
(supra) it was submitted that the said case was based on First Information
Report and the interference was done by the Hon'ble Apex Court as the said
FIR was quashed at the stage of investigation. Lastly, it was submitted that as
the ingredients of the offence are lacking in the petition of complaint the initial
deposition of the two witnesses as well as the documents relied upon by the
complainant the proceedings relating to C. Case No. CNS/124/2019 pending
before the learned Metropolitan Magistrate, 9 th Court, Calcutta should be
quashed.
The dispute between the complainant company and the accused
company arise out of an agreement which commenced on or about May, 2011
and was suspended/terminated on or about July, 2014. During this period the
supply of CBM Gas continued and the parties exchanged their communications
relating to the supply and the transactions. The grievance of the complainant
company as is revealed from the complaint was that the accused company had
a monopoly in the supply of CBM Gas in the area where the complainant
company's factory were situated and the accused company abused its
dominant position to agree to the terms which according to the complainant
company was unfair. The clause relating to Minimum Guaranteed Offtake
which was introduced by the accused company, hurt the business of the
complainant company as they found that on this term to carry on the business
was becoming unviable. The complainant company as is reflected in the
complaint by its order dated 2nd April, 2014 requested the accused company to
waive the MGO clause, it has been alleged that initially the accused company
accepted such proposal subject to the increase in the price of the gas but later
unethically refused to withdraw the MGO Clause which sparked a dispute
between them. It is also alleged that the dispute and differences arose with this
particular clause to such an extent that the complainant company had to
approach Court of law, and during such pendency of proceedings the accused
company suspended the supply of gas on permanent basis on and from 6 th
July, 2014. Consequently the complainant company by its notice dated 7 th
July, 2014 terminated the contract with effect from 15 th July, 2014. The other
allegations which have been made in the petition of complaint so filed is that
because of the unfair terms in the agreement the complainant company had to
furnish the initial Bank Guarantee of Rs.1,75,80,472/- and subsequently
another Bank Guarantee to the tune of Rs.93,18,728/-. Additionally it has also
been alleged regarding the pricing which has been charged by the accused
company which was beyond the scope of the price fixed by the Government of
India. The complainant company has also challenged the tenure/period for
which the accused company compelled the complainant company to enter into
the agreement or the lease which was beyond the period of lease granted by the
Government to the accused company. Finally the complainant company alleged
that because of the GSPA agreement and the terms incorporated therein which
was with an evil motive and full of misrepresentations, the complainant
company suffered to the tune of Rs.20,16,05,831/-.
The nature of allegations made in the petition of complaint are
exclusively on the foundation of the GSPA agreement, the terms and clause
incorporated therein. The grievance of the complainant relate to Minimum
Guaranteed Offtake which is one of the terms incorporated in the GSPA
agreement. The pricing of the gas, the Bank Guarantee which was furnished
and the expectation of the complainant that because of such incorporation of
clause and pricing, the loss has been incurred which have been claimed to be
an amount of Rs.20,16,05,831/-.
The present is not a dispute that an agreement was entered into for
supply of gas and the accused company after entering into all formalities
relating to the agreement and payment, did not supply any gas or for failure of
commitment as is revealed from the complaint. Even if the allegations made in
the petition of complaint and the initial evidence under Section 200 of the Code
of Criminal Procedure are taken to be correct what is more glaring in the
petition of complaint is the negotiations relating to the terms and clause
incorporated in the agreement. A business house has the authority to decide
its terms and clause on which it would carry on its business. The pricing
charged if it was excess and any contravention of any rule, the same should
have been brought to the notice of the statutory authorities responsible for
fixing such price and the same cannot be a subsequent plea of a party to an
agreement after carrying on business for more than three years. So far as the
allegations to the tenure or period of the agreement is concerned the time
period has not reached for the accused to allege and if the Minimum
Guaranteed Offtake had an impact on the tenure of the agreement in that case
the pricing negotiations cannot be a subject matter of adjudication by a
criminal Court, when the parties had the option to exit from the contract.
The Hon'ble Supreme Court in Pepsi Foods Ltd. -Vs. - Special Judicial
Magistrate reported in (1998) 5 SCC 749 has observed that:
"28. Summoning of an accused in a criminal case is a serious
matter. Criminal law cannot be set into motion as a matter of course.
It is not that the complainant has to bring only two witnesses to
support his allegations in the complaint to have the criminal law set
into motion. The order of the Magistrate summoning the accused
must reflect that he has applied his mind to the facts of the case and
the law applicable thereto. He has to examine the nature of
allegations made in the complaint and the evidence both oral and
documentary in support thereof and would that be sufficient for the
complainant to succeed in bringing charge home to the accused. It is
not that the Magistrate is a silent spectator at the time of recording
of preliminary evidence before summoning of the accused. The
Magistrate has to carefully scrutinise the evidence brought on record
and may even himself put questions to the complainant and his
witnesses to elicit answers to find out the truthfulness of the
allegations or otherwise and then examine if any offence is prima
facie committed by all or any of the accused."
The said principle was reiterated by the Hon'ble Supreme Court in
Ravindranatha Bajpe -Vs. - Mangalore Special Economic Zone Ltd. & Ors.
reported in 2021 SCC OnLine SC 806.
Taking into account the overall allegations made in the petition of
complaint and the initial evidence under Section 200 of the Code of Criminal
Procedure, I am of the view that no offence has been made out under Section
384/406/420/467/468/120B/34 of the Indian Penal Code and the issuance of
process by the Learned Magistrate by its order dated 31.05.2019 as such calls
for interference.
In view of the aforesaid observations, that the petition of complaint read
along with the initial evidence under Section 200 of the Code of Criminal
Procedure of the complainant and its witness, fails to make out any offence, all
further proceedings of C. Case No. CNS/124/2019 pending before the Learned
Metropolitan Magistrate, 9th Court, Kolkata as also the orders passed therein
are hereby quashed.
Accordingly, CRR 1408 of 2019 along with CRR 3329 of 2019 are
allowed.
Pending applications, if any, are consequently disposed of.
Interim order, if any, is hereby made absolute.
All parties shall act on the server copy of this judgment duly downloaded
from the official website of this Court.
Urgent Xerox certified photocopy of this judgment, if applied for, be given
to the parties upon compliance of the requisite formalities.
(Tirthankar Ghosh, J.)
