Deepak Khuntia @ Deepak Kumar Khuntia & ... vs State Of West Bengal & Anr
2023 Latest Caselaw 7463 Cal

Calcutta High Court (Appellete Side)

Deepak Khuntia @ Deepak Kumar Khuntia & ... vs State Of West Bengal & Anr on 29 November, 2023

                                    1


               IN THE HIGH COURT AT CALCUTTA
                Criminal Revisional Jurisdiction
Present: -      Hon'ble Mr. Justice Subhendu Samanta.
                      C.R.R. No. -1251 of 2018
                                 With
                         IA No. CRAN 1 of 2018
                   (Old No. CRAN 1443 of 2018)
                             +
                     CRAN 7 of 2021
                             +
                 CRAN 8 of 2023 (not here)
                             +
                 CRAN 9 of 2023 (not here)
                             +
                 CRAN 10 of 2023 (not here)

                    IN THE MATTER OF
   Deepak Khuntia @ Deepak Kumar Khuntia & Anr.,
                           Vs.
                 State of West Bengal & Anr.

For the Petitioners         : Mr. Sudipto Moitra Sr.Adv.,
                              Mr. Somopriyo Choudhury Adv.,
                              Mr. Uttam Sharma Adv.,
                              Ms. V. Kedia Adv.

For the O.P.                   : Mr. Ayan Bhattacharjee Adv.,
                                 Mr. Anirban Dutta Adv.,
                                 Mr. Shivam Bhimsaria Adv.


For the State              :     Mr. Arijit Ganguly Adv.,
                                 Ms. Debjani Sahu Adv.




Judgment on                     :       29.11.2023
                                 2


Subhendu Samanta, J.

This is an application u/s 482 of the Code of Criminal

Procedure for quashing of a proceeding in complaint case No.

320C of 2018 pending before the Learned Judicial Magistrate

3rd Court Howrah (sadar) u/s 406/34 IPC.

The brief fact of the case is that the present opposite

party No. 2 has lodged a complaint case against the present

petitioners contending inter alia that the complainant is a

proprietor of a company namely Sur Feed Centre and the

present petitioner/accused persons are the proprietor of a

company namely Eva Exotica Private Limited. There were

business transactions between the two companies for more

than 2 years. There was an agreement between the parties that

the complainant company shall provide the raw materials to

the accused company and by such raw materials the accused

company shall manufacture animal feed including poultry and

cattle feeds and shall supply the same to the complainant

company. For such purpose the accused company shall receive

the manufacturing and processing feeds from the complainant

company. It has been alleged that as per such agreement a

huge raw material were supplied by the complainant company

to the accused company which was stocked and stored at the

factory of the accused company. According to the terms, the

accused company used to deliver the animal feed to the

complainant company and bills are raised by the accused

company and were paid by the complainant company regularly.

It is the allegation of the complaint that suddenly on

08.05.2018 the accused persons had stopped production of

poultry feed though a huge raw materials were lying in the

custody of the accused persons valued more than Rs. 2.5

crores.

The further allegation of the complainant was that he has

informed by his labour that the accused company is selling raw

materials to the third parties. On query the accused company

with ulterior motive demanded Rs. 2.25 Crores from the

complainant by saying that if the same amount is not paid the

raw materials shall not be released. On several occasions the

complainant requested the accused persons to supply animal

feed but they denied to do so and finally, threaten the

complaint and his officials and that if they come again to their

unit factory they will not hesitate to assault the complainant.

Hence this complaint.

After receiving such complaint the cognizance was taken

by the Learned Magistrate u/s 406/34 IPC and the Learned

Magistrate after examine the complainant on oath u/s 200

Cr.P.C. and one witness issued process against the present

petitioner u/s 406 and 34 IPC and also issued search warrant

of scheduled articles and called for a report from the Officer-in-

Charge concern by the 28.05.2018. By such order of Learned

Magistrate directed the OC concern not to hand over the

articles to anybody except by the court's order. The

complainant is directed to furnish proper identification marks

on his raw materials during the process of search.

Being aggrieved and satisfied with the said order of

issuance of process and the issuance of search warrant the

present revision has been preferred for quashing the entire

criminal proceeding.

Learned Advocate for the petitioner submits that the

Learned Magistrate has committed a grave error of issuance of

process by virtue of the petition of complaint. The petition of

complaint dose not disclose any offence punishable u/s

406/34 IPC.

It is the submission of the Learned Advocate for the

petitioner that the opposite party No. 2 has maliciously convert

a civil litigation into a criminal case. He further argued that

there was a specific agreement entered into between the parties

wherein it has been agreed that the complaint has to deliver

the raw materials to the petitioner company and by such the

petitioner company shall prepare poultry feed which would be

supplied to the complainant company and for such the

petitioner company would entitled to raise separate bills for

furnish products and also towards process charges. It has been

further agreed between the parties that if the opposite party

No. 2 failed to release the payments within 30 days from the

date of bills. The petitioner company shall be entitled to recover

the amount from the materials/stock supplied by the opposite

party No. 2 which will kept in the premises of the petitioner

company. It is the fact that a huge amount became

outstanding on the part of the Opposite party No. 2. Several

reminders are sent to him by the company asking him to

release payments within the specific time but he failed to

making payment. On several circumstances the petitioner

company intimated the OP No 2 that in the event of defendant

of his part the company would invoke the terms of agreement

which entitled it to recover its dues from the materials of the

OP 2. Several demands/correspondence were sent to the OP

No. 2 but he failed to released payments. Accordingly the

petitioner company has adjusted the raw materials lying in the

custody of the petitioner company and in spite of such

adjustment a further sum of Rs. 58, 27,371.88/-paisa was still

due and payable by the OP No. 2. Vide his letter dated 12th May

2018 in reply, the OP No. 2 intent to invoke the arbitration

clause in the agreement. Suddenly, on 15th May 2018 some

police officers from Jagatballavpur PS came to the factory

premised and goes an inquiry at the said factory without any

prior intimation to the present petitioners by virtue of a

purported order of Executive Magistrate passed u/s 144(2)

Cr.P.C. It appears that the proceeding was filed by the OP No.

2; it is misconceived and mala fide. No breach of peace was

occurred at the factory premises moreover no men or labour of

the OP No. 2 were engaged at the petitioner's factory premises

at any point of time. Considering the cunning attitude of the

OP No. 2 the petitioner has informed the entire matter to the

Superintendent of Police (rural) Howrah. In the mean time the

present OP No. 2 has lodged the instant complaint before the

Learned Chief Judicial Magistrate Howrah curiously

suppressed the aforesaid fact by labelling false charge of

breach of trust against the employees of the company.

Surprisingly by virtue of the said order passed by the Learned

Magistrate in response of a prayer of search warrant some

police personnel along with the men of OP No. 2 came to the

factory premised by petitioners and seized all raw materials

lying in the factory premises which altogether is much more

valuable than the subject matter in dispute. At the time of

seizing such materials, no stock register of the OP No. 2 as well

as the petitioner was verified by the OC of the said police

station. Actually the OC of the said police station accompanied

by the Opposite party No. 2 entered inside the factory premises

of the petitioner and took away all the consignment lying the

factory premises in several trucks brought by the opposite

party No. 2. Thereafter the petitioner immediately moved before

the Learned Magistrate for modification of the order but having

no effect thereafter the forthwith the petitioner lodged a written

complaint disclosed the facts and circumstances of the

cognizable case and punishable u/s 392/395/403 of the IPC

against the OC of Jagatballavpur PS on 19th May 2018. But the

said police officers of Jagatballavpur PS neither register FIR

nor took any action. On 19th May 2018 the police officer after

realising such illegalities on their part came back to the factory

premises of the petition and returned the raw materials

damaged the same in the factory premises and under

threatening to the employees of the petitioner received some

signature or a piece of paper and stated that the sized

materials are being kept as an interim measures at the factory

premises of the petitioner company.

On the basis of the alleged fact marks the Learned

Advocate for the petitioner submits that the OP stole the raw

materials through by purported search and seizure; and the

complaint against the present petitioners are baseless. From

the four corner of the petition of complaint it would be revealed

that the ingredients of an offence u/s 406 of IPC is not at all

made out. This is a completely civil dispute between the two

companies which was coloured by the complainant to be a

criminal action. The Opposite party no. 2 has purposefully

invoked jurisdiction of a criminal forum by making a complaint

which is subject matter of arbitration proceedings. More so it

was sought to be initiated by the Opposite Party No. 2 terms of

the contract between the parties. The instant criminal

complaint and the criminal proceedings it allowed to be

continued would be tantamount to abuse of process of court

so, he prayed for quashing the entire criminal proceeding.

In support of his contention he cited a decision reported

in Dipak Gab and Ors. Vs. State of U.P. & Anr. AIR 2023 SC

Quashing of summoning order--

dispute pertaining to statement of against--allegations were that gives supplied by accused were not as per requirements and demands of complainant--complaint disclosed civil dispute--grievances relating claim made by the accused--demand, even if assumed to be lying would not satisfied ingredients Under Section 405/420/421 of 120B IPC so as to justify summoning orders--

summoning order quashed.

Binod Kumar & Ors Vs. State of Bihar and Anr. 2014

(8) Supreme 112.

In discussing the judgment of Sagar Suri Vs. State of

U.P. (2000) 2 SCC 636 wherein this court observed that

"It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This court has laid certain principles on the basis of which the High court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice.

M/s GHCL Employees Stock Option Trust Vs. M/s

Inda Infoline Ltd. (2013) 2 CLJ (SC) 111

Complaint filed by the appellant alleging false demand--criminal proceeding started by the Metropolitan Magistrate--the respondent filed criminal revisional sanction for quashing the proceeding against them--there is no specific allegations against them except the allegations that they are officer bearers of the company--on the basis of such vague allegations criminal proceeding cannot be initiated against the respondents--hence High Court rightly dismissed the criminal prosecution against them.

SK. Alagh Vs. State of U.P. & Ors. 2008 CRLJ 2256

In absence of any provisions laid down under statute a director of a company or an employee cannot be held to be vicariously liable to any offence committed by the company itself.

Cargo Messers (India Private Limited) Vs. Dhanseh

Badarmal Jain and Anr. (2007) 14 SCC 776

Criminal breach of trust and cheating--Pleadings--Ingredients of the offence not averred in criminal complaint filed one year after civil suit--Civil suit was filed alleging negligence and breach of contractual obligations-- Held, breach of contract simpliciter does not constitute an offence--Allegations in the criminal complaint must disclose the necessary ingredients therefor--Court can for the purpose of finding out as to whether the said allegations are prima facie correct, take into consideration the correspondences exchanged by the parties and other admitted documents--Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of process of the court--Superior courts while exercising inherent power should also strive to serve the ends of justice--Criminal Procedure Code, 1973--S. 482--Abuse of process of court/Law/ Fraud on court--High Court should strive to serve ends of justice.

By citing the above judgments the Learned Advocate for

the petitioner submits that the criminal proceedings initiated

by the OP No. 2 is misconceived and if the same be allowed to

continued that would be an abuse of process of court.

Learned Advocate for the OP submits that the instant

criminal revision has got no merit. The entire materials

produced before this court cannot be looked into at this stage.

The Learned magistrate after receiving the complaint examined

the complainant along with his witness u/s 200 Cr.P.C.; being

satisfied about the prima facie of the case issued process

against the accused persons u/s 406/34 of IPC.

He further argued that at this juncture the revisional

court cannot go into the merit of this case. The Hon'ble

Supreme Court in several occasions as directed that the High

court shall not exercise its jurisdiction u/s 482 Cr.P.C. wherein

the merit of the criminal complaint has been specifically made

out. In support of his contention he cited some decisions on the

basis of his argument

Central Bureau of Investigation Vs. Ariyan Singh &

Ors

Where in the Hon'ble Supreme Court has held that

As per cardinal principle of law at the stage of discharge and/or quashed of criminal proceedings, while exercising the power u/s 482 Code of Criminal procedure, the court is not required to conduct the mini trial.

Kaml Sibaji Pokar Nekar Vs. Maharashtra, (2019) 14

Supreme Court cases 350.

--Criminal complaints cannot be quashed only on ground that allegations made therein appeared to be civil in nature--if ingredients of offence alleged against the accused are prima facie made out in complaint, criminal proceedings not to be interdicted.

Trisuns Chemical Vs. Rajesh Agarwal (1999) 8

Supreme Court cases 686.

Quashment of complaint or FIR--

cheating alleged--criminal prosecution, held, cannot be throttled merely because civil proceedings are also maintainable-- existence of an arbitration accused in the contract for supply of goods between the appellant company and another company, held in a sufficient ground for quashing the complaint filed by the appellant against the supplier company alleging cheating by supplying inferior goods--arbitrator for competent to adjudged of an offence.

Dilbag Rai Vs. State of Hariyana (2019) 16 SCC 736

Quashment of proceedings when not warranted even when dispute being a civil nature--though accused did not have titled to property, she had dealt with property and induced the complaint to part with valuable consideration--

whether these allegations are true or otherwise is a matter of trial.

Fiona Shirkhande Vs. State of Maharshtra (2013) 14

Supreme Court Cases 44.

Complaint case--issue of process -

scope of inquiry--sufficient of grounds for proceeding--must be as arrived at prima facie satisfaction as to whether there are grounds for proceedings, by reading complaint as a whole without deferring to defence of accused, if any without going merit to the case--must has to examine prima facie truth and inherent probabilities apparent on allegations made in complaint so as to satisfy that prima facie ingredients of alleged offence made out from complaint for issuance of process--once magistrate by exercising his discretion forms opinion regarding the existence of grounds for proceedings higher court should not substitute its own discretion for that of Magistrate.

Learned Advocate for the OP No. 2 submits that it is a

settled principles of law that to exercise of power u/s 482 of

Cr.P.C. the complaint in its entirety shall have to be examined

on the basis of the allegations made in the complaint and the

High Court at this stage was not under obligation to go into the

merit or examined its correctness. Whatever appears on the

face of the complaint shall be taken into consideration when

any critical examination of the summoned offences ought to be

appeared ex facie on the complaint and other documentary

evidences if any on record.

He further argued that inherent power of the High Court

u/s 482 of the Cr.P.C is an extraordinary power which is to be

exercised with great care and circumspection before the

marking to scrutinise the complaint. In deciding whether the

case is the rarest of rare case to scuttle the prosecution at its

inception.

On the basis of the above argument he prayed for

dismissal of the instant criminal revision.

Heard the Learned Advocates.

Perused the materials on record also perused by

complaint. Perused the application for quashing as well as

connected documents therein. The complaint was lodged by the

OP 2 against the present petitioner alleging the offence

punishable u/s 406/34 IPC. It has been alleged by the

complainant before the Learned Magistrate that a huge amount

of raw materials were supplied to the petitioners company by

the complainant for preparation of animal feed by virtue of a

specific contract. The petitioners accused had the authority

over the raw the materials but without any information and

opinion to the complainant, the accused/petitioner has

misappropriated the raw materials by disposing it in favour of

third party.

Let me find out whether the petition of complaint itself

disclosed about the commission of an offence punishable u/s

406 IPC. Section- 406 IPC is the punishment for the offence of

criminal breach of trust. The Criminal Breach of Trust has

been defined u/s 405 IPC.

405. Criminal breach of trust.-- Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes or that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust'.

The ingredients of Criminal Breach of Trust are as

follows:--

1. The accused was entrusted with the property or domain over

it.

2. He dishonestly misappropriated or converted of his own use

such property or he dishonestly used or disposed of that

property.

3. The disposal of property must be in violation legal direction

or of any legal contract.

4. There must have a mens ria of the accused for commission

of such offence.

In this case it is true that the accused petitioner were

entrusted to some raw materials and there was a legal

contract/agreement between the parties that the accused

petitioner shall prepared animal feed by using such raw

materials and shall deliver the same to the complainant for

which he shall raise bills for furnish products and also towards

processing charges. It is the version of the petition of complaint

that there was a long business transaction between the

complainants and the petitioners. The petitioners also averted

that they were entered into an agreement for the purpose of

such business. The agreement was placed before this court

along with the criminal revisional application. The opposite

party No. 2 has also admitted the existence of such agreement;

more over, the opposite party has admitted before this court

that he has terminated the agreement and proceeded for

arbitration. So, it is abundantly clear that, the OP No. 2 while

filed the complaint before the Learned Magistrate did not

disclose about the fact of agreement and its present status

thereof standing between the parties; he also concealed his

conduct of termination of the agreement and his proceeding

towards the arbitration. It is the case the petitioner before this

court that there was a huge outstanding bills to be paid by the

OP No. 2 in favour of the petitioners. The OP did not pay the

huge amount of bill and also did not answered to their

demand. It was also averted by the petitioner that by virtue of

the terms of the agreement, the petitioners is at liberty to

dispose of the raw materials to clear out the bills. The entire

facts was suppressed by the OP 2 before the Learned

Magistrate.

To constitute the offence u/s 406 IPC it has to be proved

or that the accused has dishonestly disposed of or

misappropriates the property to his own use. In this present

case the petitioners company has alleged to have been disposed

of the raw materials in favour of the third party but such

conduct was within the ambit of the contract between the

petitioner and the complainant. The OP No. 2 has managed to

show a colourable picture before the Learned Magistrate by

suppressing the terms of the agreement.

A business transaction between two or more companies

must have exists by virtue of an agreement. In performing such

business the parties are duty bound to adhere to the terms of

the agreement. Breach of any terms of such business

agreement has its required redress before arbitrator or may

invoke a civil liability against the party in breach. Breach of

Business Agreement is not always referred as criminal liability

unless the ingredients of the offence are satisfied and presence

of mens rea is shown. The offence u/s- 406 IPC in a business

transaction can only be invoked if it is shown that the disposal

of the property made dishonestly in violation of the legal

contract between the parties. Furthermore, realisation of the

outstanding according to the express contract cannot referred

as guilty mind (mens ria) or the part of accused/petitioner.

Considering the same it appears to me that on the face of

the petition of complaint the offence punishable u/s 406 IPC

appears to be not made out. Without going through the merit of

the case, it further appears to me that the criminal proceeding

initiated by the OP No. 2 before the Learned Magistrate is a

suppressions of material fact by which the business contract

between the parties culminated into a criminal proceeding. It is

true that this revisional court u/s 482 of the Cr.P.C. has very

limited power and to exercise the inherent power of this court

the only requirement is to whether continuation of the

proceeding is totally abuse of the process of the court. In this

case the entire materials suggest a fit case where this court can

invoke its inherent power.

I have carefully perused the entire case records along

with the petition of complaint and the pleadings placed by the

respective parties before this court. Considering the entire

material I am of a view that the OP 2 has preferred the

complaint before the Magistrate by suppression the material of

facts and the alleged petition of complaint does not make out a

case punishable u/s 406 IPC against the present petitioners.

Thus I find merit to entertain the instant criminal revision.

CRR is allowed.

The complaint case No. 320 C of 2018 pending before the

Learned Judicial Magistrate 3rd Court Howrah (Sadar) u/s

406/34 IPC against the present petitioners along with

connected Orders passed by the Learned Magistrate is hereby

quashed.

CRR is disposed of.

Connected CRAN applications if pending are also

disposed of.

Any order of stay passed by this court during the

pendency of the instant criminal revision is also vacated.

Parties to act upon the server copy and urgent certified

copy of the judgment be received from the concerned Dept. on

usual terms and conditions.

(Subhendu Samanta, J.)