Rooplal Jindal vs Adalat Prasad & Ors.
1999 Latest Caselaw 1173 Del

ORDER

M.S.A. Siddiqui, J.

1. The petitioner is the sole proprietor of M/s. Deepak Handloom Indus- tries engaged in manufacture of handloom fabrics. The respondent No. 1 is a textile representative and general order supplier and mainly operates in Eastern sectors of the country through his business associates in and around Calcutta. The respondents No. 2, 3 and 4 deal in textile goods and operate through respondent No. 1. On 17.8.1990, the petitioner filed a complaint under Sections 120-A/120-B/405/406/415/420/463/465/468 IPC against the respondents and others on the allegations that respondents No. 2, 3 and 4 and others operate through respondent No. 1 to cheat and defraud other suppliers of goods located far off from Calcutta. Their modus operan- di is to approach innocent manufacturers/suppliers through respondent No. 1 and to place orders for the supply of goods to various parties, fraudulent- ly induce the suppliers to deliver the goods, dishonestly divert the goods to their co-associates and misappropriate the amount of goods supplied by the manufacturers/suppliers. In February, 1998, the respondents hatched a conspiracy to defraud the petitioner and pursuant to the said conspiracy the respondent No. 1 approached the petitioner and placed orders for supply of goods to the remaining respondents. The petitioner supplied the goods to the respondents and others. The respondent No. 2 and 3 made some payments to respondent No. 1 for the goods supplied by the petitioner but the amount so paid was misappropriated by the respondent No. 1. Even some of the latters despatching the goods (annexures B-5, C-4 and D-4) were also forged by the respondents and some of the goods supplied by the petitioner were also misappropriated by the respondent. It is the further case of the prosecution that the respondent Bajinder Sinha cheated the petitioner by issuing certain cheques which were dishonoured by the Bank.

2. The petitioner examined three witnesses in support of the averments made in the complaint. By the order dated 26.5.1992, the learned Magistrate took cognizance of the offences punishable under Sections 420/120-B IPC against the respondents and issued process against them. Aggrieved thereby, the respondents filed the petition (Crl. M. (M). No. 501/93) before this Court. By the order dated 4.3.1993 passed by this Court in Crl. M. (M) No. 501/93, the respondents were directed to approach the trial court for re- calling the process in view of the judgment of the Apex Court in K.M. Mathew Vs. State of Kerala and Another . Pursuant to the said direction, the respondents filed an application before the trial court for re-calling the process. By the order dated 28.1.1995, the learned Magistrate allowed the application and dismissed the complaint. Feeling aggrieved, the petitioner has come up in revision before this Court.

3. Assailing the validity of the impugned order dated 28.1.1995, learned counsel for the petitioner contended that the learned Magistrate has com- mitted a manifest illegality in re-calling the process issued against the respondents. In Smt. Nagawwa Vs. Veeranna Shivalingappa Konjalgi and Oth- ers. , the Apex Court has categorised the following cases in which an order of the Magistrate issuing process against the accused can be quashed or set aside :-

(1) Where the allegations made in the complaint or the statement of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused;

(2) Where the allegations made in the complaint are potently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused;

(3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inad- missible; and

(4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like."

4. Applying the aforesaid principles to the facts of the present case. I am of the opinion, that the present case is not one in which the learned Magistrate should have re-called the order issuing the process against the respondents. The order dated 26.5.1992 passed by the learned Magistrate shows that the learned Magistrate had taken into considerations the aver- ments made in the complaint as also the evidence adduced in support of it. The learned Magistrate on consideration of the statements made by the witnesses and the documents Ex. PW-1, Ex. PW-2 and Ex.PW-6 and the docu- ments No. 16, 17, 18, 20, 21 and 22 came to the conclusion that the respondents had conspired to cheat the petitioner in pursuance of which the respondent No. 1 placed orders to the petitioner to supply goods to the remaining respondents. The respondents made some payments to respondent No. 1 which were misappropriated and the remaining respondents also misappropriated certain goods supplied by the petitioner. He further concluded that the respondents Bajinder Sinha issued three cheques in respect of payment of goods supplied by the petitioner but they were dishonoured on their presentation in the Bank. While re-calling the said order, the learned Magistrate examined the merits of the evidence and after a detailed discus- sion came to the conclusion that the averments made in the complaint do not constitute any offence against the respondents. This was entirely a wrong approach on the part of the learned Magistrate as at this stage averments made in the complaint and the evidence of the witnesses examined in support of it cannot be sieved through a cull ender of finest gauzes to test their veracity. At this stage elaborate documentation on merits should be avoided lest it may pre-judge or prejudice the case of either side. As noticed earlier, the averments made in the complaint and the evidence of the wit- nesses examined by the petitioner read along with the documents annexed with the complaint, prima facie, show that the respondents had conspired to cheat the petitioner and pursuant to the said conspiracy the respondent No. 1 placed orders on behalf of the remaining respondents to supply goods, which were supplied by the petitioners vide documents No. 16, 17, 18. 20, 21, 22, 32 and 33. Thereafter the petitioner supplied goods to respondents No. 2, 3 and 4 as per orders placed by respondent No. 1. The respondents No. 2 and 3 and made certain payments to respondents No. 1 for the goods supplied by the petitioner but the said amount was misappropriated by the respondent No. 1 and further the respondent No. 4 issued three cheques in favour of the petitioner for the goods supplied by the petitioner but these cheques were dishonoured when presented for encashment in the Bank. In respect of the said cheques, there was an implied representation that: (i) the cheques were good and valid order for payment of the amount and (ii) that the cheques would be paid when presented for encashment. In this context, reference may be made to the illustration (f) to Section 415 I.P.C. which is as under :-

"A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonest induces Z to lend him money. A not intending to repay it. A cheats."

5. Thus, it is manifest from the said illustration that what is material is the intention of the drawer at the time the cheque is used, and the intention has to be gathered from the facts and circumstances of a case. If from the circumstances it is established that the failure to meet a cheque was not accidental but was consequence expected by the accused, the presumption would be that the accused intended to cheat. At this stage of the proceedings, it cannot be held that dishonour of cheques issued by the respondent No. 4 was accidental and not known and expected consequence of his conduct. This is evidently a matter to be gone into by the trial court at the appropriate stage of the case. As noticed earlier, there are specif- ic averments in the complaint that the respondents had conspired to defraud the petitioner and in pursuance of the said conspiracy they actually caused wrongful loss to the petitioner by depriving him of the price of goods supplied to them as well as the goods, to which he was entitled. The in- tended means by which the said purpose was to be achieved appears to be dishonest. It is a matter of common experience in the criminal courts that the terms of a criminal conspiracy are hardly ever susceptible of proof. The evidence from which the Court may infer a criminal conspiracy is almost invariably to be found in the conduct of parties. As at present, all I need to say is that the material on record is sufficient to afford a ground for proceeding against the respondents, under Section 120-B/420 I.P.C. In this view of the matter, the learned Magistrate was perfectly justified in taking cognizance of the offences punishable under Sections 420/120-B IPC against the respondents and his successor Magistrate, in re-calling the aforesaid order completely failed to consider the limited scope of an inquiry under Section 202 of the Code of Criminal Procedure.

6. It was contended by learned counsel for the respondents that the petitioner had also filed the civil suit No. 2597/89 against the respond- ents for recovery of unpaid price of the goods supplied by him and this fact was deliberately suppressed by the petitioner. He further contended that the alleged transactions between the petitioner and the respondents were of commercial nature and as such they do not attract the criminal liability. It is now well settled that merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. (Trisuns Chemical Industry Vs. Rajesh Agarwal and Others, . For these reasons, therefore, I am satisfied that the impugned order of the learned Magistrate suffers from a serious legal infirmity and thus it is not sustainable in law.

7. In the result, the revision is allowed and the impugned order dated 28.1.1995 is set aside. The case is sent back to the learned Magistrate for its disposal in accordance with law. Before I part with this order, I would like to make it clear that nothing stated herein shall be construed as expression of opinion on merits of the controversy between the parties.

8. The parties are directed to appear before the trial court on 20.12.1999.