Gujarat High Court

Hasmukhbhai @ Harishbhai S/O ... vs State Of Gujarat on 30 June, 2023

Bench: Sandeep N. Bhatt

    R/CR.MA/13117/2021                           JUDGMENT DATED: 30/06/2023




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/CRIMINAL MISC.APPLICATION NO. 13117 of 2021

                             With
CRIMINAL MISC.APPLICATION (FOR VACATING INTERIM RELIEF) NO.
                           1 of 2021
       In R/CRIMINAL MISC.APPLICATION NO. 13117 of 2021

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE SANDEEP N. BHATT

==========================================================

1     Whether Reporters of Local Papers may be allowed
      to see the judgment ?

2     To be referred to the Reporter or not ?

3     Whether their Lordships wish to see the fair copy
      of the judgment ?

4     Whether this case involves a substantial question
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

==========================================================
          HASMUKHBHAI @ HARISHBHAI S/O RAVJIBHAI BHANDERI
                              Versus
                        STATE OF GUJARAT
==========================================================
Appearance:
MR ZUBIN BHARDA FOR MR. KISHAN H DAIYA(6929) for the Applicant(s)
No. 1,2,3
MR SOAHAM JOSHI for the Respondent(s) No. 1
MR PK JANI, SENIOR ADVOCATE WITH MR PREMAL RACHH for the
Respondent(s) No. 2
==========================================================

    CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT

                             Date : 30/06/2023

                            ORAL JUDGMENT

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

1. This application is filed under Section 482 of

the Code of Criminal Procedure, 1973 (`the Code' for

short) praying to quash the FIR being

No.11210060212412 of 2021 registered with Varachha

Police Station, Surat for the offences punishable under

Sections 406, 409, 420, 506 and 120(b) of the Indian

Penal Code and all the further proceedings pursuant to

the same.

2. The brief facts leading to filing of this

application are such that the complainant filed the

impugned complaint stating that the complainant was

doing land brokerage work with his son and also

running business in the name and style of C.R.M.Pharma

and Pramukh Enterprise; that he came into contact with

one Hasmukhbhai @ Harishbhai Patel S/o Ravjibhai

Bhanderi-applicant no.1 herein through his friend

Dr.Babubhai Bhanderi in the year 2010 and as they

were in the same business, Hasmukhbhai showed some

lands to the complainant and that to make a deal with

one Mehta Saheb and make payment of Rs.35 crores to

the farmers, Hasmukhbhai told the complainant that if

he will make the payment, he will give good profit to

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

him and within 14 months he will return the payments

with profit; that relying on this, the complainant took

the amount of Rs.12,50,00,000/- from his brother-in-law

namely Kaushikbhai Dhirubhai Patel and paid by

different cheques between 6.8.2012 to 16.1.2013 to the

accused for which Hasmukhbhai executed writing on

100/- stamp paper to return Rs.20,00,00,000/- within 14

months and thereafter on further asking, the complainant

paid Rs.22,50,00,000/- by different cheques between

10.8.2013 to 5.10.2013 to Hasmukhbhai; thereafter, on

demand the said Hasmukhbhai gave cheques with

amount of Rs.61,00,00,000/- in the name of the

complainant in different names as stated in the

complaint on 11.7.2014 and even documents were also executed in presence of two cases that if the cheques

returned, the complainant can file case against him;

thereafter in the month of August, 2014, seven cheques

were deposited, however, the same returned with the

endorsement `stop payment'; that inspite of repeated

demands, the said Hasmukhbai did not make the

payment and therefore six cases under the Negotiable

Instruments Act (`NI Act' for short) were filed and the

same are pending; that the said Hasmukhbhai assures

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

that he will make the payment before 10.4.2015,

however, the same was not made and therefore the son

of the complainant Harikrushne has filed Summary suit

in the Court at Surat and the same are pending; the

impugned complaint is lodged for the offences mentioned

therein, which is sought to be quashed by way of this

application.

3. Heard learned advocate Mr.Zubin Bharda for

learned advocate Mr.Kishan Daiya for the applicants,

learned advocate Mr.Joshi for the respondent no.1-state

and learned senior advocate Mr.P.K.Jani for learned

advocate Mr.Premal Rachh for the respondent no.2-

complainant.

3.1 Learned advocate Mr.Bharda for the applicants

submitted that on bare reading of the complaint, it

transpires that there is dispute regarding the civil

transaction and the entire transaction has taken place

pursuant to the deal of land in question, for which

different cheques have been given. He has submitted that

on bare reading of FIR, the FIR is filed in the year

2021 whereby as per the FIR, the transaction has taken

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

place in the month of 2012-13, he has further submitted

that by drawing my attention towards the fact that as

per the allegation made in the complaint in the month

of August 2014, when the complainant has demanded his

money, the accused has asked to deposit the cheques and

therefore on different dates, seven cheques were deposited

but same have been returned with endorsement of 'stop

payment' and when it is informed to the accused

Hasmukhbhai, he called the complainant at Mumbai and

when the complainant went at Mumbai and meet with

other person as named in FIR and they have assured

the complainant that Hasmukhbhai has big investment in

the land and also asked that he will return your amount

even some documents were also signed and thereafter also as Hasmukhbhai has not made the payment, the

complainant has filed six cases under NI Act and same

are pending before the concerned court. It is also alleged

in the complaint that Hasmukhbhai has assured that he

will make the payment before 10.4.2015, thereafter also

payment was not made and therefore son of the

complainant vnamely Harikrushne has filed Summary

Suits in court of Surat, which are also pending.

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

3.2 He has further submitted that on bare reading

of the FIR, the ingredients of Sections 406, 409 and 420

of the IPC are not made out. He has further submitted

that the offences in question have taken during 2012-14

even as per the FIR and FIR is lodged in the year

2021, therefore there is substantial delay of seven to

nine years and this is third proceeding by way of false

FIR came to be lodged. He has further submitted that

the complainant twice filed application for registering

complaint against the applicants and other 19 persons

before the very same police station and after that the

statement of the applicants came to be recorded in the

year 2018 in connection with CA No.503 of 2018 and

local number 1020 of 2018 and the proceedings have been closed by investigating officer by saying that it is

between two parties and for very same transaction

different litigations are pending before learned court

below and therefore no offence is made out against the

applicants and other persons and thereafter after passing

of three years in the year 2021, once again the

complainant has filed application with similar allegations

and after knowing the entire fact of the case, this

complaint came to be filed with malafide intention.

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

3.3 He has further submitted that the complainant

has lodged FIR belatedly after applying legal mind by

creating cococted story and version and therefore also

case of the present applicants is required to be

considered in the interest of justice. He has further

submitted that the applicant no.1 has some transaction

with the complainant and applicant nos.2 and 3 are

family members and they do not have any transaction

with the complainant but as the cheques are deposited

in their account they are also sought to be implicated as

accused under this set of circumstances, the complaint in

question is required to be quashed.

3.4 In support of his contentions, he has relied on

the following decisions:

(1) Sarabjit Kaur V/s The State of Punjab & Anr.

Reported in 2023 Live law (SC) 157.

(2) Sardar Ali Khan V/s State of Uttar Pradesh through

Principal Secretary Home Department reported in 2020(0)

AIJEL SC 65675.

(3) Banshilal Motilal Chandak V/s State of Gujarat

reported in 2019(0) AIJEL SC 240805

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

(4) Prof R.K.Vijayasarathy and Another V/s Sudha

Seetharam and Another, reported in 2019(16) SCC 739

3.5 He has also relied on the judgment of State of

Haryana V/s Bhajan Lal reported in AIR 1992 SC 604 and submitted that this is a case of abuse of process of

law and therefore the impugned FIR requires to be

quashed by allowing this application.

4. Per contra, learned senior advocate Mr.Jani for respondent no.2 has strongly opposed this application and

submitted that on bare reading of the complaint, prima

facie case is made out. He has further submitted that the Court has to consider the facts of the present case

whether the present applicants in collusion with each

other have played with the present complainant and had

lured him to purchase the land and for that blank

cheques were given for different amounts to the tune of

Rs.61,00,00,000/- in different names and thereafter also

after paying substantial amount, when it was inquired by

the present complainant from the applicant no.1 that the

land is not yet transferred in his name or purchased in

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

his name, the applicant no1 has informed him that the

process is going on and land will be transferred or

purchased immediately in the name of the complainant

or the name suggested by the complainant. Thereafter,

the applicants who are recipients of the amount of the

cheques have given the cheques to the present

complainant and it also transpires from the record that

the cheques, on assurance by the present applicants,

were deposited in the bank account by the complainant,

the cheques were bounced as the applicants had informed

the bank by giving instruction of `stop payment'. He has

further submitted that there is also meeting between the

complainant and the applicants for amicable settlement

but no fruitful outcome has been arrived. In pursuance to the earlier application filed by the complainant before

the same police station, he has submitted that in view

of the application filed under RTI Act before the

concerned authority, the complainant has received answer

that such record is not found or traceable, therefore it

cannot be believed at this stage that such complaints

was filed on earlier occasion and as indicated by learned

advocate for the applicants, such complaints are directed

to be kept in file and therefore prima facie ingredients

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

of Sections 406, 409 and 420 are attracted.

4.1 He further submitted that merely because the

complaint is filed in the year 2021, it is not good

ground as the parties are trying to resolve the dispute

and therefore this Court may not interfere with the

process of criminal proceedings.

4.2 In support of his submissions, learned senior

advocate Mr.Jani has relied on the following decisions:

(1) Lakshman V/s State of Karnataka reported in 2019(9)

SCC 677.

(2) Skoda Auto Volkswagen India Private Limited V/s

State of Uttar Pradesh reported in 2021(5) SCC 795.

(3) Iqbal Hasanali Syed V/s State of Gujarat reported in

2022(4) GLR 2680.

4.3 He, therefore, submitted that the civil

proceedings which are pending does not preclude the

Court to permit the complainant to proceed with the

criminal proceedings as some of the matters are also

having criminal texture in the matter and therefore the

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

present application deserves to be dismissed.

5. Learned APP Mr.Joshi has also submitted that

essentially it is a dispute between two private parties,

however, prima facie, ingredients of Sections 406, 409

and 420 of the IPC are made out. On inquiry by the

Court, he has submitted that as per the written

instructions received by him from the authority, the

applications which are indicated by the applicants of

earlier occasion in the year 2018 are filed and it is also

directed to be filed by the concerned authority. Therefore,

that factum is supported by the learned APP regarding

that particular communication which is placed on record

by the applicants, however, he has submitted that no prayer can be granted as the applicants should face the

trial as prima facie case is made out against the

applicants.

6. I have considered the rival submissions and I

have also perused the material placed on record. It

transpires that entire transaction is pursuant to land in

question to be to be purchased at Mumbai whereby the

complainant has given some amount to the present

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

applicant no.1 by way of cheques, there are different

cheques by which amount of Rs.61,00,00,000/- are

received by the applicant no.1. Somehow, it seems that

the said transaction to purchase the land could not be

materialized and therefore, the present applicant nos.2

and 3 have not entered into any direct transaction but

since the cheques were taken by applicant no.1 in the

name of applicant nos.2 and 3, they are also made

accused in the impugned complaint which is filed by the

complainant. The entire transaction of first meeting till

the cheques were given by the complainant to the

applicants and in turn the applicants has given back

those cheques to the present complainant, have occurred

and completed during the period of 2012-14. The cheques were returned lastly in the year 2014. Pursuant to that,

it transpires that the complainant filed before the

concerned court six different cases under the provisions

of NI Act, which are also pending. It transpires that the

summary suit no.28 of 2016 is also pending pursuant to

some writing executed by the present applicant no.1 in

presence of one Amrutbhai Shah. It is also relevant to

note from the material available on the record that on

18.9.2018, the incharge Police Inspector Varachha police

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

station has sent one yadi to the applicants by

mentioning that the parties have entered into the

settlement and therefore the application no. CA No.503

of 2018 dated 29.7.2018 and local number 1020 of 2018

dated 27.7.2018 preferred by complainant herein against

the present applicants were directed to kept at file as it

was recorded that the parties have entered into

compromise.

7. In this background, if the applications of

similar nature were given to the concerned police station

i.e. Varachha police station, Surat in the year 2018 by

the complainant against the present applicants and in

those applications, the statements were also recorded, after that it was decided by the concerned police

inspector by yadi that those applications should be filed

as parties have entered into compromise, then there is

no believable reason to file the impugned complaint in

the year 2021 i.e. 12.7.2021 under Sections 406, 409,

420, 506 and 120B of the IPC before the same police

station pertaining to the same transaction.

8. In view of the above, the following points have

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

to be taken into consideration; (i) the complaint filed in

the year 2021 pertains to dispute that occurred in the

year 2012-14; (ii) in the meantime, criminal cases are

filed by the present complainant against the present

applicants and pending under Section 138 of the NI Act

(iii) summary suit is also filed and pending pursuant to

the subject matter of the present complaint and no

explanation is given in the complaint for filing the

complaint after a period of seven years and the delay

that occurred in filing the complaint at such belated

stage; (iv) even the conduct of the concerned police

officer of the police station who has taken the complaint

or who has directed to register the complaint is also

doubtful in view of the fact that though there were earlier applications which were inquired, not proceeded

further after recording the statements of the concerned

persons regarding the same subject matter and after

delay of seven years, the police has registered the

impugned complaint which is given by the complainant

and that too without recording the material aspect that

earlier applications were given in the year 2018, were

inquired and thereafter not proceeded further; (v) that,

even considering the allegations in the complaint,

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

essentially the dispute pertains to civil proceeding and

for that the complainant has already availed remedy

under the provisions of NI Act or CPC.

9. Now, if the judgments relied on by learned

advocate Mr.Bharda are considered, it is held as under:

(1) In the case of Sarabjit Kaur (supra), it is held by

the Hon'ble Apex Court that "a breach of trust does not

give rise to criminal prosecution for cheating unless

fraudulent or dishonest intention is shown right at the

beginning of the transaction. Merely on the allegation of

failure to keep up promise will not be enough to initiate

criminal proceedings. The criminal Courts are not meant to be used for settling scores or pressurise parties to

settle civil disputes."

(2) In the case of Sardar Ali Khan (supra) wherein there

was civil dispute and criminal proceedings were initiated,

it is held by the Hon'ble Apex Court that "there is no

allegation of impersonation and forgery of signatures in nd suit filed by 2 respondent and having regard to serious

factual disputes which are of civil nature, for which civil

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

suits are pending, allowing respondent no.2 to pursue his

complaint in criminal proceedings is nothing but abuse of

process of law."

(3) In the case of Banshilal Motilal Chandak (supra), it

is held by this Court that "the complainant has filed

impugned FIR only with view to harass applicants and

compel them to part with money though dues of 2009 to

2010 are pending, no reason has been given by first

informant for delay in filing complaint and on plain and

simple reading of FIR, it is revealed that civil dispute

has been given colour of criminal proceedings".

(4) In the case of Prof R.K.Vijayasarathy and another, it is held by the Hon'ble Supreme Court that "son of the

appellants has instituted a civil suit for recovery of

money against first respondent. Suit is pending. First

respondent has filed the complaint against appellants six

years after date of alleged transaction and nearly three

years from filing of suit. Averments in complaint, read

on its face, do not disclose ingredients necessary to

constitute offences under Penal Code. Attempt has been

made by first respondent to cloak a civil dispute with a

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

criminal nature despite absence of ingredients necessary

to constitute a criminal offence. Complaint filed by first

respondent against appellants constitutes abuse of process

of court and is liable to be quashed." The facts of the

case on hand are identical to the facts of the said case.

(10) At this stage, if we refer to the decisions cited by

learned senior advocate Mr.Jani, they are as under:

(1) In the case of Lakshman (supra), it is held by the

Hon'ble Supreme Court that "mere filing of suit or

complaint filed u/s 138 of the N.I.Act by itself is no

ground to quash proceedings.

(2) In the case of Skoda Auto Voklswagen India Private

Limited (supra), it is held by the Hon'ble Supreme Court

that, "it is only in cases where no cognizable offence or

offence of any kind is disclosed in first information

report that Court will not permit an investigation to go

on, power of quashing should be exercised very sparingly

and with circumspection and that too in rarest of rare

cases, mere delay in lodging complaint, cannot by itself

be ground to quash FIR."

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

(3) In the case of Iqbal Hasanali Syed (supra), this

Court has held that `before filing of chargesheet any

citizen aggrieved by registration of FIR has to invoke

jurisdiction under Art.226 of Constitution r/w S.482 of

Cr.P.C."

11. At this stage, a reference to the recent

decision dated 12.6.2023 passed in Criminal Miscellaneous

Application No.2567 of 2021 will be fruitful, wherein it is

held in paragraphs 13 and 14 as under:

"13. In the case of Narendra Lal Jain and

Ors. (supra), the Hon'ble Apex Court has referred to the case of Gian Singh (supra) and Nikhil

Merchant (supra) and observed in paragraphs 9,10

and 11 as under:

"9.Learned counsel has further pointed out that the charges framed against the accused-respondents are under Section 120-B/420 of the Indian Penal Code and the respondents not being public servants, no substantive offence under the PC Act can be alleged against them. The relevance of the views expressed in

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

para 61 of the judgment of this Court in Gian Singh (supra), noted above, to the present case is seriously disputed by the learned counsel in view of the offences alleged against the respondents. Learned counsel has also submitted that by the very same impugned order of the High Court the criminal proceeding against one Nikhil Merchant was declined to be quashed on the ground that offences under Sections 468 and 471 of the IPC had been alleged against the said accused.

Aggrieved by the order of the High Court the accused had moved this Court under Article 136 of the Constitution. In the decision reported in Nikhil Merchant v. Central Bureau of Investigation and another 4this Court understood the charges/allegations against the aforesaid Nikhil Merchant in the same terms as in the case of the accused-respondents, as already highlighted. Taking into consideration the ratio laid down in B.S. Joshi (supra) and the compromise between the bank and the accused Nikhil Merchant (on the same terms as in the present case) the proceeding against the said accused i.e. Nikhil Merchant was quashed by the Court taking the view that the power and the Section 482, Cr.P.C. and of this Court under Article 142 of the Constitution cannot be circumscribed by the provisions of Section 320, Cr.P.C. It is further submitted by the learned counsel that the correctness of the view in B.S. Joshi

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

(supra) and Nikhil Merchant (supra) were referred to the three Judges Bench in Gian Singh (supra). As already noted, the opinion expressed in Gian Singh (supra) is that the power of the High Court to quash a criminal proceeding under Section 482, Cr.P.C. is distinct and different from the power vested in a criminal court by Section 320, Cr.P.C. to compound an offence. The conclusion in Gian Singh (supra), therefore, was that the decisions rendered in B.S. Joshi (supra) and Nikhil Merchant (supra) are correct.

10.In the present case, as already seen, the offence with which the accused-respondents had been charged are under Section 120-B/420 of the Indian Penal Code. The civil liability of the respondents to pay the amount to the bank has already been settled amicably. The terms of such settlement have been extracted above. No subsisting grievance of the bank in this regard has been brought to the notice of the Court. While the offence under Section 420, IPC is compoundable the offence under Section 120-B is not. To the latter offence the ratio laid down in B.S. Joshi (supra) and Nikhil Merchant (supra) would apply if the facts of the given case would so justify. The observation in Gian Singh (supra) (para 61) will not be attracted in the present case in view of the offences alleged i.e. under Sections 420/120B, IPC.

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

11.In the present case, having regard to the fact that the liability to make good the monetary loss suffered by the bank had been mutually settled between the parties and the accused had accepted the liability in this regard, the High Court had thought it fit to invoke its power under Section 482,Cr..P.C. We do not see how such exercise of power can be faulted or held to be erroneous. Section 482 of the Code inheres in the High Court the power to make such order as may be considered necessary to, inter alia, prevent the abuse of the process of law or to serve the ends of justice. While it will be wholly unnecessary to revert or refer to the settled position in law with regard to the contours of the power available under Section 482, Cr.P.C. it must be remembered that continuance of a criminal proceeding which is likely to become oppressive or may partake the character of a lame prosecution would be good ground to invoke the extraordinary power under Section 482, Cr.P.C."

14. In the case of Tirthwshwar Plywood

Pvt.Ltd. And Ors. (supra), it is held in paragraphs

13 to 19 as under:

"13. During the period from 15.9.1994 to 21.5.1997, NSIC Limited, Ahmedabad, paid total amount of

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

Rs.7,68,000/- against RMA scheme and the company has made payment of dues of Rs.2,27,000/- and failed to make payment of remaining amount of Rs.11,68,021/- including interest and said NSIC Limited officials failed to recover this dues from the company. Due to this, NSIC Limited, Ahmedabad, suffered a wrongful monetary loss of Rs.11,68,021/- as on 31.3.2000 and the accused gained wrongfully.

14. In the present case, charge framed against the accused is for the offence under Section 120 (B) read with Section 420 of IPC. Section 415 of the Indian Penal Code defines "cheating", which reads thus:

"Section 415. Cheating.- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".

14.1 The ingredients to constitute an offence of cheating are as follows:-

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

i) there should be fraudulent or dishonest inducement of a person by deceiving him;

ii) (a) the person so induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or

(b) the person so induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived; and

iii) in cases covered by (ii) (b) above, the act or omission should be one which caused or is likely to cause damage or harm to the person induced in body, mind, reputation or property.

A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating.

15. Section 420 of the Penal Code reads thus:

"Section 420. Cheating and dishonestly inducing deliver of property.- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and 7 which is capable to being converted into a valuable security, shall be punished with imprisonment of either description for a term

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

which may extend to seven years, and shall also be liable to fine."

15.1 The ingredients to constitute an offence under Section 420 are as follows:

(i) A person must commit the offence of cheating under Section 415; and

(ii) The person cheated must be dishonestly induced to

(a) deliver property to any person; or

(b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. Cheating is an essential ingredient for an act to constitute an offence under Section 420.

16. Admittedly, in the present case, the entire exercise was regarding sanctioning of loan. It is also admitted fact that certain amount of loan was repaid by the accused at the relevant time also and the remaining amount was not paid. Therefore, for recovery of the amount, proper course was to file necessary civil litigation before appropriate Court, however, instead of doing so, present criminal proceedings have been initiated. Moreover, as per the facts available on record, remaining amount has also been paid by the applicant company and "No Due Certificate" has been

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

issued by NSIC Limited. Of course, heavy reliance has been placed on letter dated 4.7.2014 written by the complainant to the Superintendent of Police stating that the Corporation has settled the account only regarding Recovery Certificate dues and not against the CBI case. This is an internal correspondence between CBI and the complainant and even if it is considered that the right to pursue CBI case is kept open, then also basic ingredients of the offence under Section 420 of IPC are required to be made out, which are not made out in the present case.

17. Therefore, the only case against the applicants is failure to repay the amount of loan availed from NICS Limited. However, it has come on record that a settlement is arrived at M/s.Tirtheshwara Plywood Limited and NSIC Limited-original complainant. As per this settlement, M/s.Tirtheshwara Plywood Private Limited has paid an amount of Rs.12 Lacs to the original complainant-NSIC. Not only that the complainant-NSIC has also issued a "No Due Certificate" in this regard, specifically stating that the account of the unit is closed as per the record of the Corporation. Therefore, the allegation of nonpayment of amount of loan availed do not survive in view of settlement arrived at and No Due Certificate issued by NSIC Limited.

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

18. Assuming for the moment that the applicants have failed to repay the amount borrowed by them from the respondent No.2, even then the same would not even constitute an offence of cheating. In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the process, to say that he committed an act of cheating. It may be pertinent to mention here that the amount in dispute is already paid back by the accused, therefore, there is no loss or damage caused to the complainant also. Considering the totality of the circumstances, this appears to be a fit case in which this Court can exercise its inherent powers under Section 482 of the Code for quashing the proceedings.

19. It is also pertinent to note that the charge sheet has been filed for the offences punishable under the Prevention of Corruption Act, but there is no prima facie material to substantiate the charge against the present applicants. It is not the case of the prosecution that the present accused have indulged in the act of either taking or giving bribe. Therefore, the charges under the Prevention of Corruption Act are also not sustainable against the present accused."

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

12. Further, it will also be fruitful to mention the

judgment of Hon'ble Supreme Court in the case of State

of Haryana V/s Bhajan Lal reported in AIR 1992 SC 604, wherein the Hon'ble Supreme Court has observed thus -

"In the backdrop of the interpretation of the various relevant provisions of the Code under Ch.XIV and of the principles of law enunciated by this court in a series of decisions relating to the exercise of the extraordinary power under Art.226 or the inherent powers under sec.482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under sec.156(1) of the Code except under an order of a Magistrate within the purview of sec.155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under sec.156(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/ or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

13. It is also relevant to refer to the judgment of

the Hon'ble Apex Court in the case of Inder Mohan

Goswami and Another versus State of Uttaranchal reported in (2007) 12 SCC 1, more particularly para : 23

& 24 thereof, which read as under :

"23. This Court in a number of cases has laid down the scope and ambit of courts' powers under Sec. 482 CrPC. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court.

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

Inherent power under Sec. 482 CrPC can be exercised:

[(i) to give effect to an order under the Code;]

[(ii) to prevent abuse of the process of court, and]

[(iii) to otherwise secure the ends of justice.]

24. Inherent powers under Sec. 482 CrPC though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself'. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the statute. Discussion of decided cases."

14. In view of above settled position of law and

after considering the facts as alleged in the FIR and

circumstances of the present case, it transpires that it is

nothing but abuse of process of law and continuation of

R/CR.MA/13117/2021 JUDGMENT DATED: 30/06/2023

further proceedings pursuant to the said FIR will cause

greater hardships to the applicants and no fruitful

purpose would be served if such further proceedings are

allowed to be continued. The Court must ensure that

criminal prosecution is not used as instrument of

harassment or for seeking private vendetta or with

ulterior motive to pressurise accused or to settle the