Jharkhand High Court

M/S Andhra Ferro Alloys Ltd. vs The State Of Jharkhand on 1 November, 2022

                                            -1-      Cr.M.P. No. 2185 of 2016


       IN        THE HIGH COURT OF JHARKHAND AT RANCHI
                              Cr.M.P. No. 2185 of 2016
      1. M/s Andhra Ferro Alloys Ltd., a duly incorporated
         Company under the provisions of Companies Act, 1956,
         represented through its Director Brojender Khandelwal.
      2. Brojender Khandelwal,
         the Director of M/s Andhra Ferro Alloys Ltd.
      3. Manju Bala Khandelwal,
         the Director of M/s Andhra Ferro Alloys Ltd.
      4. Garvit Khandelwal,
         the Director of M/s Andhra Ferro Alloys Ltd.
      5. Babu Khandelwal,
         Director of M/s Andhra Ferro Alloys Ltd. ..... ... Petitioners
                                    Versus
      1. The State of Jharkhand.
      2. Siddhi Vinayak Coal and Cock Pvt. Ltd. represented
         through its Director Vicky Kathoria.           ..... ...      Opposite Parties
                                 --------

CORAM : HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI

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For the Petitioners : Mr. Navin Kumar, Advocate.

                                 :        Mr. Kumar Saurav, Advocate.
      For the State              :        Mrs. Priya Shrestha, Spl.P.P.
      For the O.P. No. 2         :        Mr. M.B. Lal, Advocate.
                                 ------
07/ 01.11.2022     Heard Mr. Navin Kumar, learned counsel appearing for the

petitioners, Mrs. Priya Shrestha, learned Spl.P.P. appearing for the State and Mr. M.B. Lal, learned counsel appearing for the O.P. No. 2.

2. This criminal miscellaneous petition has been filed for quashing of the entire criminal proceedings including the order taking cognizance dated 13.06.2016, by which, cognizance has been taken against the petitioners under Sections 406, 420, 506 and 120-B of the Indian Penal Code, by the learned Judicial Magistrate, Dhanbad, in connection with Complaint Case No. 108 of 2016, pending in that Court.

3. The complaint petition was filed by the O.P. No. 2 alleging as under:-

The O.P. No. 2 is a registered company duly incorporated under the provisions of the Companies Act, 1956 and dealing a business of coal and coke manufacturing.

It was further alleged in the complaint that some time in the month of May, 2015, the petitioner No. 2 approached the complainant at his office situated at Dhanbad on behalf of and capacity of representative of petitioner No. 1 and convinced him and the Director of the petitioners' company by hatching preplanned conspiracy expressed their desire to purchase coal on credit basis

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from the complainant and also promised to issue purchase order and to make payment within a period of 15 days from supply of goods and by trusting upon the aforesaid assurance given by the petitioner No. 2, the complainant supplied goods to them as per their order and requirement.

It was further alleged in the complaint that since 07.07.2015, undisputed outstanding dues amounting for Rs. 3,95,304/- of the complainant was lying with the petitioners, which was to be paid in July, 2015, but after expiry of the aforesaid period the complainant requested the petitioners to clear the dues as per the terms of payments and assurance but the petitioners always lingered on some pretext or the other and intentionally demanded for further quantity of goods without making the payments of the previous supply of goods and upon which the complainant (O.P. No. 2) requested the petitioners several times in person and also met telephonic conversation for release of his dues but the petitioners did not pay any heed upon the same.

Ultimately in November, 2015, the complainant (O.P. No. 2) requested to the petitioner No. 2 to clear the dues through telephonic conversation but the petitioners No. 2 to 5 flatly denied to make the payment and misbehaved with him by using filthy languages and even stated that they had never intention to make the payment and were giving false assurance for payment of the dues falsely for taking further supply of coal and threatened the complaint that if asked about the payment than he will have to face dire consequence.

4. Mr. Navin Kumar, learned counsel appearing for the petitioners submits that there was an agreement between the petitioners and the O.P. No. 2 for supply of coal and the total amount for the said coal came to Rs. 8,12,655/-. He submits that out of the total, a sum of Rs. 4,17,351/- has already been paid to the O.P. No. 2 and for recovery of Rs. 3,95,304/-, the complaint case has been filed by the O.P. No. 2. He further submits that the entire case is civil in nature and for commercial transaction, the complaint case has been filed and the criminal colour has been set in motion in the complaint petition. He further submits that there is no intention of cheating of O.P. No. 2 from the very beginning, which is one of the ingredients to make out a case under Section 420 of IPC. He further submits that the cognizance order is also bad and the same is not in

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accordance with law, as what are the prima facie materials are there against the petitioners, are not disclosed in the said cognizance order.

5. Mr. M.B. Lal, learned counsel appearing for the O.P. No. 2 submits that there are allegations against the petitioners of cheating to O.P. No. 2 from the very beginning and the remaining amount of Rs. 3,95,304/- as mentioned in the complaint has not been paid to the O.P. No. 2. He submits that what are the arguments, being advanced by the learned counsel appearing for the petitioners are the subject matter of trial and this Court under Section 482 Cr.P.C. may not exercise its power at this stage.

6. Mrs. Priya Shrestha, learned Spl.P.P. appearing for the State submits that there is no illegality in the impugned cognizance order.

7. Looking into the submissions of the parties, the court has gone through the materials available on record and finds that the complaint case has been filed by the O.P. No. 2 for recovery of Rs. 3,95,304/-, which has not been paid to the O.P. No. 2. Looking into the complaint, it transpires that there was an agreement between the parties for supply of coal and the dispute has arisen due to non-payment of balance amount, for which, notice was issued to the petitioners by the O.P. No. 2 and the said notice was replied by the petitioners, in which, it has been mentioned that total amount came to Rs. 8,12,655/-, out of which, a sum of Rs. 4,17,351/- has already been paid to the O.P. No. 2 by the petitioners. It also transpires that for recovery of Rs. 3,95,304/-, the complaint case has been filed. Thus, it is crystal clear from para-3 of the complaint that for recovery of certain amount, the complaint case has been lodged, however, there is an agreement between both the parties and a sum of Rs. 4,17,351/- has already been paid to the O.P. No. 2.

8. Cheating is described under section 415 IPC which suggest that however, by deceiving any person, fraudulently or dishonestly induces the person so deceived to delivery 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'.

9. So far as section 406 IPC is concerned, that is the punishment of criminal breach of trust. Criminal breach of trust is defined under section 405 IPC. Section 415 IPC defines cheating and in order to

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constitute an offence of cheating there must be fraudulent or dishonest intention at the time of making promise. It is well known that for section 420 IPC there must be inducement from very beginning to cheat which is absent in the case in hand. In this regard, a reference may be made in the case of "Vesa Holdings P.Ltd. and Anr. vrs. State of Kerala and Ors." reported in 2015 (2) East Cr.C. 226 (SC). Paragraph nos. 8 and 9 of the said judgment are quoted hereinbelow:-

"8. From the decisions cited by the appellant, the settled proposition of law is that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In other words for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out.

9. It is true that a given set of facts may make out a civil wrong as also a criminal offence and only because a civil remedy may be available to the complainant that itself cannot be a ground to quash a criminal proceeding. The real test is whether the allegations in the complaint disclose the criminal offence of cheating or not. In the present case there is nothing to show that at the very inception there was any intention on behalf of the accused persons to cheat which is a condition precedent for an offence under Section 420 IPC. In our view the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be malafide or otherwise an abuse of the process of the court. Superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and the High Court

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committed an error in refusing to exercise the power under Section 482 Criminal Procedure Code to quash the proceedings."

10. This Court in a proceeding under section 482 Cr.PC is required to be circumspect in considering such application as this Court cannot conduct a roving enquiry or sift through the evidences if the same are not unimpeachable in nature. However, if on considering the allegations and the documents which are not denied by the opposite party no.2 this Court can exercise its inherent power under Section 482 of Cr.P.C to prevent the abuse of the process of the Court and the miscarriage of justice. Section 482 Cr.PC and Article 226 of the Constitution of India are on the same footing as has been held by the Hon'ble Supreme Court in the case of "Pepsi Foods Limited and Anr. vrs. Special Judicial Magistrate" reported in (1998) 5 SCC 749. This case is arising out of commercial transaction. There is no deceiving by the petitioners from initial stage which is mandatory for proving under section 420 IPC which is absent in the case in hand.

11. Having found merit in this petition, the entire criminal proceedings including the order taking cognizance dated 13.06.2016, by which, cognizance has been taken against the petitioners under Sections 406, 420, 506 and 120-B of the Indian Penal Code, by the learned Judicial Magistrate, Dhanbad, in connection with Complaint Case No. 108 of 2016, pending in that Court, are hereby, quashed and set aside.