Jharkhand High Court

Jamshedpur Mineral Wool ... vs The State Of Jharkhand on 20 September, 2022

                                                    1                 Cr.M.P. No. 1338 of 2021


                    IN THE HIGH COURT OF JHARKHAND AT RANCHI
                              Cr.M.P. No. 1338 of 2021
             1.   Jamshedpur Mineral Wool Manufacturing Company Private Limited
                  Works incorporated under the Companies Act, 1956 having its office at
                  A-20, Phase-II, Industrial Area, Adityapur-831013 represented by
                  Rajesh Ganjoo, Authorised Signatory, aged about 57 years, S/o Moti
                  Lal Ganjoo, Resident of T-4/1604, Sunworld Vanalika, Gh-01b, Sector-
                  107, Noida, Gautam Buddha Nagar, P.O. & P.S. Gautam Buddha Nagar,
                  Noida, District- Gautam Budh Nagar, State- Uttar Pradesh
             2.   Mr. Arun Krishna Srivastava, aged about 61 years, S/o Late Vishnu
                  Narayan Deengar, R/o House No.B-54, Sector-47, Noida, Gautam
                  Buddha Nagar, P.O. & P.S. Gautam Buddha Nagar, District- Gautam
                  Buddha Nagar, State- Uttar Pradesh
             3.   Nirmal Punj, aged about 70 years, W/o Subhash Punj, Resident of Flat
                  No.379D, Pocket-2, Mayur Vihar Phase-1, P.O. & P.S. Mayur Vihar
                  Phase-1, Delhi, District- East Delhi, State- New Delhi ... Petitioners
                                           -Versus-
             1.   The State of Jharkhand
             2.   Surya Logistics, a proprietorship firm represented through its
                  Proprietoress Indira Pandey, W/o Sri Jitnendra Nath Pandey, aged
                  about 57 years, resident of H. No.219, New Layout Area, Sitaramdera,
                  P.O. & P.S. Sitaramdera, Jamshedpur, District- East Singhbhum, State-
                  Jharkhand                                         ... Opposite Parties
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CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI

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For the Petitioners : Mr. Ravi Prakash Mishra, Advocate Ms. Surabhi, Advocate For the Opposite Party-State : Mr. P.D. Agrawal, S.P.P. For Opposite Party No.2 : Mr. Indrajit Sinha, Advocate Mr. Rahul Dev, Advocate Mr. Bhaskar Trivedi, Advocate

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06/20.09.2022. Heard Mr. Ravi Prakash Mishra, learned counsel for the petitioners,

Mr. P.D. Agrawal, learned counsel for the State and Mr. Indrajit Sinha

assisted by Mr. Rahul Dev and Mr. Bhaskar Trivedi, learned counsel for

opposite party no.2.

2. This petition has been filed for quashing the FIR in connection with

Sitaramdera P.S. Case No. 58/2021 registered under Section 406/420/467/

471/120B of the Indian Penal Code, pending in the court of the learned

Judicial Magistrate, 1st Class, Jamshedpur.

3. The complaint was filed by opposite party no.2 alleging therein that

opposite party no.2 has been carrying on business in the line of

transportation under the name and style of Surya Logistic being its

proprietoress. It was further alleged that sometime in or about the month of

April, 2008 the accused nos. 2 to 4 had been to the office of opposite party

no.2 and represented that they are the directors of Jamshedpur Mineral

Wool Manufacturing Company Private Limited i.e. accused no.1 and they

used to manage the day to day business affairs of the said company and

are responsible for the day to day business affairs of the aforesaid company.

It was also alleged that accused nos. 2 to 4 also disclosed that they are

amongst the few company having huge demand of their products in market

and the company has got impeachable reputation in the business circle and

any person or concern will associate with them will derive profit by doing

such assigned work with them and they further assured that they will give

good profitable business to opposite party no.2 in future if opposite party

no.2 will associate with the petitioners. It was further alleged in complaint

that the petitioners were in a need of a transporter who will transport their

products like LRB & Pipe section to different destinations within India and if

opposite party no.2 will transport those materials then opposite party no.2

will be benefited as accused persons making payment of transportation

charge within period of 90 days from the date of delivery of articles at their

destination. It was also alleged that accordingly on believing such

assurances of the petitioners, opposite party no.2 in good faith time to time

as per direction of the petitioners transported various products of accused

persons to different destinations as ordered by the petitioners. It was

further alleged that the petitioners have made payment of Rs.2,73,950/-

only out of Rs.41,17,001/- and keeping balance of Rs.38,43,051/-. It was

also alleged that in spite of repeated request follow ups and demand made

by opposite party no.2 regarding payment of aforesaid balance of sum of

Rs.38,43,051/-, the petitioners have started to avoid in making payment of

the aforesaid sum on some or other pretext. It was further alleged that

opposite party no.2 served legal notice dated 05.11.2020 upon all the

accused persons demanding payment of aforesaid outstanding amount of

Rs.38,43,051/- within 15 days from the date of receipt of the legal notice,

though upon receipt of the said legal notice, the petitioners contacted

opposite party no.2 in first week of December, 2020 and had assured to pay

the aforesaid sum of Rs.38,43,051/- before 31.01.2021, but failed to do so

as per their assurance. It was further alleged that opposite party no.2 has

reason to believe that the petitioners in collusion and in connivance with

each other with oblique motive to cheat opposite party no.2 by giving false

assurance regarding payment within 90 days, had succeeded to induce the

opposite party no.2 to transport their products to various destination

without making due payment of transportation. On these backgrounds, the

complaint case has been instituted by opposite party no.2 against the

petitioners. The complaint case was sent back by the learned court to the

police under Section 156(3) Cr.P.C. for registering the FIR and conducting

the investigation.

4. Learned counsel for the petitioners submits that the amount of

transportation to the tune of Rs.38,43,051/- has not been paid by the

petitioners to opposite party no.2 and for that the case has been filed. He

submits that the allegation is of the year 2008 and FIR has been lodged in

the year 2021. He further submits that non-payment of entire dues of

opposite party no.2 cannot constitute criminal offence. He submits that civil

liability cannot be converted into criminal liability. He also submits that to

allow to continue this case will amount to abuse of the process of law. He

relied upon paragraphs 6 and 11 of the judgment passed by this Court in

M.s Yona Smelters Private Limited & others v. The State of

Jharkhand & another in Cr.M.P. No.100 of 2017 decided on

07.12.2020.

5. Paragraphs 6 and 11 of the aforesaid judgment are quoted herein

below:

"6. After hearing the parties, I find that this is a case where the petitioner has sought to quash the First Information Report. The principle has already been set at rest by the Hon'ble Supreme Court. It is well settled by a catena of decisions that when an offence is made out from bare perusal of the First Information, the First Information Report cannot be quashed. The Hon'ble Supreme Court in the case of Anand Kumar Mahatta versus State (NCT of Delhi) reported in (2019) 11 SCC 706 had taken note of the growing trend in business circle to convert purely civil dispute into a criminal case. In the aforesaid judgment, reliance was placed on Indian Oil Corporation versus NEPC India Ltd. & Others reported in (2006) 6 SCC 736 wherein the Hon'ble Supreme Court at paragraph 13 observed as follows:-

"13. ............ Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged."

11. In this case, when I see the facts and the allegations levelled against the petitioners, I find that the only allegation levelled is that the complainant-informant has supplied coke to the petitioners for which a sum of Rs.47,38,262/- is lying as outstanding to be paid by the petitioners to the complainant. Thus, the entire grievance is in respect of non-payment of dues arising out of business transaction. This allegation cannot come within the ambit of Section 405 of the Indian Penal Code. There is no material in the First Information Report to suggest that the petitioners have dishonestly misappropriated or converted the property for their own use. The entire dispute is in respect of non-payment of dues to the informant by the petitioners, which is nothing, but, a money claim. The money claim has been given a colour of criminal offence, which is an abuse of the process of the Court. Thus, in view of the judgment passed by the Hon'ble Supreme Court in the case of State of Haryana & Others versus Bhajan Lal &

Others reported in (1992) Suppl. (1) SCC 335 and in the case of Binod Kumar & Others versus State of Bihar & Another reported in (2014) 10 SCC 663, I hold that this FIR is an abuse of the process of law and cannot be held to be justified. I am inclined to allow this criminal miscellaneous petition. The First Information Report being Bank More Police Station Case No. 247 of 2016 (G.R. No.4674 of 2016) is, hereby, quashed, so are all the consequential proceedings."

6. On these grounds, he submits that entire criminal proceeding

including the FIR may kindly be quashed.

7. On the other hand, Mr. Indrajit Sinha, learned counsel appearing for

opposite party no.2 submits that the petitioners have made payment of

Rs.2,73,950/- and on the assurance that remaining amount will be paid to

opposite party no.2 within 90 days, which are disclosed in paragraphs 7 and

10 of the complaint, the service was provided to the petitioners. He further

submits that in this way the petitioners have induced opposite party no.2 to

provide the service and on the assurance and inducement of the petitioners,

the service was provided to the petitioners. He relied upon paragraph 36 of

the judgment passed by the Hon'ble Supreme Court in Indian Oil

Corporation v. NEPC India Ltd. & others; [(2006) 6 SCC 736].

8. Paragraph 36 of the said judgment is quoted herein below:

"36. In this case, the complaints clearly allege that the accused with fraudulent intention to cheat and defraud IOC, had induced IOC to resume supply of aircraft fuel on cash- and-carry basis, by entering into a further agreement dated 20-9-1997 and undertaking to clear the outstanding amount of Rs 18 crores approximately within the time stipulated in the hypothecation agreements. The sum and substance of the said allegation read with other averments extracted above, is that NEPC India, having committed default in paying the sum of Rs 18 crores, entered into a fresh agreement dated 20-9- 1997 agreeing to clear the outstanding amount as per a fresh schedule, with the dishonest and fraudulent intention of pre- empting and avoiding any action by IOC in terms of the hypothecation deeds to take possession of the aircrafts. Though the supplies after 20-9-1997 were on cash-and-carry basis, the fraudulent intention is alleged to emanate from the promise under the said agreement to make payment, thereby preventing immediate seizure (taking possession) of the

aircrafts by IOC. This allegation made in addition to the allegation relating to removal of engines, has been lost sight of by the High Court. All that is to be seen is whether the necessary allegations exist in the complaint to bring the case within Section 415. We are clearly of the view that the allegations in the complaint constitute such an offence. We are not concerned with the proof of such allegations or ultimate outcome of trial at this stage."

9. In view of the above facts and considering the submissions of the

learned counsel for the parties, this Court has gone through the materials

on the record. In the complaint, there is allegation against the petitioners

that after initial payment of Rs.2,73,950/-, the petitioners further induced to

provide the service on the assurance that payment shall be made within 90

days and opposite party no.2 on the said inducement has provided the

service to the petitioners. In the complaint, it has also been disclosed in

paragraph 9 that after receipt of the legal notice, accused nos. 2 to 4

contacted opposite party no.2 sometime in the first week of December,

2020 and had assured to pay outstanding amount of Rs.38,43,051/- before

31.01.2021, but they failed to do so as per their assurance. Thus, prima

facie it appears that the allegations of inducement are there. It is well

settled that one need not dilate on the score and the allegations in the

complaint will have to be accepted on the face of it and the truth or falsity

of which would not be gone into by the Court at this earliest stage. A

reference may be made to the judgment passed by the Hon'ble Supreme

Court in Medchil Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. &

Ors., [(2000) 3 SCC 269]. Paragraph 15 of the said judgment is quoted

herein below:

"15. In the matter under consideration, if we try to analyse the guidelines as specified in Shivalingappa case can it be said that the allegations in the complaint do not make out any case against the accused nor do they disclose the ingredients of an

offence alleged against the accused or the allegations are patently absurd and inherently improbable so that no prudent person can ever reach to such a conclusion that there is sufficient ground for proceeding against the accused? In the present case, the complaint as noticed above does not, however, lend credence to the questions posed. It is now well settled and one need not dilate on this score, neither do we intend to do so presently that the allegations in the complaint will have to be accepted on the face of it and the truth or falsity of which would not be gone into by the Court at this earliest stage as noticed above: whether or not the allegations in the complaint were true is to be decided on the basis of the evidence led at the trial and the observations on this score in the case of Nagpur Steel & Alloys (P) Ltd. v. P. Radhakrishna ought to be noticed. In para 3 of the Report this Court observed: [SCC (Cri) p. 1074, para 3)] "3. We have perused the complaint carefully. In our opinion it cannot be said that the complaint did not disclose the commission of an offence. Merely because the offence was committed during the course of a commercial transaction, would not be sufficient to hold that the complaint did not warrant a trial. Whether or not the allegations in the complaint were true was to be decided on the basis of evidence to be led at the trial in the complaint case. It certainly was not a case in which the criminal trial should have been cut short. The quashing of the complaint has resulted in grave miscarriage of justice. We, therefore, without expressing any opinion on the merits of the case, allow this appeal and set aside the impugned order of the High Court and restore the complaint. The learned trial Magistrate shall proceed with the complaint and dispose of it in accordance with law expeditiously."

10. How the High Court is required to exercise power under Section 482

Cr.P.C. was the subject matter in State of Karnataka v. M.

Devendraappa & Anr., [(2002) 3 SCC 89] . Paragraphs 7, 8 and 9 of the

said judgment are quoted herein below:

"7. In R.P. Kapur v. State of Punjab1 this Court summarized some categories of cases where inherent power can and should be exercised to quash the proceedings.

(i) where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction;

(ii) where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;

(iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.

8. In dealing with the last case, it is important to 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 accusations. When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is the function of the trial Judge. Judicial process should not be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of a private complainant to unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short-circuit a prosecution and bring about its sudden death. The scope of exercise of power under Section 482 of the Code and the categories of cases where the High Court may exercise its power under it relating to cognizable offences to prevent abuse of process of any court or otherwise to secure the ends of justice were set out in some detail by this Court in State of Haryana v. Bhajan Lal. A note of caution was, however, added that the power should be exercised sparingly and that too in rarest of rare cases. The illustrative categories indicated by this Court are as follows: (SCC pp. 378-79, para

102) "(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 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 Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 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 Section 155(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 any of the provisions of the Code or the Act concerned (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 Act concerned, 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."

9. As noted above, the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. (See: Janata Dal v. H.S. Chowdhary, and Raghubir Saran (Dr) v. State of Bihar) It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. In a proceeding instituted on complaint, exercise of the inherent powers to quash the 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 in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the

proceedings. (See: Dhanalakshmi v. R. Prasanna Kumar, State of Bihar v. P.P. Sharma, Rupan Deol Bajaj v. Kanwar Pal Singh Gill, State of Kerala v. O.C. Kuttan, State of U.P. v. O.P. Sharma, Rashmi Kumar v. Mahesh Kumar Bhada, Satvinder Kaur v. State (Govt. of NCT of Delhi) and Rajesh Bajaj v. State NCT of Delhi.)"

11. In the judgment relied by the learned counsel for the petitioners,

legal notice was issued in the year 2015 and thereafter the FIR has been

lodged and the dispute was with regard to supply of coal and in the facts

and circumstances of that case, the Coordinate Bench of this Court has

quashed the FIR. In the case in hand, there is allegation of inducement by

the petitioners by way of payment of Rs.2,73,950/- and it was assured that

within 90 days remaining amount will be paid and after receiving legal

notice, the petitioners contacted opposite party no.2 in first week of

December, 2020 and had assured to pay outstanding amount of

Rs.38,43,051/- before 31.01.2021, but failed to do so as per their

assurance. Thus, that judgment as relied by the learned counsel for the

petitioners is different from the present case.