Rizwan Sayed S/O Syed Moinodin And ... vs Krs Fitness, Proprietorship ...
2021 Latest Caselaw 3764 Kant

                           1




         IN THE HIGH COURT OF KARNATAKA
                KALABURAGI BENCH

     DATED THIS THE 10TH DAY OF NOVEMBER 2021

                       BEFORE

       THE HON'BLE MR. JUSTICE H.P.SANDESH

        CRIMINAL PETITION No.200428/2016

BETWEEN:

1.    RIZWAN SAYED
      S/O SYED MOINODIN
      AGE: 55 YEARS
      OCC: BUSINESS YFC
      R/O FLAT NO.203, PLOT NO.21
      SECTION 7
      GHANSOLI-MUMBAI-400701

2.    KAIZZAD CAPADIA
      S/O FARROKH CAPADIA
      AGE: 48 YEARS, OCC: BUSINESS
      R/O SALSETTEPARSI-D 201
      BH.6 CHS LTD.,
      NEAR PUMP HOUSE
      ANDHERI (E), MUMBAI

3.    MR. KALYANI TILAK
      S/O VAMAN MADHAV TILAK
      AGE: 40 YEARS, OCC: BUSINESS
      R/O SALSETTEPARSI-D 201
      BH.6 CHS LTD.,
      NEAR PUMP HOUSE
      ANDHERI (E), MUMBAI

4.    SULTAN SYED S/O MOINODDIN
      AGE: 50 YEARS, OCC: BUSINESS
      R/O PLOT NO.B-J
                             2




       LINE SHIVAJI NAGAR
       GOKHANDI-MUMBAI-43
                                      ... PETITIONERS

(BY SRI CHAITANYAKUMAR CHANDRIKI, ADVOCATE)

AND:

1.     KRS FITNESS, PROPRIETORSHIP CONCERN
       OFFICE SITUATED AT SEDAM ROAD
       AND ALSO PLOT NO.52 P & T COLONY
       OLD JEWARGI ROAD, KALABURGI
       THROUGH ITS PROPRIETOR
       KRISHNA REDDY S/O C RAMESH
       AGE: 29 YEARS, OCC: BUSINESS
       R/O KALABURAGI

2.     STATE OF KARNATAKA THROUGH
       M.B.NAGAR POLICE STATION
       REPRESENTED BY SPP
       HIGH COURT OF KARNTAKA
       KALABURAGI BENCH
                                     ... RESPONDENTS

(BY SRI GURUBASAVA C. NAIK, ADVOCATE FOR
 SRI RAMACHANDRA K., ADVOCATE FOR R1;
 SRI SHARANABASAPPA M. PATIL, HCGP FOR R2)

       THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CRIMINAL PROCEDURE CODE, PRAYING TO QUASH
THE IMPUGNED ORDER DATED 21.12.2015 PASSED BY 4TH
ADDL. JMFC, KALABURAGI, IN P.C.NO.1056/2015 AND ALSO
QUASH THE FIR REGISTERED BY THE SECOND RESPONDENT
IN CRIME NO.182/2015 AGAINST THE PETITIONERS.


       THIS PETITION COMING ON FOR HEARING, THIS DAY,
THE COURT MADE THE FOLLOWING:
                                  3




                           ORDER

Heard the learned counsel appearing for the

petitioners, learned counsel appearing for respondent No.1

and the learned High Court Government Pleader appearing

for respondent No.2-State.

2. This petition is filed under Section 482 of

Cr.P.C., by accused Nos.2 to 5 praying to quash the

impugned order dated 21.12.2015 passed by IV-Additional

JMFC, Kalaburagi, in P.C.No.1056/2015 and also quash the

FIR registered by respondent No.2 in Crime No.182/2015

against the petitioners.

3. Factual matrix of the case is that respondent

No.1 filed private complaint before the Magistrate making

allegation against the petitioners herein that in terms of

Franchise Agreement the petitioners have not provided

services and committed offence of cheating. The

complainant in paragraph-4 of the complaint has stated

that due to non-compliance of requirements of customer

services, the complainant has incurred such heavy

monetary loss and sustained mental shock. The

complainant has paid franchisee fee of Rs.5,61,800/- and

even till date the amount is with the accused. The

complainant also credited an amount of Rs.4,75,000/-

through bank to the accused. When the complaint was

filed before the learned Magistrate, the learned Magistrate

though comes to the conclusion that the contents of the

complaint does not disclose committing of offences invoked

against the petitioners, but ordered to investigate the

matter by referring the matter to the Investigating Officer

under Section 156(3) of Cr.P.C. Hence, the present

petition is filed before this Court contending that even

looking into the contents of the complaint, it is a civil

dispute between the parties with regard to Franchise

Agreement and even if there is any violation or non-

compliance of terms of agreement, respondent No.1

cannot initiate criminal proceedings against the petitioners

and there is provision in the agreement to initiate

arbitration proceedings. The learned counsel vehemently

contended that arbitration proceedings was initiated by the

petitioner before Mumbai Court and upon receiving notice

in the arbitration proceedings, the present complaint is

filed with mala fide intention. The learned counsel submits

that when the complaint is filed stating that the petitioners

are having business concern at Mumbai, unless enquiry is

conducted as required under Section 202 of Cr.P.C., the

learned Magistrate ought not to have entertained the

complaint and ordered to investigate the matter by the

Investigating Officer. The learned counsel also submits

that as per Section 436 of the Companies Act which is

amended in 2013, the complaint has to be filed before the

Special Court. All these factors are not considered by the

learned Magistrate before entertaining the complaint and

ordered to refer the matter under Section 156(3) of

Cr.P.C., for investigation. The learned counsel also

submits that in support of the complaint, the complainant

has not filed affidavit. On these grounds, he seeks to

quash the proceedings initiated against the petitioners.

4. The learned counsel appearing for respondent

No.1 submits that there was an agreement between the

petitioners and respondent No.1 that is called as 'Franchise

Agreement' and the petitioners have not complied the

terms and conditions of the agreement and as a result,

respondent No.1 has suffered huge loss. He also submitted

that the petitioners have cheated the complainant. Hence,

the private complaint is filed and the learned Magistrate

has rightly referred the matter under Section 156(3) of

Cr.P.C, for investigation.

5. Per contra, the learned High Court Government

Pleader appearing for respondent No.2-State would submit

that the learned Magistrate has not committed any error

and he has only referred the matter under Section 156(3)

of Cr.P.C., for investigation and has not taken any

cognizance. Hence, the same does not require

interference of this Court.

6. Having heard the learned counsel appearing

for the petitioners, learned counsel appearing for

respondent No.1/complainant and the learned High Court

Government Pleader appearing for respondent No.2-State

and on perusal of the material on record, it is evident that

respondent No.1 has filed private complaint against the

petitioners and the allegation made in the complaint is that

it has made payment in terms of Franchise Agreement and

other allegation is that the petitioners have committed

offence of cheating. The learned counsel for respondent

No.1 does not dispute the fact that there is agreement

between the parties and there is clause in the agreement

that if any dispute arose between the parties, the parties

have to invoke arbitration clause. It is also not in dispute

that the petitioners approached Mumbai High Court

invoking arbitration jurisdiction. When such being the

case, filing of private complaint is nothing but an abuse of

process. If the complaint is continued, it leads to

miscarriage of justice. The petitioners are having business

at Mumbai, therefore, if private complaint is filed, before

entertaining the complaint, compliance of Section 202 of

Cr.P.C., is mandatory. Apart from that, along with the

complaint no affidavit is filed. The learned Magistrate

though comes to the conclusion that contents of the

complaint do not disclose offences invoked against the

petitioners, but proceeded to refer the matter under

Section 156(3) of Cr.P.C. When the Court comes to the

conclusion that the contents of the complaint do not

disclose the offences against the petitioners, the learned

Magistrate ought to have dismissed the complaint at the

threshold, instead of referring the matter under Section

156(3) of Cr.P.C., or should have considered the complaint

and taken cognizance and enquired into the matter. But

the same has not been done by the learned Magistrate. It

is clear abuse of process at the instance of respondent

No.1 by filing private complaint when arbitration

proceeding is initiated against him. Hence, it is not a fit

case to exercise power under Section 482 of Cr.P.C.

7. This Court in the case of Mr. Prateek

Jaswant and another vs. The State of Karnataka and

another in Criminal Petition No.1097/2020 disposed

of on 02.03.2021 in detail discussed the scope of

Sections 200 and 202 of Cr.P.C., in a case where the

respondent/accused is not residing within the jurisdiction

of the Court in which complaint is filed and the said

judgment is aptly applicable to the case on hand.

8. In view of the observations made above, I pass

the following:

ORDER

The petition is allowed.

The impugned order dated 21.12.2015 passed by IV-

Additional JMFC, Kalaburagi, in P.C.No.1056/2015 and the

FIR registered in Crime No.182/2015 by respondent No.2-

M.B.Nagar Police Station against the petitioners are hereby

quashed.

Sd/-

JUDGE

NB*