Madras High Court
D.Ishaan Bhatia vs The State Rep By on 5 September, 2022
Crl.O.P.No.17651 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 05.09.2022
CORAM
THE HONOURABLE Mr.JUSTICE G.K.ILANTHIRAIYAN
Crl.O.P.No.17651 of 2022
and Crl.M.P.No.11029 of 2022
D.Ishaan Bhatia ... Petitioner
Vs
1.The State rep by
The Inspector of Police,
EDF-I, Team II,
Central Crime Branch,
Chennai 600 007. (Crime No.55 of 2021)
2.P.Rahul Chhajer ... Respondents
PRAYER: Criminal Original Petitions filed under Section 482 of Cr.P.C,
praying to cal for the records in C.C.No.1619 of 2022 pending on the file of
the learned Metropolitan Magistrate for exclusive trial of CCB and CBCID
Metro Wing Cases, Egmore, Chennai and quash the same.
For Petitioners : Mr.R.Vivekananthan
For Respondents : Mr.E.Raj Thilak
Additional Public Prosecutor for R1
No appearance for R2
Page 1 of 9
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Crl.O.P.No.17651 of 2022
ORDER
This petition has been filed to quash the proceedings in C.C.No.1619
of 2022 pending on the file of the learned Metropolitan Magistrate for
exclusive trial of CCB and CBCID Metro Wing Cases, Egmore, Chennai,
thereby taking cognizance for the offences under Sections 406 and 420 IPC,
as against the petitioner.
2.The case of the prosecution is that M/s.MGK International DWC-
LLC is a Private Limited Company is indulged in international trade of
buying and selling Metal scrap around the globe, whereas M/s.MTC
Business Private Limited Company is a concern/ Company of M/s. MGK
International and the said company runs through the subsidiary received
from M/s.MGK International. The further allegation is that through a
business agent, one Rajiv Kumar Gupta, the petitioner's Company had
approached the defacto complainant's Company for purchase of MS Turning
Scrap. After initial negotiations, the defacto complainant had agreed to
proceed with the business transactions with the petitioner's Company and in
continuation of the said business transactions, a high valued transaction was
entered into between them. Subsequent to the shipment of goods from
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Crl.O.P.No.17651 of 2022
Brazil, the petitioner had informed his inability to make the whole payment
for the goods under shipment and refused to collect the export douments to
be presented before the Customs. It is further alleged that in furtherance of
the business transactions, the petitioner had refused to give 'No objection' to
the defacto complainant's company to sell the shipment to others and made
him to accept the terms of his contract and made him to sell the goods to
him. Due to the acts of the petitioner, the defacto complainant's Company
had sustained loss to the tune of Rs.47,00,000/- and in this regard, the
defacto complainant had lodged the present complaint. After registration of
the complaint in Crime No.55 of 2021, the first respondent / Police has filed
the final report and the same has been taken on file in C.C.No.1619 of 2022
pending on the file of the learned Metropolitan Magistrate for exclusive trial
of CCB and CBCID Metro Wing Cases, Egmore, Chennai.
3.The learned counsel for the petitioner submitted that even before
completion of investigation, the petitioner has filed Crl.O.P.No.5537 of
2021 before this Court seeking to quash the First Information Report in
Crime No.55 of 2021. This Court admitted the quash petition and granted an
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Crl.O.P.No.17651 of 2022
interim order that the first respondent/ Police shall not file a final report.
Pending the quash petition, the first respondent filed the final report and the
same has been taken cognizance. He further submitted that the entire
allegations are commercial business transaction, which are governed by a
Special Act i.e., Commercial Courts Act, 2015. Therefore, no offence is
made out as against the petitioner as alleged by the 2nd respondent herein for
the offences under Sections 406 and 420 IPC. He further submitted that to
attract the ingredients of offence under Section 406 IPC, it is necessary to
show that the defacto complainant, in a fiduciary capacity, had entrusted the
property to the petitioner and the petitioner has disposed the same for their
personal use or in violation of contractual agreements. Under the transaction
of sale, once the properties were delivered by the defacto complainant to the
petitioner, his ownership over the properties is being ceased out. After the
sale, the defacto complainant has neither any right nor dominion over the
property and after the delivery of the properties by the defacto complaiant,
he cannot claim that he has entrusted the same to the petitioner.
4.The learned counsel for the petitioner further submitted that mere
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Crl.O.P.No.17651 of 2022
business transaction involving buying and selling of goods with an intent to
obtain monetary consideration would amount only to transactions which are
commercial in nature and the same does not amount to entrustment of
property. That apart, for the offence under Section 420 IPC, it must be
shown that the petitioner, with a mala-fide intention, had deceived the
defacto complainant to deliver the goods to them. It is necessary to consider
the state of mind of the petitioner at the very inception of entering into a
contract with the defacto complainant and as per the case of the prosecution,
the petitioner has paid the amount to the goods delivered by the defacto
complainant on earlier occasions and obtained his confidence over the
business transactions which evidently shows that the petitioner had no
intention to cheat the defacto complainant. Mere breach of contract and
subsequent non-fulfillment of a promise does not amount to cheat, unless it
is shown that there was dishonest intention that had existed in the mind of
the petitioner. A dishonest intention cannot be inferred from a mere fact of
subsequent breach of promise. When there is a regular business dealing
between the petitioner and the defacto complainant, non-performance of a
promise at a future date, does not attract the ingredients of cheating.
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Crl.O.P.No.17651 of 2022
Therefore, the offences under Sections 406 and 420 IPC would not come
together for a single transaction.
5.Heard the learned counsel for the petitioner as well as the learned
Additional Public Prosecutor and perused the entire materials available on
record. Though notice has been served on the second respondent, he has not
appeared in person or through counsel.
6.On a perusal of the impugned charge sheet, it reveals that it
amounts to only about single transaction, whereas the statement of accounts
produced by the petitioner reveals that from the year 2018 onwards, there
has been transaction between them. That apart, a bare perusal of the
commercial agreement entered into between the defacto complainant and
the petitioner, it is seen that the settlement of disputes has to be done
through Arbitration. It is relevant to extract the relevant clause of the
agreement, which reads as follows, by the agreement dated 19.07.2019:
“ARBITRATION: Arbitration in New Jersey under
auspices of New Jersey maritime arbitrators association and
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Crl.O.P.No.17651 of 2022
controversy or claim arising out of or relating to this contract
or the breach thereof, shall be selected by arbitration in new
jersey by there arbitrators in accordance with the provisions of
the Arbitration act, 1963 and subsequent amendments, under
the auspices of the New Jersey maritime arbitrators
association. The arbitrators shall issue a reasoned award in
writing judgment upon the award rendered by the arbitrators
be entered in any court having jurisdiction thereof.”
6.Thus, it is made clear that any violation of the said clause and non-
compliance of the same would amount to viodable agreement and it is open
to the parties to settle their issue through Arbitration proceedings.
7.It is made clear that any claim arising out of or relating to this
contract or the breach thereof, shall be selected by Arbitration in New
Jersey by three arbitrators in accordance with the provisions of the
Arbitration Act, 1963. Therefore, the violation of the said clause and non-
compliance of the same would amount to voidable agreement and a
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Crl.O.P.No.17651 of 2022
commercial dispute was over and again labeled as a criminal transaction. In
view of the above, no offence is made out under Sections 406 and 420 IPC
as against the petitioner and entire charge sheet is nothing but an abuse of
process of Court and it cannot be sustained as against the petitioner.
8.In view of the above discussion, this Criminal Original Petition is
allowed. Consequently, connected Miscellaneous Petition is closed.
05.09.2022
Internet:Yes
Index:Yes/no
Speaking/non speaking order
vkr
To
1.The Inspector of Police,
EDF-I, Team II,
Central Crime Branch,
Chennai 600 007.
2.The Public Prosecutor,
Madras High Court,
Chennai.
G.K.ILANTHIRAIYAN. J,
https://www.mhc.tn.gov.in/judis
Crl.O.P.No.17651 of 2022
vkr
Crl.O.P.No.17651 of 2022
and Crl.M.P.No.11029 of 2022
05.09.2022
https://www.mhc.tn.gov.in/judis
