Orissa High Court
Jindal India Thermal Power ... vs State Of Odisha And Ors on 13 May, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.2039 of 2017 along with CRLMC Nos.343,
3059 & 3285 of 2018, 2805, 2806, 3184 & 3185 of
2019 and 13 of 2021.
(These are the applications under Section 482 of the
Code of Criminal Procedure, 1973)
In CRLMC No.2039 of 2017
Jindal India Thermal Power Limited .... Petitioners
and Ors.
-versus-
State of Odisha and Ors. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioners : Mr. Ashok Mohanty, Sr. Adv.
Mr. Prafulla Ku. Rath, Adv.
Mr. Satyajit Mohanty, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.P.3)
In CRLMC No.343 of 2018
M/s. Sinhotia Metals and Minerals .... Petitioners
Pvt. Ltd and Ors.
-versus-
State of Odisha & Ors. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioners : Mr. Rajjeet Roy, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Sahoo, Adv.
(for O.P.3)
CRLMC No.2039 of 2017 and batch of cases 1 of 41
In CRLMC No.3059 of 2018
Jindal India Thermal Power Limited .... Petitioners
and Ors.
-versus-
State of Odisha and Anr. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioners : Mr. Biswa Mohan Patnaik, Sr.
Adv.
Mr. Satyajit Mohanty, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.P.2)
In CRLMC No.3285 of 2018
Shyam Jindal .... Petitioner
-versus-
State of Odisha and Anr. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioners : Mr. Biswa Mohan Patnaik, Sr.
Adv.
Mr. Satyajit Mohanty, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.P.2)
In CRLMC No.2805 of 2019
Jindal India Thermal Power Limited .... Petitioners
& Ors.
-versus-
State of Odisha and Anr. .... Opp. Parties
CRLMC No.2039 of 2017 and batch of cases Page 2 of 41
Advocates appeared in the case through Hybrid Mode:
For Petitioners : Mr. Satyajit Mohanty, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.P.2)
In CRLMC No.2806 of 2019
Shyam Sunder Jindal .... Petitioner
-versus-
State of Odisha and Anr. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioner : Mr. Satyajit Mohanty, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.P.2)
In CRLMC No.3184 of 2019
Jindal India Thermal Power Limited .... Petitioners
& Ors.
-versus-
State of Odisha and Anr. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioners : Mr. Satyajit Mohanty, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.P.2)
CRLMC No.2039 of 2017 and batch of cases Page 3 of 41
In CRLMC No.3185 of 2019
Shyam Sunder Jindal .... Petitioner
-versus-
State of Odisha and Anr. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioner : Mr. Shyamalendu Pattnaik,
Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.P.2)
In CRLMC No.13 of 2021
M/S. Sinhotia Metals and Minerals .... Petitioners
Pvt. Ltd. & Anr.
-versus-
State of Odisha and Anr. .... Opp. Parties
Advocates appeared in the case through Hybrid Mode:
For Petitioners : Mr. Rajjeet Roy, Adv.
-versus-
For Opp. Parties : Mr. Karunakar Gaya, ASC
(for O.P.1)
Mr. A.K. Panigrahi, Adv.
(for O.Ps.2 & 3)
CRLMC No.2039 of 2017 and batch of cases Page 4 of 41
CORAM:
MR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-22.03.2022
DATE OF JUDGMENT:-13.05.2022
S.K. Panigrahi, J.
1. These petitions under Section 482 of the Code of
Criminal Procedure, 1973 (hereinafter referred to as
'Cr.P.C.') have been filed with a prayer to quash the
proceedings emanating from ICC Case No.33 of 2017,
ICC Case No.74 of 2017, ICC Case No.57 of 2018
pending before the learned Sub-divisional Judicial
Magistrate, Talcher and ICC Case No.44 of 2019
pending before the learned Sub-divisional Judicial
Magistrate, Angul. As the petitions involve the similar
facts, they are being decided by this common judgment
and order.
2. Shorn of unnecessary details, the facts of the
present matter are as follows:
i. The Complainant Company, one M/s Quartz Infra
and Engineering Private Limited is engaged in the
business of civil engineering and providing
construction services. The Complainant Company
had undertaken a back to back sub-contract work
from one M/s GSR Ventures Private Limited to
execute the construction of a boundary wall as well
as area grading and leveling work in March 2010 at
the newly constructed 2x600 MW Thermal Power
Plant belonging to Jindal India Thermal Power
Limited (hereinafter referred to as "M/S JITPL",
present Petitioner No.1 in CRLMC No.3184 of 2019,
CRLMC No.2085 of 2019, CRLMC No.3059 of 2018
and CRLMC No.2039 of 2017) at Derang, Odisha
(hereinafter referred to as the "Derang Power
Plant").
ii. The Complainant Company then entered into six
Civil engineering work contracts with M/S JITPL
between April 2011 to February 2012 for
construction of; peripheral roads and drains,
internal roads and drains, security sheds, boundary
wall, raw water reservoir extension and execution of
the balance work left in the Ash Dyke by M/s GSR
Ventures Private Limited, all for the said Derang
Power Plant. To that end the Complainant Company
submitted three bank guarantees for a total sum of
Rs. 2.72 Crores towards security/earnest money for
the same.
iii. At the relevant point of time, in December 2012,
the work pertaining to the construction of the
boundary wall was completed, the work pertaining
to the construction of security sheds was closed
and the work pertaining to the remaining four
contracts i.e. construction of; peripheral roads and
drains, internal roads and drains, raw water
reservoir extension and execution of the balance
work left in the Ash Dyke by M/s GSR Ventures
Private Limited was underway.
iv. It is the contention of the Complainant
Company, that prior to terminating the contracts
with the Complainant Company, M/S JITPL
maliciously entered into an understanding with one
M/s Sinhotia Metals and Minerals Private Limited
(hereinafter referred to as "M/s SMMPL" and
present Petitioner No. 1 in CRLMC No.3285 of 2018
and CRLMC No.13 of 2021) in December 2012
itself, to usurp the work contracts from the
Complainant Company at the Derang Power Plant
at a rate much higher compared to the one awarded
to the Complainant Company.
v. Subsequently, the Complainant Company's
contracts with M/S JITPL were unilaterally
terminated on 31.1.2013 and the bank guarantees
furnished by the Complainant Company fora total
sum of Rs.2.72 Crores were encashed on 29.1.2013
without any prior notice or intimation to the
Complainant. The Complainant Company was then
asked to draw up its final bills after measurement of
its work done till 31.1.2013 and vacate the
premises of the Derang Power Plant forthwith.
vi. It is the contention of the Complainant Company
that despite its strong protest in relation to the
manner of the illegal termination of their contracts
as well as the fact that M/s SMMPL had already
entered into the work site, the Complainant
Company who was by this pushed into a corner,
was forced to accept the promise of the officers of
M/S JITPL who assured them that the entire work
site would get measured and the final bill would be
processed within 9 days on the meeting dated
6.2.2013.
vii. Pursuant to the same, a joint verification of the
work done till 31.01.2013 as well as a measurement
of the materials of the Complainant Company lying
in store at the Derang Power Plant was conducted
by the officers of M/S JITPL, officers of one M/s
Currie & Brown and officers of the Complainant
Company. After due measurement, the details of
which were recorded in ground level books and the
officers of the aforesaid attested to the same by
putting their signatures. A final bill of Rs. 1.53
Crores was submitted which was also duly
endorsed by the concerned officers of M/S JITPL.
The Complainant Company subsequently vacated
the premises of the Derang Power Plant. M/S JITPL
thereafter admittedly made a payment of Rs. 92.25
lacs but did not make any payment for the
remainder amount of about Rs. 60.8 lacs as claimed
by the Complainant.
viii. It is the Complainant's case that despite the
repeated requests for releasing the payment of the
remainder amount, when M/S JITPL paid no heed
to the Complainant Company, the Complainant
Company was constrained to invoke arbitration
clause as was contracted between them.
ix. During the course of the arbitration proceedings
the Complainant Company assailed not only the
non-payment of the remainder amount as aforesaid
of the final bill but also disputed the termination of
the contracts as well as encashment of the bank
guarantees. In the reply filed by M/S JITPL before
the learned Arbitral Tribunal, the Complainant
Company has alleged that it was shocked to learn
that M/S JITPL has forged/fabricated, and in the
process altered, the final bill and the ancillary 29
level books containing measurements of the works
to show that the final bill amount was Rs.94.88
lacs. It was also contended that M/S JITPL has
submitted documents wherein they themselves have
contradicted the alternate amount arrived by them
and stated that the final bill was a further reduced
amount of Rs. 92.25 lacs which has been fully paid
to the Complainant Company.
x. It was further submitted that these alleged
manipulated, forged and fabricated bills as well as
ancillary documents were relied upon by M/S JITPL
throughout the course of arbitration much to the
chagrin of the Complainant Company in an effort to
defraud the learned Tribunal.
xi. Finally, the Learned Tribunal, for reasons other
than for the alleged forgery, manipulation and
fabrication, in its majority award dated 21.2.2017,
rejected all contentions raised by M/S JITPL and,
awarded a total sum of Rs.9.71 Crores in favour of
the Complainant Company including the entire sum
of Rs.1.53 Crores of the final bill.
xii. It is around this time that the Complainant
Company filed the four criminal complaint petitions
against various persons including M/S JITPL, M/s
SMMPL and Mr. Shyam Sunder Jindal (present
Petitioner No.1 in CRLMC No. 3185 of 2019,
CRLMC No. 2806 of 2019 and CRLMC No.3285 of
2018) who are the parties before this Court seeking
quashing of the four criminal complaint petitions
through the present criminal miscellaneous
petitions.
3. Before proceeding to record the submissions made
by the parties, this Court finds it apposite to firstly
succinctly encapsulate the allegations contained in
each of the four impugned criminal complaint
petitions. The pith and substance of the criminal
complaint petitions is as follows:
i. ICC Case No.33 of 2017, pending before the
learned Sub-divisional Judicial Magistrate,
Talcher.
The Complainant Company has alleged
commission of offences under Sections 447/ 403/
379/ 406/ 408/ 409/ 420/ 426/ 341/ 109/ 120-B
IPC r/w Section 34 IPC contending that the
Opposite Parties therein (including present
Petitioners M/S JITPL in CRLMC No 2039 of 2017
and M/s SMMPL in CRLMC No.343 of 2018) have
misappropriated the Complainant Company's
property that was lying in the work site of the
Derang Power Plant for their own individual benefit
while colluding, conniving and acting in a concerted
manner in furtherance of criminal conspiracy to
illegally oust the Complainant Company from the
work site for their own gratification. The Opposite
Parties have surreptitiously entered the work site of
the Derang Power Plant and taken over the work of
the Complainant Company in a malafide manner
behind the Complainant Company's back. The
Opposite Parties have also forced the Complainant
Company to sell its materials on the work site to
M/s SMMPL on a much lower rate than acceptable
out of which also the full payment was never
realized despite multiple reminders and requests.
As such, the Opposite Parties have dishonestly
misappropriated the Complainant Company's
movable property and have cheated the
Complainant Company while also committing
criminal breach of trust. Thus, the accused persons
have colluded with each other to cheat the
Complainant so as to unlawfully cause loss of
property and have therefore breached the
agreement between them and are thereby guilty of
criminal breach of trust.
ii. ICC Case No.74 of 2017, pending before
the learned Sub-divisional Judicial Magistrate,
Talcher.
The Complainant Company has alleged
commission of offences under Sections 191/ 192/
193/ 196/ 463/ 465/ 468/ 471 /120-B/ 420/
427/ 506 IPC r/w Section 34 IPC contending that
the Opposite Parties therein (including present
Petitioners M/S JITPL in CRLMC No.2805 of 2019
and Shyam Sunder Jindal in CRLMC No.2806 of
2019) fabricated false evidence to defeat the claims
of the Complainant Company before the Learned
Arbitration Tribunal, placed reliance on the said
evidence and misleading the tribunal despite
knowing the same to be false and forged documents
including level books to fraudulently create an
altered final bill being thus guilty of cheating,
forgery and fabrication. It is the Complainant
Company's submission that the Document. No 2
relating to specifications of Ash Dyke contract ran
counter to the earlier filed Document No. 1 which
was said to have been inadvertently filed by the
Opposite Party, despite the fact that Document No.
1 was admittedly treated as undisputed document
at the very threshold of the arbitration proceedings.
This fabricated and forged Document No.2 was filed
at a later point in time and was inconsistent while
containing a completely different and more
stringent set of requirements for performance by the
Complainant Company and was a stark departure
from the earlier specifications described and
contained in Document No. 1. Upon scrutiny of the
specifications contained in Document No. 3 as well,
filed before the Learned Arbitral Tribunal, it is also
alleged that the same has been forged and
fabricated intentionally to frustrate and cause
wrongful loss to the Complainant Company and
hoodwink the Tribunal to secure an erroneous
opinion against the Complainant Company by
misleading the Learned Tribunal. Thus the
Complainant Company makes out a serious case
against the Opposite Parties of a well-planned and
concerted effort to forge and fabricate documents to
cheat the Learned Tribunal so as to secure a
favourable award.
iii. ICC Case No.57 of 2018, pending before
the learned Sub-divisional Judicial Magistrate,
Talcher.
The Complainant Company has alleged the
commission of offences u/s 192/ 193/ 196/ 420/
463/ 465/ 468/ 469 /471 /120-B/ 403 IPC r/w S.
34 of IPC and under Sections 66(c) and 66(d) of IT
Act 2000 contending that the Opposite Parties
(including present Petitioners M/S JITPL in CRLMC
No. 3059 of 2018, M/s SMMPL in CRLMC No. 13 of
2021 and Shyam Sunder Jindal in CRLMC No.
3285 of 2018) have in active connivance arbitrarily
terminated all the contracts with the Complainant
Company in January, 2013. The Opposite Parties
have further dishonestly altered the final ground
level measurements as well as the end points of
work to reduce the quantity of work executed and
thereby cheating the Complainant Company by
depriving it of the money rightfully due to it. The
illegal alteration of measurements is to
forge/fabricate a new final bill has resulted in
misappropriation of the hard earned money of the
Complainant Company and therefore the Opposite
Parties have caused grave wrongful loss to the
Complainant Company while causing wrongful gain
to M/s SMMPL who would have then been in the
position to charge M/S JITPL for an inflated
quantity of work than that done by them. On these
facts, the Opposite Parties are alleged to be
conjointly liable for commission of alleged offences
of criminal conspiracy, misappropriation of amount,
cheating, fabricating / forgery of critical documents
besides adducing false evidence before the Learned
Arbitral Tribunal.
iv. ICC Case No.44 of 2019, pending before
the learned Sub-divisional Judicial Magistrate,
Angul.
Here, the Complainant Company has alleged the
commission of offences u/s 422 IPC r/w S. 120-B
and 34 IPC on the contention that the Opposite
Parties (including present Petitioners M/S JITPL in
CRLMC No. 3184 of 2019 and Shyam Sunder Jindal
CRLMC No. 3185 of 2019) have willfully dragged the
arbitration proceedings for four years to inflict pain
and mental agony on the Complainant Company
and have thereafter filed an alleged false and
frivolous application under Section 34 of the
Arbitration and Conciliation Act challenging the
award dated 21.2.2017 of the Learned Arbitration
Tribunal as a counter to the Execution Case No.158
of 2017 filed by the Complainant Company for
recovery of the awarded amount. After dismissal of
the application under Section 34 of the Arbitration
Act, the Opposite Parties have subsequently filed an
application under Section 37 of the Arbitration Act
before this Hon'ble Court which is pending
adjudication. As such, the Complainant Company
alleges that the Opposite Parties have stalled the
Execution Case No.158 of 2017 filed by the
Complainant Company and have prevented the
attachment of immovable and movable properties of
the Derang Power Plant towards fulfillment of the
debt i.e. the award dated 21.2.2017 of the Learned
Arbitration Tribunal.
4. Learned counsel for the Petitioner M/S JITPL (in
CRLMC No.2805 of 2019, CRLMC No.3184 of 2019,
CRLMC No.3059 of 2018 and CRLMC No.2039 of 2017)
vehemently submits that the allegations on the whole
germinate from a dispute which is purely civil in
nature and the criminal proceedings initiated by the
Complainant Company amount to an abuse of the
process of the Court. The said proceedings have all
been allegedly initiated with mala fide and malice to
wreak vengeance on the M/S JITPL Company and its
officers. It is also submitted that the issue of forgery
has been specifically dealt with by the learned Arbitral
Tribunal in its award and therefore the present
petitions may all be allowed to secure the ends of
justice as the complaints amount to an abuse of the
process of law primarily due to the reason that the
disputes between the parties are primarily civil in
nature and the complaints are works of malice as they
are vexatious in nature with the sole intent to harass
the accused persons.
5. Thereafter, the Learned Counsel for the Petitioner
M/s SMMPL (in CRLMC No.13 of 2021 and CRLMC
No.343 of 2018) has ardently argued that the
allegations contained in the impugned complaint
petitions are entirely against the other Opposite Parties
and have no material against the abovementioned
Petitioner. As such, it is submitted that the dispute is
entirely civil in nature and the abovementioned
Petitioner has no role to play in the dispute which
primarily involves the Complainant Company and M/S
JITPL and its personnel. The allegations contained
even if taken at their face value and accepted in its
entirety do not satisfy the ingredients of the offences
alleged to have been committed by the abovementioned
Petitioners.
6. Learned counsel for the Petitioner Mr. Shyam
Sunder Jindal (in CRLMC No.2806 of 2019, CRLMC
No.3185 of 2019 and CRLMC No.3285 of 2018) has
submitted that the abovementioned Petitioner is
neither the Chairman, nor a Director, nor a
Shareholder, nor an employee of M/S JITPL and is
nowhere connected with the present matter. The
abovementioned Petitioner is a stranger to the dispute
between the Complainant Company and the other
Opposite Parties and as such allowing the proceedings
to continue against him would tantamount to an abuse
of the process of law.
7. Per contra, learned counsel for the Complainant
Company opposes the petitions on the grounds that it
is the settled position of law that facts which may give
rise to a civil claims can also tantamount to criminal
offences and separate proceedings may be initiated
under the law for prosecution of the same independent
of each other. As such, an arbitration is a remedy
limited to affording relief to a party affected by the
breach of a contract but the arbitrator does not have
the power to conduct a criminal trial of any offences
that may have been committed by the party in
connection with the self-same contract. The learned
counsel further submits that a strong prima facie case
is apparent on the face of the record wherein all the
three present petitioners have actively connived and
entered into a criminal conspiracy to fraudulently
misappropriate the Complainant Company's property,
cause wrongful gain to themselves in the process and
purposely fabricate and forge important documents to
defeat the claims of the Complainant Company before
the Learned Arbitral Tribunal. He also submitted that
although the criminal conspiracy and cheating have
been committed both prior to and pending the
arbitration proceedings, the acts of forgery and
fabrication have been committed in a concerted
manner which only came into light during the course
of the arbitration proceedings. Thus, the act of
cheating has been a continuing offence hatched in
deep conspiracy by the parties concerned.
8. Heard learned counsels for the parties and perused
the materials on record. Before adverting to the facts of
the case, it is apposite to refer first to the law
applicable to the facts of the present case. It is well
settled that though the inherent powers of the High
Court under Section 482 of the Code are very wide in
amplitude, yet they are not unlimited. However, it has
been deemed neither to be feasible nor desirable to lay
down an absolute rule which would govern or inhibit
the exercise of inherent jurisdiction of the Court under
Code of Criminal Procedure, 1973. Nevertheless, it is
trite that powers under the said provision have to be
exercised sparingly and with caution to secure the
ends of justice and to prevent the abuse of the process
of the court. Where the allegations in the first
information report or the complaint taken at its face
value and accepted in their entirety do not constitute
the offence alleged, ex facie, the High Court would be
justified in invoking its powers under Section 482 of
the Code to quash the criminal proceedings. Reference
may be made to the Hon'ble Supreme Court's decisions
in R.P. Kapur v. State of Punjab1 and Rupan Deol
Bajaj v. Kanwar Pal Singh Gill2.
9. In the case of State of Haryana v. Ch. Bhajan
Lal3, the Hon'ble Apex Court has held that an FIR can
be quashed at the initial stage where the allegations
made, even if taken at their face value and accepted in
its entirety, do not prima facie constitute any offence or
make out a case against the accused. In a similar vein
in the case of Rishipal Singh v. State of Uttar
Pradesh4, the Hon'ble Supreme Court held that the
High Court in exercise of its inherent power under
Section 482 Cr.P.C., should not allow a vexatious
complaint to continue, which would be a pure abuse of
the process of law and the same ought to be interdicted
at the threshold.
10. The principle relating to the nature and scope of
exercise of power under Section 482 of the Cr.P.C. has
now, by and large, been crystallized by the Hon'ble
Supreme Court in the case of Shakson Belthissor v.
State of Kerala5, relying upon its earlier judgment in
the case of Indian Oil Corpn. v. NEPC India Ltd.6
and a plethora of case law on the subject matter has
authoritatively laid down as under;
1 AIR 1960 SC 866
2 (1995) 6 SCC 194)
3 AIR 1992 SC 604
4(2014) 7 SCC 2015
5(2009) 14 SCC 466
6(2006) 6 SCC 736
"12. The principles relating to exercise of
jurisdiction under Section 482 of the Code of
Criminal Procedure to quash complaints and
criminal proceedings have been stated and
reiterated by this Court in several decisions.
To mention a few--Madhavrao Jiwajirao
Scindia v. Sambhajirao Chandrojirao Angre
[(1988) 1 SCC 692 : 1988 SCC (Cri) 234] ,
State of Haryana v. Bhajan Lal [1992 Supp
(1) SCC 335 : 1992 SCC (Cri) 426] , Rupan
Deol Bajaj v. Kanwar Pal Singh Gill [(1995) 6
SCC 194 : 1995 SCC (Cri) 1059], CBI v.
Duncans Agro Industries Ltd. [(1996) 5 SCC
591 : 1996 SCC (Cri) 1045] , State of Bihar v.
Rajendra Agrawalla [(1996) 8 SCC 164 :
1996 SCC (Cri) 628], Rajesh Bajaj v. State
NCT of Delhi [(1999) 3 SCC 259 : 1999 SCC
(Cri) 401], Medchl Chemicals &Pharma (P)
Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269 :
2000 SCC (Cri) 615], Hridaya Ranjan Prasad
Verma v. State of Bihar [(2000) 4 SCC 168 :
2000 SCC (Cri) 786] , M. Krishnan v. Vijay
Singh [(2001) 8 SCC 645 : 2002 SCC (Cri) 19]
and Zandu Pharmaceutical Works Ltd. v.
Mohd. SharafulHaque [(2005) 1 SCC 122 :
2005 SCC (Cri) 283] . The principles, relevant
to our purpose are:
(i) A complaint can be quashed where the
allegations made in 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 the case
alleged against the accused.
For this purpose, the complaint has to be
examined as a whole, but without examining
the merits of the allegations. Neither a
detailed inquiry nor a meticulous analysis of
the material nor an assessment of the
reliability or genuineness of the allegations in
the complaint, is warranted while examining
prayer for quashing of a complaint.
(ii) A complaint may also be quashed where
it is a clear abuse of the process of the court,
as when the criminal proceeding is found to
have been initiated with mala fides/malice
for wreaking vengeance or to cause harm, or
where the allegations are absurd and
inherently improbable.
(iii) The power to quash shall not, however,
be used to stifle or scuttle a legitimate
prosecution. The power should be used
sparingly and with abundant caution.
(iv) The complaint is not required to verbatim
reproduce the legal ingredients of the offence
alleged. If the necessary factual foundation
is laid in the complaint, merely on the ground
that a few ingredients have not been stated
in detail, the proceedings should not be
quashed. Quashing of the complaint is
warranted only where the complaint is so
bereft of even the basic facts which are
absolutely necessary for making out the
offence.
(v) A given set of facts may make out: (a)
purely a civil wrong; or (b) purely a criminal
offence; or (c) a civil wrong as also a criminal
offence. A commercial transaction or a
contractual dispute, apart from furnishing a
cause of action for seeking remedy in civil
law, may also involve a criminal offence. As
the nature and scope of a civil proceeding are
different from a criminal proceeding, the
mere fact that the complaint relates to a
commercial transaction or breach of contract,
for which a civil remedy is available or has
been availed, is not by itself a ground to
quash the criminal proceedings. The test is
whether the allegations in the complaint
disclose a criminal offence or not."
11. The aforesaid proposition of law was again
reiterated by the Hon'ble Apex Court in Madhavrao
Jiwajirao Scindia v. Sambhajirao Chandrojirao
Angre7, wherein the Supreme Court has observed as
follows;
"7. The legal position is well settled that
when a prosecution at the initial stage is
asked to be quashed, the test to be applied
by the Court is as to whether the
uncontroverted allegations as made prima
facie establish the offence. It is also for the
Court to take into consideration any special
features which appear in a particular case to
consider whether it is expedient and in the
interest of justice to permit a prosecution to
continue. This is so on the basis that the
Court cannot be utilized for any oblique
purpose and where in the opinion of the
Court chances of an ultimate conviction are
bleak and, therefore, no useful purpose is
likely to be served by allowing a criminal
prosecution to continue, the Court may while
taking into consideration the special facts of
a case also quash the proceeding even
though it may be at a preliminary stage."
12. Furthermore, given that it has been vehemently
urged that the allegations contained in the criminal
complaints are civil in nature, it is also relevant to
consider the position of law pertaining to whether a
criminal complaint is maintainable when the same
primarily arises from a civil dispute. It is now settled
law that when in certain cases the very same set of
AIR 1988 SC 709
facts may rise to remedies in civil as well as in criminal
proceedings and even if a civil remedy is availed by a
party, he is not precluded from setting in motion the
proceedings as provided for in criminal law. In
Pratibha Rani v. Suraj Kumar8 the Hon'ble Supreme
Court summed up the distinction between the two
remedies as under;
"21. ... There are a large number of cases
where criminal law and civil law can run side
by side. The two remedies are not mutually
exclusive but clearly coextensive and
essentially differ in their content and
consequence. The object of the criminal law is
to punish an offender who commits an offence
against a person, property or the State for
which the accused, on proof of the offence, is
deprived of his liberty and in some cases even
his life. This does not, however, affect the civil
remedies at all for suing the wrongdoer in
cases like arson, accidents, etc. It is an
anathema to suppose that when a civil
remedy is available, a criminal prosecution is
completely barred. The two types of actions
are quite different in content, scope and
import."
The aforesaid view was reiterated by the Hon'ble
Supreme Court in Kamaladevi Agarwal v. State of
W.B.9 as under;
"9. Criminal prosecution cannot be thwarted
at the initial stage merely because civil
proceedings are also pending. After referring
to judgments in State of Haryana v. Bhajan
(1985) 2 SCC 370
(2002) 1 SCC 555
Lal [State of Haryana v. Bhajan Lal, 1992
Supp (1) SCC 335 : 1992 SCC (Cri) 426] and
Rajesh Bajaj v. State (NCT of Delhi) [Rajesh
Bajaj v. State (NCT of Delhi), (1999) 3 SCC
259 : 1999 SCC (Cri) 401] this Court in
Trisuns Chemical Industry v. Rajesh Agarwal
[Trisuns Chemical Industry v. Rajesh
Agarwal, (1999) 8 SCC 686 : 2000 SCC (Cri)
47] held :
'7. Time and again this Court has been
pointing out that quashing of FIR or a
complaint in exercise of the inherent
powers of the High Court should be
limited to very extreme exceptions [vide
State of Haryana v. Bhajan Lal [State of
Haryana v. Bhajan Lal, 1992 Supp (1)
SCC 335 : 1992 SCC (Cri) 426] and
Rajesh Bajaj v. State (NCT of Delhi)
[Rajesh Bajaj v. State (NCT of Delhi),
(1999) 3 SCC 259 : 1999 SCC (Cri) 401] ].
8. In the last referred case this Court
also pointed out that merely because an
act has a civil profile is not sufficient to
denude it of its criminal outfit. We quote
the following observations : (Rajesh Bajaj
case [Rajesh Bajaj v. State (NCT of Delhi),
(1999) 3 SCC 259 : 1999 SCC (Cri) 401] ,
SCC p. 263, para 10)'
10. It may be that the facts narrated in the
present complaint would as well reveal a
commercial transaction or money transaction.
But that is hardly a reason for holding that
the offence of cheating would elude from such
a transaction. In fact, many a cheatings were
committed in the course of commercial and
also money transactions.'"
After referring to a plethora of decisions on the subject
the Hon'ble Supreme Court has finally held in
KamaladeviAgarwal v. State of W.B10 that;
"17. In view of the preponderance of
authorities to the contrary, we are satisfied
that the High Court was not justified in
quashing the proceedings initiated by the
appellant against the respondents. We are
also not impressed by the argument that as
the civil suit was pending in the High Court,
the Magistrate was not justified to proceed
with the criminal case either in law or on the
basis of propriety. Criminal cases have to be
proceeded with in accordance with the
procedure as prescribed under the Code of
Criminal Procedure and the pendency of a
civil action in a different court even though
higher in status and authority, cannot be
made a basis for quashing of the
proceedings."
13. The Hon'ble Supreme Court, tellingly, in a similar
case where allegations of criminality arose during the
course of arbitration proceedings and where the parties
approached the Hon'ble High Court invoking its powers
under S. 482 of the Cr.P.C., held in Trisuns Chemical
Industry v. Rajesh Agarwal and Ors.11 that:
"9. We are unable to appreciate the reasoning
that the provision incorporated in the
agreement for referring the disputes to
arbitration is an effective substitute for a
criminal prosecution when the disputed act is
an offence. Arbitration is a remedy for
affording reliefs to the party affected by
Supra.
(1999) 8 SCC 686
breach of the agreement but the arbitrator
cannot conduct a trial of any act which
amounted to an offence albeit the same act
may be connected with the discharge of any
function under the agreement. Hence, those
are not good reasons for the High Court to axe
down the complaint at the threshold itself.
The investigating agency should have had the
freedom to go into the whole gamut of the
allegations and to reach a conclusion of its
own. Pre-emption of such investigation would
be justified only in very extreme cases as
indicated in State of Haryana v. Bhajan
Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri)
426] ."
In a similar light, the Hon'ble Apex Court in Lalmuni
Devi v. State of Bihar12, observed that;
"8. There could be no dispute to the
proposition that if the complaint does not
make out an offence it can be quashed.
However, it is also settled law that facts may
give rise to a civil claim and also amount to an
offence. Merely because a civil claim is
maintainable does not mean that the criminal
complaint cannot be maintained. In this case,
on the facts, it cannot be stated, at this prima
facie stage, that this is a frivolous complaint.
The High Court does not state that on facts no
offence is made out. If that be so, then merely
on the ground that it was a civil wrong the
criminal prosecution could not have been
quashed."
(2001) 2 SCC 17
A similar fact situation was also ensconced in the case
of State of Orissa v. Ujjal Kumar Burdhan13,
wherein the Hon'ble Supreme Court observed;
"14. Further, the impugned order also notes
that in view of the arbitration agreement
between the agent and the Government, all
the alleged violations fell within the purview
of the Arbitration and Conciliation Act, 1996
and therefore, the respondent could not be
held liable for any criminal offence. This
observation is against the well-settled
principle of law that the existence of an
arbitration agreement cannot take the criminal
acts out of the jurisdiction of the courts of law.
15. On this aspect, in S.W. Palanitkar v. State
of Bihar [(2002) 1 SCC 241 : 2002 SCC (Cri)
129] , this Court has echoed the following
views: (SCC p. 250, para 22)
"22. Looking to the complaint and the
grievances made by the complainant
therein and having regard to the
agreement, it is clear that the dispute and
grievances arise out of the said
agreement. Clause 29 of the agreement
provides for reference to arbitration in
case of disputes or controversy between
the parties and the said clause is wide
enough to cover almost all sorts of
disputes arising out of the agreement. As
a matter of fact, it is also brought to our
notice that the complainant issued a
notice dated 3-10-1997 to the appellants
invoking this arbitration clause claiming
Rs.15 lakhs. It is thereafter the present
complaint was filed. For the alleged
breach of the agreement in relation to
commercial transaction, it is open to
Respondent 2 to proceed against the
4 SCC 547
appellants for his redressal for recovery
of money by way of damages for the loss
caused, if any. Merely because there is
an arbitration clause in the agreement,
that cannot prevent criminal prosecution
against the accused if an act constituting
a criminal offence is made out even prima
facie.""
From the aforesaid discussion, it therefore emerges
that prosecution in criminal law is permissible in law
in the event when an offence is committed in
pursuance to a contractual agreement/commercial
transaction. The filing of a civil suit or invoking the
arbitration clause in the contract by a party is not a
bar for filing a criminal complaint before a Court of
law.
14. In the present case, the main issue underlying
three of the four impugned criminal complaints, i.e.
ICC Case No.33 of 2017, ICC Case No.74 of 2017 and
ICC Case No.57 of 2018 revolves around allegations of
forgery and fabrication of ground level books and
measurements by the present Petitioners to create an
alternative final bill than the one agreed to by and
between the parties as well as illegal encashment of the
bank guarantees so as to cause wrongful loss to the
Complainant Company while simultaneously causing
wrongful gain to the Opposite Parties including the
present Petitioners.
15. In this regard, we may refer to the events that had
transpired giving rise to such an allegation. Upon the
alleged unilateral termination of the contracts of the
Complainant Company, the Complainant Company
was invited to conduct a joint verification of the work
done till 31.01.2013 and measure the materials of the
Complainant Company that remained at the work site
of Derang Power Plant. The said verification/inspection
was attended by representatives of M/s JITPL, the
Complainant Company and M/s Currie & Brown. At
the end of the verification which was recorded in
various ground level books, a final bill was prepared
and submitted by the Complainant Company
amounting to Rs.1.53 Crores. The same was attested
by the representatives of all three companies present
there. After such a final bill was submitted, the
Complainant Company vacated the work site. However,
M/s JITPL only made a payment of Rs.92.25 lacs and
did not make any payment for the remainder amount
of about Rs.60.8 lacs. Despite multiple requests and
reminders, such payment was not received and
therefore, the Complainant Company invoked
arbitration. During the course of the arbitration
proceedings, "Document No.1" containing details of the
joint verification and ground level books was submitted
on the basis of which the final bill was prepared. It was
at this point that M/s JITPL filed "Document No 2" and
"Document No.3" whereby the specifications of the
verification, the ground level measurements as well as
the conditions of performance of the contracts were all
substantially altered. According to M/s JITPL, the final
bill was revised after the measurements were revised
and the final bill in their records was for Rs.92.25 lacs
only, which had been cleared. This was strongly
disputed by the Complainant Company who had no
knowledge of any revision or alternation being made to
the final bill or measurements. It was the Complainant
Company's submission that if at all any such changes
had been made; the same should have been brought to
the notice of the Complainant Company at the relevant
time and could not have occurred unilaterally behind
the Complainant Company's back. As such, the final
bill and all ancillary documents presented by M/s
JITPL were disputed to be forged and fabricated and
the Tribunal was urged to disregard them as they did
not bear any evidentiary value. This Court's attention
was then drawn to the relevant portion of the Arbitral
Award dated 21.02.2017 which deals with the veracity
of the documents presented by M/s JITPL. The
relevant observations of the learned Tribunal are
reproduced hereunder:
"426. In this connection it would be noticed
that although measurement book and level
books have been brought on records, the
Claimant has pointed out that the same had
been amended without giving any opportunity
to the Claimant."
"427. This Tribunal is of the opinion that the
measurement and level books should not be
amended and if any amendment is carried
out therein, the same should be signed by all
concerned, so that it may become a part of the
joint measurement. However, it is not denied
or disputed that quantities of the work done
are calculated on the basis of level books and
thus, integrity thereof should have been
maintained so that the measurements could
have been verified. The level books filed by
the Respondent contain many corrections
without any endorsements."
"428. Had some officer of M/s Currie and
Brown been examined, he could have been
questioned with regard to any mistake which
had been found in the level books. Non-
examination of any officer of M/s Currie &
Brown speaks a volume."
"429. As indicated hereto before, the
Respondent, while purporting to make
corrections in the final bill did not assign any
reasons no has examined any competent
witness including a representative of M/s
Currie and Brown to show why the same was
done or found to be necessary."
"453. It is not in dispute, that before effecting
such deductions, the Claimant has not been
given any opportunity of hearing by the
Respondent. No reason has been assigned as
to why the same has been done."
"455. Even the other parts of the bill were
reduced without giving an opportunity of
hearing to the Claimant and/or without
assigning any reason. No material has been
bought on record to show that such
deductions are otherwise justified."
"456. It appears from the records that so far
as joint measurement is concerned, the same
was conducted between 5.2.2013 to 23.
3.2013 whereafter Quartz left the site which
according to CW1, [See question No 282 and
its answer] the Respondent was unilaterally
taking decisions as regards to the next step to
be taken."
"457. The Respondent although has itself
produced the documents certified by M/s
Currie and Brown, curiously it called upon the
Claimant to produce the said documents"
"458. In this connection it is pertinent to
mention that the Respondent despite not
having been called upon to do so sought to file
29 original level books only for the purpose of
confronting CW1. Why the said documents
were not filed before the oral evidence began
has not been explained. The Claimant did not
get an opportunity to properly inspect the
documents and adduce his evidence with
regard thereto."
"459. Despite opportunities, the Respondent
did not examine any site Engineer nor did it
examine the concerned officers of M/s Currie
and Brown, which in the facts and
circumstances of the case, it was obligated to
do."
"460. Adverse inference must, therefore, be
drawn against the Respondent. Moreover, the
burden of proof to justify the deductions made
from a bill which bear the signature of both
the parties to the dispute as also M/s Currie
and Brown was on the Respondent. It failed
to discharge the said burden."
"461. Furthermore, the corrections made in
the bills and/or the level books being not
authenticated and having not been proved in
accordance with law, no reliance can be
placed thereupon."
"464. The Respondent had prepared its own
final bill two weeks later. RW-2 has not made
any statement before this Tribunal as to the
reasons for doing so, nor any material has
been brought on record to show the legality,
justifiability or correctness thereof."
"471. As noticed hereto before, the alternative
final bill prepared by M/s Curie and Brown /
the Respondent cannot be said to have been
proved inter alia on the premise that it had
used wrong figures.
"473. As M/s Currie and Brown made
calculations on the basis of a wrong figure
and it was not summoned / examined despite
being called upon to do so by the Claimant/ it
cannot be said that the alternative bill
prepared by it, can otherwise be relied upon;
particularly in view of the fact that at no point
of time the Claimant was informed that its
calculations of various jobs done by it, in the
final bill was wrong."
"484. It may be pertinent to note that the
Respondent has not examined either Mr.
Sailesh or the representative of M/s Currie
and Brown to establish as to under what
circumstances the purported corrections have
been made, despite the quantities of the work
executed by the Claimant bear the signature
of all concerned."
It is with such a backdrop of findings that the Learned
Tribunal finally recorded as follows:
"485. The Claimant has filed an application
alleging forgery on the part of the Respondent
in so far as the level books are concerned."
16. It is evident from the above that even when the
Learned Tribunal attempted to adjudicate the
correctness and reliability of the documents produced
by M/s JITPL, it found itself unable to rely on the same
given the fact that the documents failed on the twin
parameters of reliability and trustworthiness. The
manner in which the alterations were made did not
inspire the confidence of the learned Tribunal and
given the Complainant Company's allegation of forgery
and fabrication, the Tribunal found itself pressed to
discredit the documents so produced by M/s JITPL. It
is pertinent to note here that in the criminal petitions
filed henceforth by the Complainant Company which
are under challenge here, it is these very documents
which are alleged to be forged and fabricated thereby
leading to the Complainant Company invoking criminal
prosecution against the present Petitioners for the
same.
17. It is pertinent to note here that any alteration
made to the measurements of the Complainant
Company's work done at the end on the site of the
Derang Power Plant would also inescapably result in
the alteration of the work level from which M/s SMMPL
would begin its work. Therefore, it was submitted by
the Learned Counsel for the Complainant Company
that M/s SMMPL has actively connived and played an
integral role in the cheating, misappropriating and
causing wrongful loss to the Complainant Company as
it stood to directly benefit from the perpetration of
such illegal acts.
18. Also in this regard pertaining to the involvement of
Mr. Shyam Sunder Jindal, this Court's attention is
drawn to submissions made by the learned Counsel for
the Complainant Company whereby he submits that
Mr. Shyam Sunder Jindal in the Vakalatnama filed by
him before the Learned SDJM, Talcher in ICC Case
No.74 of 2017, ICC Case No.57 of 2018 and ICC Case
No.44 of 2019 has referred to himself as "Chairman" of
M/s JITPL. Furthermore, he has referred to himself as
"Chairman" of the said Company even in the
Application under Section 205 of Cr.P.C. filed before
the learned SDJM, Talcher in ICC Case No.74 of 2017
seeking dispensation with his personal appearance
during trial. Apart from this, it is also submitted that
Mr. Shyam Sunder Jindal in an attempt to draw
attention to himself and to remain in the shadows
would consistently sign on documents of M/S JITPL
as "No.1" when granting approvals or making
decisions. The very fact that there has been a
contradictory stand taken on behalf of Mr. Shyam
Sunder Jindal before the Court below while filing the
Vakalatnamas and application wherein he has clearly
written the word "Chairman, M/s JITPL" next to his
name, and the contradictory stand taken before this
Court that he is not a Chairman, Director, employee or
shareholder in M/s JITPL casts doubt about the
truthfulness and veracity of his submissions as well as
casts a doubt on his role in the Company. The same
requires proper determination. Even otherwise, the fact
that such contradictory stands have been taken before
the courts of law makes the same dubious and
necessitates examination of the same.
19. It is trite in law as laid down by the Apex Court in
Pankaj Kumar v. State of Maharashtra14, that the
scope and ambit of powers of the High Court under
Section 482 of Cr.P.C. has been enunciated and
reiterated by this Court in a series of decisions. Thus,
it would suffice to state that though the powers
possessed by the High Courts under the said
provisions are wide but they should be exercised in
appropriate cases, i.e., ex debito justitiae, to do real
and substantial justice for the administration of which
the courts alone exist. The inherent powers do not
confer an arbitrary jurisdiction on the High Court to
act according to whim and caprice. The powers have to
be exercised sparingly, with circumspection and in the
rarest of rare cases, where the court is convinced, that
allowing the proceeding to continue would be an
affront on the process of the court or that the ends of
the justice beseech that the proceedings be quashed.
20. If the allegations are so patently absurd and
inherently improbable that no prudent person can ever
reach to such a conclusion and where the basic
AIR 2008 SC 3077
ingredients of a criminal offence are not satisfied then
the Court may interfere. Where the factual foundation
for an offence has been laid down, the courts must be
reluctant and should not hasten to quash the
proceedings even on the premise that one or two
ingredients have not been stated or do not appear to be
satisfied, if there is otherwise substantial compliance
with the requirements of the offence. No meticulous
examination of the evidence is needed for considering
whether the case would end in conviction or not at the
stage of framing of charge or quashing of charge.
Where the exercise of such power is absolutely
essential to prevent patent miscarriage of justice and
for correcting some grave errors that might be
committed by the sub-ordinate Courts even in such
cases, the High Court should be loath to interfere, at
the threshold, to throttle the prosecution in exercise of
its inherent powers. The Court is concerned primarily
with the allegations taken as a whole whether they will
constitute an offence and, if so, whether or not it is an
abuse of the process of Court culminating in injustice.
The power cannot be invoked to stifle or scuttle a
legitimate prosecution.
21. The role, the complicity and the intention of the
present Petitioners in allegedly committing the offences
leveled against them in ICC Case No.33 of 2017, ICC
Case No.74 of 2017 and ICC Case No.57 of 2018 are,
in the opinion of this Court, purely matters of trial due
to the convoluted nature of the facts and the grave
nature of the offences. The test at this point is to
simply take the allegations of the complaint as they
are, and without adding or subtracting anything, if
absolutely no offence was made out then only will this
Court be justified in quashing the FIR in exercise of its
powers under Section 482 of the Code of Criminal
Procedure.
22. I do not believe it is correct to adopt a hyper
technical approach at this stage in the proceeding and
such an endeavor may only be justified during a trial.
At any rate, it is too premature a stage for this Court to
step into stall the investigation, especially, since the
criminal complaints do make out a prima facie case
against the petitioners. Without a thorough
investigation, it is not possible or proper to hold
whether the allegations made by the complainant are
true or not.
23. However, as far as ICC Case No.44 of 2019 is
concerned, the allegations contained in them are
broadly based on the ground that the Opposite Parties
have purposely stalled the Execution Case No.158 of
2017 filed by the Complainant Company by filing an
application challenging the arbitral award under
Section 34 of the Arbitration Act and subsequently
moved an application under Section 37 of the
Arbitration Act, to prevent the attachment of
immovable and movable properties of the Derang
Power Plant towards fulfillment of the debt i.e. the
award dated 21.02.2017 of the Learned Arbitration
Tribunal which is alleged to be a prima facie abuse of
the process of law. The Opposite Parties' right to
exercise the remedies available to it under law can by
no stretch of imagination be curtailed or said to be a
dishonest exercise of the same. The Opposite Parties
are free to pursue all legal remedies available to them
to challenge the arbitral award dated 21.02.2017.
Pursuing the same would not impute any criminal
liability on them. Such an allegation is ex facie
fallacious and doesn't disclose the commission of any
offence whatsoever.
24. Thus, in view of the discussions and observations
hereinabove, CRLMC No.3184 of 2019 and CRLMC
No.3185 of 2019 are allowed and ICC Case No.44 of
2019 pending before the learned Sub-divisional
Judicial Magistrate, Angul and all proceedings
emanating therefrom are quashed.
25. However, I find no ground to interfere, at this
stage, under Section 482 Cr.P.C., with CRLMC
No.2039 of 2017, CRLMC No.343 of 2018, CRLMC
No.3059 of 2018, CRLMC No.3285 of 2018, CRLMC
No.2805 of 2019, CRLMC No.2806 of 2019 and CRLMC
No.13 of 2021. Resultantly, CRLMC No.2039 of 2017,
CRLMC No.343 of 2018, CRLMC No.3059 of 2018,
CRLMC No.3285 of 2018, CRLMC No.2805 of 2019,
CRLMC No.2806 of 2019 and CRLMC No.13 of 2021
are dismissed.
26. It is made clear that any of the observations made
hereinabove with respect to the fact of the case, shall
not come in the way or prejudicially affect the fair
trial of the present case.
27. Accordingly, all the CRLMCs are disposed of.
(S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 13th May, 2022/B. Jhankar
