Pawan Kumar Jain Son Of Late Shri ... vs State Of Rajasthan
2022 Latest Caselaw 5381 Raj/2

      HIGH COURT OF JUDICATURE FOR RAJASTHAN
                  BENCH AT JAIPUR

      S.B. Criminal Miscellaneous (Petition) No. 1985/2022

1.     Pawan Kumar Jain Son Of Late Shri Maluk Chand Jain,
       Aged About 64 Years, Resident Of F-217A, 218, 219, 220
       And 230A, Mia, Desula, District Alwar (Rajasthan).
2.     Siddharth Jain Son Of Shri Pawan Kumar Jain, Aged About
       39 Years, Resident Of F-217A, 218, 219, 220 And 230A,
       Mia, Desula, District Alwar (Rajasthan).
3.     Mohnish Jain, Son Of Shri Pawan Kumar Jain, Aged About
       37 Years, Resident Of F-217A, 218, 219, 220 And 230A,
       Mia, Desula, District Alwar (Rajasthan).
                                                                  ----Petitioners
                                   Versus
1.     State Of Rajasthan, Through Public Prosecutor.
2.     Anup    Dhanuka,       Son      Of    Shri     Shubhkaran      Dhanuka,
       Director Umang Boards, Riico Kaladera, Jaipur Rural,
       Rajasthan.
                                                                ----Respondents

For Petitioner(s) : Ms. Suruchi Kasliwal, Adv. with Mr. Vikram Singh, Adv.

For Respondent(s) : Mr. Prashant Sharma, PP Mr. Pradeep Kumar Choudhary, Adv.

Mr. Karan Avdichya, Adv.

Ms. Saloni Dagur, Adv.

          HON'BLE MR. JUSTICE BIRENDRA KUMAR

Judgment reserved on                   :               27/07/2022
Date of Pronouncement                  :                02/08/2022

1. The petitioners have sought for quashing of FIR No.

0021/2022 registered at Kaladera Police Station, District Jaipur

(Rural) for offences under Section 420, 406 and 120B IPC on the

information of respondent No.2.

(2 of 8) [CRLMP-1985/2022]

2. The challenge is on the ground that no ingredients of

offences alleged are made out and a pure civil dispute is being

given the cloak of a criminal case just to put undue pressure.

3. Undisputed facts of this case are that the petitioners are

Directors of M/s. Kotsons Private Limited, Alwar whereas the

respondent company is engaged in business of manufacturing and

sale of transformers. The petitioners had approached to the

complainant, the Managing Director of respondent Company, and

the parties agreed that respondent company would supply

transformers to the petitioners' company and after sale of the

transformers to different customers, the petitioners company

would make payment of the purchased transformers within a

period of 30 days. The parties were smoothly engaged in the

dealing since more than 30 years.

4. Allegation in the FIR is that initially payments were made by

the petitioner company on time, however gradually, the petitioners

company started making payment of lesser amount with promise

to pay the remaining in future and they started putting orders for

more supply of the transformers. The petitioners company lastly

made payment in January 2020 and thereafter pretending the

effect of COVID stopped payment on one pretext or the other,

however continued placing orders for supply of transformers and

getting the supply till the end of 2021 without payment made to

the complainant company. The complainant gathered from the

market that the petitioners company is heavily indebted to

different banks and financial institutions as well as business

dealers. In spite of the aforesaid situation, the petitioners

(3 of 8) [CRLMP-1985/2022]

suppressed the aforesaid fact to the complainant and continued

placing orders for supply of transformers and getting the supply.

As a result whereof the petitioners carry dues of Rs. 1,02,19,924/-

of the complainant. The complainant asserts that if the petitioners

would have disclosed his financial bankruptcy, the complainant

would not have supplied more transformers, therefore, the

complainant was misled by the petitioners company.

5. In Mohammed Ibrahim & ors. Vs. State of Bihar & Anr.,

(2009) 8 SCC

,

the Hon'ble Supreme Court relied on earlier judgment in G.

Sagar Suri Vs. State of U.P. (2000) 2 SCC 636 and stated in

Para 8 of the judgment as follows:

"7. This Court has time and again drawn attention to the growing tendency of complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurise parties to settle civil disputes. But at the same, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes. [See: G. Sagar Suri v. State of U.P. [2000 (2) SCC 636] and Indian Oil Corporation vs. NEPC India Ltd. [2006 (6) SCC 736]. Let us examine the matter keeping the said principles in mind."

6. Learned counsel for the petitioners submits that it is not

disputed that the petitioner had sent a letter dated 18.1.2021 to

the respondent informing therein about the financial constraint of

(4 of 8) [CRLMP-1985/2022]

the company. A copy of the letter at Annexure-3, the relevant

portion is being reproduced below:

"We would like to state that we have the payment due of Rs. 63000029.85 Rs. Sixty three lakh and twenty nine rupees point eighty five only. Outstanding in our books of accounts in our Kostons Private Limited Alwar Unit as date 18.01.2021 of your company. We would like to inform you that we are currently in financial trouble due to which we are not able to make out the above payment to you presently. We are hopeful of getting funds from our customers very shortly after which we aim to clear your due outstanding as well as post clearing your outstanding we aim to also give fresh orders.

We request your kind support in the above matter."

Therefore, the petitioners were not dishonest in suppressing

about his financial condition to the respondent. Moreover by

Annexure-5, the petitioners ensured payment of Rs. 4,94,290/- on

19.01.2022 through purchaser of transformer from the petitioner

named "Bee Pee Electricals". This fact is also not disputed.

Therefore, even after institution of the FIR, the petitioners were

ensuring payment of dues of the complainant. Moreover, the

papers at Annexure R/1 produced by respondent No.2 along with

the counter affidavit finds mention the terms and conditions of the

business between the parties as follows:

"1. All disputes are subject to Jaipur jurisdiction only.

2. Our responsibility ceases on delivery of goods.

3. Interest @ 24% per annum will be charged if Bill remains beyond due date,

4. Payment of this invoices should be through A/c Payee's Cheque or Demand draft or RTGS only."

According to the learned counsel, if the petitioners could not

make payment of dues of respondent, it was the financial

(5 of 8) [CRLMP-1985/2022]

constraints due to effect of COVID, and not dishonest intention.

Moreover, civil remedy is only way for redressal of the grievance of

respondent, if any.

7. Learned counsel for the petitioners has relied upon case of

Binod Kumar & ors. Vs. State of Bihar & Anr., (2014) 10

SCC 663 for his submission that civil liability cannot be converted

into a criminal liability. Learned counsel has further placed

reliance on the judgment of Hon'ble Supreme Court in Prof. R.K.

Vijayasarathy & Anr., Vs. Sudha Seetharam & Anr., (2019)

16 SCC 739 for his submission that if prima facie ingredients of

offence are not there, the criminal prosecution would be an abuse

of the process of court, as well as for his submission that an

attempt to cloak a civil dispute with a criminal nature, despite

absence of ingredients necessary to constitute a criminal offence,

would amount to an abuse of the process of law.

8. Learned counsel for the respondent contends that if the

petitioners having not suppressed the fact that they are defaulters

of the bank and are indebted to other business concerns, then the

informant would not have further supplied transformers to the

petitioners. Therefore, there is clear case of inducement by

suppression of material facts. Moreover, a civil remedy is no bar

for criminal prosecution if the ingredients of criminal offences are

made out as in the present case.

9. Learned counsel has placed reliance on the judgment of the

Hon'ble Supreme Court in Vijayander Kumar & ors. Vs. State

of Rajasthan & Anr., (2014) 3 SCC 389

to support his contention that, a given set of facts may make out

(6 of 8) [CRLMP-1985/2022]

a civil wrong as also a criminal offence and only because a civil

remedy may also be available that itself would not be a ground to

quash a criminal proceeding. Learned counsel for the respondent

have relied on the judgment of the Hon'ble Supreme Court in

Amit Kapoor Vs. Ramesh Chander & Anr., (2012) 9 SCC

460. The case of Amit Kapoor (supra) was against the order of

framing of the charge, hence not applicable in the facts and

circumstances of the present case. Learned counsel also places

reliance on Neeharika Infrastructure Pvt. Ltd. Vs. State of

Maharashtra & ors., 2021 SCC OnLine SC 315 wherein the

challenge was to an interlocutory order of grant of interim relief in

a matter pertaining to quashing of the FIR under Section 482

Cr.P.C.

10. After hearing the learned counsel for the parties, the

question that arises for consideration is whether the ingredients of

offences alleged are made out. It is stated at the outset that the

complainant has not pleaded any entrustment of property to the

petitioners. An entrustment by necessary implication means that

the property was handed over to someone with clear

understanding that it has to be returned back as it is. It is not the

case of the complainant that any property was entrusted to the

petitioners for getting back, therefore, an important ingredient to

prove an offence of criminal breach of trust as defined under

Section 405 IPC "entrustment of property" is missing in this case,

therefore, allegation under Section 406 IPC is not made out.

11. Section 415 IPC defines word `cheating' as follows:

(7 of 8) [CRLMP-1985/2022]

"415. Cheating.--Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".

12. In Mohammed Ibrahim (supra), the Hon'ble Supreme

Court stated essential ingredients of the offence of cheating as

follows:

"(i) deception of a person either by making a false or misleading representation or by dishonest concealment or by any other act or omission;

(ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived; and

(iii) such act or omission causing or is likely to cause damage or harm to that person in body, mind, reputation or property."

13. As discussed above, the conduct of the petitioners in giving

information to the complainant that the petitioners are facing

financial hardship, however the petitioners would make payment

of the dues amount soon after recovery, clearly depicts that the

petitioners were not carrying any dishonest and fraudulent

intention. Annexure-3 would further reveal that the petitioners

had not suppressed any material fact from the complainant. The

past conduct of 40 years of the petitioners cannot be overlooked

while considering whether the petitioners had dishonest and

fraudulent intention at the inception of entering into

(8 of 8) [CRLMP-1985/2022]

understanding with the complainant. Moreover, the act of making

payment to the complainant of the due amount even after lodging

of the FIR further fortifies the claim of the petitioners that at no

point of time there was any false or misleading representation, or

any dishonest concealment of fact. Therefore, this Court finds

that the ingredients of offence of cheating is also not made out.

13. When the ingredients of main offences are not there, the

allegation of conspiracy to commit those offences would

automatically fail. Evidently, the facts and circumstances of the

case show that only pure civil dispute with stipulation of civil

remedy was there and no ingredients of criminal offences alleged

are established, hence the continuance of criminal proceedings in

pursuance of the impugned FIR, as well as FIR would amount to

an abuse of the process of the Court.

14. Accordingly, the impugned FIR as also subsequent

proceedings arising out of the said FIR stands hereby quashed and

this petition is allowed.

(BIRENDRA KUMAR),J

BRIJ MOHAN GANDHI /77/105

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