Atul Paikane v. State & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:18.12.2012CORAM:THE HON'BLE MR.JUSTICE A.ARUMUGHASWAMYCrl.O.P.No.17261 of 2012andM.P.Nos. 2 and 3 of 20121. Atul Paikane2. Sunil Paikane ... Petitioners/AccusedNo.1 and 2Versus1. State rep. by Inspector of Police, City Crime Branch, Alandur, Guindy, Chennai-16.... Respondent/Complainant2. V.Anbalagan, M.D. Varalakshmi Starch Industries (P) Ltd., 2nd Floor, No.127/1, Gandhi Road, Salem-636 007. ... Respondent/DefactoComplainantPetition filed under Section 482 of Cr.P.C. to call for therecords relating to the F.I.R. in Crime No.209 of 2010 pending onthe file of the 1st respondent and quash the same. For Petitioner..Mr.K.M.Vijayan, Sr. Counsel, for Mr. G.Sankaran.For Respondents..Mr.C.Emalias, Govt.Advocate (Crl.side) for R1.Mr.V.Gopinath, Sr. Counsel for Mr.L.Mahendran for R2. O R D E RThe petitioners are the Accused in Crime No.209 of 2010pending on the file of the first respondent and they have comeforward with this petition to quash the FIR against them. https://hcservices.ecourts.gov.in/hcservices/

2. The second respondent/Defacto Complainant filed acomplaint against the petitioners on the file of the firstrespondent. In the complaint it is alleged that MAN Rollo PowerGeneration India Private Limited, approached the complainantclaiming that MAN Rollo, Netherland who are alleged to beauthorised sellers of MAN Germany made Gas Engines in India aretheir Principal and joint venture company. By sustained effortsand canvassing they obtained purchase orders. Later, they gave afalse information that MAN Rollo, Power Generation India PrivateLimited was to be merged with M/s.Power Engineering India PrivateLimited, an Indian Company and would become non-existent. Toconvince the complainant they showed a letter purported to havebeen issued by MAN Germany to the effect that M/s. PowerEngineering India Private Limited is their dealer for sales andservice of Man Germany made Gas Engines in India. Bu dubiousmethods MAN Rollo, Power Generation India Private Limited gottransferred the purchase order and original agreement, through atripartite agreement to Power Engineering India Private Limitedhandled by the first petitioner originally signed the purchaseagreement in the capacity of authorised signatory of MAN Rollo,Power Generation India Private Limited. With full knowledge thatthey are not going to supply the Gensets, MAN Rollo, PowerGeneration India Private Limited represented by the first accusedcanvassed, gave false assurances and to gain our confidence thatMAN Rollo, Netherlands is the principal and joint venture companyof MAN Rollo, Power Generation India Private Limited, the firstaccused booked the order and collected huge money as advance fromthe complainant and made the complainant invest further for thisproject by giving false promises, assurances and information forthe supply of 8 numbers of Bio-gas gensets to be supplied in twophases, each phase for 4 numbers of gensets at a cost ofRs.3,39,72,400/- and received advance of Rs.61,60,000/- for 8gensets on 19.08.2009.3. An agreement dated 19.8.2009 was entered into betweenthe defacto complainant and a company under the name and style ofMan Rollo Power Generation India Pvt. Ltd., for supply of 8 gensetswith auxillaries. The petitioners gave false information that theboard of their company has decided M/s. Man Rollo Power GenerationIndia Pvt. Ltd., will be merged with M/s. Power Engineering Pvt.,Ltd., Goa, an Indian Company and MRPGIPL will become non existent.In this regard they entered a Tripartite agreement on 17.01.2010 atChennai by producing an authorization letter said to be issued byMan Nutzfathrzeuge AG. Germany. The complainant gave post datedcheque dated 05.04.2010 for Rs.31,72,400/- to M/s. PowerEngineering Pvt. Ltd., Goa for excise duty. After receiving thecheque the petitioners company supplied four numbers of MAN bio gasengines with accessories. Before installing the Bio Gas Gensets atSalem it was noticed that some of the vital equipments were notsupplied and due to short supply of materials the commissioning of https://hcservices.ecourts.gov.in/hcservices/ the gensets failed. The complainant gave discrepancy acceptanceletter to the concerned State Bank of India for releasing theamount by which the petitioners company received the first Letterof Credit amount of Rs.2,49,48,000/-. As per the agreement thesecond Letter of Credit 10% value of Rs.27,72,000/- has alreadybeen opened by the defacto complainant/second respondent in favourof the petitioners which encashable after successful commissioningand proving the agreed performance test by the petitioners. Sincethey have not commissioned the genset supplied they have not moneyfor this Letter of Credit. But Letter of Credit is withpetitioners. The petitioners/accused have supplied four Bio-gasgensets to the complainant company without proper equipments tocommission the project. Hence the defacto complainant sustainedhuge loss of Rs.11.62 crores which become dead capital. 4. The petitioners raised forgery and false invoices formaterials not supplied to get money from the complainant throughLetter of Credit. When the forgery of the invoice was found out,they gave false assurances and attractive guarantee with timeschedule to supply the non supplied items and caused thecomplainant recommend to the Bank to release the Letter of Creditmoney of 2.49 crores including the value of non supplied importantitems and electronics without these components the Genset isunusable and no market value. After getting money, the petitionersturned back, failed to supply the non supplied items and commissionthe project rendering the entire investment for the power projectmade by the complainant a dead capital thereby causing wrongfulloss and mental agony to the complainant and his company'sinvestors. Hence, the complainant has preferred the said complaintand pursuant to the order passed by this Court in Crl.O.P.No.27542of 2010 dated 14.12.2010, FIR was registered by the firstrespondent in Crime No.209 of 2010 against the petitioners for theoffence under Section 420 r/w 34 of IPC. Against which thepetitioners have come forward with this petition. 5. The first contention raised by the learned seniorcounsel appearing for the petitioners/accused is that by givingwrong information to the Court by saying that it is a GovernmentScheme and as if some irregularities had happened and in such a waythe Criminal Original Petition has been filed and order has beenobtained suppressing the fact and on that basis only FIR has beenregistered. Hence, on the ground of suppression of fact thecomplaint has to be thrown out. 6. The next contention raised by the learned senior counselfor the petitioners is that the petitioners have supplied Gensetsonly as per the specifications in the MOU, still there is a balanceand if at all any breach of agreement has been made, it has to bequestioned only by way of civil suit and not by way of criminalcomplaint. Hence, the complaint has to be quashed. https://hcservices.ecourts.gov.in/hcservices/

7. The first contention raised by the learned seniorcounsel appearing for the second respondent/complainant is that itis a sponsored scheme for which documents have been produced and onsatisfying with the said documents this Court has given directionto the first respondent to register the complaint. Hence, there isno suppression of material facts in this case. Hence, he praysthat the quash petition has to be dismissed. 8. The second contention raised by the learned seniorcounsel for the second respondent/complainant is that admittedlythe petitioners have received 90% of the agreed amount for supplyof Gensets. Whereas, they have supplied four Gensets withoutproper equipments to commission the project and due to short supplyof materials the commissioning of the gensets failed. Hence thedefacto complainant sustained huge loss of Rs.11.62 crores whichbecome dead capital. Hence, he prays that the petition has to bedismissed. 9. The learned Government Advocate (Crl.side) appearing forthe first respondent contended that the grounds agitated by thepetitioners to quash the FIR cannot be considered by this Court atthis stage and it has to be decided only after investigation.Hence he prays that the petition has to be dismissed. 10. Heard the rival submissions and perused the materialsplaced on record.11. The first ground agitated by the learned senior counselappearing for the petitioners/accused is that by giving wronginformation to the Court by saying that it is a Government Schemeand as if some irregularities had happened and in such a way theCriminal Original Petition has been filed and order has beenobtained by suppressing the fact and FIR has been registered.From the perusal of the records it is seen that the complainant hasfiled a petition in Crl.O.P.No.27542 of 2010 for a direction to theDirector General of Police, Tamil Nadu, Chennai to register a caseupon the complaint dated 06.10.2010 and pursue follow up action inaccordance with law and this Court by order dated 14.12.2010disposed of the said petition. It is relevant to extract para 2of the said order, which runs as follows:"2. Learned Senior counsel submits thatcrores of rupees have been cheated by the proposedaccused on a Government Project. A complaint hasbeen given to the respondents and they have notinitiated any action." On that basis, this Court has directed the Central Crime Branch,to investigate and register an FIR if any cognizable offence ismade out and it is also made clear that if the Central Crime Branch https://hcservices.ecourts.gov.in/hcservices/ feels it fit that the investigation may be handled by any otheragency, the Commissioner of Police, Chennai is directed to forwardthe complaint to CBCID. On that basis FIR has been registered bythe Central Crime Branch.12. The contention of the learned senior counsel appearingfor the second respondent/complainant is that this project is aCentral Government Project and only after commencement of theproject they are entitled to claim subsidy for their company.Hence, they mentioned it as it is a Government Project. Therefore,there is no suppression or wrong representation has been madebefore this Court. 13. From the perusal of the MOU said to have entered intobetween the parties on 19.8.2009 as well as the TripartiteAgreement entered into between the parties on 17.10.2010 it hasbeen mentioned that after commencing the power project and aftercommencing production of power the second respondent/complainant isentitled for the subsidy from the Government of India. Since it ismentioned as a Government Project, no doubt after commencing thesaid project the Government will sanction subsidy to thecomplainant. Therefore, there is no suppression or wrongrepresentation has been made by the complainant before this Court.Hence, I am of the view that there is no force in the contentionraised by the learned senior counsel appearing for thepetitioners/accused and I reject the said contention. 14. The next ground agitated by the learned senior counselappearing for the petitioners is that as per the agreement dated19.8.2009 the petitioners company supplied four numbers of MAN biogas engines with accessories to the complainant. Under suchcircumstances, after delivering the goods, there is no question ofcheating arise and if at all any breach of contract, thecomplainant has to file a civil suit for such breach of contract orfor specific performance of the agreement. In respect of the civildispute criminal complaint filed by the complainant against thepetitioners is not maintainable. Hence, he prays that thecomplaint against the petitioners has to be quashed. 15. The learned senior counsel appearing for therespondent/complainant contended that there was an agreemententered into between the defacto complainant and a company underthe name and style of Man Rollo Power Generation India Pvt. Ltd.,for supply of 8 gensets with auxillaries. The petitioners companyhad received advance of Rs.61,60,000/- for 4 gensets on 19.09.2009and the entire amount has been received by them except the amounttowards payment of tax and Excise, which alone are due, since theyhave not prepared the bill. Though the petitioners company suppliedfour numbers of MAN bio gas engines with accessories, beforeinstalling the Bio Gas Gensets at Salem it was noticed that some of https://hcservices.ecourts.gov.in/hcservices/ the vital equipments were not supplied and due to short supply ofmaterials the commissioning of the gensets failed. Under suchcircumstances, the machineries have not been commissioned. On thelast hearing they made inspection and even during such inspectionthey found that certain axially equipments for commissioning theproject has to be supplied, they have not extended the warranty andguarantee. Though the petitioners have received the entire amountand they have supplied 4 gensets at the site of the secondrespondent/complainant due to short supply of certain vitalequipments the machineires have not been commissioned. Hence, thelearned senior counsel for the second respondent/defactoComplainant prays that the petition has to be dismissed. 16. It is not in dispute that first agreement has beenentered into between the parties on 19.8.2009 and thereafter,Tripartite Agreement has been entered into between three parties on17.10.2010 wherein the complainant is the First Part, thepetitioners/accused viz., are the Second Part and the PowerEngineering (India) Private Limited is the Third Part. Thecomplainant entered into the said agreement for purchase of 8 Gensets and as per the said agreement the petitioners agreed to supplythe first 4 Gensets with Auxilliaries to the complainant by 10thDecember 2009 and the next 4 Gensets with Auxilliaries by March2010. The complainant paid an amount of Rs.61,60,000/- to MANROLLO company as advance/part payment towards its obligations underthe contract. It is relevant to extract the statement oftransaction which runs as hereunder:For 1st 4 Gas GensetsValuesTotalTotal Invoice ValueRs.3,08,00,000.00Add ED @ 10.3%Rs. 31,72,400.00Add CST @ 2%Rs. 6,79,448.00'C' Form not submitted-Diff.Rs. 35,67,102.00Total ReceivableRs.3,82,18,950.00Material short suppliedRs. 14,19,200.00Hence value of materialsuppliedRs.3,67,99,750.00AdvanceRs. 30,80,000.00Payment Received 1st LCRs.2,49,48,000.00Total ReceivedRs.2,80,28,000.00Balance to be ReceivedRs.87,71,750.00 https://hcservices.ecourts.gov.in/hcservices/

17. There is no dispute with regard to the above paymentsmade by the second respondent/complainant to thepetitioners/accused. There is also no dispute with regard to thedelivery of 4 Gen sets to the place of the secondrespondent/complainant. The dispute is only with regard to the nonsupply of some of the vital equipments which resulted thecommissioning of the work has not been commenced. Under thisjuncture, the contention of the learned senior counsel appearingfor the second respondent/complainant is that as per the firstagreement dated 19.8.2009 the second respondent/complainant hadplaced order to Man Rollo Power Generation India Pvt. Ltd., forsupply of 4 gensets with auxillaries. As per the TripartiteAgreement dated 17.10.2010 MAN Nutzfahizeuge AG, Germany hassupplied the gensets directly to the petitioners/Accused Company,instead of placing the same in the name of the secondrespondent/complainant company. Because of this, the secondrespondent/complainant company could not get the benefits ofsubsidy from the Government of India as well as the warranty fromthe MAN Nutzfahizeuge AG, Germany who has supplied the gensetsdirectly to the petitioners/Accused Company. From this it is veryclear that the petitioners have not supplied the gensets as agreedby them, in spite of entire payment has been received by them.Further, even though the petitioners have supplied four gensetsbecause of non supply of vital equipments the complainant could notcommission the machineries. The petitioners have not taken propersteps to commission the machineries. Due to that, therespondent/complainant could not get subsidy from the Government ofIndia and as well as the amount advanced by therespondent/complainant to the petitioners for purchase of gensetsalso has become idle. 18. From the perusal of the documents it seen that twoagreements have been entered and further the petitioners/accusedplaced orders on behalf of the second respondent/complainant whichresulted in the second respondent/complainant company could not getthe benefits of subsidy from the Government of India as well as thewarranty from the MAN Nutzfahizeuge AG, Germany who has suppliedthe gensets directly to the petitioners/Accused Company. Furtherone has to see the terms of the contract. Whether the MAN Rollo,Power Generation India Private Limited has been merged withM/s.Power Engineering India Private Limited, an Indian Company hasto be seen only after the investigation. This cumulative aspecthas to be appreciated only after investigation. The investigationhas to be allowed to continue further. Further, unless theinvestigation is allowed at this stage one cannot decide this.Admittedly, the petitioners/accused have received the entire amountfor the supply of 4 gensets and they have supplied 4 gensets at theplace of the second respondent/complainant. Whereas, as per theMOU gensets have not been commissioned due to non supply of some https://hcservices.ecourts.gov.in/hcservices/ of the vital equipments. Further, warranty or guarantee has notbeen given to the second respondent/complainant. That itself isprima facie sufficient to hold that the case against thepetitioners/accused is made out. Regarding the arbitration clauseand other question will not have to be allowed to continue further.Hence, I am of the view that all these small aspects have to bedecided only after investigation and at this stage this Court isnot inclined to quash the FIR against the petitioners. 19. This Criminal Original Petition is dismissed. Sincealready two years have been elapsed, the first respondent isdirected to proceed with the investigation and file final reportexpeditiously. Sd/Asst.Registrar/true copy/Sub Asst.Registrargr.To1. The Inspector of Police, City Crime Branch, Alandur, Guindy, Chennai-16.2. The Public Prosecutor, High Court, Madras. 1 cc To Mr.K.Sankaran, Advocate, SR.775511 cc To Mr.L.Mahendran, Advocate, SR.77223CRL.O.P.NO.17261 of 2012PA (CO)SRA(31/12/2012)