Chandan Singh v. The State of Jharkhand and Another
Case Details
1 IN THE HIGH COURT OF JHARKHAND, RANCHI ---- Cr.M.P. No. 2272 of 2013 Chandan Singh -- Versus -- The State of Jharkhand and Another ---- .... Petitioner .... Respondents ---- CORAM: HON’BLE MR. JUSTICE SANJAY KUMAR DWIVEDI For the Petitioner For the State For the O.P.No.2 :- :- :- --- Mr. Pandey Neeraj Rai, Advocate A.P.P. Mr. Suraj Verma, Advocate ---- 10/06.10.2023 Heard Mr. Pandey Neeraj Rai, the learned counsel appearing
Legal Reasoning
on behalf of the petitioner and Mr. Suraj Verma, the learned counsel appearing on behalf of the O.P.No.2. 2. This petition has been filed for quashing of the entire criminal proceeding including the order taking cognizance dated 31.05.2002, in Complaint Case No.722 of 2011, pending in the court of learned Chief Judicial Magistrate, Ranchi. 3. The complaint case was filed alleging therein that the allegations leveled in the complaint, in short, are as follows:- The complainant (who has described herself as Medical Business Person and proprietor of Galaxy Agency) entered into an agreement on 04.04.2006 with the accused Company represented by the accused for handing over a flat after completion of the apartment (although, the company has not been impleaded as accused). Initial amount of Rs.1.5 Lakhs was paid leaving out rest to be paid as per schedule. Housing loan of Rs.8.5 Lakhs was obtained from LIC Housing Loan Ltd. through a tripartite agreement amongst complainant accused and LIC. The loan amount was disbursed on 09.11.2006 to the accused company by the LIC Housing Finance. EMI for almost 18 months were paid by the complainant to LIC, and thereafter the complainant got information that the rest loan amount 2 was paid by somebody else. Complainant made verification and found this to be true. Accused gave notices to the complainant dated 14.02.2008 and 30.05.2008 attributing default in payment, which shows accused’s malafide as he, having received entire amount from LIC, should have no concern about the payment of EMI. The complainant learnt that the flat booked was sold to someone else, which is violation of the agreement and the law of contract. She sent legal notice to LIC on 03.10.2008 to which reply dated 22.10.2008 was given by LIC asking her to settle the accounts with respect to the flat with the developers-accused no.1 because LIC having received its due amount is not concerned with the matter. Another legal notice dated 06.07.2010 was sent to the accused which has not been replied. So the accused should be punished because both the accused committed fraud and the flat allotted to the complainant was sold to someone else with connivance of the accused no.2 after entering into the agreement with the complainant who took housing loan and disbursed it to the accused by paying regular EMI to LIC. 4. Mr. Pandey Neeraj Rai, the learned counsel appearing on behalf of the petitioner submits that the petitioner is the Director of the company namely, M/s Aakriti Infrastructure Projects Pvt. Ltd. He submits that the present case has been filed for not delivering the flat in question to the O.P.no.2 and for recovery of the amount. He submits that the agreement was entered into between the petitioner, the O.P.No.2 and the LIC Housing Finance Limited and the flat in question was financed by the by the LIC Housing Finance Limited. The petitioner was required to give the EMI on time in terms of agreement. The tripartite agreement has also been entered into between the builder, the purchaser and the LIC Housing Finance Private Limited wherein the procedure of refunding the 3 amount is made. He submits that in view of the said procedure, finding that the O.P.No.2 was not paying the EMIs, the amount has been refunded back to the LIC Housing Finance Private Limited and the amount of refund has been brought on record by way of filing supplementary affidavit. He draws the attention of the Court to the solemn affirmation and submits that on the Court’s query, the O.P.No.2 submitted that the case has been filed for taking the possession of the flat or recovery of the money and referred to the judgment rendered in the case of Anand Kumar Mohatta and Another v. State (NCT of Delhi), Department of Home and Another, (2019) 11 SCC 706. Paragraph no.27 and 31 of the said judgment are quoted below: “27. We find it strange that the complainant has not made any attempt for the recovery of the money of rupees one crore except by filing this criminal complaint. This action appears to be mala fide and unsustainable. 31. We find that the prosecution is mala fide, untenable and solely intended to harass the appellants. We are fortified in view of the respondent not having made any attempt to recover the deposit of rupees one crore through a civil action.” 5. On the point of vicarious liability, he submits that being Director of the company, the vicarious liability cannot be fastened upon the petitioner and to buttress his argument, he relied in the case of S.K. Alagh v. State of Uttar Pradesh and Others, (2008) 5 SCC 662 and referred to paragraph nos.19 and 20, which are quoted below: “19. As, admittedly, drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offence committed by the Company itself. (See Sabitha Ramamurthy v. R.B.S. Channabasavaradhya [(2006) 10 SCC 581 : (2007) 1 SCC (Cri) 621] .) 20. We may, in this regard, notice that the provisions of the 4 Essential Commodities Act, the Negotiable Instruments Act, the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, etc. have created such vicarious liability. It is interesting to note that Section 14-A of the 1952 Act specifically creates an offence of criminal breach of trust in respect of the amount deducted from the employees by the company. In terms of the Explanations appended to Section 405 of the Penal Code, a legal fiction has been created to the effect that the employer shall be deemed to have committed an offence of criminal breach of trust. Whereas a person in charge of the affairs of the company and in control thereof has been made vicariously liable for the offence committed by the company along with the company but even in a case falling under Section 406 of the Penal Code vicarious liability has been held to be not extendable to the Directors or officers of the company. (See Maksud Saiyed v. State of Gujarat [(2008) 5 SCC 668 : (2007) 11 Scale 318] .)” 6. By way of referring above two judgments, he submits that the case of the petitioner is fully covered and in view of that the entire criminal proceeding may kindly be quashed. 7. Mr. Suraj Verma, the learned counsel appearing on behalf of the O.P.No.2 vehemently opposed the prayer made by the learned counsel for the petitioner for quashing the criminal proceeding and submits that the learned court has taken cognizance looking into the solemn affirmation and the enquiry witnesses and what has been submitted by the learned counsel for the petitioner is the subject matter of trial which may not be considered at this stage under section 482 of the Cr.P.C. He draws the attention of the Court to the notice issued by the petitioner contained at page no.49 and submits that by the said notice, although the O.P.No.2 has been called upon to pay the balance amount and he submits that the said notice suggest that the amount of the petitioner has been taken by the company and the flat in question has not been handed over. He submits that the case of possession of any property is made out under section 406 of the IPC and in view of that no case of interference is made out. He submits that the case of the petitioner is covered in light of the judgment of the Hon’ble Supreme 5 Court in the case of Amit Kapoor v. Ramesh Chander and Another, (2012) 9 SCC 460 and relied on paragraph no.29 and 30, which are as under: “29. In the light of the above principles, now if we examine the findings recorded by the High Court, then it is evident that what weighed with the High Court was that firstly it was an abuse of the process of court and, secondly, it was a case of civil nature and that the facts, as stated, would not constitute an offence under Section 306 read with Section 107 IPC. Interestingly and as is evident from the findings recorded by the High Court reproduced supra that “this aspect of the matter will get unravelled only after a full-fledged trial”, once the High Court itself was of the opinion that clear facts and correctness of the allegations made can be examined only upon full trial, where was the need for the Court to quash the charge under Section 306 at that stage. Framing of charge is a kind of tentative view that the trial court forms in terms of Section 228 which is subject to final culmination of the proceedings. 30. We have already noticed that the legislature in its wisdom has used the expression “there is ground for presuming that the accused has committed an offence”. This has an inbuilt element of presumption once the ingredients of an offence with reference to the allegations made are satisfied, the Court would not doubt the case of the prosecution unduly and extend its jurisdiction to quash in State of in haste. A Bench of this Court the charge Maharashtra v. Som Nath Thapa [(1996) 4 SCC 659 : 1996 SCC (Cri) 820] referred to the meaning of the word “presume” while relying upon Black’s Law Dictionary. It was defined to mean “to believe or accept upon probable evidence”; “to take as proved until evidence to the contrary is forthcoming”. In other words, the truth of the matter has to come out when the prosecution evidence is led, the witnesses are cross-examined by the defence, the incriminating material and evidence is put to the accused in terms of Section 313 of the Code and then the accused is provided an opportunity to lead defence, if any. It is only upon completion of such steps that the trial concludes with the court forming its final opinion and judgment. Merely because there was a civil delivering transaction between the parties would not by itself alter the status of the allegations constituting the criminal offence.” its 8. In view of the above submission of the learned counsels appearing on behalf of the parties, the Court has gone through the materials on record including the complaint and the order taking cognizance. In the complaint case itself, it is admitted that there was an agreement for sale of the flat between the petitioner- M/s Aakriti 6 Infrastructure Projects Pvt. Ltd., the O.P.No.2 and the LIC Housing Finance Private Limited. In paragraph no.8 the admission is there that only 18 months EMI was paid and in several paragraphs the LIC Housing Finance Private Limited name has been disclosed which suggest that the case is arising out of a civil dispute. The terms and conditions of the agreement between the petitioner and the O.P.No.2 are there in the said agreement which is on record and Article 19 of the said agreement, speaks of default and clause 9.2 of the same, is as under: “9.2 If the default on the part of the Purchasers in making payments of the installments exceeds the period of two months from the date it becomes due, in that event, the Purchasers in addition to the said interest of 2% (two percent) per month shall also be liable to pay penal interest at the rate of 2% two percent) per month on the outstanding amount and if such default is continued consecutively up to four months, then in such event, the Developer shall be entitled to terminate or determine this agreement and on such unit /flat or construction made shall belong to and vest with cloper as 1: absolute property of the Developer, The Purchasers shall have the only claim to get the refund of the amount deposited so far with the Developer. But the said deposited amount shall be refunded to the Purchasers by the Developer after deduction of 20% (twenty percent of the amount to be refunded, only after the execution of the necessary document and papers in the name of new purchasers by the out going Purchasers. The new purchasers shall only be selected and determined by the developer.” 9. The tripartite agreement with LIC Housing Finance Private Limited is on the record, wherein at paragraph no.14, after the cancellation of the agreement, the loan amount is said to be returned to the LIC Housing Finance Private Limited and paragraph no.14 stipulates as under: “That in the event of cancellation of the allotment by the Builder, the Builder shall at first refund to LICHFL the entire amount paid by LICHFL together with the interest, additional interest and any other charges as quoted by LICHFL by adjusting it against the money received from the borrower to the Builder. It is further specification provided and agreed that in case of cancellation of the agreement for sale, the Builder shall not nor be entitle to transfer or sell the Property to another person if such time, the entire amounts advanced by LICHFL refunded by the Builder to LICHFL. Until such time the Property shall main charged in favour of LICHFL.” 7 10. In view of aforesaid, clause-14 of the tripartite agreement, the amount has been refunded by the company to the LIC Housing Finance Private Limited which has been brought on record by way of filing supplementary affidavit by the petitioner. At best, it can be a case of deficiency in service, and for that, a separate legislation is there in the form of Consumer Protection Act, and for recovery of the amount, there are procedures of recovery by way of filing proper money recovery suit. The further vicarious liability is one of the aspect that has been dealt with by the Hon’ble Supreme Court in the case of S.K. Alagh v. State of Uttar Pradesh and Others (supra). The case of the petitioner is further strengthened in view of the judgment of the Hon’ble Supreme Court rendered in the case of Anand Kumar Mohatta and Another v. State (NCT of Delhi), Department of Home and Another(supra). The judgment relied by Mr. Suraj Verma, the learned counsel appearing on behalf of the O.P.No.2, the Hon’ble Supreme Court has considered the discharge petition under section 227 and 228 of the Cr.P.C and in that aspect, the said view was taken by the Hon’ble Supreme Court in paragraph nos.29 and 30, as referred hereinabove in the argument of Mr. Surav Verma, the learned counsel for the O.P.No.2 and that judgment is on different footing which is not helping the O.P.No.2. 11. In view of the above facts, reasons and analysis, entire criminal proceeding including the order taking cognizance dated 31.05.2002, in Complaint Case No.722 of 2011, pending in the court of learned Chief Judicial Magistrate, Ranchi is quashed. 12.
Decision
Cr.M.P. No.2272 of 2013 is allowed and disposed of. 13. Pending petition, if any, also stands disposed of. ( Sanjay Kumar Dwivedi, J.) SI/, A.F.R.