Another v. State of NCT of Delhi & Another
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr.M.P. No. 2834 of 2022 ------ 1. Bhagaban Mohapatra Construction & Engineers Pvt. Ltd. through its Director Saubhagyabati Mohapatra 2. Bijay Bharat Mahapatra @ Mohapatra 3. Rajshree Mohapatra Petitioners .... …. .... Versus 1. The State of Jharkhand 2. Karnjeet Kumar Singh .... .... .... Opp. Parties
Legal Reasoning
out a prima facie case that accused had fraudulent of dishonest intention at the time of making the promise. Deception is the essence of the offence of cheating which is not in the case of criminal misappropriation. In case of later there may be deception incidentally but that is not main ingredient of the offence. There is a difference between misappropriation and the mere non-fulfillment of legal obligation. Entrustment and misappropriation are two basic ingredients of the offence of criminal breach of trust. Mere breach of contract is not criminal, unless it was at the same time dishonest and was manifested by some overt act. In every criminal breach of trust a breach of contract is implicit. The determining factor to impute criminality in a particular case is whether the proceeded against had acted dishonestly. The distinction between cheating and breach of contract lies in the intention of the accused at the time when the inducement was made. It has been held in Hridaya Ranjan Prasad Verma v. State of Bihar; (2000) 4 SCC 168 that mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. It is the intention which is the gist of the offence. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed. 7. The present case involves a dispute between the sub-contractor and the contractor. Indisputably, there was time overrun for which the contract was 3 terminated. The complainant is aggrieved by the withholding of payment of the work already executed for which he has already invoked the jurisdiction of the MSME Council for the said amount. Whether the subcontract was permissible within the term of contract or not, or the necessary permission was taken from the principal of contractor or not, are peripheral issues, which cannot perse give rise to criminal liability. It is too stretched logic to say that it reflected the intention of deception from the inception. The complaint entered into work agreement and the trouble arose after termination of the work order on account of delay in execution of the contract. It does not appeal to logic, reason and common sense that the petitioner company had anything to gain by issuing a work order in favour of a party, which was not permitted to work, and thereby jeopardizing the execution of the contract awarded in its favour by the principal contractor. If such civil disputes regarding payment between contractor and sub-contractor is permitted to assume the form of criminal cases, then every such dispute will give rise to a criminal case. As discussed above, it has been held in Vijay Kumar Ghai v. State of W.B.; (2022) 7 SCC 124, “25. This Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corpn. [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] noticed the prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. The Court further observed that : (Indian Oil Corpn. case [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] , SCC p. 749, para 13) “13. … Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged.” This Court is of the view that materials on record do not disclose criminality and the prima facie case with regard to the offence alleged will not be made out. The prosecution in the instant case shall be an abuse of the process of court. The impugned order dated 10.6.2022 is set aside and the entire criminal prosecution arising out of Complaint Case No.3606 of 2021, is set aside. Criminal Miscellaneous Petition is allowed. Anit (Gautam Kumar Choudhary, J.)
Arguments
CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY For the Petitioners For the State For the O.P. No.2 ------ Order No.06 Dated : 24.01.2023 : Mr. Kaustav Roy, Advocate : Ms. Priya Shrestha, A.P.P. : Mr. Rahul Kumar, Advocate Instant criminal miscellaneous petition has been filed for quashing the entire criminal proceeding arising out of Complaint Case No.3606 of 2021 registered under Sections 406 & 420 of the Indian Penal Code pending in the Court of Judicial Magistrate, 1st Class, Jamshedpur. 2. Petitioner No.1 is the Company and petitioner Nos.2 and 3 are its Directors. Opposite party No.2 is the complainant. Work order dated 14.06.2020 was issued for construction of residential building and infrastructure services in refinery township for Indian Oil Corporation Ltd. at Paradip, Odisha to the complainant by the petitioner company. 3. The main argument on behalf of the petitioners is that the work was to be completed within ten months from the date of work order which was not completed and consequently, the work order was terminated by e-mail dated 09.05.2021. 4. It is submitted by Mr. Rahul Kumar, learned counsel on behalf of O.P. No.2 that the main allegation of the complainant is that there was an intention from the very inception on the part of the petitioners, which will be evident from the fact that necessary approval for allocation of the sub-contract was to be taken from the principal contractor IOCL by the petitioner, which was never obtained. On account of petitioners’ not getting requisite approval from the IOCL, the complainant was prevented from even entering into the work area and due to the said obstructions the work could not be completed within the stipulated time. The complainant had invested huge amount to the tune of Rs.33,00,000/- and subsequent investments were made and because of the non-compliance of the pre-condition by the petitioners, the delay occurred in execution of the work order. It is further submitted that even in cases of civil law where criminal allegation is involved, the petitioner has remedy for invoking criminal remedy also. The offences are fully made out in the impugned order. The learned Court below has assigned specific and robust reasons for taking cognizance in the instant case. Reliance is placed on Priti Saraf & 2 Another Versus State of NCT of Delhi & Another; 2021 SCC OnLine SC 206. 5. It is submitted by the learned counsel on behalf of petitioners that absence of approval by Principal Contractor, was not the proximate cause for breach of contract. This will be apparent from the fact that the work commenced as per the agreement on 1st August, 2020 and it proceeded uninterruptedly till its termination on 09.05.2021. It is further submitted that the complainant has already invoked the jurisdiction of MSME for payment of the amount due and in pure case of civil law for breach of criminal jurisdiction of the Court is invoked which is not permissible in view of ratio decided in the case of R. Nagender Yadav Versus The State of Telangana & Another passed in Cr. Appeal No.2290 of 2022 wherein in para 17 it has been held that: “While exercising its jurisdiction under Section 482 of the Cr.P.C., the High Court has to be conscious that this power is to be exercised sparingly and only for the purpose of prevention of abuse of the process of the Court or otherwise to secure the ends of justice. Whether a complaint discloses a criminal offence or not, depends upon the nature of the act alleged thereunder. Whether the essential ingredients of a criminal offence are present or not, has to be judged by the High Court. A complaint disclosing civil transaction may also have a criminal texture. But the High Court must see whether the dispute which is in substance of civil nature is given a cloak of a criminal offence. 6. In order to make out a case of cheating, there should be material to make