The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No.410 of 2022 Abinash Dash Petitioner Mr. Prafulla Kumar Rath, Advocate …. -Versus- State of Odisha and Another Opposite Parties …. Mr. S.S. Mohapatra, ASC Mr. Ramesh Chandra Swain, Advocate for O.P. No.2 CRLMC No.181 of 2022 Abinash Dash Petitioner Mr. Prafulla Kumar Rath, Advocate …. -Versus- State of Odisha and Another Opposite Parties …. Mr. S.S. Mohapatra, ASC Mr. Chittaranjan Pattanaik, Advocate for O.P.No.2 CRLMC No.411 of 2022 Abinash Dash Petitioner Mr. Prafulla Kumar Rath, Advocate …. -Versus- State of Odisha and Another …. Opposite Parties Mr. S.S. Mohapatra, ASC Mr. Ramesh Chandra Swain, Advocate for O.P. No.2 CRLMC Nos.410, 181,411 & 419 of 2022 Page 1 of 12 Abinash Dash Vrs. State of Odisha and Another And CRLMC No.419 of 2022 Abinash Dash Petitioner Mr. Prafulla Kumar Rath, Advocate …. -Versus- State of Odisha and Another
Legal Reasoning
accepted in entirety do not prima facie constitute any offence; (ii) if the criminal proceedings have been initiated with malafide or malice or wreaking vengeance or to cause harm or where the allegations are absurd and inherently improbable, under such circumstances, the proceeding may be quashed as it would be a CRLMC Nos.410, 181, 411 & 419 of 2022 Page 7 of 12 Abinash Dash Vrs. State of Odisha and Another clear abuse of process of court; (iii) power to quash should be used sparingly and with abundant caution and should be a rarity at the initial stage as it is not intended to scuttle justice at the very inception; (iv) complaint must lay down the necessary factual foundation for constituting an offence but it is not required to verbatim re-produce and explain the legal ingredient of the offence alleged in detail; (v) however merely for the fact that the complaint emanates from a commercial transaction or breach of contract for which a civil remedy is available or is being availed is not a ground by itself to disqualify criminal proceedings. Above all, the test is, whether, the allegations in the complaints disclose any criminal offence or not. 9. A dispute related to commercial transaction and breach of contract is usually civil in nature unless the contents of the complaint disclose that it has a criminal base or element. In Hridaya Ranjan Prasad Verma and Others Vrs. State of Bihar and Another (2000) 4 SCC 168, the Apex Court held that mere breach of a contract cannot be a ground for criminal prosecution as fraudulent or dishonest intention to cheat has to be shown right from the beginning of the transaction since mens rea is an essential ingredient which is to be established for proving the offence. In Sushil Sethi and Another Vrs. The State of Arunachal Pradesh and Others (2020) 3 SCC 240, the chargesheet was filed under Section 420 read with 120-B IPC with the allegations that the accused persons supplied substandard material not as per the technical specification and therein, the Apex Court held that on a bare reading of the chargesheet and FIR there is no allegation that the fraudulent or dishonest intention was there to cheat the suppliers from the very beginning of the transaction and hence, an offence under Section 420 IPC is not made out and quashed the CRLMC Nos.410, 181, 411 & 419 of 2022 Page 8 of 12 Abinash Dash Vrs. State of Odisha and Another proceeding, as a result. In Sagar Suri Vrs. State of UP (2000) 2 SCC 636, the Supreme Court expounded that care should be taken to ensure that civil disputes are not given a cloak and reminded that the criminal proceedings are not a short-cut of other remedy available under law. In Anand Kumar Mohatta and Another Vrs. State (Govt. of NCT of Delhi) 2018 SCC OnLine SC 2447, the Supreme Court while dealing with a dispute of civil in nature but a criminal case was filed observed that the case was for recovery of money, however, the complainant directly filed the complaint without taking any other steps for recovering the amount and that points towards malafide intention. Above all, in the landmark of judgment of the Apex Court in State of Haryana and Another Vrs. Ch. Bhajan Lal and Others AIR 1992 SC 604, it is held that a criminal proceeding with malicious intention or with an ulterior motive for wreaking vengeance shall have to be quashed and set aside. With regard to quashing of FIRs/complaints, the Apex Court in Medchl Chemicals and Pharma Private Limited Vrs. Biological E. Limited and Others (2000) 3 SCC 269 held that power under Section 482 Cr.P.C. to quash a complaint is an exception rather than a rule and its quashing at the initial stage must have to be treated as a rarest to the rare. In State of Andhra Pradesh Vrs. Golconda Linga Swamy and Others (2004)6 SCC 522, the Supreme Court held that FIR or criminal complaint cannot be quashed on the mere ground that it was filed with malafide intention and such interference at the initial stage is only if no offence is disclosed on a bare reading of it. With regard to independent jurisdiction, the Apex Court in Lalmuni Devi Vrs. State of Bihar and Others 2001 (1) JIC 717 (SC) and Kamaladevi Agarwal Vrs. State of West Bengal and Others AIR 2001 SC 3846, the Apex Court held that both the proceedings for criminal as well civil liabilities can be maintained CRLMC Nos.410, 181, 411 & 419 of 2022 Page 9 of 12 Abinash Dash Vrs. State of Odisha and Another at the same time, If cases are made out from the set of facts alleged. So therefore, the above are the decisions with regard to powers and limitations of the Court in exercising the inherent jurisdiction while dealing with such matters. 10. Applying the standard as set out by the Apex Court in the decisions (supra), the Court is to examine the FIRs in order to reach at a conclusion that whether in the present case, jurisdiction under Section 482 Cr.P.C. may be exercised. In all the cases, as it is revealed from the complaints which have subsequently been treated as FIRs, the allegations are in common to the effect that the petitioner being the proprietor of M/s. Ashirbad Construction received materials for different projects and in return, cleared the dues but not in full leaving the outstanding payable to the suppliers. In the above cases, as it is made to appear from the complaints, there were contracts between the parties though not in writing, in discharge of which, the complainants supplied the materials for some projects with a corresponding duty of the petitioner to pay back the dues. It is not in denial that the petitioner made payments but according to the complainants, the former failed to clear the outstanding despite being approached. In fact, payments were made by the petitioner initially and major part of the dues was cleared but despite the demands made by the complainants, he did not pay back the rest. Whether, in the present facts and circumstances of the case, it would be justified to allege bad intention of the petitioner from the inception? It is not a case that the petitioner outrightly avoided the payment of dues after supply of construction materials, etc. In fact, the Court finds from the complaints that after supply of the materials, the petitioner made payments but did not clear it entirely. No doubt, there are transactions for supply of materials, invoices have been CRLMC Nos.410, 181, 411 & 419 of 2022 Page 10 of 12 Abinash Dash Vrs. State of Odisha and Another raised but at the end since the petitioner failed to pay the outstanding dues, the complaints were filed. The Court finds that maximum of the outstanding payable by the petitioner has been cleared leaving the remainder. In such view of the matter, would it be just and proper to allege that the petitioner with bad intention from the beginning committed the mischief along with other accused with a criminal conspiracy to misappropriate the dues. Of course, the complaints do not reveal that any of the complainants ever initiated civil litigation in order to realize the outstanding dues from the petitioner but instead directly filed the same and set the criminal courts into motion. To allege that the petitioner all along acted mischievously with an intention from the very inception not to pay back the outstanding dues conspiring it with others in the given set of facts emerging from the complaints may be grossly unjustified but denying the liability and not obliging to pay back the residue with a conduct unbecoming on his part could invite criminal consequence. If the dues are not disputed and at the same time, it is not paid and avoided on some pretext or the other could well attract a criminal liability when no other issues exist between the parties. Having said that and being conscious of the legal position discussed herein above, the Court is of the view that it would not be just and proper to quash the proceedings at the threshold as everything shall depend on the conduct of the petitioner, who may be visited with criminal liability, which he cannot escape merely on the premise that the disputes emanate from contracts and if ultimately, it prima facie proves absence of any other issues involved vis-a-vis the parties not to honour the obligations thereby leaving everything open for a decision by the learned courts below at the appropriate stage. CRLMC Nos.410, 181, 411 & 419 of 2022 Page 11 of 12 Abinash Dash Vrs. State of Odisha and Another 11. Accordingly, it is ordered.
Arguments
Opposite Parties …. Mr. S.S. Mohapatra, ASC Mr. Sanjay Kumar Das, Advocate for O.P.No.2 CORAM: JUSTICE R.K. PATTANAIK DATE OF JUDGMENT:30.05.2023 1. Since the petitioner is common, all the above petitions have been clubbed together for disposal by the following order. 2. (i)CRLMC No.410 of 202: The petition under Section 482 Cr.P.C. is filed for quashing of the criminal proceeding in connection with 1CC Case No.160 of 2021 corresponding to C.T. Case No.783 of 2021 arising out of Basta P.S. Case No.351 of 2021. (ii)CRLMC No.411 of 2022: The petition is filed with a similar relief in respect of the proceeding in 1CC Case No.183 of 2021 which corresponds to C.T. Case No.784 of 2021 arising out of Basta P.S. Case No.352 of 2021. (iii)CRLMC No.181 of 2022: The petition is at the behest of the petitioner challenging the criminal proceeding corresponding CRLMC Nos.410, 181, 411 & 419 of 2022 Page 2 of 12 Abinash Dash Vrs. State of Odisha and Another to 1CC Case No.161 of 2021 and in connection with C.T. Case No.717 of 2021 arising out of Basta PS. Case No.322 of 2021. The above three cases are pending in the file of learned J.M.F.C., Basta, Balasore. (iv)CRLMC No.419 of 2022: The petitioner has approached this Court seeking quashment of the criminal proceeding in 1CC Case No.356 of 2021 corresponding to C.T. Case No.589 of 2021 of the file of learned S.D.J.M., Balasore arising out of Bamapada Industrial Area P.S. Case No.116 of 2021. 3. In fact, the challenge to the proceedings is at the instance of the petitioner is pre-dominantly on the ground that the disputes between the parties is civil in nature but the complaints were filed by giving it a criminal flavour which is, therefore, not maintainable but then the learned courts below by entertaining the same directed registration of cases at Basta P.S. and Bamapada Industrial Area P.S exercising power under Section 156(3) Cr.P.C. In CRLMC Nos.410 and 411 of 2022 corresponding to C.T. Case Nos.783 and 784 of 2021 of the file of learned J.M.F.C., Basta, the cases stand registered under Sections 417, 406 and 420 read with 34 IPC vide Basta P.S. Case Nos.351 and 352 dated 24th December, 2021 respectively. In CRLMC No.181 of 2022, a case under Section 420 read with 34 IPC has been registered against the petitioner and others, whereas, in CRLMC No.419 of 2022, Bamapada Industrial Area P.S Case No.116 was registered on 31st July, 2021 under Section 420 read with 34 IPC corresponding to C.T. Case No.589 of 2021 of the file of learned S.D.J.M., Balasore. As earlier stated, the petitioner is common in all the cases which have been filed primarily with the allegation of cheating. As revealed from the FIRs, in the aforesaid cases, the CRLMC Nos.410, 181, 411 & 419 of 2022 Page 3 of 12 Abinash Dash Vrs. State of Odisha and Another petitioner and other accused persons were obliged to pay back dues which were not obliged rather avoided and as a result, malafide and mischief was alleged. The complainants approached the courts of the local jurisdiction and filed complaints, wherein, directions were issued to register cases and accordingly, the complaints were treated as FIRs and separate cases were registered. The petitioner has alleged that disputes between him and the complainants arise out of contractual obligations and consequential payment of dues if he is liable for but the FIRs have been lodged giving it a colour of criminality. 4. Heard Mr. Rath, learned counsel for the petitioner and Mr. Mohapatra, learned counsel for the State besides Mr. Swain (CRLMC Nos.410, 411 of 2022); Mr. Pattanaik (CRLMC No.181 of 2022); and Mr. Das-2 (CRLMC No.419 of 2022) appearing for opposite party No.2 in respective cases. 5. Mr. Rath, learned counsel appearing for the petitioner in all the cases would submit that the petitioner and other accused persons while providing construction materials and other items, such as, patrol and diesel, etc. for being utilized in different projects allegedly did not pay back the outstanding dues despite being approached which was intentionally avoided, as according to the complainants, however, the disputes are with regard to contracts between the parties and for realization of whatever dues, remedy lies before the civil court but instead the complaints have been lodged in order to force or compel him to make payment and as such, the course of action which has been adopted by the complainants is an act of coercion. 6. On the contrary, the learned counsels for opposite party No.2 in respective cases, in unison, contend that the liability has been CRLMC Nos.410, 181, 411 & 419 of 2022 Page 4 of 12 Abinash Dash Vrs. State of Odisha and Another denied and the petitioner played the mischief and misappropriated the outstanding dues an hence, cognizable offences have been committed and therefore, rightly, the cases have been registered against him after the direction of the learned courts below under Section 156(3) Cr.P.C. It is submitted that the petitioner and other accused persons intentionally, with a criminal conspiracy hatched, misappropriated the money and committed criminal breach of trust. In view of such mischief of the petitioner, as according to the learned counsel for opposite party No.2, the case is well made out against him. Mr. Mohapatra, learned ASC for the State supported that contention of learned counsels for opposite party No.2 and submitted that since misappropriation is alleged with bad intention on the part of the petitioner and others not to pay back the outstanding dues and complaints after being received having been treated as FIRs and at present investigation to be pending, this Court at the threshold should not exercise the inherent jurisdiction and quash the proceedings. 7. The question is, whether, the Court should invoke jurisdiction under Section 482 Cr.P.C. and quash the criminal proceedings vis- à-vis the petitioner accepting the plea to the effect that the disputes are basically civil in nature since it relate to recovery of outstanding dues? As everyone knows, legal wrong occurs when someone’s lawful right is violated. Such act of infringement entails legal liability. When a right is taken away or breached affecting a person’s legal interest, a civil wrong results but when such wrong affects the society as a whole, it is categorized as a crime and for both the consequences, the means of redressal are different. It is very often experienced that criminal complaints are filed which are civil in nature which is brazen misuse of criminal law machinery and abuse of process of court and in such cases, CRLMC Nos.410, 181, 411 & 419 of 2022 Page 5 of 12 Abinash Dash Vrs. State of Odisha and Another inherent jurisdiction under Section 482 Cr.P.C. may be exercised to quash it. However, such exercise and extra-ordinary jurisdiction, as it has been reiterated time and again by the Apex Court, to be used sparingly and cautiously on a case to case basis. The scope of inherent power and limitations to exercise it while considering the quashing of criminal proceedings have been discussed and lucidly explained by the Supreme Court on many occasions. Despite separate procedure being laid down, criminal complaints in relation to civil disputes are filed to expedite recovery of dues and there, attempts are made to give it a criminal colour. It has been held and concluded in umpteen numbers of cases that such practice of giving civil dispute a cloak of criminal offence is nothing but a vexatious and oppressive litigation which is used as a tactic to coerce the defendant to enter into a settlement. 8. At this juncture, it would be profitable to refer to some of the prominent decisions of the Apex Court on the point under consideration. The above concern was shared in Indian Oil Corporation Vrs. NEPC India Limited and Another (2006) 6 SCC 736 by the Supreme Court observing that there is a growing tendency in business circle to convert civil disputes into criminal action and this is mainly owing to the existing perception that civil law remedy takes time and do not sufficiently protect the interest of the lenders and it is also believed that there is a possibility of imminent settlement if a person is threatened and pressurized by the initiation of criminal proceeding. The above practice has been condemned by the Apex Court and it was held that a complaint should not be entertained to exploit the process of criminal court for settling scores arising out of civil dispute. But at the same time, it is also to be borne in mind that a civil dispute CRLMC Nos.410, 181, 411 & 419 of 2022 Page 6 of 12 Abinash Dash Vrs. State of Odisha and Another may also result in criminal consequence and both the processes In D.N. can co-exist being of independent jurisdictions. Bhattacharjee Vrs. State of West Bengal and Another AIR 1972 SC 1607, the Apex Court held that if on bare perusal of the complaint, the essential ingredients of an offence alleged are absent or that the dispute is only civil in nature or that there are such patent absurdities in evidence produced that it would be a waste of time to proceed further, under such circumstances, it may be dismissed under Section 203 Cr.P.C. If there is a breach of contractual obligation, it is clearly a civil dispute. In such cases, civil remedy lies and if a criminal wrong has been committed which is punishable under law as an offence, jurisdiction of a criminal court may also be invoked. However, a civil dispute simplicitor cannot be allowed to become a criminal liability and any such attempt is required to be interfered with at any stage of the proceeding. The Supreme Court in the case of the Commissioner of Police and Others Vrs. Devender Anand and Others 2019 SCC OnLine SC 966 reiterated the same principle and acknowledged the fact that in array of cases for civil disputes, criminal law have been set into motion which amounts to abuse of process of law and in such cases, it would be justified to quash the proceedings in exercise of inherent jurisdiction. In Indian Oil Corporation (supra), some of the prominent guidelines which govern the quashing of the criminal proceedings in cases which are civil in nature have been outlined which are as follows: (i) if the allegations in the complaint are taken at their face value and
Decision
12. In the result, the CRLMCs stand dismissed, however, with the observations made herein above. (R.K. Pattanaik) Judge TUDU Signature Not Verified Digitally Signed Signed by: THAKURDAS TUDU Reason: Authentication Location: OHC,CTC Date: 05-Jun-2023 11:21:19 CRLMC Nos.410, 181, 411 & 419 of 2022 Page 12 of 12