The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC NO.1811 of 2021 (In the matter of application under Section 482 of the Criminal Procedure Code, 1973). Govind Prasad Agarwal and another … Petitioners -versus- State of Orissa and another … Opposite Parties For Petitioners : Mr. B.K. Ragada, Advocate For Opposite Parties : Mr. S.K. Samal, AGA [O.P. No.1] Ms. A. Das, Advocate [O.P. No.2] CORAM: JUSTICE G. SATAPATHY DATE OF JUDGMENT :15.09.2023 G. Satapathy, J. 1. This application under Section 482 of Cr.P.C. by the petitioners seeks to quash the order passed on 03.03.2020 by the learned J.M.F.C., Jajpur Road in 1.C.C. Case No.14 of 2020 taking cognizance of CRLMC No.1811 of 2021 Page 1 of 16 offences under Sections 420/ 468/ 406/ 294/ 506/ 323/ 34 of IPC. 2. An overview of the facts involved in this case are, the petitioners are the accused persons in the complaint instituted by OPNo.2 in 1.C.C. Case No.14 of 2020 pending in the file of the learned J.M.F.C., Jajpur Road. It is stated in the complaint that OPNo.2 got a contract from Tata Steel Ltd. for civil work at Kalinga Nagar, Duburi, but the petitioner No.1 being the proprietor of Odisha Enterprises expresses his interest to do the aforesaid work and he was accordingly, assigned by OPNo.2 to complete the work on a mutual agreement embodying the terms and conditions therein with ultimate condition of sharing 9% of the profit with the complainant- OPNo.2. It is alleged in the complaint that petitioners left the work without finishing it, but they had kept two cheques vide Nos.419201 and 034141 as a security from OPNo.2-complainant by putting the CRLMC No.1811 of 2021 Page 2 of 16 amount Rs.20,00,000/- each in the two cheques, but it was agreed while entering into a contract to return the aforesaid two cheques after receiving payment in lieu of the bills and in order to harass the OPNo.2- complainant, the petitioners did not return the cheques despite being repeatedly requested and, accordingly, on 01.11.2019, the OPNo.2-complainant issued legal notice to the petitioners to return the cheques, but instead of returning such cheques, on 06.01.2020 at about 11 AM, the petitioners came to the office of OPNo.2-complainant and demanded outstanding dues by abusing in filthy language and when the OPNo.2-complainant protested, the petitioners pushed and pulled OPNo.2-complainant and threatened him to take away of his life and to institute false case to harass him. It was also alleged in the complaint that due to non-completion of work by the petitioners, Tata Steel Ltd. had blacklisted the CRLMC No.1811 of 2021 Page 3 of 16 complainant-OP No.2 depriving him from getting any work of the Company. On receipt of complaint, the learned J.M.F.C., Jajpur Road registered it vide 1.C.C. Case No.14 of 2020 and recorded initial statement of the complainant and conducted inquiry by recording the statement of witnesses under Section 202 of Cr.P.C. After being satisfied with the complaint, initial statement of complainant and statement of witnesses in an inquiry under Section 202 of Cr.P.C., the learned J.M.F.C., Jajpur Road by the impugned order, took cognizance of offences and issued process against the petitioners, who challenge the same in this application under Section 482 of Cr.P.C. 3.
Legal Reasoning
In the course of hearing of the matter, Mr. B.K. Ragada, learned counsel for the petitioners by relying upon the decision in Criminal Appeal No.463 of 2022 arising out of SLP (Crl.) No.10951 of 2019 decided on 22.03.2022 (Vijay Kumar Ghai & Ors. CRLMC No.1811 of 2021 Page 4 of 16 Vrs. State of West Bengal & Ors.) submits that the dispute between the parties primarily was civil in nature, but OPNo.2 has instituted a complaint by giving it the colour of criminal case and the learned J.M.F.C., Jajpur Road has fallen in error for taking cognizance of offences without analyzing the materials produced by the complainant. Mr. Ragada accordingly prays to quash the impugned order taking cognizance of offences. 4. On the contrary, Ms. A. Das, learned counsel appearing for Mr. A. Mishra, learned counsel for the OPNo.2 has submitted that the act of the petitioners is squarely covered under criminal liability as well as civil liability, since the petitioners and OPNo.2 had entered into an agreement, which the petitioners have no intention to keep from the very beginning giving rise to criminal consequence against the petitioners and by merely terming the act of the petitioners to be covered under civil in nature, the CRLMC No.1811 of 2021 Page 5 of 16 criminal liability arising against them cannot be wiped out by way of quashing this proceeding vis-à-vis the order taking cognizance of offences. 5. For a similar matter in Vijay Kumar Ghai (Supra), the Apex Court while discussing the ingredients of offence U/Ss.405/415 of IPC has quashed the criminal proceeding by observing in paragraphs-21, 23 to 30 and 33 as follows:- “21. This Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corporation Vrs. NEPC India Ltd. & Ors; (2006) 6 SCC 736 noticed the prevalent impression that civil law time consuming and do not remedies are adequately of the lenders/creditors. The Court further observed that:- interests protect "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." 23. Section 405 of IPC defines Criminal Breach of Trust which reads as under:- "405. Criminal breach of trust.-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or CRLMC No.1811 of 2021 Page 6 of 16 converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust". The essential ingredients of the offense of criminal breach of trust are:- (1) The accused must be entrusted with the property or with dominion over it. (2) The person so entrusted must use that property, or; (3) The accused must dishonestly use or dispose of that property or willfully suffer any other person to do so in violation, a) of any direction of law prescribing the is to be in which such trust mode discharged, or; b) of any legal contract made touching the discharge of such trust. 24. "Entrustment" of property under Section 405 of the Indian Penal Code, 1860 is pivotal to constitute an offence under this. The words used are, 'in any manner entrusted with property'. So, it extends to entrustments of all kinds whether to clerks, servants, business partners or other persons, provided they are holding a position of 'trust'. A person who dishonestly misappropriates property entrusted to them contrary to the terms of an obligation imposed is liable for a criminal breach of trust and is punished under Section 406 of the Penal Code. CRLMC No.1811 of 2021 Page 7 of 16 25. The definition in the section does not restrict the property to movables or immoveable alone. This Court in R K Dalmia vs Delhi Administration; (1963) 1 SCR 253 held that the word 'property' is used in the Code in a much wider sense than the expression 'moveable property'. There is no good reason to restrict the meaning of the word 'property' to moveable property only when it is used without any qualification in Section 405. 26. In Sudhir Shantilal Mehta Vs. CBI; (2009) 8 SCC 1, it was observed that the act of criminal breach of trust would, inter-alia mean using or disposing of the property by a person who is entrusted with or has otherwise dominion thereover. Such an act must not only be done dishonestly but also in violation of any direction of law or any contract express or implied relating to carrying out the trust. 27. Section 415 of IPC define cheating which reads as under: - "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"." The essential ingredients of the offense of cheating are: 1. Deception of any person CRLMC No.1811 of 2021 Page 8 of 16 2. (a) Fraudulently or dishonestly inducing that person- (i) to deliver any property to any person: or (ii) to consent that any person shall retain any property; or (b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were no 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. 28. A fraudulent or dishonest inducement is an essential ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating. 29. Section 420 IPC defines cheating and dishonestly inducing delivery of property which reads as under: - and Cheating dishonestly "420. inducing delivery of property.- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine." includes 30. Section 420 IPC is a serious form of cheating that lead or move inducement (to someone to happen) in terms of delivery of property as well as valuable securities. This section CRLMC No.1811 of 2021 Page 9 of 16 is also applicable to matters where the destruction of the property is caused by the way of cheating or inducement. Punishment for cheating is provided under this section which may extend to 7 years and also makes the person liable to fine. 33. The following observation made by this Court in the case of Uma Shankar Gopalika Vs. State of Bihar & Anr.; (2005) 10 SCC 336 with almost similar facts and circumstances may be relevant to note at this stage:- XXX XXX XXX “every breach of contract would not give rise to an offence of cheating and only in those cases of breach of contract would amount to cheating where there was any deception played at the very inception”. XXX XXX XXX 6. A careful perusal of the complaint would go to disclose that OPNo.2-cum-complainant being the proprietor of M/s. Jena & Swain Enterprises got a contract from the Tata Steel Plant Ltd., Kalinga Nagar, Duburi for doing civil work, but since the petitioner No.1 being the proprietor, Odisha Enterprises expresses his desire to do the work, OPNo.2 accordingly assigned the petitioners to do the said work by way of a mutual agreement between CRLMC No.1811 of 2021 Page 10 of 16 them on 18.12.2019 embodying certain conditions in the agreement including the profit sharing between them in the ratio of 9:91% and amicable settlement of disputes with mutual discussion and such agreement was notarized. It was also stated in the complaint that the petitioners had retained two cheques bearing Nos.419201 and 034141 from the complainant as a security and the petitioners had also filled up the two cheques for an amount of Rs.20,00,000/- on each cheque. According to the complainant, he had only signed the cheques, but when he asked to return the cheques, petitioner No.1 did not return such cheques. In this case, the complainant being examined had stated in his initial statement that on 06.01.2020 when he demanded, the petitioners came to his office and demanded money and abused him in obscene language and pushed him and they told him that they will harass him by lodging a case against him as they got his CRLMC No.1811 of 2021 Page 11 of 16 cheques and one Paresh Nayak saw the occurrence, but the said Paresh Nayak while being examined as PW1, in his inquiry U/S.202 of Cr.P.C., had stated the followings: “2. The occurrence took place on 06.01.2020. Complainant works as a vendor at Tata Steel & he got a civil work of Rs. 1,21,85,742 on contract basis. Complainant handed over the said work to accused as per one agreement between them on 18.12.2019. Complainant gave two numbers of cheques each of Rs.20,00,000 as security. It was agreed to return the cheques after completion of work. Accused did not finish the work for which complainant was black listed by plant. Accused did not return the cheques and a lawyers notice was sent to accused in this regard. On 06.01.2020 accused persons came to office of in obscene complainant & abused him languages and denied to return the cheque.” 7. A cumulative and comparative reading of the complaint, initial statement and statement of witnesses recorded U/S.202 of Cr.P.C. would no where disclose the ingredients of Sections 294/506/323 of the IPC. Further, the ingredients of Sections 420/468 of IPC were neither disclosed in the complaint nor in the statement of CRLMC No.1811 of 2021 Page 12 of 16 complainant/witnesses. The unambiguous facts disclose that there was an agreement between the petitioners and OPNo.2 for doing a civil contract of construction and the initial agreement do not disclose about accused persons retaining two cheques from the complainant-OPNo.2 for a sum of Rs.20,00,000/-, but the subsequent agreement dated 23.07.2019 reveals about the complainant giving two post dated cheques each for a sum of Rs.20,00,000/- in favour of Odisha Enterprises belonging to the petitioners. 8. In the circumstance of aforesaid allegations, which even do not disclose about the petitioners- accused persons practicing deception upon the complainant-OPNo.2 to cheat him and even the averments of the complaint are taken together, it would reveal that the cheques in question were handed over to the petitioners by the complainant-OP No.2 as a security for securing payment in lieu of the bills raised by the complainant. Besides, the CRLMC No.1811 of 2021 Page 13 of 16 petitioners firm namely M/S. Odisha Enterprises has instituted a complaint U/S.138 of NI Act against the company of the present complainant M/S. Jena and Swain Enterprises on 09.01.2020 and in such complaint demand notice was stated to be received on 16.12.2019 by the present complainant, who instituted the present complaint against the petitioners on 10.01.2020. Moreover, learned counsel for the complainant-OPNo.2 has admitted in his written notes of submission at paragraph-6 that though the dispute between the parties appear to be civil in nature, but the criminal liability of the accused persons/petitioners cannot be waived out by way of quashing the proceeding. It, therefore, clearly demonstrates from the complaint, initial statement of the complainant and the statement of witness recorded U/S.202 of Cr.P.C. that the disputes between the parties was civil in nature and a bare perusal of the aforesaid complaint, initial statement CRLMC No.1811 of 2021 Page 14 of 16 of the complainant and the statement of witness recorded U/S.202 of Cr.P.C. do not disclose the necessary ingredients of offence U/Ss. 420/468/406 of the IPC, meaning thereby the ingredients of no offence are made out against the petitioners and the present complaint appear to be the defence plea of the complainant-OP No.2 to the complaint instituted U/S.138 of NI Act by the petitioners’ company against OP No.2. In absence of the basic ingredients of the offences, no criminal proceeding is permissible against the petitioners and, therefore, the uncontroverted allegation as appearing against the petitioners in the complaint together with the materials placed on record disclose no offence against the petitioners. In such circumstance, the present criminal proceeding against the petitioners in 1CC No. 14 of 2020 pending before the learned JMFC, Jajpur Road is nothing, but an abuse of process of Court and liable to be quashed. CRLMC No.1811 of 2021 Page 15 of 16 9. In the result, the CRLMC is allowed on contest, but in circumstance there is no order as to cost. Consequently, the order taking cognizance of offences together with criminal proceeding against the petitioners in 1CC No. 14 of 2020 pending before the learned JMFC, Jajpur Road is hereby quashed. (G. Satapathy) Judge Orissa High Court, Cuttack, Dated the 15th of September, 2023/Subhasmita Signature Not Verified Digitally Signed Signed by: SUBHASMITA DAS Designation: Jr.Stenographer Reason: Authentication Location: High Court of Orissa Date: 15-Sep-2023 15:31:43 CRLMC No.1811 of 2021 Page 16 of 16