The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No. 4749 of 2023 Bijoy Bhusan Mohapatra …. Petitioner Mr. M. Mishra, Advocate -versus- State of Odisha & another …. Opp. Parties Mr. D. Biswal, ASC CORAM: JUSTICE CHITTARANJAN DASH Order No. ORDER 18.12.2023 02. 1. Heard learned counsel for the Petitioner and the State. 2. By means of the present application, the Petitioner seeks the indulgence of this Court challenging the order dated 16.05.2023 passed by the learned J.M.F.C.1 (Cog Taking) Bhubaneswar in C.T. Case No. 5980 of 2020 wherein the learned court framed the charge against the Petitioner in the offence U/s. 406/409/418/420/427 of IPC. 3. The back ground facts of the case are that initially Janmejay Mohapatra filed 1 C.C. No 2819/2020 against the petitioner and pro forma O.P. No. 2 alleging that he is the owner of the landed property pertaining to the plot no 573, khata no 604/392, conversion khata No. 604/1096 and plot No. 577, khata No. 141, conversion khata No. 604/1106 situated in mouza - Bhubaneswar Sahar unit- 36, Rajrani. Page 1 of 19 // 2 // The petitioner is the Director of proforma O.P. No. 2 which is a company registered under the companies Act, 1956. Being the Director he is responsible for all the affairs of the company. The accused company dealing with development of land by constructing multi stored Building for the purpose of selling it to intending purchasers. The Petitioner representing the proforma O.P. No.2 had approached the Complainant to induct it for development of the above property of the Complainant by constructing multi storied building on sharing basis. The petitioner assured to the Complainant that after construction of the house, the Complainant will get his share from the house. Believing the petitioner, the Complainant on good faith agreed to allow the petitioner for construction of apartment over his land. Accordingly, an agreement was executed on 19.04.2011, wherein the terms and conditions were fixed under Annexure -2. As per the terms and conditions of the agreement, the petitioner was to complete the entire construction work and after completion, the Complainant would get 35% of the super built-up area together with impartible and indivisible share in the land. The Complainant executed power of attorney in favour of the petitioner on 25.10.2011. A supplementary agreement was also executed on 19.12.2012 under Annexure-3. According to the Petitioner, he proceeded with the construction of the apartment with total built up area of 15235 Sq. ft. akin to the terms of the agreement. The complainant being the owner to be entitled to get 35% of the total built up area that comes to 3603 sq. ft. While executing the supplementary agreement the petitioner had paid an amount of Page 2 of 19 // 3 // Rs.4,20,000.00/- to the Complainant which is the cost of 150 sq. ft. built up area at the rate of Rs 2, 800 per square feet. After completion of the apartment, the petitioner handed over a three bed room flat measuring 1528 sq. ft. and another two bed room flat measuring 1205 sq.ft. to the complainant and taking advantage of old age and innocence of the Complainant was falsely represented to the Complainant to have complied the terms of the agreement. After compliance of the same the complainant with a retaliatory attitude filed a complaint on the basis of false claim under Annexure-4. 4. It is submitted by learned counsel for the Petitioner that the averment made in the complaint petition is absolutely a dispute of civil nature and is not maintainable in criminal proceeding even if the agreement is of the year 2011/2012. According to learned counsel for the Petitioner, as per limitation Act he ought to have filed the suit within three years from the date of cause of action in order to claim any benefit to which he is entitled but after lapse of eight years such complaint has been filed making false allegations which is not sustainable in the eye of law. The learned counsel referred to the decision of the Apex court in the matter of Sha vrs. The state of karnatak (2021) & State of Haryana vrs. Bhajanlal (1 SCC 335,1992). The learned counsel further reiterated that the matter in controversy is a subject matter of civil suit and the present complaint having been filed after eight years of the cause of action has been filed only with an intention to harass the Petitioner and the cognizance taken on the basis of the complaint by the learned court below is not sustainable in the eye of law. Page 3 of 19 // 4 //
Legal Reasoning
16. This Court in R.P. Kapur Vs. State of Punjab, (1960) 3 SCR 388 summarized categories of cases where inherent the power can and should be exercised proceedings:- to quash (i) Where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction; (ii) Where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged; (iii) Where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge. 17. This Court in Inder Mohan Goswami & Anr. Vs. State of Uttaranchal & Ors. (2007) 12 SCC 1 observed:- “27. The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. The court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court should normally Page 4 of 19 // 5 // refrain from giving a prima facie decision in a case where all the facts are incomplete and hazy; more so, when the evidence has not been collected and produced before the court and the issues involved, whether factual or legal, are of such magnitude that they cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceedings at any stage" 18. In Indian Oil Corpn. v NEPC India Ltd. & Ors., (2006) 6 SCC 736 a two-judge Bench of this Court reviewed the precedents on the exercise of jurisdiction under Section 482 of the Code of Criminal Procedure 1973 and formulated guiding principles in the following terms: “12… (i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint is warranted while examining prayer for quashing of a complaint. (ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala Page 5 of 19 // 6 // fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable (iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution. (iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. 19. A two-Judge Bench of this Court in State of Madhya Pradesh Vs. Awadh Kishore Gupta & Ors. (2004) 1 SCC 691 made the following observation :- "11. The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. High Court being the highest Court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are Page 6 of 19 // 7 // incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. In proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under Section 482 of the Code." 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 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, Page 7 of 19 // 8 // which he has made touching the discharge of such trust, or wilfully 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 wilfully suffer any other person to do so in violation, (a) of any direction of law prescribing the mode in which such trust is to be 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 Page 8 of 19 // 9 // liable for a criminal breach of trust and is punished under Section 406 of the Penal Code. 25. The definition in the section does not restrict the property to movables or immoveable alone. This Apex Court in RK 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, Interalia 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 Page 9 of 19 // 10 // 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 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: - “420. Cheating and dishonestly 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 Page 10 of 19 // 11 // 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." 30. Section 420 IPC is a serious form of cheating that includes inducement (to lead or move someone to happen) in terms of delivery of property as well as valuable securities. This section 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. 31. To establish the offence of Cheating in inducing the delivery of property, the following ingredients need to be proved:- 1. The representation made by the person was false. 2. The accused had prior knowledge that the representation he made was false. 3. The accused made false representation with dishonest intention in order to deceive the person to whom it was made. 4. The act where the accused induced the person to deliver the property or to perform or to abstain from any act which the person would have not done or had otherwise committed. 32. As observed and held by this Court in the case of Prof. R.K. Vijayasarathy & Anr. Vs. Sudha Seetharam & Anr., (2019) 16 Page 11 of 19 // 12 // SCC 739 the ingredients to constitute an offence under Section 420 are as follows:- i) a person must commit the offence of cheating under Section 415; and ii) the person cheated must be dishonestly induced to; a) deliver property to any person; or b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. Thus, cheating is an essential ingredient for an act to constitute an offence under Section 420 IPC. 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:- "6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of the complaint any criminal offence whatsoever is made out much less offences under Section 420/120- B IPC. The only allegation in the complaint petitioner against the accused person is that they assured the complainant that when they receive the insurance claim amounting to Rs. 4,20,000, they would pay a sum of Rs. 2,60,000 to the complainant out of that but the same has never been paid. It was pointed out that on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may take steps for moving the consumer forum in relation to the claim of Page 12 of 19 // 13 // Rs.4,20,0000/-. It is well settled that 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. If the intention to cheat has developed later on, the same cannot amount to cheating. In the present case, it has nowhere been stated that at the very inception that there was intention on behalf of the accused person to cheat which is a condition precedent for an offence under 420 IPC. "7. In our view petition of complaint does not disclose any criminal offence at all much less any offence either under Section 420 or Section 120-B IPC and the present case is a case of purely civil dispute between the parties for which remedy lies before a civil court by filing a properly constituted suit. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of court and to prevent the same it was just and expedient for the High Court to quash the same by exercising the powers under Section 482 Cr.P.C which it has erroneously refused." 38. Respondent No. 2 filed a complaint u/s 156(3) Cr.P.C on 06.06.2012, wherein his prayer for registration of an FIR was rejected vide order dated 28.02.2013 by the MM, Tis Hazari Court, immediately after which he filed his complaint on 28.03.2013 at P.S Bowbazar, Calcutta. The timeline of filing complaints clearly indicates the malafide intention of Respondent No. 2 which was to simply harass the petitioners so as to pressurise them into shelling out the investment made by Respondent No. 2. Page 13 of 19 // 14 // Malafide intention of Respondent No.2 is culled out from following facts:- 1. At the time of filing of complaint dated 31.03.2013 at PS Bowbazar, Respondent No. 2 did not disclose about the filing of two complaints at Delhi against the appellants. 2. After filing of closure report by the IO Bowbazar PS dated 04.03.2014, Respondent No. 2 filed a protest petition before the CMM, Kolkata where the material fact of two complaints was completely suppressed. 39. In the complaint no. 306/1/2012 dated 06.06.2012 registered before the MM, Tis Hazari Court, New Delhi, Respondent No. 2/complainant stated that:- "(c) That, thereafter Mr. Vijay Kumar Ghai and Mr. Mohit Ghai started visiting the office of the complainant company every now and then in order to persuade the complainant company to invest in their company. It is pertinent to mention herein that they stated the complainant company that the retail business of the apparels under the PRIKNIT brand through a network of exclusive brank outlets was witnessing a growth.." 10. That it is submitted that this court has jurisdiction to try and entertain the matter as the complainant company is situated within the jurisdiction of this court. Moreover, all the business activities/transactions are being regulated and controlled at Delhi. Furthermore, the complaints filed by the complainant company are Page 14 of 19 // 15 // lying before the concerned police station, which also falls within the jurisdiction of this Hon'ble Court. This clearly demonstrates that the jurisdiction has been created in Delhi as the Appellants used to visit Respondent No. 2 in order to persuade them to invest in their company and special emphasis can be laid on the fact that Respondent No. 2 himself accepted/agreed to the fact that all the transactions took place in Delhi. Therefore, registering a complaint in Kolkata is way of harassing the appellant as a complaint has already been filed in Delhi with all the necessary facts, apart from the jurisdictional issue at Kolkata. 40. The MM, Tis Hazari while dismissing the application under Section 156(3) Cr.P.C categorically observed that:- “.....In case the complainant had suffered any loss on account of the same, the necessary civil remedy lied in the form of damages, compensation and recovery. In case of breach of any term or condition of the contract, the necessary proceedings for injunction or specific performance can be initiated. But that by itself would not mean that the accused had misappropriated the amount of complainant for a year. There is nothing to show any conversion or misappropriation of money as the shares had been allotted subsequently. The parties have themselves agreed on clauses as to failure to honor their commitments providing for levy of interest on delayed payments. Page 15 of 19 // 16 // There is no prima facie element of deception or dishonest inducement or misappropriation or conversion or entrustment or forgery in this case. There is no requirement of police interference in this case. Even otherwise, the evidence in the present case is well within the reach of the complainant itself and it is well aware of the identity of accused persons and no investigation of technical nature is required which could warrant police intervention. The necessary record is withing the possession of the complainant itself and the same can always be proved on record by examining the witnesses. There is no necessity of any custodial interrogation at this stage and nothing identifiable is to be recovered from anyone. In these circumstances, I do not deem it appropriate to exercise my discretion and get the FIR registered against the accused persons, especially when there is no necessity for police interference. The present application under Section 156(3) Cr.P.C is thus dismissed." 41. It is pertinent to mention that Application under Section 156(3) Cr.P. C filed before the MM, Tis Hazari Court, Delhi was dismissed and there was no further challenge against the same. Instead, Respondent No. 2 chose to file a complaint with the same cause of action in Bowbazar PS, Calcutta and to further clarify, the Complaint filed in Bowbazar PS was the exact reproduction of the complaint filed before Tis Hazari Court, New Delhi with the only difference or what may be termed as 'Jurisdictional improvement' being in point (c) of the facts. It is reproduced in bold below:- Page 16 of 19 // 17 // "(c) That, thereafter Mr. Vijay Kumar Ghai and Mr. Mohit Ghai started visiting the office and regional office of the complainant company every now and then in order to persuade the complainant company to invest in their company...” 10. That the facts mentioned above clearly disclose the commission of cognizable offences under Sections of the Indian Penal Code mentioned herein. That the accused persons approached the regional office too to persuade the head office for the aforesaid purposes therefore the cause of action also arose in the local jurisdiction." 42. The order of the High Court is seriously flawed due to the fact that in its interim order dated 24.03.2017, it was observed that the contentions put forth by the Appellant vis-à-vis two complaints being filed on the same cause of action at different places but the impugned order overlooks the said aspect and there was no finding on that issue. At the same time, in order to attract the ingredients of Section of 406 and 420 IPC it is imperative on the part of the complainant to prima facie establish that there was an intention on part of the petitioner and/or others to cheat and/or to defraud the complainant right from the inception. Furthermore it has to be prima facie established that due to such alleged act of cheating the complainant (Respondent No. 2 herein) had suffered a wrongful loss and the same had resulted in wrongful gain for the accused (appellant herein). In absence of these elements, no proceeding is permissible in the eyes of law with regard to the commission of the offence punishable u/s 420 IPC. It is apparent that the complaint Page 17 of 19 // 18 // was lodged at a very belated stage (as the entire transaction took place from January 2008 to August 2009, yet the complaint has been filed in March 2013 i.e., after a delay of almost 4 years) with the objective of causing harassment to the petitioner and is bereft of any truth whatsoever.” 7. In the case in hand, perusal of the terms and conditions of the agreement as well as the averments made in the complaint petition registered vide 1CC Case No.2819 of 2020 reveals that the Petitioner constructed the apartment with total built up area with 15235 Sq.ft. As per the agreement, the Complainant being the owner was entitled to 35% of the built up area that comes to 3603 Sq.ft. While executing the supplementary agreement, the Petitioner had paid an amount of Rs.4,20,000/-(Rupees Four Lakh Twenty Thousand) to the Complaint towards the cost of 150 Sq. ft of built up area at the rate of Rs. 2,800/- per square feet. After completion of the apartment, the Petitioner handed over a three bed room flat measuring 1528 Sq.ft and another two bedroom flat measuring 1205 Sq.ft to the Complainant. According to the Complainant, the Petitioner handed over only 2883 Sq.ft of the built up area in place of 3603 Sq.ft, and as such is entitled to the balance of 720 Sq.ft built up area to be handed over to the Complainant. Its value comes to Rs.20,16,000/-(Rupees Twenty Lakh Sixteen Thousand). In any case, from the fact emerges from the averments made in the complaint registered under 1CC Case No.2819 of 2020, nothing appears that there is any intention on the part of the Petitioner to deceive the Complainant. The dispute borne out from the narration in the complaint is purely a matter of civil nature since it involves Page 18 of 19 // 19 // issue as regards the entitlement of the balance area to the extent of 720 Sq. ft. Therefore, the averments in the complaint designedly constituted showing the offences U/s. 406/409/418/420 and 427 of IPC cannot be sustained in the eye of law. 8. Keeping in view the decisions of the Apex Court as discussed herein above, in absence of any material before this Court emerging from the complaint and on the contrary giving clear indication of entitlement of a civil right, the learned court ought not to have taken cognizance of the offences instead directing the parties to resolve their dispute in a proper civil court. The impugned order being not in conformity with law, therefore, cannot be allowed to sustain. The same is quashed. The CRLMC is allowed. Judge (Chittaranjan Dash) Bijay Signature Not Verified Digitally Signed Signed by: BIJAY KETAN SAHOO Reason: Authentication Location: HIGH COURT OF ORISSA Date: 04-Jan-2024 18:03:23 Page 19 of 19
Arguments
5. Learned counsel for the State submitted that there is material to initiate action under the criminal charges and the Petitioner with mala fide intention, deceived the complainant right from the inception and as such, the cognizance taken by the court is just and proper. 6. In the matter of Vijay Kumar Ghai and others vrs. The State of West Bengal and others, the Apex Court as reported in 2022 live law (SC) 305 held as follows:-