THE HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARA CRIMINAL PETITION No.6881 of 2009 AND CRIMINAL PETITION No.7079 of 2009 COMMON ORDER: These two petitions are filed by A1 and A2 respectively for quashing proceedings in CC.No.1107 of 2004, on the file of V Metropolitan Magistrate, which is re-designated as III Additional Chief Metropolitan Magistrate, Hyderabad. The offence alleged in that case is one under Section 420/34 I.P.C. A1 is Anil Kumar Agarwal, Managing Director of M/s. Stilbene Chemicals Limited, Hyderabad. A2 is Satish Kumar Agarwal, Chairman of M/s. Kumar’s Cotex Limited, Secunderabad. Both are stated to be brothers. It is alleged that A1 also started Cheminor Drugs Limited and it became amalgamated with the 2nd respondent namely M/s. Dr.Reddy’s Laboratory Limited, as per the scheme of amalgamation approved by this Court in C.P.Nos. 215 and 216 of 2000, dated 11.12.2000. It is further alleged that Stilbene Chemicals Limited and Cheminor Drugs Limited entered into Memorandum of Understanding (MOU) dated 19.09.1996, with regard to construction and maintenance of common effluent collection sump located in IDA, Paidibhimavaram, Ranastalam Mandal, Srikakulam District and laying of pipelines through Vizianagaram and Srikakulam Districts and that as per MOU, Stilbene Chemicals Limited is required to reimburse 50% of cost of the capital work and 50% of cost of maintenance, which came to Rs.41,50,320.69 paise by 31.03.1999 and that as Stilbene Chemicals Limited did not comply with the demand made by the 2nd respondent, the 2nd respondent filed A.A.No54 of 2000 in this Court for appointment of arbitrator. It is further alleged that Stilbene Chemicals Limited represented by A1 as Managing Director and also as Director of Kumar’s Cotex Limited and A2, Chairman of Kumar’s Cotex Limited, approached the 2nd respondent for out of Court settlement of proceedings by offering to pay Rs.27,00,000/- in full and final settlement and all of them entered into Memorandum of Understanding on 10.12.2002. As per the said MOU dated 10.12.2002, Rs.3,00,000/- was to be paid by way of Demand Draft and balance amount has to be paid by way of fifteen post dated cheques covering every month for Rs.1.60 lakhs each on the account of Kumar’s Cotex Limited. It is alleged that A1 handed over banker’s cheque for Rs.3,00,000/- When cheques drawn by Kumar’s Cotex Limited were presented for collection, they were returned dishonoured due to insufficient funds. 2. It is contended by counsel for both the petitioners that for dishonour of cheques, the 2nd respondent had already filed separate complaints under Section 138 of the Negotiable Instruments Act and that therefore, this case alleging offence under Section 420 I.P.C. for the same cause of action, is not maintainable. The cases under Section 138 of the Negotiable Instruments Act are filed on the basis of the subsequent event of dishonour of cheques. Whereas, cheating or fraud alleged in the present case is based on anterior deception alleged to have been practised by A1 and A2 by making representation and getting A.A.No.54 of 2000 withdrawn by the 2nd respondent. Therefore, inspite of the 2nd respondent filing criminal cases under Section 138 of the Negotiable Instruments Act for dishonour of the post-dated cheques, this criminal case for the offence under Section 420 I.P.C. is maintainable, in case there is any element of deception and/or dishonest or fraudulent representation. 3. It is contended that for attracting the offence under Section 420 I.P.C, parting with property or valuable security is a pre-requisite. On the other hand, it is contended by the 2nd respondent’s counsel that in order to attract basic offence of cheating defined in Section 415 I.P.C., it is sufficient if the person so deceived does or omits to do anything which he would not have done or omitted to have done if not so deceived. But for the alleged representation of A1 and A2, the 2nd respondent would not have withdrawn A.A.No.54 of 2002 in this Court by filing a joint memo. No doubt, the joint memo was filed by A1 and 2nd respondent only and A2 is not a party to the said joint memo. A2 did not sign in the joint memo filed in A.A.No.54 of 2000, since A2 was not a party to the said arbitration application. According to the 2nd respondent’s case, it was A1 as well as A2 who made joint misrepresentation fraudulently and dishonestly by inducing the 2nd respondent to receive fifteen post-dated cheques towards the settlement arrived at for Rs.27,00,000/-. But for the said representation and alleged deception practised by A1 and A2, the 2nd respondent would not have withdrawn A.A.No.54 of 2000 restricting his entitlement to Rs.27,00,000/-, even though the actual claim was Rs.41,50,3420.69 paise. A1 and A2 by the alleged fraudulent misrepresentation, made the 2nd respondent to forego the said claim and withdraw Arbitration Application No.54 of 2000. Therefore, it cannot be said that the allegations in this case do not attract the offence under Section 420 I.P.C. 4. Even though the case in the lower Court has been pending since the year 2004, A1 and A2 have chosen to file these criminal petitions in the year 2009, after five years, with a view to drag on the proceedings in the lower Court to their advantage. These Criminal Petitions lack merits as well as bonafides. 5. In the result, both the Criminal Petitions are dismissed. ______________________________ JUSTICE SAMUDRALA GOVINDARAJULU Dt:09.12.2011 ysk THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.6881 of 2009 AND CRIMINAL PETITION No.7079 of 2009 Dt:09.12.2011 ysk