IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.2647 of 2008 DALIP JOLLY, SON OF SRI K.L. JOLLY,MANAGING DIRECTOR, M/S FENA(P) LTD., A-237, OKHLA INDUSTRIAL AREA, PHASE-1, NEW DELHI-110020…………………………………….PETITIONER. Versus 1. THE STATE OF BIHAR. 2. MANISH KUMAR, SON OF SRI SUBODH CHANDRA JHA, PROPRIETOR OF M/S LAXMI LATA TRADING, MIRCHAI BARI, KATIHAR, RESIDENT OF MOHALLA OFFICERS COLONY, P.S. KATIHAR, DISTRICT-KATIHAR. …………………………………………………OPPOSITE PARTIES. ----------- For the Petitioner : M/s. Chitranjan Sinha, Sr. Advocate and Ambar Nath Banerjee, Advocate. For the State : Mr. Jharkhandi Upadhyay, A.P.P. For O.P. No.2 : None. ---------- O R D E R This application at the instance of one of the named accused of Complaint Case No.468 of 2005, is for the quashing of the order dated 27.9.2006 passed therein by the learned Chief Judicial Magistrate, Katihar, whereby he has taken cognizance of the offence under Section 406 I.P.C. The prosecution case is founded on the complaint filed by one Manish Kumar, impleaded herein as O.P. No.2, and may be noticed with relative brevity. It is alleged that the complainant being the proprietor of the firm, “M/s. Luxmi Lata Trading”, Katihar was on 4.1.2002 visited in his office by the then Area Sales Manager of Fena (P) Limited (hereinafter referred to as “the Company”) and induced the complainant to deal in products of the company by falsely representing that goods - 2 - manufactured by the Company are exempted from payment of sales tax and additional tax. It is further alleged that the complainant in view of the assurances given at the conclave and having full faith in the submissions advanced by the said Area Sales Manager and he being an old acquaintance, the informant agreed to deal in the products of the Company and accordingly on demand gave a draft of Rs.5000/- as interest free security which was acknowledged by the company through its letter of February, 2002. The further allegation is that on the same day on the request of the Area Sales Manager he placed orders for supply of products of the Company and in lieu thereof paid Rs.90,000/- through two bank drafts each of Rs.45,000/-. The said Area Sales Manager is again said to have visited the complainant‟s business premises on 8.1.2003 and being pleased with the performance of the complainant in dealing with the products of the Company proposed and agreed to give the complainant cash credit facilities for which the complainant was to pledge two blank cheques duly signed by the complainant without date and amount mentioned thereupon which was duly complied by the complainant by giving two cheques bearing nos.0882324 and 0882325 of the Katihar Main Branch of State Bank of India. In this view of the matter the Company started giving a grace period of 21 days short term credit from its billing date. It is alleged that the Officers and Agents of the Company verbally assured the complainant that it shall compensate the complainant for the damaged stock and at the same time the Company would also take back unsold stock in the event the complainant was unwilling to deal with the - 3 - products of the Company. The complainant is said to have submitted accounts of the damage costs to the then Sales Officer but notwithstanding several requests and reminders and visits to the Company‟s office the Company had not compensated the complainant as yet , moreso, when the Sales Manager and one Dayanand Singh had verified the damaged stock of the valuation of approximately Rs.20,000/- and found unsold fresh stock worth Rs.40,000/- However, with ulterior motive they avoided granting copy of the memo prepared by them by falsely assuring that the Company will confirm the same later on. It is said that on 15.9.2004, the complainant wrote to the Company stating that he had stopped dealing with the Company and, therefore, a Form IX „C” was required by the complainant‟s firm for the year 2003-04 and 2004-05. Thereafter the complainant sent a registered letter on 11.1.2005 to the Company requesting them to settle all the pending claims of the complainant and again requested for issuing Form IX „C‟ for the period 2003-04 and 2004-05 as also to return the two blank cheques issued by the complainant by way of security money against the short term credit and also to return his initial security amount of Rs.5000/-. A request was also made to the Company to pay the sales tax levied upon the complainant for the year 2001-02 as the Company‟s declaration was not accepted by the Sales Tax Department. It is said that the Company dishonestly in total disregard of the faith and promise inserted Rs.5,552.41/- in cheque no. 0882324 and the same was presented to the bank for encashment on 2.2.2005. However, the cheque could not be encashed as the - 4 - complainant got the payment of the said forged cheque stopped by the banker and sent a registered notice on 18.2.2005. Denying the allegations made in the complaint petition, it was submitted on behalf of the petitioner that the aforesaid cheques had been issued by O.P. No.2 in lieu of goods supplied by the Company to the complainant from time to time and was meant to clear the monetary liability of the Company that the cheque had been presented before the bank for encashment and as such there was no illegality on the part of the Company in presentation of the cheques. It was also submitted that the petitioner had received the legal notice in the capacity of the Managing Director of the Company on 17.2.2005 without a request to settle all pending matters immediately and in reply thereto by letter dated 23.5.2005 a further request was made to withdraw the notice under reply and pay the outstanding amount of the Company that lay with the complainant with upto date interest. It was also submitted that there was no such agreement or assurances by the Company to compensate the complainant for his damaged goods since the damage to the stock were also caused due to mishandling of the stock on the part of the person responsible to keep the property. To the contrary, the agreement and assurances were to accept such claims of such damage which arises in course of manufacturing or improper handling by the personnel of the Company. Denying the fact that the Officer of the Company had found damaged stock to the extent of Rs.20,000/-, it was submitted that the petitioner had received a claim of Rs.1950/- only from the complainant and to the contrary the complainant had not paid his legal dues which he - 5 - owns to the Company notwithstanding having received a notice under Section 138 of the Negotiable Instruments Act. It was further submitted that since the entire issue revolves round business transactions and accounting, no criminal liability can be fastened on the Company and if the complaint petition is to be read and accepted as true, no criminal offence is made out leave alone an offence under Section 406 I.P.C. Although O.P. No.2 had appeared by filing vakalatnama to contest the application, yet curiously at the time of the hearing of the application, none was present on his behalf. From perusal of the complaint petition itself, it is apparent that the entire matter in issue does revolve round business transactions and accounting in connection therewith. Such matters do not entail criminal liability and the proper remedy in case of the grievance in connection therewith can be sought before the appropriate forum. For the reasons stated above, the prosecution of the petitioner would amount to an abuse of the process of the court and cannot be sustained in law. Accordingly, the impugned order, so far as the petitioner is concerned, is hereby set aside and the application is allowed. (Abhijit Sinha,J) Patna High Court, Patna. Dated: The 7th day of August, 2009. Pradeep Srivastava/A.F.R.