*HON'BLE SRI JUSTICE P.S. NARAYANA +Criminal Petition No.6460 of 2007 % 6-4-2010 # Vinay Patil s/o. Rohidas Patil and others .. Petitioners Vs $ M/s. Emars Mining & Construction Pvt. Ltd. and another .. Respondents <GIST: >HEAD NOTE: ! Counsel for petitioners : Sri T.M.K. Chaitanya ^ Counsel for respondents : Sri Srinivas Rao for R-1 : Additional Public Prosecutor for R-2 ? CASES REFERRED : 1. 2006 AIR SCW 3830 2. 2007 Crl.L.J. 1813 3. 1997(4) ALD 609 4. 2006(2) SCC (Crl.) 49 5. 2006(1) SCC 746 (Crl) 6. 2000(3) SCC 693 7. 1991 SCC (Crl.) 84 8. 2002 SCC (Crl.) 129 9. AIR 1979 S.C. 850 10. 2003 SCC (Crl.) 703 11. 1998 AIR SCW 4007 12. AIR 2000 S.C. 2780 13. 1997(2) ALT (Crl.) 271 14. 2005 Crl.L.J. 1838 HON'BLE SRI JUSTICE P.S. NARAYANA Criminal Petition No.6460 of 2007 Date : 6-4-2010 Between : Vinay Patil s/o. Rohidas Patil and others .. Petitioners and M/s. Emars Mining & Construction Pvt. Ltd. and another .. Respondents HON'BLE SRI JUSTICE P.S. NARAYANA Criminal Petition No.6460 of 2007 ORDER: 1. This Criminal Petition is filed to quash the proceedings in C.C.No.777/2007 for the offences under Sections 420 and 120-B I.P.C. on the file of Chief Metropolitan Magistrate, Visakhapatnam. A-1 to A-4 are the petitioners. 2. Sri T.M.K. Chaitanya, the learned Counsel representing the petitioners would maintain that there are no specific allegations against the petitioners and even if these allegations are to be taken as they are, at the best it may be a case of breach of contract and definitely such acts would not attract any criminal liability whatsoever. The remedy if any available is before a competent Civil Court, but invoking the criminal forum would clearly amount to abuse of process of court. The learned Counsel also relied on several decisions and further specifically pointed out to Section 415 I.P.C. with certain of the statutory illustrations. Hence the learned Counsel would maintain that in the light of the specific grounds raised in this Criminal Petition filed under Section 482 of the Code of Criminal Procedure (in short hereinafter referred to as “Code” for the purpose of convenience), the proceedings are to be quashed. 3. Sri Srinivas Rao, the learned Counsel representing the 1st respondent however would maintain that the conduct of the petitioners also to be taken into consideration and on a careful analysis of the factual matrix, it is clear that prima facie the ingredients of Sections 420 and 120-B I.P.C. are clearly attracted. At any rate, it cannot be said that the remedy is only before a Civil Court. Merely because the dispute also attracts civil complexion on that ground itself necessarily always criminal proceedings need not be quashed. When the conduct of the petitioners would clearly reflect the intent to cheat, on that ground that the remedy is before a competent Civil Court, the proceedings cannot be quashed. The learned Counsel also relied on certain decisions. 4. The learned Additional Public Prosecutor representing the 2nd respondent would maintain that in the facts and circumstances of the case, may be, prima facie, this is a case of breach of contract, but however the dishonest intention being clear from the acts of the petitioners/accused, this is not a fit matter to be interfered with under Section 482 of the Code. 5. Heard the Counsel on record. 6. It is the case of the petitioners that on 12-4- 2007, a report had been lodged before Harbour P.S. Visakhapatnam by the 1st respondent alleging that after long discussion by phone the 1st petitioner agreed to supply m3913 MT of Iron ore fines to the 1st respondent @ 2300 per MT and consequently on 1-3-2007 paid an amount of Rs.90,00,000/- in the A/c.No.30059640712 of M/s. Samruddha Overseas Ltd./1st petitioner from their head office Kolkata with an agreement to deliver cargo of Iron Ore Fines at a quantity of 2745.030 MT through handling agent P.K.Rath, Branch Manager of Lee & Murihead Pvt. Ltd., Visakhapatnam. It is further alleged tht petitioner failed to deliver the remaining balance cargo of 1167.970 MT for which they had received the amount and thereby caused unlawful loss of an amount of Rs.27,40,057/- by detained cargo. It is also further stated that it was alleged that the petitioners caused unnecessary delay even after receiving the cost of the total consignment and they are avoiding the delivery of the remaining cargo and also avoiding to pay back the cost of the cargo thereby cheated and a crime was registered in Cr.No.35/2007 under Section 420 and 120-B IPC of Harbour Police Station, Visakhapatnam. 7. It is also further stated that while the investigation is in progress the petitioners obtained bails from the concerned courts. The investigation had been completed and charge sheet had also been filed and the same was taken on file by Chief Metropolitan Magistrate, Visakhapatnam and numbered as C.C.No.777/2007. It is further stated that on 23-4-2007, the defacto- complainant/1st respondent filed a suit O.S.No.110/2007 against the 1st petitioner for recovery of balance cargo amount of Rs.27,45,898/- on the file of the I Additional District Judge, Visakhapatnam and I.A.No.556/2007 had been filed seeking temporary injunction which was dismissed on 24-7-2007. 8. Further it is the case of the petitioner that originally the understanding between the petitioner and the complainant was that the cargo would be sold on volumetric basis and never on weighment basis. The complainant is expected to take the measurement on volumetric basis alone and cannot take the cargo by weighment. The petitioner agreed to sell the cargo in volumetric basis since he never had necessary man power and infrastructure to supervise the proceedings personally. Surprisingly without any intimation the complainant had lifted the cargo by way of 106 lorries with their transporter namely Reliable Services and he is now claiming short supply which is not correct. 9. The principal contention advanced by the petitioners is that even as per the allegations made in C.C.No.777/2007 on the file of Chief Metropolitan Magistrate, Visakhapatnam, this being purely a civil dispute, the remedy may be to claim damages for breach of contract and definitely this is not a case falling under Sections 420 and 120-B I.P.C. 10. In M/s.Indian Oil Corporation Vs. M/s. NEPC India Ltd. & others [1] it was observed : “While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil dispute into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged. In G.Sagar Suri Vs. State of U.P. (2000(2) SCC 636), this Court observed : “It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid down certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice”. While no one with a legitimate cause or grievance should be prevented from seeking remedies available on a criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under Section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may.” 11. In Crl.P.No.4127/2006, dated 21-12-2006, the learned Judge of this Court at para-13 observed : “Mens rea is the crux of the offence of cheating. There is no allegation that the accused entertained idea of cheating the complainant from the inception. The only grievance of the complainant is that some spurious parts were sent to him and cost of those parts are less. Having accepted the same, now he cannot turn around and say that spurious parts have been sent by the accused. So, the ingredients for the offence of cheating or criminal breach of trust are not at all attracted even if the allegations in the complaint are taken as true and correct at this stage. Therefore, continuation of the proceedings against the accused is nothing but abuse of process of Court.” 12. Strong reliance was placed on Thelapalli Raghavaiah Vs. Station House Officer [2], K.Srinivas Vs. State of A.P. [3], Uma Shankar Gopalika Vs. State of Bihar and another [4], Anil Mahajan Vs. Bhor Industries Limited and another [5], G.V. Rao Vs. L.H.V. Prasad [6], A.L. Panian Shanmugam Vs. State of A.P. [7], S.W. Palanikar Vs. State of Bihar [8], Trilok Singh and others Vs. Satya Deo Tripathy [9], Ajay Mitra Vs. State of M.P. [10], Nageshwar Prasad Singh Vs. Narayan Singh [11], Indian Oil Corporation Vs. NEPC India Ltd. [12] and K.Srinivas Vs. State of Andhra Pradesh [13]. 13. The learned Counsel representing the 1st respondent/defacto complainant however strongly relied on the decision of this Court in M/s.Vishal Paper Tech India Ltd. And others Vs. State of A.P. and another [14] wherein the learned Judge observed : “Cheating’, as understood by a common man is different from ‘cheating’ as defined in Section 415 IPC, because for ‘cheating’ to be an offence under IPC, intention to cheat even at the time of entering into the transaction has to be established. In the present day situation when honesty became a very rare commodity, and since nobody would make apparent his intention to cheat even at the time of inception, and since persons resort to cheating only after creating confidence about his being honest in the mind of the man he intends to cheat, in my considered opinion it may be in the fitness of things, and to suit the present day need, to cast the burden to establish that he had no intention to cheat on the accused, by making suitable amendment to Section 415 IPC. It is for the concerned authorities to take a decision.” 14. Section 415 I.P.C. defines Cheating as hereunder: 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 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". Explanation-A dishonest concealment of facts is deception within the meaning of this section. Illustration (g) of Section 415 I.P.C. reads as hereunder : A intentionally deceives Z into a belief that A means to deliver to Z, a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to civil action for breach of contract. 15. Copies of the applications filed in the civil suit i.e., O.S.No.110/2007 also had been placed before this Court. On a careful reading of the whole factual matrix and the allegations made as against the petitioners, this Court is thoroughly satisfied that predominantly this is a civil dispute and may be due to certain lapses, the 1st respondent/defacto complainant had thought of initiating the present criminal proceedings. In the light of the same, it may not be just and proper to permit the proceedings under challenge to be continued especially in the light of the fact that a civil suit had already been instituted in this regard. Accordingly, the proceedings in C.C.No.777/2007 for the offences under Sections 420 and 120-B I.P.C. on the file of Chief Metropolitan Magistrate, Visakhapatnam are hereby quashed. 16. The Criminal Petition is hereby allowed. _________________ Justice P.S. Narayana Date : -4-2010 AM [1] 2006 AIR SCW 3830 [2] 2007 Crl.L.J. 1813 [3] 1997(4) ALD 609 [4] 2006(2) SCC (Crl) 49 [5] 2006(1) SCC 746 (Crl). [6] 2000(3) SCC 693 [7] 1991 SCC (Crl) 84 [8] 2002 SCC (Crl) 129 [9] AIR 1979 S.C. 850 [10] 2003 SCC (Crl) 703 [11] 1998 AIR SCW 4007 [12] AIR 2000 S.C. 2780 [13] 1997(2) ALT (Criminal) 271 [14] 2005 Crl.L.J.1838