1 wp 3315-2010 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION WRIT PETITION NO. 3315 OF 2010 Jayant Agro Organics Limited & Anr. ..Petitioners vs. The Union of India & Ors. ..Respondents Mr.Shirish Gupte, Senior Counsel with Mr.Sumit Raghani i/b. M/s,PDS Legal for the Petitioners. Mr.R.A. Lokhande i/b. Mr.D.A. Nalawade for Respondent No.1. Mr.D.P. Adsule, APP for Respondent Nos.2 to 5. Mr.A.H.H. Ponda with Mr.Raju Yamgar i/b. M/s.K.P. Tiwari & Co. for Respondent No.6. CORAM : B.H. MARLAPALLE & U.D. SALVI, JJ. JUNE 10, 2011 P.C. : 1 We have heard the learned Counsel for the parties. 2 Rule. Respondents waive service. 2 wp 3315-2010 Respondent no.6, who is the main contestant of this petition has filed affidavit-in-reply and hence, the petition is heard finally. 3 On 15th November, 2008, a Memorandum of Understanding/Agreement was entered into between the petitioner and respondent no.6 by which it was agreed that respondent no.6 will arrange everything for the petitioner with regard to VKGUY licence and in that event, the petitioner shall sell to respondent no.2 exclusively its product for export and the parties agreed to deal with YKGUY on the terms and conditions set out in the said MOU. Party no.1 i.e. the petitioner would charge at the rate of 72% including tax on the scrip value of eligible export towards the sale of YKGUY and this price has been subsequently increased by a supplementary agreement between the parties on 2nd March, 2009, to 78%. Respondent no.6 in turn agreed that it shall only sell the VKGUY licence exclusively to the petitioner at the said rate for the goods exported 3 wp 3315-2010 from 1.4.2007 to 31.3.2009. The petitioner agreed to issue transfer letter for sale of VKGUY in the name of the party to be introduced by respondent no.6 or their nominee exclusively. 4 The Government of India through the Director General of Foreign Trade issued a circular in public interest on 2nd March, 2009 and published a list of the products included for duty credit scrip on exports made with effect from 1st April, 2008. 5 The petitioner is a manufacturer of the Refined Castor Oil, Hydrogenated Castor oil, Hydroxy Stearic and Ricinoleic Acid and petitioner no.2, who is of 82 years of age, is the chairman of petitioner no.1 company. Petitioner no.1 is exporting its products from the ports in the State of Maharashtra and Gujarat and its manufacturing facilities are located in the State of Gujarat. The products manufactured by the petitioner no.1 4 wp 3315-2010 company are falling under Chapter sub-heading 1515.00, 1516.00, 2915.00, 2916.00 respectively for the Central Excise Tariff Act, 1985 and the Customs Tariff Act, 1975. 6 The MOU signed between the parties was acted upon and on 21st June, 2010, the respondent no.6 addressed a letter to the petitioner company after the public notice dated 2nd March, 2009 was issued. He pointed out that profits of the petitioner no.1 company and its turnover had increased to about Rs.509 crores in respect of Castor Oil and derivatives to Rs.209 crores. It also stated that the associate company of petitioner no.1 M/s.Ihsedu Agrochem Private Limited had reached the turnover approximately to Rs.87.41 crores. Respondent no.6 claimed that M/s.Ihsedu Agrochem Pvt.Ltd. is the 100% owned subsidiary of the petitioner and therefore, the turnover in terms of the balance sheet in respect of both the companies would be Rs.509 crores plus Rs.209 crores 5 wp 3315-2010 and it claimed the recovery commission on the combined turnover at the rate of 3.5% under the scheme VKGUY amounting to Rs.28.24 crores. It also pointed out that it had received an amount of Rs. 14.01 crores and the balance amount of Rs.14.23 crores was sought to be recovered from the petitioner. 7 The petitioner replied to the said letter on 7th July, 2010 and denied the liability for payment of the balance amount as claimed by respondent no.6. It contended that the notice dated 21st June, 2010 was given in respect of the MOU and pointed out that M/s. Ihsedu Agrochem Pvt.Ltd. was not a party to the agreement between the petitioner and respondent no.6. It also referred to the subsequent notice dated 29th June, 2010 and claimed recovery of Rs.3.5 crores from respondent no.6 for the loss caused to petitioner no.1. 8 It appears that it is under these 6 wp 3315-2010 circumstances, respondent no.6 approached the Additional Commissioner of Delhi Police, EOW, New Delhi and lodged a complaint of cheating. It claimed that the petitioner had maliciously denied the recovery of the amount claimed. Consequently, the Inspector from the EOW of the Crime Branch of Delhi Police addressed the letter dated 29th October, 2010 calling upon petitioner no.2 to furnish certain information for inquiry. The petitioners requested the Inquiry Officer to furnish a copy of the complaint it had received and as the same was not furnished, this petition under Article 226 came to be filed challenging the notice dated 29th October, 2010. 9 In the affidavit-in-reply filed by respondent no.6, gravamen of the allegations has been stated. The said para reads as under :- I say that the petitioner no. 1 with the sole intention of deceiving M/s.The Solutions 7 wp 3315-2010 dishonestly induced M/s.The Solutions to enter into an MOU/Agreement dated 15/11/2008 and do such acts as were necessary for the purpose of getting the Public Notice issued and after the said act has been done by M/s.The Solutions, the Petitioner No.1 intentionally omitted to do, which the Petitioner No.1 to do under the Memorandum of Understanding. The wrongful action of M/s.JAOL was with the sole intention/motive to cause damages and to cheat to M/s.The Solutions and they had the intention to cheat the Solutions since inception. 10 Having regard to the scheme of Section 420 of the IPC, we have no doubt in our mind that prima facie, the dispute between the parties is purely of a commercial nature and the claim of respondent no. 6 is for recovery of money. A competent forum will have to first decide whether the claim made by respondent no.6 in respect of the turnover achieved by the associate company of the petitioner is required to be clubbed so as to bring within the ambit of MOU entered between the petitioner and respondent no.6 and if the respondent no.6 succeeds 8 wp 3315-2010 in the same, it will be entitled for recovery of its claim. As of now, there is no case for the Crime Branch of Delhi Police to undertake any inquiry or investigation. Surprisingly, the Delhi Police instead of calling for the information from the respondent no.6, who is the complainant, issued the impugned notice dated 29th October, 2010 calling the information from the petitioners so as to find out whether any case of offence has been made out. Such as course of action, in our opinion, is not permissible in law. 11 We, therefore, allow this petition and quash and set aside the communication dated 29th October, 2010 addressed to petitioner no.2 by the Inspector of EOW, Crime Branch, Delhi Police. 12 Rule is made absolute, accordingly. (U.D. SALVI, J) (B.H. MARLAPALLE, J)