CRIMINAL MISCELLANEOUS NO. 10055 OF 2000 WITH CRIMINAL MISCELLANEOUS NO. 28057 OF 2001 ************ (In the matter of applications under Section 482 of the Code of Criminal Procedure) ******** 1. IGNAC PHARMACEUTICALS (P) LTD. , IGNAC HOUSE, ARYA NAGAR COLONY, KABIR CHAURA, VARANASI-1 THROUGH BHARAT PRASAD MISHRA, SON OF LATE RAMAYAN MISHRA, JOINT MANAGING DIRECTOR, IGNAC PHARMACEUTICALS (P) LTD. D-3, RAM NAGAR INDUSTRIAL AREA, VARANASI, POLICE STATION RAM NAGAR, DISTRICT VARANASI 2. BROSWELL PHARMACEUTICALS INC. (P) LTD. C-20/1-38, RAMAKANT NAGAR COLONY, VARANASI THROUGH ITS AUTHORISED SIGNATORY ARVIND KUMAR, SON OF SHRI RAM MOHAL SINGH, BROSWELL PHARMACEUTICALS, INC (P) LTD. C-20/1-38, RAMAKANT NAGAR, POLICE STATION SIGRA, DISTRICT VARANASI ………………………………………………PETITIONERS (CR. MISC. 10055/2000) WITH 1. ARUN KUMAR PANDEY, SON OF SHRI SALIGARM PANDEY, OF D/57/37 SSIDHAGIRIBAGH, POLICE STTION SIDHAGIRIBAGH, DISTRICT VARANASI 2. BHUTANI, SON OF SHRI M.L. BHUTANI OF C-K-14/40 NANDAN SAHU LANE, POLICE STATION CHOWK, DISTRICT VARANASI 3. BHARAT PRASAD MISHRA, SON OF LATE SHRI RAMAYAN MISHRA, RESIDENT OF C-20/1-38 RAMAKANT NAGAR, POLICE STATION LALLAPURA, DISTRICT VARANASI 4. ANIL AHUZA, SON OF LATE R. P. AHUZA, RESIDENT OF SAMPURNANAND NAGAR, POLICE STATION SIGRA, DISTRICT VARANASHI ………………………………………………PETITIONERS (CR. MISC. 28057/2001) VERSUS 1. THE STATE OF BIHAR 2. SUNIL KUMAR, SON OF LATE SHEOPUJAN RAI, RESIDENT OF M/S MEDI SYNDICATE, HIRA BHAWAN, M.P. SINHA ROAD, KADAMKUAN, POLICE STATION KADAMKUAN, DISTRICT PATNA …………………………..……………..OPPOSITE PARTIES (IN BOTH THE CASES) *********** FOR THE PETITIONERS :- MR. PANKAJ KUMAR SINHA, ADVOCATE MR. KAMAL KISHORE JHA, ADVOCATE FOR THE S T A T E :- MR. RAM SUMIRAN RAI, A.P.P. MR. P.M.P. SINHA, A.P.P. ********** 2 P R E S E N T THE HON'BLE JUSTICE SMT. SHEEMA ALI KHAN Sheema Ali Khan, J. These applications have been filed challenging the order taking cognizance under Sections 406, 420 & 120 B of the Indian Penal Code in Complaint Case No. 1712 (C) of 1998 against the company and the partners of the company. The allegation in the complaint petition is that the complainant was the consignee agent for the accused company. The accused company had deposited the security amount vide three demand drafts on 24.12.1996 and 05.07.1994. The total amount deposited was Rs. Five lakhs. At paragraph 5 of the complaint petition, it has been stated that the accused persons become dishonest and began to misappropriate all profits and income of the complainant and did not co-operate properly in commencement of business, as a result of which the complainant sustained heavy loss and injury. The complainant is said to have approached the company through letters and in the letters, it is specifically stated in the complaint petition as follows:- “The complainant wrote many times to the 3 accused that he is not able to work with the company- accused and at last, he terminated the agreement due to non-operation and fault of the company/accused”. The complainant give the information to the company and demanded the security deposited and interest thereupon along with commission and other dues, profits, sales tax amount etc. At paragraph 7, it has further been stated that “thus, the accused persons had received money from the complainant for illegal gain with dishonest intention and only for the purpose of cheating in collusion and conspiracy with each other and grabbed money and according to the terms and conditions the accused persons did not refund money and breached the terms of the agreement and they have badly cheated the petitioner”. In the statement on S.A. also, it has been stated that the petitioners had violated the agreement dated 29.01.1997. Learned Counsel for the petitioner submits that this is a case of breach of contract and there is no element of misappropriation or cheating involved in the present case. It is a question of accounting which has arisen out of dispute between both the parties, each claiming that the other has not acted fairly and violated the terms of the agreement. Counsel for the petitioner refers to the agreement 4 which has been mentioned in the complaint petition, and as such this Court has no qualms in referring to certain provisions of the agreement. One of the provisions of the agreement is that in case there is a dispute between the signatories to the agreement, the Courts at Varanasi would have the exclusive jurisdiction to hear such matters. Paragraph 43 of the agreement reads as follows:- “This agreement is subject to the exclusive jurisdiction of the courts at Varanasi and any cash payable under or by virtue of this agreement shall be payable at Varanasi only and that too to the Directors of the company only.” Paragraph 44 of the agreement specifically provides that the disputes arising between the parties would be settled by an arbitrator under the Indian Arbitration Act. On the basis of the aforesaid facts, Counsel for the petitioner submits that this case is of civil nature, where there is a dispute with respect to the claims of the parties regarding payment of dues including the security deposit and the like. The matter can be settled through the arbitration as the parties have not been able to resolve their differences in any other manner. The contents of the complaint petition do not constitute an offence under Section 406 and 420 of the Indian Penal Code. Section 415 of the Indian Penal Code defines 5 cheating. To be guilty for an offence of cheating, the criteria has been laid down by several judgments of the Supreme Court. In the case of Hira Lal Hari Lal Bhagwati vs. Central Bureau of Investigation, New Delhi [2003 SCC (CRI) 1121], wherein to constitute an offence of cheating, the criteria has been laid down. There must be an element of deception which is intentional, to deprive a person of his rights, or an act which would cause damage to a person. In this case, obviously there is a dispute with respect to the settlement of accounts and, therefore, it cannot be said that the petitioner company or his partners were guilty of the offence aforesaid. Similarly, criminal breach of trust envisages that a person who has been entrusted with a particular property dishonestly uses or disposes of that property or willfully suffers any person to do so in breach of a legal contract. The facts of the present case discloses that the agreement was made subject to certain conditions, governed by the agreement between the parties to do a particular business, if there is a complaint by the signatories to an agreement, that one or the other party is not performing in accordance with the contract between them, at most, it would constitute an offence for breach of contract. The elements of mensrea or in other words the elements of dishonestly, cheating or misappropriation of the property would not 6 come into play, in a case such as this. While parting with the order, I may observe that the petitioners had filed a case for arbitration at Varanasi. Notice was also issued to the complainant, but he has not appeared before the Arbitrator in terms of the agreement. Considering the facts of this case, the order dated 23.07.1999 passed by Shri B. K. Tiwary, Judicial Magistrate, 1st Class, Patna in Complaint Case No. 1712 (C) of 1998 is hereby quashed. In the result, these two applications are allowed. ( Sheema Ali Khan, J. ) PATNA HIGH COURT DATED, THE 03RD DECEMBER, 2010 N.A.F.R./ANAND