^ HKSH COURTOF CHHATTISGARH AT BILASPUR WritADpealNo.281 of 2009 APPELLANTS: Srinwas Gundluri and others '»- Versus RESPONDENTS: M/s SEPCO Electric Power Construcfion Corporation and oUiers JUDGMENTFORCQNSlDERL&nOBL ]v-> HON'BLE SHRI R.N. CHANDRAKAR.J ^) Sd/- Dhirendra Mishra Judge Sd..'- R.N. Chandrakar Judge .^.-.. „.- PQSTFQR JUDGMENTON l APRlt.. 2010 Sdt- ^ .^^ HIGH CQURTOF CHHATTISGARH AT BILASPUR WritADpeal No.281 of 2009 APPELLANTS: 3. Srlnivas Gundluri, S/o Shri G. Venlateshwar Rao, aged 44 years, Managing Director & Principal Officer of M/s SSVG Engineering Projects Private Limited, 12-2-460, Srinivasa Gundluri Complex, Amba Gaiden, Medhipatnam, Hydertgd (Andhra Pradesh) Smt, Bharathi Devi Gundluri, W/o Shrinivas Gundluri, aged 39 yeare, Director & Promoter of M/s SSVG Engineering Projeots Pvt. Ltd, 12-2-460 Srinivasa Gundlyri Complex, Amba Garden, Medhipatnam, Hyderabad (Andhra Pradesh) SSVG Engineering Projects Private Limited, Company Incorporated under the Companies Act, 1956, having its registered office at 12-2-460, Srinivasa Gundluri Complex, Amba GanJen, Medhipatnam, Hyderabad (Andhra Pradesh) Versus RESPONDENTS: M/s SEPCO Electric Power Cdnstruotion Corporation, 150, Jinger Road, Jinan, Shangdong (China) having its site office at SEPCO Projeot Office, Balco Najgar Korba (Chhattisgarh) through its authorized representative Mr, Wang Chengeai, S/o Mr. Wang Xianli, aged about 34 years, R/o Hong Lou Road, Jinan City, Shang Dong & presently residing at SEPCO Projeot OfFioe, Balco Nagar, Korfaa (Chhattigarh) Union Bank of India, Branch Somajiguda, 6-3-347/9/4, Dwarakapuri Colony, Hyderabad, 500 082 (A.P.) Chief Manager, Union Bank of India, Branch Somajiguda, 6-3^347^/4, Dwarakapuri Colony, Hyderabad 500 082 . Station House Officer, Poliee Station Balcp Nagar, Kofba, District Korba (Qhhatti^arh) Present: Shri Ravindra Shrivastava, Sr. Advocate with Shri Ashish Shrivastaya & Shri Devendra Patel, Advocates fdr the appellants. Shri RaviShankar Prasad, Sr. Advocate with ShriSanjay Sen.Shri B.D. Guru & Shri Mridul Chakravarty, Advocatesfor respondentNo.1. Shri Kishore Bhaduri, Additional Advocate General forthe State. !81 .fi.-:^^---'. ,., ^\/\ "«a •itSSW c) Division Bench: Hon'bleShri Dhirendra Mishra & Hon'ble Shri R.N. Chandrakar, JJ. JUDGMENT (Delivered onJ^.April, 2010) The following judgment of the Court was delivered by Dhirendra Mishra, J. l This writ appeat is directed against theorder dated 3 September, 2009 jMissed in W.P.(Cr.) No.3647/2009 whereby the appellants' writ petitionhas been dismissed. 2. The facts necessary for the purposes of this writ appeat are that respondent No.1 (hereinafter referred to as SEPCO) was engaged in erection of power plant at village Nariyara in Akaltara District Janjgir- Champa. SEPCO awarded constructional work to the appellants' company (for brevity SSVG) as per terms and conditions settled between SEPCO and SSVG. The contract value of the work was Rs.42,92,19,800/-. The work was to be completed within a period of 2 months. 50% of the value of the contract was to be paid in advance to SEPCO. SSVG was required to go ahead with the project work immediately. The work order was issued by SEPCO on 16-6-2009. A cheque towards payment of 50% advance was issued Tor a sum of Rs.20,97,46,840/- on 25-6-2009. SSVG wrote a letter on 28-6-2009 complaining that SEPCO has not handed over the site for commencing the work despite repeated requests and requested to hand over the site so as to enable it to complete thework within 2 months, however, SEPCO vide its letter dated 29-6-2009 cancelled the work order dated 16-6-2009 on the ground that the company has failed to mobilize requisite man power, machinery and equipment by that date and demanded refund of advance money. ffi'SBBE'~r:;:" ^^ 3, SSVG received a letter on 3-7-2fx)9 from the respondent Lfnion Bank of India whereby it was apprised that the Bank has received a letter on 2-7-2009 from the Police Station Balco Nagar requesting to freeze the current account with immediate effect on the complaint of SEPCO. Subsequently, SSVG learned that SEPCO has submitted a complaint in the Court of Magistrate Class 1 Korba'ron 4-7-2009 against the appellants. The Chief Judicial Magistrate vide its order dated 4-7-2009 allowed the application of SEPCO filed under Section 156 (3) of the Code of Criminal Procedure (fpr short 'the Code') and forwarded the originat complaint along writh documents to the concemed Station House Officer and directed to register first information report after due enquiry and submit the charge sheet after investigation; 4. SSVG (appellant No.1) atso received a memo from Police Station Balco whereby he was called for recording his statement. In this background, the appellants herein filed a writ petition and prayed for quashing and setting aside the order dated 4-7-2009 and the proceedings drawn by the Magistrate Class 1 Korba on the complaint ofSEPCO. They also prayed for issuance of writ of prohibition prohibiting further proceedings pending in the Court of Magistrate Class 1 in connection with complaint todged by SEPCO and quashing the communication dated 3 July, 2009 by the respondent bank relating to freezing of the appellants' company's account. 5. Learned Single Judge dismissed the writ petition and held that the Magistrate has not committed any itlegality by directing the poliee to register FIR. The Magistrate passed an order under Section 156 (3) of the Code after perusing the complaint which diseloses commissjon of ^^ cognizable offence. The police authorities are investigating into the matter after registering first information report and final report isyet to be filed and, therefore, challenge at thisstage by the petitioners/appellants is premature. 6. Shri Ravindra Shrivastava, learned senior counsel with Shri Ashish Shrivastava leamed counsel appearing on behalf of the appellants would argue that the Magistrate did not apply its mind before passing the order under Section 156 (3) ofthe Code and directing the police to investigate. The complaint titled as an application under Sectjon 156 (3) ofthe Code did not disctose any cognizablejoffence and, therefore, direction to the police to fite charge sheet after completing investigation is in excess of jurisdiction vested with the Magistrate under the law. Indisputably, SEPCO and SSVG entered into a contract for constructional work. The time allowed for performance of contract was 2 months, However, the contract was terminated by SEPCO immediately after paymentof advance and thus, there was a breach of contract by SEPCO and on these facts, by no stretch of imagination any commission of offence could be alleged as against the appellants. The whole exercise of SEPCO in filingcomptaint in purely contractual dispute with SSVG is an arm-twisting method with an objeet of recovering advance money by bypassing civil aetion. Leamed Single Judge also did not consider the appellants' prayer for quashing of -communication dated 3rd July, 2009 ofthe respondent Bank relating to freezing of company's account. 7. On the other hand, Shri Ravi Shankar Prasad, learned Sr. Advocate with Shri Sajnay Sen and Shri B.D. Guru, Advocates, appearing on ^) y •f'- behatf of respondent No.1 submltted that learned Single Judge after carefully considering the allegations in the complaint has observed that by perusing the complaint it cannot be said that if does not disclose anycognizable offence and the Magistrate haspassed the order under Section 156 (3) ofthe Code in accordance with law after perusing the complaint which discloses cognizable offeace. 8. SEPCO after receivingadvanee of Rs.20.97crores on 25-6-2009 wrote a letter on 28-6-2009 alleging that he has suffered loss due to delay in handing over the lancf and thereafter uses the advanee money to clear his own bank's dues. This clearly reveals that the appellants cheated the respondent company in aplanned manner. The appellants have admitted in their pleading that they appropriated the advance money forthe purposeotherthan forwhteh it was advanced, The Magistrate correctly exercised the jurisdiction under Seetion156 (3) ofthe Code and referred the matter for investigation. 9. The scope of interference in police investigation under Article 226 of the Constitution of India is limited and no case is made out for any interference at this stage. Merely because the act has ctvil profile is not sufficient to denude it of its criminat outfit. Subsequent criminal proceeding in Hyderabad arose from a separate and distinct causeof action fotlowing bouncing oTsecuritychequeissuedbytheaccused. The order of the Chief Judicial Maglstrate dated 4-7-2009 under Section 156 oftheCodewas passed at pre-cognizance stageand the same does not suffer Trom any legal infirmity. The power to order police irivestigation under Section 156 (3) is different Trorti the power to direct investigation conferred by Section 202(1). The two operate in ^7 .-> distinct spheres at different stages. The first is exercisable at the pre- cognizance stage, whereas latter at the post-cognizance stage. The investigation to be carried out bythepolice at a pre-cognizanee stage cannot be interfered at this stage at the Instance of theacoused persons as per settled position of law. It is also settled law that the facts of the case may give rise to a cMI-claim and atso amount to an offence. Merely because a civil claim is maintainable does not mean that the criminal complaint cannot be maintained. 10. We have heard learned counsel for the parties. 11. Learned Single Judge after perusal ofcopyofthe complaint flled by the SEPCO and material available on record has observed that it cannot besaid that it did not disclose any cognizable offence. l2.We have also carefulty examined the allegations made in the complaint. We entirely agree with the observations of learned Single Judge that the complatnt prima facie discloses commission of cognizableoffence bytheaccused persons. 13. Various judgment of the Supreme Court were cited by learned senior advocates representing the appellants and respondent No.1 during the course of arguments in appeal aswell asbefore teamed Singte Judge. Leamed Single Judge after elaborately considering the legal arguments advanced by the respective parties has heldthatto proceed - under Section 156 (3) of the Code, what isrequired is that a bare reading ofthe complalnt, if it disetoses a cognizable offence, then the Magistrate instead of applying his mind to the complaint for deciding whether or not there is sufficientground for proeeeding, may direct the police for investigation under Section 156 (3) ofthe Code, 14. Further relying upon a decision ofthe Supreme Court in the matter of Sakiri Vasu Vs. State of U.P. {(2008) 2 SCC 409}, it has been held that the Magistrate can also direct the police to register an FIR. trT 15. Dealing with the arguments advanced by the appettants/petitioners that the dispute is purely ofa civil nature and criminal comptaint by the complainant is with an ulterior motlve and the same is an abuse of process of law, a reference has been made to the decision of the Supreme Court in the matter of Indian Oil Corpn. Vs. NEPC India Ltd., {(2006) 6 SCC 736}, wherein it has been held that the above ground in itself is not a ground for quashlng criminal proceeding, The test is whether allegatlon in the complaint discloses criminal offence or not. 16. We do not deem it necessary to refer to the judgments cited by the respective parties, as thesame have been elaborately eonsidered fay the leamed Singte Judge. We entirely agree with the reasons assigned in the impugnedorder fordismissing the writ petition that the Magistrate has passed the order under Section 156 (3) of the Code after perusing the complaint which discloses commissionof cognizable offence and in Turtherance thereto, the police authorities, after i.egistering FIR are investigatingthe matter and final report is yet to be filed. Challenge at this stage by the appellants/petitioners is premature. C7*^ 17.0n the basls of aforesaid discussion, we find nosubstance In this appeal, the samedeserves to be and is hereby dismissed. Barve Sd/- Dhirendra Mishra Judge Sd'- R.N. Chandrakar Judge s 1 ^.