Criminal Misc. No. 15791-M of 2005 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** Criminal Misc. No. 15791-M of 2005 Date of Decision:26.05.2009 Hira Toor .....Petitioner Vs. State of Punjab and another .....Respondents CORAM:- HON'BLE MR. JUSTICE HARBANS LAL Present:- Mr. N.S. Khandhola, Advocate for the petitioner. Mrs. Manjari Nehru Kaul, Deputy Advocate General, Punjab assisted by Mr. Karminder Singh, Advocate. **** JUDGMENT HARBANS LAL, J. This petition has been moved by Hira Toor under Section 482 of the Code of Criminal Procedure for quashing FIR No.57 dated 10.10.2001 registered at Vigilance Bureau, Jalandhar under Sections 408 and 409 of IPC. The brief facts giving rise to this petition are that FIR No.57 ibid was lodged on the complaint of District Manager, Punjab State Warehousing Corporation at the instance of Sukhdev Chand, District Food and Supplies Officer, Nawanshahr who had come on routine physical verification of the paddy lying in M/s Sant Rice Mill of which the petitioner is a partner. This mill is engaged in the business of custom milling of paddy provided by the Warehousing Corporation and subsequent milling and delivery of the rice to the Food Corporation of India. The dispute between the petitioner's firm and the complainant Corporation, namely, the Punjab Criminal Misc. No. 15791-M of 2005 -2- State Warehousing Corporation involves the apparent non-delivery of about 3972.86 quintals and 503.6 quintals of 2 categories of rice against paddy stock issued by the complainant to the Food Corporation of India. The fact is that the rice could not be delivered owing to the lack of space in the Food Corporation of India Depots and the refusal of this Corporation and/ or the complainant to accept the rice. The petitioner on behalf of his firm M/s Sant Rice Mills Nawanshahr entered into an agreement with M/s Punjab State Warehousing Corporation, Chandigarh for milling the paddy into rice from the miller. The agreement specifically stated in page 22 that all the disputes and differences arising from the agreement should be referred to the sole arbitrator and Director/ Managing Director or any other person appointed by him on his behalf. In pursuance to this agreement, the Punjab State Warehousing Corporation handed over 56740 bags of A Grade paddy and 1573 bags of B Grade paddy to the petitioner's firm for custom milling, out of which 8772 bags were shifted to M/s Gautam Rice Mills. 11,376 quintals of A Grade rice was delivered by the petitioners to the Food Corporation of India in the account of Punjab State Warehousing Corporation and a balance of 3972.86 quintals of A Grade Rice and 503 quintals of B Grade rice was yet to be supplied to the Food Corporation of India. A letter dated 2.7.2001 was addressed on behalf of the petitioner to the Food Corporation of India, requesting for space for dumping rice so as to ensure that the milling of the Punjab State Warehousing Corporation could be completed in time. No reply thereto was received. Thereafter, the petitioner addressed another communication dated 12.7.2001 to the Food Corporation of India reiterating their request for grant of space for dumping rice and further requested that if the space was not available in Nawanshahr Criminal Misc. No. 15791-M of 2005 -3- Depot, this permission may be granted to deliver the rice at Food Corporation of India Depot, Phillaur. As per the standing instructions issued by the Director Food and Supplies, the millers who failed to deliver rice during 2000-2001 season due to shortage of space with Food Corporation of India were not to be considered defaulters. The licence of the petitioner which was suspended on 29.9.2001 on the ground of non- supply of rice to the Food Corporation of India was restored on 16.10.2001 upon the undertaking by the petitioner that he would deliver the balance consignments of rice within one month. In the FIR No.57 ibid, it was alleged that the firm had failed to deliver 3972.86 quintals of rice 'A' grade and 503.36 quintals of rice against paddy stock issued to them by Punjab State Warehousing Corporation for custom milling and that the firm had thereby misappropriated paddy stock of Punjab State Warehousing Corporation to the tune of 13988 bags. Similar FIRs were also registered against other rice millers without going into the details as to why the remaining rice was not supplied by the mills. The petitioner filed Criminal Misc. Petition No. 42842-M of 2001 in this Court for grant of anticipatory bail, wherein, the direction was given to the petitioner to supply the balance rice to the complainant and in compliance therewith, the petitioner vide letter dated 16.2.2002 requested the Punjab State Warehousing Corporation to lift the remaining rice. The FIR in question is liable to be quashed on the ground that in terms of its letter dated 8.1.2004, the respondent-Corporation has already appointed an arbitrator and arbitration proceedings are at final stage of arguments. The dispute is of civil nature in terms of Kailash Verms Vs. Punjab State Civil Supply Corporation and another , 2005 (1) Recent Criminal Reports (Criminal) 727 (SC). As per allegations in the Criminal Misc. No. 15791-M of 2005 -4- FIR, no case is made out against the petitioner inasmuch as the petitioner is neither the clerk nor a public servant. In reply filed by DSP Vigilance Bureau, Nawanshahr/ Jalandhar, it has been inter alia pleaded that during the course of physical verification conducted by the District Manager on 21.8.2001, no paddy stock was found in the premises of petitioner and FIR was got registered against miller due to non-availability of paddy stock physically in premises. An identical plea has been taken by respondent No.2 in his written reply. I have heard learned counsel for the parties besides perusing the record with due care and circumspection. Mr. N.S. Khandhola, Advocate appearing on behalf of petitioners reiterating the averments as embodied in the petition urged with great eloquence by relying upon the observations rendered in re: Kailash Verma (supra) that this being a dispute of civil nature, no offence under Section 408 or 409 IPC is made out. To overcome this submission, learned State counsel being assisted by Mr. Karminder Singh, Advocate maintained with good deal of force that in view of the rule laid down in the authority Trisuns Chemical Industry v. Rajesh Aggarwal, 1999(4) Recent Criminal Reports (Criminal) 223, the contention raised by learned counsel for the petitioner is unsustainable. On giving a deep and thoughtful consideration to the rival contentions, the view I am disposed to take is that the submissions made on behalf of the petitioner is unsustainable for the reasons to be recorded hereinafter. As a matter of fact, the thrust of the argument of learned Criminal Misc. No. 15791-M of 2005 -5- counsel for the petitioner is that there being an arbitration clause in the agreement entered into between the parties, the matter has been referred to the arbitrator and that being so the FIR is liable to be quashed. In re: Trisuns Chemical Industry (supra), the Apex Court held as under:- “We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself.” In view of these observations, the FIR is not liable to be quashed merely because of the fact that the matter has been referred to the arbitrator. In re: S.W. Palanitkar v. State of Bihar, 2001 A.I.R. (SC) 2960, there was an agreement between accused and the complainant for supply of goods. The accused supplied goods for less than required quantity. It was held by Apex Court that “It may make an offence under Section 420 of IPC but no offence under Section 406 IPC is made out.” In re: Sham Lal v. State of Punjab, 2001 Criminal Law Journal 2967, the goods were entrusted to the accused. There was an arbitration clause in the agreement. There was breach of trust. It was held that no matter there was arbitration clause in the agreement but the offence under Section 406 of IPC is made out. Criminal and civil proceedings both can go side by side. The Criminal Misc. No. 15791-M of 2005 -6- Apex Court in re: Sanapareddy Maheedhar v. State of Andhra Pradesh, 2008(1) Law Herald (SC) 101, has held as under:- “The High Court has to bear in mind that judicial intervention at the threshold of the legal process initiated against a person accused of committing offence is highly detrimental to the larger public and societal interest. If the allegations contained in the FIR or complaint discloses commission of some crime, then the High Court must keep its hands off and allow the investigating agency to complete the investigation without any fetter and also refrain from passing order which may impede the trial. The High Court should not go into the merits and demerits of the allegations simply because the petitioner alleges malus animus against the author of the FIR or the complainant.” Now, it is to be noticed as to whether the FIR No. 57 ibid discloses the commission of any offence. Respondent No.2 has mentioned in reply, that on 21.8.2001, the then District Manager, Punjab State Warehousing Corporation, Jalandhar, along with the Warehouse Manager, S/o of Nawanshahr and the District Food & Supplies Officer (DFSO) Nawanshahr conducted physical verification of paddy stocks of Punjab State Warehousing Corporation and found 13988 bags were missing from the mill premises. Physical verification report was duly signed by the petitioner on behalf of M/s Sant Rice & General Mills, Nawanshahr. Similar averments, which find place in the reply filed by DSP Vigilance Bureau, Nawashahr/Jalandhar. Thus, it is manifestly clear that during the course of physical verification of the paddy stock of Punjab State Criminal Misc. No. 15791-M of 2005 -7- Warehousing Corporation by the District Manager of Punjab State Warehousing Corporation and other officers, it was revealed that 13988 bags were missing from the mill premises of the petitioner. The allegations in the FIR are that the firm of the petitioner has failed to deliver the 3972.86 quintals of rice 'A' grade and 536.3 quintal of rice against paddy stock issued to them by Punjab State Warehousing Corporation for custom milling. It was further found that such firm has misappropriated paddy stock of Punjab State Warehousing Corporation to the tune of 13988 bags. Thus, ostensibly the FIR in question revealed the commission of offence by the petitioner. Consquently, no case is made out for quashing of the same. As a sequel of above discussion, this petition fails and is dismissed. May 26, 2009 ( HARBANS LAL ) renu JUDGE Whether to be referred to the Reporter? Yes/No