* 1 * W.P. 2154.2009 31.01.2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO. 2154 OF 2009 1. Tytan Organics Pvt.Ltd 2. Cyrus M. Bahadurji 3. Tanaz C. Bahadurji 4. Nitesh Sethi ...Petitioners/Orig.accused nos.1, 2, 3 & 6. V/S. 1. Jayesh s/o. Champshi Ruparel 2. State of Maharashtra (at the instance of Tilaknagar Police Station, Chembur, Mumbai) ....Respondents * * * * * Mr. Shirish Gupte, Senior Counsel with Mr. P.M. Rustomkhan, Advocate for the petitioner. Mr. A.H.H. Ponda i/by. Mr. Girish Kedia, Advocate for respondent no.1. Mr. A.S. Shitole, APP for State-respondent no.2. * * * * * CORAM :- Smt. R.P. SondurBaldota, J. 31 January, 2011. P.C. : 1. This petition as filed originally sought quashing of the order * 2 * W.P. 2154.2009 31.01.2011 dated 28th May, 2009 passed by the Magistrate’s Court in referring Case No. 65/SW/2009 for investigation under Section 156(3) Criminal Procedure Code. Later, on registration of the FIR on 13th June, 2009 vide MECR No. 6 of 2009 under Sections 406, 420 read with Section 34 and 114 of Indian Penal Code, the petitioners amended the petition to include therein challenge to the FIR. 2. The brief statement of facts is as follows : . Petitioners no.2 and 3 are the Directors of petitioner no.1-company. Original accused no.4- Mustafa Abdulla Surka was employed with petitioner no.1 as Manager and original accused no.5 Ketan Dilip Khedekar as Assistant Manager, Purchase and Finance. Respondent no.1 carries on business of dealing with chemicals in the name of M/s. Jai Ambe Enterprises. During the period December, 2006 to October, 2008 petitioners no.2 and 3 and accused nos.4 and 5 represented to respondent no.1 that they are big businessmen having their business in India, as well as, at other places. Their business was being looked after by accused nos.4, 5 and 6. With these representations they persuaded and instigated respondent no.1 to supply chemicals under various bills, challans and purchase orders. The petitioners duly received all the material supplied by respondent no.1 and have also * 3 * W.P. 2154.2009 31.01.2011 utilised the same. At the time of supply, no dispute as regards the quality, quantity and rate of supply was raised. The petitioners had also handed over cheques to respondent no.1 towards the price of the chemicals sold and delivered. The cheques when presented for payment were dishonoured. Respondent no.1 has filed separate proceedings under Section 138 Negotiable Instruments Act in respect of the cheques. 3. Respondent no.1 alleges that the petitioners and other accused persons had dishonest intentions since beginning. They had in manipulation with the bank authorities returned the cheques initially for the reason referred to drawer or funds insufficient” and “ subsequently for the reason signature defers”. According to “ respondent no.1, there was no question of any difference in the signature as the cheques bearing same signature had been encashed by the bank authorities. Thereafter, petitioners no.2 and 3 in collusion and connivance with the other accused persons started shifting the burden upon accused nos.4, 5 and 6 alleging that accused nos.4, 5 and 6 acting in collusion with respondent no.1 had purchased the material at a rate higher than that prevailing in the market. Petitioners no.2 and 3 filed a complaint against accused nos. 4, 5 and 6 * 4 * W.P. 2154.2009 31.01.2011 with Economic Offences Wing (EOW), Crime Branch only to forestall the payment to be made to respondent no.1 and in this way have committed the offence of cheating. Respondent no.1 also alleges that as per the prevailing pratice in the market, the petitioners were not entitled to utilise the material received by them, until the payment was made. Therefore, until making of the payment, the chemicals supplied by the petitioner would remain in the custody of the petitioner in trust. Since, the petitioners have utilised the material for their own benefits, according to respondent no.1 they alongwith other accused persons have committed the offence of criminal breach of trust. 4. The petitioners do not dispute that they had placed orders for supply of the chemicals with respondent no.1 for the quality, quantity, as well as, the rate of supply as alleged. They also do not dispute receipt of the goods and utilisation thereof. According to them, on 14th July, 2008 a number of their employees approached petitioner no.2 complaining about certain cheques issued on behalf of petitioner no.1. The employees informed the petitioners, that accused no.4 had over a long period of time been preparing inflated invoices and had pressurized the employees to withhold the information. He was also supplying false and misleading information to various departments of * 5 * W.P. 2154.2009 31.01.2011 petitioner no.1 including the costing department. The Assistant Manager of petitioner no.1 informed petitioners no.2 and 3 that the prices of raw-materials purchased by petitioner no.1 reflected in the weekly reports were wrong and misleading. The invoices were being fraudulently altered to reflect a lower value. The petitioners realised that there was a systematic plan by their own employees to embezzle money. As a consequence of the acts of accused nos.4 to 6, petitioner no.1 had unwittingly sold its final products at a price much lower than its actual price input. This resulted in petitioner no.1 making staggering losses. Petitioner no.1 was, however, under mistaken impression that it was selling its final products at a profit. Infact it had paid income-tax to the extent of Rs.50,21,000/- on the basis of the final figures that incorrectly indicated a profit. Accused no.4 was instrumental in showing profits inspite of actual losses. The petitioners then appointed a Chartered Accountant to carry out audit of the company. The audit report disclosed that, (i) the company had purchased raw-material at a higher cost than that disclosed to the costing department; (ii) the cost of napthalene purchased was shown lower than 25% as opposed to the actual purchase price; (iii) raw- material was inexplicably purchased on the same day at different * 6 * W.P. 2154.2009 31.01.2011 prices from the same vendors. The petitioners therefore complained to the Joint Commissioner of Police, EOW, Crime Branch, Mumbai against accused no.4 Mustafa Suraka alleging that he had, systematically over a period of approximately 3 years been purchasing material in India, as well as, in the UAE at prices higher than the market prices and reporting lower prices in the MIS reports and this led to petitioner no.1 suffering losses to the extent of about Rs.11.11 crores. The complaint does not contain any allegations against respondent no.1. In the present application, however, the petitioners alleged that Mustafa has played fraud alongwith respondent no.1 and another firm by name M/s. Lakshmi Dyechem. 5. The contentions raised by the petitioners in the petition is infact the defence of the petitioners to the complaint filed by respondent no.1, which cannot be gone into at this stage of the proceedings. Since, the complaint as filed by respondent no.1, on a prima-facie view makes out the offences alleged therein, respondent no.1 must get an opportunity to establish the same by leading evidence at the trial. 6. Mr. Gupte, the learned counsel for the petitioner, submits that infact the dispute disclosed in the complaint filed by petitioner no.1 is a dispute of civil nature and there is no justification to proceed * 7 * W.P. 2154.2009 31.01.2011 criminally against the petitioners. It has also been contended that petitioner no.1 cannot be prosecuted for the offences under Sections 406 and 420 Indian Penal Code as each one of these sections require imposition of a mandatory term of imprisonment coupled with fine. These aspects will have to be gone into at the time of trial. Hence, the petition is dismissed. 7. The counsel appearing on behalf of the petitioners, seeks continuation of the interim order dated 27th August, 2009 for a reasonable period to enable the petitioners to approach the Apex Court. The order dated 27th August, 2009 directs that no coercive steps should be taken against petitioners no.2 and 3. That order is continued for a period of 4 weeks from today. Mr. Ponda, appearing on behalf of respondent no.1, apprehends that in view of dismissal of the petition, petitioners no.2 and 3 may abscond. It is therefore directed that petitioners no.2 and 3 shall attend to Tilak Nagar Police Station, Chembur once a week. The learned counsel makes a request that the police be also directed not to file chargesheet for a period of 4 weeks. The request is opposed by Mr. Ponda. The request is rejected. [Smt. R.P. SondurBaldota, J]