IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.44326 of 2009 1. ICEBERG INDUSTRIES LIMITED, A REGISTERED COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT C-654, NEW FRIENDS COLONY, NEW DELHI- 110065 THROUGH ITS DIRECTOR AMIT KATYAL, S/O SHRI OM PRAKASH KATYAL, R/O C-654, NEW FRIENDS COLONY, NEW DELHI- 110065 2. OM PRAKASH KATYAL S/O SHRI R.L.KATYAL DIRECTOR M/S ICEBERG INDUSTRIES LIMITED, R/O C-654, NEW FRIENDS COLONY, NEW DELHI- 110065 3. AMIT KATYAL S/O SHRI OM PRAKASH KATYAL DIRCTOR M/S ICEBERG INDUSTRIES LIMITED, R/O C-654, NEW FRIENDS COLONY, NEW DELHI- 110065 4. RAJESH KATYAL S/O SHRI OM PRAKASH KATYAL DIRECTOR M/S ICEBERG INDUSTRIES LIMITED, R/O C-654, NEW FRIENDS COLONY, NEW DELHI- 110065 5. MRS. KANTA KATYAL W/O SHRI O.P.KATYAL R/O C-654, NEW FRIENDS COLONY, NEW DELHI- 110065 6. J.P.DALAL S/O SHRI KARAN SINGH R/O HOUSE NO. 1869, SECTOR- 17, GURGAON 7. P.K.SHARMA S/O LATE KHUSAL CHAND R/O A-26, SECTOR 49, NOIDA, UP Versus 1. THE STATE OF BIHAR 2. SURENDRA PRASAD SINGH S/O LATE R.N.PRASAD SINGH R/O 503, TIRUPATI APARTMENT, A.N.PATH, NORTH S.K.PURI, P.S. S.K.PURI, TOWN & DISTT.- PATNA AND HAVING OFFICE AT 1ST FLOOR, KALYAANI COMPLEX, EXHIBITION ROAD, P.S. GANDHI MAIDAN, TOWN & DISTT.- PATNA ----------- For the Petitioners:- Mr. Jitendra Singh, Sr. Advocate & Mr. Satyabir Bharti, Advocate For the State:- Mr. Parmeshwar Mehta, A.P.P. For the O.P. No.-2:- Mr. Chitranjan Sinha, Sr. Advocate & Mr. Rakesh Kumar Samarendra, Advocate 04 30/03/2010 Heard learned counsel for the petitioners, learned counsel for the State and learned counsel for opposite party no.-2. The petitioners question the order of cognizance and their entire prosecution in Complaint Case No. 2505C of 2009 under Sections 420, 120B of 2 the I.P.C. pending in the Court of Judicial Magistrate, Ist Class at Patna. Learned counsel for the petitioners submits that reading the complaint as it is, it discloses a purely contractual relationship between the parties with regard to certain construction works for which payments are admitted to have been made at more than one stage of the construction, when allegedly certain payments have remained due and which was not being paid despite repeated requests. The allegations therefore make out a civil dispute primarily for payment of money arising out of a contractual relationship. Resort to the process of criminal law was an abuse of process of the Court. He relies upon a judgment report in 2000 (4) SCC 168 (HRIDAYA RANJAN PRASAD VERMA AND OTHERS VERSUS STATE OF BIHAR AND ANOTHER) and 2009 (4) P.L.J.R. 99 (PRABHAT KUMAR KANODIA VERSUS THE STATE OF BIHAR & OTHERS). He further submits that the legitimate dues have been paid, in fact, excess payment has been made. Learned counsel for the opposite party no.2 submitted that the petitioner has not come to this 3 Court with clean hands. He is not entitled to any discretionary relief under Section 482 Cr.P.C. It is contended that from the pleadings in the application under Section 482 Cr.P.C. it appears that the petitioners have claimed certain T.D.S. deductions under the Income Tax Act showing certain payments to have been made to the opposite party no.2 to which, in fact, has not been paid. Similarly from the statement of Accounts sought to be furnished, the payment of Rs. 15,24,403/- is alleged to have been paid by Cheque, but it gives no details of the Cheque number etc. The items of work were separate and notwithstanding that payments have been made with regard to one work does not take the dishonest intention for non-payment of the other works outside the purview of criminal law. The petitioners contend in their application under Section 482 Cr.P.C. of having allegedly made excess payment to the opposite party no.2 of Rs. 15,90,363.91/-. Surprisingly, they do not state that they have taken any steps for recovery of the excess amount paid. It is lastly submitted that the petitioners have made incorrect statement in reply to paragraph- 25 of the complaint petition which deals with certain other prosecutions inter alia before the Income Tax 4 Department of the petitioners. This court has gone through the averments made in the complaint petition as also on the statement on oath. A conjoint reading of the two reveals a contract agreement between the parties for construction of a Beer factory, its different structures and ingredients of which would ultimately constitute a composite Beer factory. That it was a verbal contract between them is also admitted in the statement on oath. The complainant himself states at paragraph-8 of the complaint, he had no reason to disbelieve the versions and proposals of the petitioners. A bald statement has been made, thereafter that they acted in criminal conspiracy and induced the complainant to accept their proposal with a positive commitment and promised early and timely payment of works done. This allegation of fraudulent inducement/ promise for early and timely payment stood fulfilled by the petitioners as per the complaint itself when the complainant himself acknowledges that as the works progressed his first bill submitted was cleared by the petitioners. Likewise the second bill was also cleared. Conscious of this fact the complainant does not alleged 5 thereafter any inducement dishonestly to continue with the construction, but only states that he was induced to continue with the construction. The dishonest aspect does not appear to be surfacing in the complaint thereafter. The complaint further states that the item rates were also fixed and he then completed the works in this manner between October, 2001 to March, 2004 by investing his own money with belief on the assurance of the accused. The complainant himself acknowledges that the petitioners were very prompt and regular in payment and, therefore, he could not decipher the underlying dishonest intention from the beginning. The pleading appears a contradiction in terms insofar as a criminal accusation is concerned. The allegations do not allege and cannot allege a dishonest intention from the inception of the contract. The subsequent conduct of part payment or a dispute regarding accounts, when again a part payment is alleged cannot invoke allegations of a dishonest intention from the inception. It makes out a simple money claim dispute under a contract. The complainant himself admits that when he pursued the matter with the petitioners, they give him further payment of Rs. 1,50,000/- cash and promised to pay 6 the balance of Rs. 36,22,413/-. The complaint then goes on to make certain allegations against the petitioners in context of certain other actions of the petitioners under the Income Tax Act, the Excise Department etc. which are not relevant for the present controversy as it has no bearing on the nature of the allegations presently being made and have necessarily to be the subject matter of appropriate proceedings by the appropriate authorities. Any statements made allegedly incorrect by the petitioners with regard to those proceedings before other authorities not connected with the present allegations under Section 420 and 120B I.P.C. falls outside the purview of this proceeding under Section 482 Cr.P.C. and cannot be either taken into consideration or have any effect on the question whether the present complaint case is amenable to challenge in the present application or not. Nothing in the present order shall be construed or shall be understood either in favour or against the petitioners or the complainant with regard to these proceedings under the Income Tax Act or the Excise Act etc. The allegations in the complaint, therefore, primarily reflect a contractual relationship arising from 7 a verbal contract with regard to construction of various structures of a brewery unit. This Court does not find it possible to hold that construction of different ingredient structures of the Brewery constitute different contracts and the construction of one part payment thereof made, has no bearing on another aspect of the construction of which payment has not have been made. They constitute one contract. If the petitioners have claimed certain payments have been made to the complainant and sought T.D.S. deduction without actually making the payment, those are matters to be appropriately examined by the authorities concerned and falls outside the pursue of either the present complaint or the present proceedings under Section 482 Cr.P.C. What are petitioners may or may not have done with regard to any excess payment made to the complainant is also not the concern of this proceeding as the maintainability and the justifiability of the complainant has to be decided on basis of the allegations made in the complaint. Any weakness in the defence put forward by the petitioners in this application under Section 482 Cr.P.C. shall not become a source of strength or lend greater force or weightage to the allegations. 8 The complainant admits payment to have been made to him on more than one occasion at the stage of construction. After the dispute has arisen as per the allegations and he approaches the petitioner he again acknowledges a payment of Rs. 1,50,000/-. But seeks to raise a grievance with regard to non payment of Rs. 36,22,413/- when the petitioners contend that they have made excess payment. In that background, combined with the absence of any allegations of dishonest intention from the inception and for which learned counsel for the petitioners has strongly relied upon a case reported in 2000 (4) SCC 168 (HRIDAYA RANJAN PRASAD VERMA AND OTHERS VERSUS STATE OF BIHR AND ANOTHER) which this Court considers appropriate to quote and hold that no criminal offence appears to be made out from what primarily appears to be a dispute with regard to payments and civil dispute for a money claim in a contractual agreement. “15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless 9 fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed.” This Court further consider it proper to take note of paragraph-7 in the case of Md. Ibrahim and Another Versus State of Bihar) relied upon by the petitioners where the Apex Court notices with anxiousness the tendency to unnecessarily resort to criminal prosecution for what are essentially civil disputes. This Court is, therefore, satisfied on consideration of the entirety of the matter that no offence under Sections 420 and 120B is made out on the allegations read on the face of it so as to warrant exposing the petitioners to the rigours of the criminal trial for what is essentially a civil dispute with regard to a money claim. The order of cognizance dated 27.10.2009 and the entire proceedings in Complaint Case No. 2505C of 2009 pending before the Judicial Magistrate, 10 Ist Class, Patna is, therefore, quashed. The application is allowed. P.K. ( Navin Sinha, J.)