~Qw ‘ ‘a ‘ v, \w ) > x ,1 W/kyw, AMENDED PETITION IN THE HON’BLE HIGH COURT OF CHHA’I‘TISDDGARH AT BILASPUR Cr.M.P. No‘ 455 [2007 Petitioners : 1 . Anand, (Accused) S/o Banshi Lal Gandhi, 22yrs. 2‘ Banshi Lal, S/a Dwarika Mal Gandhi, 45yrs. R/o Jijamgaon, RS. Kurud, Distt. Dhamtam' (C.G.} Versus Resgondent : 1. State of Chhattisgarh, Through : RS. Kurud, MISCELLANEOUSIPETITION,U/ S £82 OF THE CRIMINAL PROCEDURE CODE ‘’ \ Distt. Dhamtari (C.G.) 2. Madhav Rao, s/o Rameshwar Rao Gajkwad, aged about 45 years, 3. Mahendra Rao, S/o Rameshwai‘ Rao ”iv/‘1! Gaikwad, aged about 29 years, --)/J > Res. N0. 2 & 3 R/o Village— \2‘Ef3f3 (,7 4% Jijamgaon, Tehsil Kurud, ofg~$ Distt Dhamtari (cm HIGH COURT OF CHHATTISGARH : BILASPUR Cr.M.P.NO.433 of 2007 Petitionem Anand and another Versus Resgondents State of Chhattisgarh FOR PRONOUNCEMENT OF ORDER ON27 lk SEPTEMBER, 2011 Sdl- F ' Manindra Mohan Shrivastava; Judge v 26709/2011‘“ (13, HIGH COURT OF CHHATTISGARH : BILASPUR S.B. : HON’BLE SHRI MANINDRA MOHAN SHRIVASTAVA,J. Cr.M.P. No.433/2007 PETITIONERS Anand and another Versus RESPONDENTS State of Chhattisgarh (Petition u/S 482 of the Cr.P.C) Appearance: Shri Prafull Bharat, counsel for the petitioners. Shri Vaibhav A. Goverdhan, Panel Lawyer for the State; ORDER (Passed on 2% 09.201 1) 1. By this petition under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “the Code”), the * petitioners seeks to assail legality and validity of the order dated 15.5.2007 passed by learned Additional Sessions Judge, Dhamtari in Criminal Revision No.48/2006, by which order dated 26.8.2006, framing charges against the petitionersi has been affirmed. 2. Police of Police Station- Kurud filed a charge sheet against the petitioners and co-accused Tejmal Gandhi in the Court of Judicial Magistrate First Class, Kurud, alleging commission of offence under Section 3/7 of the Essential Commodities Act, 1955 (hereinafter referred to as “the E.C. Act”) as also under Section 420 of the IPC. . Prosecution case, in brief, is that Tejmal Gandhi, co—accused along with the petitioners engaged in sale and purchase of paddy from the agriculturist of village Jijamgaon and nearby Villages Without possessed of valid licence. It is also alleged that the petitioners did not pay them the cost of paddy. (4 .On the basis of the material collected by the police and submitted along with the charge—sheet, the Magistrate framed charges under Section 3/7 of the E.C. Act and also under Section 420 of the IPC Vide order dated 26.8.2006. Aggrieved by the order of framing of charges, the petitioners preferred revision, which has also been dismissed. The third accused Tejmal is stated to be absconding and the charge sheet was filed declaring him absconding. .Learned counsel for the petitioners submits that as the petitioners are not covered by the definition of “dealer” as defined in Rule 2 (e) of M.P./C.G. Scheduled Commodities Dealers (Licensing and Restriction on Hoarding) Order, 1991 (hereinafter referred to as the “Order of 1991”), the petitioners could not be prosecuted for violation of the Order of 1991, under the provision of Section 3/7 of the E.C. Act and consequently framing of charge under the aforesaid provision is clearly illegal and abuse of the process of law. Learned counsel for the petitioners elaborated his submissions by submitting that 'paddy is not included in Schedule —I appended to the Order of 1991 and the same is included only in Schedule -II and there is no limit for storage of paddy prescribed in Schedule —II. His submission is that unless the prosecution brings on record any charge that the petitioners were engaged in the business of sale and purchase or storage for sale of any of the food-grain specified in Schedule-I in quantity of 10 quintals or more at any one time, no case for framing charges is made out against the petitioners. It is further submitted that petitioner — Banshi Lal and the other co-accused Tejmal were in fact possessed of valid licence under Order of 1991 and whatever petitioners have done has been done in their capacity as a ‘1icensed dealer’, holding licence under Rule 3 of the Order of 1991 and therefore, no prima facie case is made out to try them for alleged commission of offence under Section 3/7 of the E.C. Act. As far as framing of charge under Section 420 of the IPC is concerned, learned counsel for the petitioners vociferously contended that the charges have been framed without there being any material on record to show that the petitioners cheated and dishonestly induced delivery of property. He submits that from the entire charge-sheet, there is no specific allegation of cheating, much less any material to prima facie make out a case of proceeding against the petitioners by \ framing charge for alleged commission of offence under Section x. \\ \ \ 420 of the IPC. Learned counsel for the petitioners submits that the only allegation against the petitioners are that they purchased paddy from various agriculturist and they have not paid the sale price, which by itself, Without any allegation or material to show that there was intention right from the inception of the transaction to cheat, could not form basis to frame charges. It is further submitted that as far as allegation of cheating to Madhav Rao and Mahendra Rao is concerned, the statements of those persons have not been recorded by the police during the investigation, to even remotely suggest that they were cheated. He further submits that in fact a suit was filed by Madhav Rao and Mahendra Rao for recovery against the petitioners and Tejmal and during the pendency of the suit, an application under Order 6 Rulel7 of the C.P.C was made for deleting the name of the petitioners, on the pleading that Tejmal alone was responsible, upon which, the name of the petitioners Was deleted and the suit of recovery remained only against Tejmal, which too was finally dismissed by the Civil Court, vide its judgment and decree dated 2.4.2004. Lastly, it is submitted that the charge~sheet is based on the FIR lodged by Basant Kumar Koram, Food Inspector, Kurud, and his statement under Section 161 of the Code, Whereas the statements of Madhav Rao and Mahendra Rao or any other agriculturist alleging sale of paddy have not been recorded. Therefore, no charges could be framed against the petitioners ‘ only on the basis of FIR and case diary statement of Basant Kumar Koram, Food Inspector. In support of his submissions, ‘ ‘ ~, \A/ learned counsel for the petitioners relied upon the decision of the Supreme Court in the cases of V. Y. Jose & another Vs. State of Gujarat & anotherl, S.V.L. Murthy Vs. State represented by CBI, Hyderabad? and Dalip Kuar 8r. Ors. Vs. Jagnar Singh and another? 6. On the other hand, learned counsel for the State has supported the order of framing of charges by submitting that in View of the comprehensive definition of “Dealer” as defined in Rule 2 (e) of the Order of 1991, a prima facie case for prosecuting the petitioners by frarning charges for commission of offence under Section 3/7 of the E.C. Act is made out as the FIR, statements recorded during inquiry before the Collector and the case diary statement of Basant Kumar Koram, Food Inspector, taken along with number of documents, report and the charge—sheet, show that the petitioners and other co—accused Tejmal were engaged in sale and purchase of paddy without any valid licence, which clearly constitutes contravention of Rule 3 of the Order of 199 1 and therefore no illegality has been committed by the trial Court by framing of charges under Section 3/7 of the EC Act. It is also submitted that Schedule-I appended to the Order of 1991 included paddy and the allegation against the petitioners is that they purchased huge quantity of paddy from the agriculturist of village-Jijamgaon and nearby villages, for which, they were not licensed under Order of 1991. He further i l K2009) 3 scc 78 (2009) s scc 77 g009 l (14) scc 696 l \ submits that the allegation and the material which have been placed on record prima facie show that the petitioner and the co-aocused had purchased more than 10 quintals of paddy from the agriculturist, therefore, a case of proceeding against them by framing charges is made out. As far as framing of charge under Section 420 of the IPC is concerned, learned counsel for the State submitted that during the course of inquiry made by the Food Inspector and various statement recorded, which have been filed along with the charge sheet, show that the petitioners purchased paddy from the various agriculturist including Madav Rao and Mahendra Rao, but did not pay the cost for paddy to them and one of the co-accused- Tejmal absconded without making payment which prima facie shows that right from the inception of the transaction, there was fraudulent and dishonest intention not to pay for the paddy purchased. Therefore, a case for proceeding under Section 420 of the IPC is made out. '7.I have considered the rival submissions made by learned counsel for the parties and perused the records. 8. In so far as framing of charge under Section 420 of the IPC is concerned, the order framing of charge against the petitioners shows that the allegation against the petitioners is that petitioners and other co-accused Tejmal formed common intention to obtain property by fraud and deceit from Madhav Rao, Mahendra Rao, Jai Singh, Govind Ram, Indra Kumar, @ Motilal and Uttam Chand and in furtherance of dishonest and fraudulent intention, paddy of those persons was purchased and, thereafter, cheated them by not making payment. 9. Section 420 of the IPC provides for punishment for cheating and dishonestly inducing delivery of property. “Cheating” has been defined in Section 415 of the IPC, Which is reproduced as below: (i “415. Cheating~ Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”. Explanation ~ A dishonest concealment of facts is a deception Within the meaning of this section. ” The ingredients and essence of cheating were examined by the Supreme Court in the matter of Inder Mohan Goswami and another Vs. State of Uttaranchal & Ors.4, while considering whether a case for quashing FIR is made out in exercise of power under Section 482 of the Code. It was observed as under: “42. On a reading of the aforesaid section, it is manifest that in the definition there are two separate classes of acts which the person deceived may be induced to do. In the first class 4 (2008) 1 scc (Cri.) 259 of acts he may be induced fraudulently or dishonestly to deliver property to any person. The second class of acts is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases, the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but need not be fraudulent or dishonest. 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 a fraudulent or dishonest intention at the time of making the promise. From his mere failure to subsequently keep a promise, one cannot presume that he all along had a culpable intention to break the promise from the beginning. In the matter of Dalip Kaur and Ors. Vs. Jaguar Singh & Another5, the Supreme Court had an occasion to examine the provision contained in Section 415 of the IPC which defines the cheating. It was observed as under: “8.... An offence of cheating would be constituted when the accused has fraudulent or dishonest intention at the time of making promise or representation. A pure and simple breach of contract does not constitute an offence of cheating.” s (2009) 14 SCC 696 [w w -9- I § In the case of Inder Mohan Goswami (supra), while examining whether a case of quashing FIR is made out or not, the question which the Supreme Court posed to itself was : “38. The question before us is—whether the case of the appellants comes under any of the categories enumerated in Bhajan Lal? Is it a case where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in entirety, do not make out a case against the accused under Sections 420, 467 and 120-B IPC? For determination of the question it becomes relevant to note the nature of the offences alleged against the appellants, the ingredients of the offences and the averments made in the FIR/complaint. While undertaking similar examination in the matter of quashing of FIR, in the case of Dalip Kuar (supra), the Supreme Court stressed upon the approach required to be adopted by the High Court, in following words” “10. The High Court, therefore, should have posed a question as to whether any act ‘of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the, very inception”... 10. In the light of the aforesaid two decisions, which specifically deal with cases relating to quashment of FIR, wherein the J i i i allegation of commission of offence under Section 420 of the K - s , -10- IPC have been made, in the present case, the allegation made in the charge-sheet and the material along with the charge— sheet need to be examined to flnd out Whether the allegation contained therein even if taken on its face value and accepted in its entirety do not prima facie constitute offence or make out a case against the accused and Whether there is sufficient ground for proceeding for framing of charges against the petitioners for commission offence under Section 420 of the IPC. 11. The charge-sheet which has been placed on record shows that the allegation against the petitioners and other co-accused is that fraudulently paddy was purchased, but cost was not paid by the petitioners. In the FIR lodged by Basant Kumar Koram, Food Inspector, it has been stated that on receipt of complaint against the petitioners that they are engaged in sale and purchase of paddy and payments towards purchase of paddy from the agriculturists have not been made, inquiry was ~ conducted, in which, Motilal and Govind Ram stated that they sold paddy and payment was not made: A complaint of Madhav Rao and Mahendra Rao has also been placed on record, which shows that the petitioners and co-accused Tejmal had purchased paddy of Rs.57,000/~ and had assured that after selling the same in the mandi, payment would be made. Thereafter, only 24,000/- was paid and remaining amount of Rs.33,000/— was not paid, stating that entire paddy has not been sold and as and When the same is sold, payments would be made. But, thereafter, payments have not been made. The case diary statement of Basant Kumar Koram states that on receipt of compliant from Madhav Rao and Mahendra Rao that after sale of paddy, payments are not being made to them, inquiry was held and in that inquiry, Mahendra Rao stated regarding sale of 168 bags of paddy to the petitioners at the cost of Rs.57,000/-, out of which, only 24,000/- was paid and the remaining amount of Rs.33,000/- was not made. In his case dialy statement, it has also been stated that in that inquiry, Motilal stated to have sold 55 bags of paddy, in respect of which, payment of RS19,685/- has not been made, though, Bansi Lal, on paper, has given the accounts. In his statement it was disclosed that Govind Ram also stated that he sold 62 bags of paddy @Rs.325/- per bag to Tejmal and Bansi for which payment of Rs.10,150/- has not been received. The statement of Govind Ram recorded before the Collector in Case No.53/97— 98 and filed as document along with the charge— sheet shows that he sold paddy in respect of which entire payment has not been made and as against payment of Rs.20,150/-, only Rs.10,000/- has been paid and the balance amount of Rs.10,150/- has not been made. The statement of Mahendra Rao as recorded in inquiry before the Collector has been filed, which also states that against sale of paddy of Rs.57,000/- only Rs.24,000/— has been paid and the balance has not been paid and petitioners stated that Tejmal is responsible and remaining balance amount may be recovered from him. \ 12. The aforesaid material in the charge—sheet only shows an allegation to the effect that the petitioners along with co- accused Tejmal were engaged in sale and purchase of paddy and they had purchased paddy from Motilal, Govind Ram and Mahendra Rao, in respect of which, part payments were made, but full payments was not made. There is no allegation much less any material to show that right from the beginning of the transaction, the petitioners had any fraudulent intention and in furtherance of such dishonest and fraudulent intention, they deceived and on such inducement, those sellers sold paddy to the petitioners. The entire case of the prosecution, even if it is taken as it is on its face value and accepted in its entirety only makes out a case of non-payment of full price of paddy alleged to be purchased by the petitioners and co-accused *Tejmal from Motilal, Govind Ram, Madhav Rao and Mahendra Rao and nothing more. Therefore, the charge sheet does not prima facie makes out any case for framing charge under Section 420 of the IPC against the petitioners. 13. There is yet another glaring aspect of the matter in so far as allegation of commission of offence under Section 420 of the IPC is concerned. Madhav Rao and Mahendra Rao, who are alleged to be cheated by the petitioners had filed a suit registered as Civil Suit No.10 B/2003 for recovery of Rs.50,000/- against the petitioners and Tejmal. The aforesaid suit Was dismissed vide judgment and decree dated 2.4.2004 passed by learned Additional District Judge, Dhamtari, copy of -13- which, is annexed as Annexure A—4. In paragraph—13 of the aforesaid judgment, it has been recorded that during pendency f the suit, plaintiff- Madhav Rao and Mahendra Rao filed amendment applicant under Order 6 Rule 17 of the C.P.C. for deleting the name of the petitioners, on the statement that the liability is only of Tejmal, Whereafter, the name of the petitioners was deleted. The aforesaid suit was finally dismissed by recording a finding that the plaintiff failed to prove that Tejmal purchased paddy from them and any amount was due and payable to the plaintiff by defendant— Tejmal. Moreover, it is extremely relevant to note that there are no case diary statements of any of the seller of paddy recorded under Section 161 of the Code to even allege that they are defrauded and cheated in the matter of sale and purchase of paddy by the petitioners in any manner. 14. As far as framing of charge under Section 3/7 of the E.C. Act is concerned, the allegation against the petitioners as contained ‘ in the charge-sheet, on the basis of which, charges have been framed is that the petitioners along with co-accused Tejmal, in partnership, engaged in sale, purchase and storage of paddy in quantity of more than 10 quintals in one time without there being any valid licence in their favour. In the FIR lodged by Basant Kumar Koram, Food Inspector, it has been stated that upon receipt of complaint, inquiry was conducted by the official of the Food Department, in which, it was found that the petitioners and the co—accused were engaged in sale and \ \ \ \ i \ o \ -14- purchase of paddy from various persons. From the statement of number of persorls, it has been found that that the petitioners were engaged in sale and purchase of paddy without any valid licence. The case diary statement of Basant Kumar Koram shows that in inquiry made, it has been found that Mahendra Rao sold 168 bags to Tejmal, Anand and Banshilal. Upon inquiry made, Banshi Lal stated during that inquiry that he is engaged in sale and purchase of paddy along with Anand and Dwarkamal as a member of the family and further that in the month of November and December, 1997, he, in partnership of Tejmal, was engaged in sale and purchase of paddy. No licence was granted to him by the Collector. Motilal sold 75 kg. of paddy to Banshi Lal. Uttam Chand Jain, stated that Tejmal Gandhi is engaged in sale of paddy in various mandi at Kurud, Abhanpur, Rajim and Raipur. In the matador of Anand, paddy purchased from Govind Ram and Mahendra was sold by Tejmal at Raipur. Indra Kumar stated that Banshi Lal and Tejmal Gandhi are engaged in partnership of business of purchase of paddy which is transported to various mandis in a matador. Govind Ram also states that he sold paddy to Tejaml and Banshi Lal. It has also been stated that from the information received from Krishi Upaj Mandi, Navapara and Abhanpur, Anand sold 307.98 quintals of paddy between the period from 4.12.1997 to 13.2.1998 in Navapara Mandi and 34.64 quintals paddy between 1.10.1997 to 30.9.1998 in Abhanpur Mandi. Tejmal sold 139.70 quintals of paddy between 1.1.1998 to ‘“ 3.1.1998 in Nawapara Mandi and 1718.29 quintals of paddy gL ig‘ . § §\ J @I- between the period from 1.10.1997 to 30.9.1998 in Abhanpur Mandi. 15. The prosecution has placed on record along with the charge sheet, pre—recorded statements of number of purchaser to show that the petitioners along With Tejmal were engaged in sale and purchase of paddy. The prosecution has also placed on record reports submitted by the Assistant Food Officer addressed to the Sub—Divisional Officer, Dhamtari, which also shows that the petitioners were found engaged in sale and purchase of paddy. There are documents on record being reports submitted by various mandis relating to sale and purchase of paddy. Receipt of sale of 37.50 quintals of paddy by Banshi Lal has also been placed on record. 16. Rule 2 (e) of the Order of 1991 defines a ‘Dealer’ to mean a person who is engaged or intents to engage in the business of purchase, sale or storage for sale of any one foodgrains specified in Schedule-I in quantity of 10 quintals or more at any one time and in respect of all foodgra'ins taken together in quantity of 50 quintals or more at‘any one time, and in addition to the Sugar 10 quintals, all kinds of pulses 10 l quintals, edible oils including hydrogenated vegetable oilie. éwr in (X vanaspati 5 quintals edible oilseeds 3O quintals at any one time, Whether on one’s own account of in partnership or in " 1 7 association with any other personor as a commission agent or Kachha. Adhatiya) or miller and I LnAdhatiya... (not including . whether or not in conjunction with any other business. Rule 3 of the Order of 1991 provides that no dealer shall carry on business as a dealer without obtaining a licence under the Order. It further provides that there shall be no retail licence in respect of items 1 8L 2 of Schedule —I. Schedule—I appended to the Order of 1991, in its clause 1, specifies foodgrain to mean wheat, wheat flour (Aata), paddy (rice in husk), rice (husked), broken