1 IN THE HIGH COURT OF BOMBAY AT GOA CRIMINAL WRIT PETITION NO. 29 OF 2010 1. Shri Girdharlal M. Gangani, Partner of M/s. Shriji Builders, residing at Galaxy Building, Opp. Nova Goa Hotel, near Mahalaxmi Temple, Dr. A. B. Road, Panaji-Goa. 2. Smt. Meena Girdharlal Gangani, wife of Shri Girdharilal Gangani, residing at Galaxy Building, Opp. Nova Goa Hotel, near Mahalaxmi Temple, Dr.A.B. Road, Panaji-Goa. 3. Shri Rasiklal M. Gangani, residing at Galaxy Building, Opp. Nova Goa Hotel, near Mahalaxmi Temple, Dr. A. B. Road, Panaji-Goa. 4. Smt. Anasuyaben Rasiklal Gangani, Partner of M/s.Shriji Builders, residing at Galaxy Building, Opp. Nova Goa Hotel, near Mahalaxmi Temple, Dr. A. B. Road, Panaji-Goa. ... Petitioners versus 2 1. Himalaya Builders Pvt. Ltd. Company registered under the Companies Act, 1956, through its Authorized Representative & Director, Shri Radhesham Sodhani, having its registered office at 1076, Dr. E. Moses Road, Worli, Mumbai-400 018, Maharashtra. 2. State of Maharashtra through the Senior Police Inspector, Worli Police Station, Mumbai-400 018, Maharashtra. 3. State of Goa, through the Police Inspector, Panaji Police Station, Panaji-Goa. ... Respondents Shri S. R. Rivonkar, Advocate for the Petitioners. Shri Jitendra P. Mishra, Advocate for Respondent No.1. Shri C. A. Ferreira, Public Prosecutor for Respondent Nos. 2 and 3. CORAM : N. A. BRITTO, J. DATE : 11TH OCTOBER, 2010. ORDER In this petition, filed under Section 482 of the Code (Code of Criminal Procedure, 1973), the petitioners seek quashing of the F.I.R. 3 dated 21-1-2010 registered under No.MECR/01/2010 at Worli Police Station at Mumbai, Maharashtra, pursuant to Order dated 23-12-2009 of the learned Additional Chief Metropolitan Magistrate, 29th Court at Dadar, and the said Order as well. 2. The sequence of events leading to the registration of the said F.I.R. and the filing of this petition, may be stated as follows:- The petitioners No.1 and 4 are the present partners of a firm known as M/s. Shriji Builders having their Office at Panaji, Goa. Petitioners No.2 and 3 are not the partners of the said firm. Respondent No.1 is a private limited company. 3. There was an agreement executed on 13-1-1998 between petitioner No.1 and petitioner No.4 and one Mr. Mohanlal Raja, who has since expired, on 13-1-1998, as partners of the firm Shriji Builders and the Respondent-Company. 4. By virtue of this agreement, the said firm, of which petitioner Nos.1 and 4 continue to be the partners, agreed to sell to the 4 Respondent-Company a plot of land admeasuring 1162 sq. meters surveyed under Chalta No.3 of P.T. Sheet No.147 situated at Panaji, Goa, for a sum of `1.20 crores out of which `115 crores were paid at the time of execution of the said agreement, and balance of `5 lakhs was to be paid at the time of execution of the sale deed. It was acknowledged in the said agreement that the purchaser-company had investigated the title of the vendor-firm, and were satisfied of the same, and that the vendor-firm would comply with any queries that may be raised by the purchaser-company. In case the purchaser- company intended to rescind the agreement, the vendor-firm was to refund the amount paid by the purchaser-company to the vendor- firm after deducting a sum of `1 lakh. It was further stipulated that the vendor-firm would obtain all necessary permissions for sale and transfer of the said company and in case the vendor-firm failed to get any of the permissions, the purchaser-company was given an option either to extend the time or to rescind the agreement. The said agreement was executed at Panaji. 5. The Respondent No.1 i.e. purchaser-company then filed a suit on or about 20-8-2009, after a lapse of about 11 years or so. The suit 5 was filed for a declaration that the said agreement was subsisting and binding between the parties and for specific performance of the same, and in case it was held that specific performance could not be granted then the vendor-firm be ordered and directed to pay a sum of `1.95 crores, etc. The suit was filed against the firm and petitioner No.1 and petitioner no.4 as partners of the same. Petitioners No.2 and 3 were not parties to the suit. 6. The purchaser-company as plaintiff in the said Civil Suit in para 29 clearly admitted that the agreement dated 13-11-1997 was signed and executed at Panaji. A further averment was made that Defendant No.1 i.e. vendor-firm was having its office at Panaji, and Defendant Nos.2 and 3 who were partners of the said firm were also residing at Panaji. A further averment was made that the whole cause of action had arisen in Panaji within the jurisdiction of the Civil Judge, Senior Division at Panaji, where the said Civil Suit was filed. 7. The petitioner nos.1 and 4 as present partners of vendor- firm filed an application on 14-10-2009 for rejection of the plaint, under Order VII, Rule 11 C.P.C. stating that the suit was hopelessly time 6 barred. According to the petitioner nos.1 and 4 who are the present partners of the said firm, the deed of sale was to be executed before 30-3-2001, and the suit which was filed on 13-8-2009 was clearly time barred. The said application is stated to be pending for consideration. 8. The Respondent-Company then filed the F.I.R. at Worli Police Station on 21-12-2009 through one R. S. Sodhani, as attorney of the said Company and on 23-12-2009 approached the learned Metropolitan Magistrate, 29th Court at Dadar with the allegation that no action was taken against the accused; and the learned Metropolitan Magistrate, observing that the allegations did show the commission of a cognizable offence sent the complaint to Worli Police Station for investigation under Section 156(3) of the Code. The petitioners then approached the Court of Sessions at Panaji for anticipatory bail and the learned Additional Sessions Judge was pleased to grant the same, by Order dated 9-3-2010. 9. A Memorandum of Understanding has been executed on 17-2-2010, between petitioner No.1 and the Respondent-Company and it is stated on behalf of the petitioners that this Memorandum of 7 Understanding is executed at the Panaji Police Station on the said date in the presence of Senior Police Inspector of Worli Police Station, Mumbai. However, it can be seen from the reply filed by him that the petitioners did not turn up on 17-2-2010 at Panaji Police Station, and as such he had to return to Mumbai. 10. Be that as it may, as per the said Memorandum of Understanding dated 17-2-2010 executed between the Respondent- Company and the petitioner No.1 it is agreed between them that the agreement dated 13-11-1997 is still valid, subsisting and binding between the parties. The said M.O.U. acknowledges that Shri G. M. Gangani has given quiet, vacant and peaceful possession of the property to the Company long back and power is also given to the Company to develop the said property in a manner required by them. It is also agreed that `5 lakhs which the Respondent-Company was required to pay at the time of execution of the conveyance would be foregone. The M.O.U. also stipulates that it is signed without prejudice to the claims of the parties in Special Civil Suit No.84 of 2009 pending before the Civil Judge, Senior Division at Panaji. It is conceded on behalf of the petitioners that till date there is no challenge to the said M.O.U. 8 11. The first question which comes to mind is whether anything is left to be investigated after the parties have signed the said Memorandum of Understanding? There is no answer from the Respondent-Company and it appears that the Respondent-Company has achieved what it could not by filing a civil suit, by filing a F.I.R. based on false allegations. 12. Three points arise for my consideration, and, the first and foremost among them is as regards jurisdiction of this Court. 13. According to the Respondent-Company, this Court has no jurisdiction to quash a F.I.R. which is registered at Worli Police Station pursuant to the orders of the learned Additional C.M.M. at Mumbai, both being situated beyond the jurisdiction of this Court. 14. On the aspect of jurisdiction, several authorities have been relied upon. As far as the facts go, there is no dispute that the property in question is situated within the jurisdiction of this Court at Goa; the agreement between the parties shows that it was executed here at Panaji, and not only that, the Respondent-Company filed the suit before the 9 Civil Judge, Senior Division at Panaji acknowledging therein that the said agreement dated 13-11-1997 was signed and executed at Panaji, and the whole cause of action had arisen at Panaji. Not only that even the State of Maharashtra did not object for the application for bail being granted to some of the petitioners by the District & Sessions Judge at Panaji(emphasis supplied). 15. The Apex Court in Navinchandra N. Majithia v. State of Maharashtra((2000) 7 SCC 640) has held that so far as the territorial jurisdiction with reference to a criminal offence is concerned the main factor to be considered is the place where the alleged offence was committed. In that case, the Apex Court was examining whether High Court of Bombay at Mumbai was right in passing the order rejecting the Writ Petition on the ground that the Court could not entertain the Writ Petition as the petitioner had prayed for quashing the complaint filed against him at Shillong(in Meghalaya) and the Apex Court came to the conclusion that the view held by this Court was unsustainable, and that this Court had based its decision on the sole consideration that the complainant had filed the complaint at Shillong in the State of Meghalaya and the petitioner had prayed for quashing the said 10 complaint. The High Court did not consider the alternative prayer made in the Writ Petition that a writ of mandamus be issued to the State of Meghalaya to transfer the investigations to Mumbai Police. The High Court also did not take note of the averments in the Writ Petition that the filing of the complaint at Shillong was a malafide intention to harass and pressurize the petitioners to reverse the transaction for transfer of shares. The Apex Court noted that reliefs sought in the Writ Petition may be one of the relevant criteria for consideration of the question but cannot be the sole consideration in the matter and on the averments made in the Writ Petition, the gist of which has been noted earlier, it could not be said that no part of the cause of action for filing the writ petition arose within the territorial jurisdiction of the Bombay High Court. 16. The Apex Court in Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd. and others(2006 (3) SCC 618) has held that in a criminal matter also, the High Court may exercise its extraordinary writ jurisdiction but interference with an order of the Magistrate taking cognizance can be the subject matter of revisional jurisdiction as well as of an application invoking the inherent jurisdiction of the High Court. 11 17. In the case of Pepsi Foods Ltd. and another v. Special Judicial Magistrate and others((1998) 5 SCC 749) the Apex Court has held that the nomenclature under which petition is filed is not quite relevant and that does not debar the court from exercising its jurisdiction which otherwise it possesses unless there is special procedure prescribed which procedure is mandatory. In a case where the Court finds that it could not exercise jurisdiction under Section 226, the Court can certainly treat the petition as one under Article 227 or Section 482 of the Code but sometimes for immediate relief Section 482 of the Code or Article 227 may have to be resorted to for correcting some grave errors that may be committed by the subordinate Courts. 18. The case of Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd. and others(2006 (3) SCC 658) stood on its own facts and what was held in the said case was that even if the averments made in the writ petition filed by the Respondent, even if given face value and taken to be correct in their entirety would not confer any jurisdiction upon the Kerala High Court. 12 19. On the contrary, the facts of the case at hand are on a much higher footing then the facts in the case of Navinchandra N. Majithia v. State of Maharashtra and others(supra) and that is because this is a case where the entire cause of action has arisen within the jurisdiction of this Court at Panaji, and, therefore it has got to extend its hands of justice to correct the abuse of process of law which is being committed by the Respondent-Company by filing a complaint in Mumbai and then obtaining the orders of the Additional Metropolitan Magistrate, to investigate it under Section 156(3) of the Code. The Respondent- Company after having pleaded that the agreement was executed at Panaji and the “whole cause of action had arisen in Panaji”, was not entitled to file a criminal complaint at Mumbai by pleading false facts that the agreement of 13-11-1997 was signed at their office at Worli, Mumbai. It is therefore obvious that the complaint/F.I.R. was filed in Mumbai with false averments and with malafide intention of pressurizing the petitioners with the aid of the Police. As stated by the Apex Court in Dalip Kaur and others v. Jagnar Singh and another((2009) 14 SCC 696) relying on Hiralal((2009) 11 SCC 89) one of the grounds on which such interference is permissible is where the action on the part of the complainant is malafide. The Apex Court in Sunder Babu and others 13 v. State of Tamil Nadu(2009) 14 SCC 244) has held that where criminal proceedings are manifestly attended with mala fide and where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge the complaint is liable to be quashed as such a complaint would fall in category (7) highlighted in the case of State of Haryana v. Bhajan Lal((1992) Supp(1) 335). 20. If the complaint/F.I.R. is quashed as malafide, nothing will remain in the Order dated 6-3-2010 to be complied with. That apart, the Order of the learned Additional Metropolitan Magistrate need not detain us any longer for it can immediately be seen that the same was passed, to say the least, without application of mind. The averments in para 3 of the application dated 23-12-2009 filed before the learned Metropolitan Magistrate, 29th Court at Dadar registered under No.128/SW/09 clearly shows that it is A-1/Girdharlal M. Gangani along with another partner Mohanlal Raja Gangani who had come to Worli and that is the time when according to the Respondent-Company the representations were made which ultimately resulted in a case of cheating under Sections 420, 406 I.P.C. If, the learned Metropolitan Magistrate had applied his mind 14 to the facts of the case, the learned Additional Metropolitan Magistrate would have immediately found out that there were no averments against accused Nos.2/Meena, A-3/Resikhar and A-4/Anusuyaben at all for having committed offence of cheating. What is essential for an offence of cheating is that fraudulent and dishonest intention ought to exist from the very inception when the promise or representation is made and according to the said application none was made by the remaining accused except petitioner No.1 and the said Mohanlal. The learned Additional Metropolitan Magistrate ought to have seen that that so-called offences were committed in September, 1997 or thereabout, and, therefore ought to have found out as to why there was a delay in approaching the Police. The learned Additional M. M. ought to have asked for the agreement executed and insisted upon perusing a copy of the agreement dated 13-11-1997 referred to in para 6 of the application and if that was done, the learned Additional M. M. would have come to know that it was executed at Panaji. The learned Metropolitan Magistrate, since a complaint was made that the Police were not investigating ought to have issued a notice to them before passing any order though such a grievance is not made on behalf of Respondent 15 No.2 who appears to be ever willing to investigate a case of this nature which is between two sets of builders. 21. The Apex Court in Maksud Saiyed v. State of Gujarat((2008) 5 SCC 668) has held that even in a case under Section 156(3) of the Code, the Magistrate is required to apply his mind. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. The Magistrate has to carefully scrutinize the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused. That was a case where an order was made under sub-section(3) of Section 156 of the Code relying on the basis of the allegations made in the complaint and the Respondent had filed an application under Section 482 of the Code for quashing the complaint and the said application was allowed by the High Court observing that it appears to the Court that the Chief Judicial Magistrate had not applied his mind while passing the order under Section 156(3) of the Code directing the Police to investigate in the matter. The impugned Order, on the face of it, 16 revealed that he had not gone through the complaint. The Apex Court had held that the approach of the High Court was entirely correct. Here, in this case too, as already stated, in case the learned Additional Metropolitan Magistrate had gone through the agreement referred to in para 6 and the averments of para 3 the Additional Metropolitan Magistrate would have immediately come to the conclusion that deception, if any, was only by accused No.1 i.e. petitioner No.1 and the agreement itself was executed at Panaji and would have refrained from asking the case to be investigated by the Additional Metropolitan Magistrate. 22. In Arvindbhai Ravjibhai Patel v. State of Gujarat and others(1998 Cri.L.J. 463) a learned Single Judge of Gujarat High Court has stated that the Magistrates should be quite discreet enough in not mechanically directing the Police to investigate the case under Section 156(3) of the Code, when the allegations in the complaint are simple enough and further where the Court undoubtedly can straightaway proceed to conduct the trial, and that would amount to clear abdication and dereliction of duty, which is required to be curbed in the overall interests of justice. 17 23. In Guruduth Prabhu and others v. M. S. Krishna Bhat and others(1999 Cri.L.J. 3909) it was observed that an order of a Magistrate directing investigation under Section 156(3) without applying his mind to allegations made in the complaint is without jurisdiction and the High Court either under Section 482 or under Article 226 of the Constitution is empowered to quash the investigation. As already stated, the Order dated 6-3-2010 clearly shows that it has been issued without application of mind to say the least, to the facts of the case, and, therefore the same needs to be set aside. 24. Thirdly, it is well settled as stated by the Apex Court in Dalip Kaur and others v. Jagnar Singh and another((2009) 14 SCC 696) that if the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non refunding the amount of advance the same would not constitute an offence of cheating. Similar is the legal position in respect of criminal breach of trust having regard to its definition contained in Section 405 of the Penal Code. The facts of the case clearly show that the complaint was filed on behalf of the Respondent-Company after almost a decade, and that too only after the petitioners had taken the plea in the suit, that the 18 suit filed by the Respondent-Company was clearly time barred. The agreement dated 13-11-1997 clearly shows that the Respondent- Company had investigated the title of the vendor-firm and were satisfied with the same. By virtue of clause 9 of the agreement the purchaser- company had retained an option either to extend the time to the vendor- firm to get permissions or sanctions or rescind the agreement. By virtue of clause 12 it was stipulated that in the event of termination, the purchaser-company will have a right of refund of the money with interest thereon, if any. Therefore, it is obvious that the dispute between the parties was a civil dispute and if at all, no sale deed was executed, it is because the Respondent-Company was not interested in executing the same. There is no other explanation for the silence on the part of the Respondent-Company for over a decade. At present there is now a M.O.U. executed between both the parties which clearly shows that the dispute between them is of a civil nature not only in the context of the first agreement but in the context of the subsequent M.O.U. executed between them, and, therefore there is nothing left to be investigated. 25. Considering the facts of the case, and for reasons stated herein above, the petition is bound to succeed. The Order dated 6-3-2010 19 of the learned Additional Metropolitan Magistrate in 128/SW/09 is hereby quashed and set aside. The F.I.R. bearing No.MECR/1/2010 dated 21-1-2010 at Worli Police Station, Mumbai is also quashed and hereby set aside. Respondent No.1-Company is hereby directed to pay costs of the petition quantified at `15,000/- to the petitioners(petitioners No.2 and 3 certainly deserve that more than petitioners no.1 and 4) within a period of two weeks, failing which appropriate action will be taken against the Respondent No.1 to recover the same in accordance with law. N. A. BRITTO, J. RD 20