THE HON’BLE SRI JUSTICE N.RAVI SHANKAR CRIMINAL PETITION No.11902 OF 2010 Date: .07.2011 Between: Times (NGO Society) rep. by its Treasurer, K.Ranganayakulu …..Petitioner And The State of A.P., rep. by Public Prosecutor, High Court of A.P., Hyderabad, through Inspector of Police, P.S. C.C.S., D.D. Hyderabad and another …..Respondents THE COURT MADE THE FOLLOWING: THE HON’BLE SRI JUSTICE N.RAVI SHANKAR CRIMINAL PETITION NO.11902 of 2010 ORDER: Heard Sri K.Gopal, learned counsel for the petitioner, learned Additional Public Prosecutor for the 1st respondent and Sri K.R.Koteswar Rao, learned counsel for the 2nd respondent. 2. The petitioner herein is a society called Times (N.G.O. Society) represented by its Treasurer. It is the accused in Crime No.101 of 2010 of Central Crime Station, Hyderabad and it filed this petition under Section 482 of Code of Criminal Procedure to quash the F.I.R. in the said case. The 2nd respondent i.e., the A.P. Central Power Distribution Company Limited, represented by its Senior Accounts Officer is the de facto complainant. 3. According to the F.I.R. the petitioner concern which is described as a registered firm has entered into a memorandum of understanding (MOU) with the 2nd respondent for collection of electricity bill amounts due to the 2nd respondent from the L.T. consumers of electricity over certain areas. According to the terms of the MOU, the amounts collected by the petitioner have to be remitted to the 2nd respondent on the next day of the collection. It is alleged that the petitioner did not remit the amounts collected regularly and as on 04.11.2009 a sum of Rs.1,23,15,369.95 Ps. was found to be due from the petitioner. It is further alleged that in view of the above dues, the 2nd respondent on 27.10.2009 denied or disconnected online facility connections to the petitioner and called upon it to pay the amounts, but the petitioner by a letter dated 04.01.2009 demanded reconciliation of accounts. 4. It is further alleged in the F.I.R. that subsequently the petitioner made a representation on 21.11.2009 informing that it has collected Rs.2,05,16,035/- from the 2nd respondent consumers through offline after disconnection of the server violating the terms of the MOU and committed wilful default in payment of the collection. It is then stated in the F.I.R. that as on 21-11-2009 a sum of Rs.1,84,55,751.95 Ps. was due from the petitioner. It is also alleged that the petitioner gave two cheques one for Rs.69,28,000/- and the other for Rs.50,00,000/- on 25.11.2009, but both the cheques were dishonoured. It is then stated that a bank guarantee for Rs.10,00,000/- given by the petitioner has also been enchased and still a sum of Rs.1.83 crores + interest thereon is due from it and despite several demands it has not paid the said amount. On the above allegations it is stated in the F.I.R. that the petitioner has dealt with public money and misappropriated it and committed the offences punishable under Sections 403, 406, 409 and 420 I.P.C. The said report has been registered as Crime No.101 of 2009 of C.C.S. Police Station for the above offences and investigation has been taken up by the said police. It is at that stage the petitioner has filed this petition. 5. The learned counsel for the petitioner firstly relied upon clause 27 of the MOU dated 30.07.2009 executed between the petitioner and the 2nd respondent and argued that the said clause which is an arbitration clause provides for resolution of all disputes between the petitioner and the 2nd respondent through arbitration and therefore if any amounts are due, the petitioner should have resorted to the arbitration for resolution of that dispute and this criminal complaint is misconceived and not maintainable and therefore it should be quashed. Then in paras 3 and 4 of this petition, it is pleaded by the petitioner that certain amounts were collected from the consumers and they were duly credited to the 2nd respondent, but due to problems in the server or online connections, the said amounts were not reflected in the accounts of the 2nd respondent and consequently certain dues were shown in its accounts and actually nothing is due from it. 6. It is also the contention of the petitioner that it sent several letters for reconciliation of accounts to the 2nd respondent, but the latter did not come forward for reconciliation and that there is no misappropriation or cheating and therefore the F.I.R. is liable to be quashed on this ground also. The petitioner also pleaded that when its administration was in a state of confusion, the officials of the 2nd respondent obtained the cheques mentioned by it on the promise that the cheques would be deposited in the concerned bank after reconciliation of accounts, but it deposited the cheques without coming forward for reconciliation. The petitioner’s counsel on the above pleas, pleaded that the dispute is a civil dispute and a criminal prosecution is not maintainable. 7. On the other hand, the learned counsel for the 2nd respondent and the learned Additional Public Prosecutor pointed out that the F.I.R. allegations would show offences of misappropriation and criminal breach of trust and therefore, the police should be allowed to go ahead with the investigation. Both of them also pointed out that the default committed by the petitioner in remitting the amounts would give to the 2nd respondent a cause of action for recovery of amounts and also equally the remedy of criminal prosecution and consequently there are no grounds to quash the F.I.R. on the ground that the petitioner has got a remedy for recovery of amounts. Even regarding the arbitration clause, they argued that itself is not a ground for quashing the F.I.R. as it is open for the 2nd respondent to give a police complaint also. 8. On the above contentions and allegations in the F.I.R., it has now to be seen whether there is ground for quashing the F.I.R. 9. The allegations in the F.I.R. and the respective contentions of the parties have already been set out supra. It is the admitted case of the petitioner that it was appointed as an agent under the MOU for collection of bill amounts from the consumers of electricity supplied by the 2nd respondent and it is also its case that it has collected the amount. What should be noted is that it is the specific case of the 2nd respondent that after noticing that a sum of Rs.1,23,15,369-95 Ps. was due from the petitioner as on 04.11.2009 it has denied online access to the petitioner for collection of further amounts to avoid further accumulation of dues, but despite the same the petitioner went on collecting the amounts through offline or directly from the consumers. It is not known as to why the petitioner should proceed to collect the amounts despite that intimation from the 2nd respondent. The 2nd respondent is an undertaking of the State of Andhra Pradesh and it appears that the petitioner took it for granted and went on collecting the amounts and this is a minus point for the petitioner. It is stated in the F.I.R. that in all a sum of Rs.1.83 crores is due from the petitioner to the 2nd respondent and the petitioner has not chosen to pay the amounts. The petitioner has been entrusted with the 2nd respondent’s money in trust and the petitioner has not chosen to pay that amount. Instead the petitioner has come up with explanations in its petition which are not convincing at all to hold that the matter does not prima facie fall within the purview of criminal offences on the allegations in the F.I.R. 10. Regarding the arbitration clause in the MOU, it may be noted that the breach of an agreement is capable of giving rise to a cause of action for a civil remedy and as well as a remedy of criminal prosecution. Whether the breach of an agreement gives rise to both or nearly a civil remedy depends upon the facts and circumstances of each case and no rule of universal application can be laid down. In the present case, the allegations in the F.I.R. would show criminal offences also regarding the collection of amounts and not depositing the same. In the F.I.R. it is stated that despite sufficient time, the petitioner did not remit the amounts. 11. It is also specifically alleged that despite the disconnection of online access, the petitioner collected an amount of Rs.2.05 crores and odd from the consumers through offline and this is contrary to the MOU. This very attitude of the petitioner, it is contended by the counsel for the 2nd respondent, would show that petitioner is bent upon misusing its position and in fact misused it in collecting the amounts. Thus the existence of mere arbitration clause in the MOU by itself is not sufficient to conclude that the dispute is a purely civil dispute and that F.I.R. can be quashed. It should also be noted here that the petitioner filed O.P.No.2335 of 2009 under Section 9 of the Arbitration Clause for an injunction against the 2nd respondent to participate in the reconciliation of accounts pending arbitration proceedings. The II Additional Chief Judge, City Civil Court, Hyderabad dismissed that O.P. on 08.07.2010 holding that relief regarding reconciliation of accounts does not come within the purview of Section 9 of the above Act and this is again a minus point for the petitioner whatever may be the legal position regarding the same. 12. Thus to sum up the allegations in the F.I.R., as contended by respondents, would show criminal offences which have to be investigated. All the contentions raised by the counsel for the petitioner would fall within the purview of disputed questions of fact which cannot be gone into in this petition. Hence, the contentions of the petitioner are rejected. 13. It is accordingly held that there is no ground to quash the F.I.R. and this petition is dismissed. The concerned police can go ahead with the investigation and find out the complicity of the petitioner concern and its officials and others regarding the offences alleged. It is made clear that any observations made in this order shall not fetter the discretion of the investigating agency in any manner. ___________________________ JUSTICE N.RAVI SHANKAR 13th July, 2011 Tjmr/CVRK