IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:29.06.2009 CORAM: THE HONOURABLE MR.JUSTICE ARUNA JAGADEESAN Crl.OP.No.28591/2006 Crl.MP.No.1/2006 1.M/s.Anand Agross Limited by its Director A.Suri Babu, Bibi Nagar 508126, Nalgonda District Andhra Pradesh 2.Suri Babu, Director, M/s.Anand Agross Limited Andhra Pradesh 3.A.Narahari Rao 4.A.Babu Rao 5.Venkateswar Rao 6.Chandrasekara Rao 7.A.Krishna Rao Petitioners Vs M/s.TVS Finance & Services Limited Formerly Known as M/s.Harita Finance Limited by its authorised signatory Sai Kumar 3, Jaffar Syrang Street, Chennai-1 Respondent Prayer:- This Criminal Original Petition is filed to to call for the records in CC.No.10817/2006 on the file of the III Metropolitan Magistrate, George Town, Chennai-1 and quash the same. For Petitioner : Mr.A.K.Mylsamy For Respondents : Mr.Abdul Saleem ORDER The Petitioners are arrayed as accused 1 to 7 in CC.No.10817/2006 on the file of the III Metropolitan Magistrate, George Town, Chennai-1. 2. The Petitioners seek to quash the proceedings in CC.No.10817/2006 on grounds that the promissory note dated 27.3.2000 and the hire purchase agreement dated 27.3.2000 were signed at Hyderabad, representing the 1st Petitioner Company and thus no cause of action arose within the jurisdiction of the court at Chennai and though the complaint reveals that some part of the machinery was sold by the 1st petitioner without the knowledge and https://hcservices.ecourts.gov.in/hcservices/ permission of the Respondent, since the said offence was committed at Hyderabad, this court has no jurisdiction. 3. According to the Petitioners, the court at Chennai has no jurisdiction to take cognizance of the offence the complaint does not disclose the alleged offence under Section 406, 408, 420 read with Section 120(b) of IPC and since the arbitration proceedings are pending, initiation of criminal proceedings is mala fide. The Respondent has converted the civil proceedings into criminal proceedings and the Petitioners 3 to 7 have already resigned from the Office, as Directors in the year 1997 and hence, they have nothing to do with the 1st Petitioner Company. 4. The brief facts are as follows:- The 1st Petitioner, which is the private Limited Company, entered into an agreement on 30.3.1994 and 1.8.1994 with the Respondent for taking the plant and machinery on hire for its use and the same was supplied by the manufacturers to the 1st petitioner and the payment was made by the Respondent directly to the manufacturers. To secure the payment, the Petitioners 2 to 7 have created equitable mortgage by depositing the original title deeds of the agricultural lands measuring an extent of 9 acres belonging to them. Later, three more hire purchase agreements were entered into on various dates and the amounts due and payable under hire purchase agreement 1 and 2 has been paid from and out of the amounts paid by the Respondent to the Petitioners. The 4th hire purchase agreement was executed on 27.3.2000. In the said course of transaction, a sum of Rs.62,68,000/- was due and payable by the 1st Petitioner Company towards hire amounts and additional finance charges under the hire purchase agreement dated 4. On account of the various defaults committed by the 1st Petitioner, the complainant in order to protect their interest had filed an application under Section 9 of the Arbitration and Conciliation Act, 1966 before this court seeking for various reliefs as against the properties. This court in turn by its order appointed an Advocate Commissioner to take inventory and symbolic possession of the plant and machinery and pursuant thereto, he had taken inventory and symbolic possession of the plant and machinery and filed his report. Subsequently, the Advocate Commissioner was directed to call for offers and sell the plant and machinery to the highest bidder. In pursuance thereof, the Advocate Commissioner called for offers and found the highest bidder, but latter backed out for the reason that part of the plant and machinery was found to be removed from the premises of the 1st Petitioner Company and a report was also filed by the Advocate Commissioner in that regard. By several letters, the 1st Petitioner promised to pay the outstanding amounts, but they failed to do so. 5. According to the complainant, the accused colluded and conspired with each other and availed various facilities with a clear dishonest intention of cheating and misappropriated the sum https://hcservices.ecourts.gov.in/hcservices/ received from the complainant and caused wrongful loss to them. It is their further case that they had induced the Respondent to part with monies/machineries and they neither returned the monies nor transferred the immovable properties as promised. So they have committed offences punishable under Sections 420, 406, 409 read with 120(b) of IPC. 6. The main contention of the learned counsel for the Petitioners is that the cause of action arose only at Hyderabad and the court at Chennai has no jurisdiction to take cognizance of the offence. He would further contend that the averments made in the complaint only go to show that they are of civil nature and it would be abuse of process of law, if the Petitioners are allowed to face the prosecution and the Petitioners 3 to 7 have already resigned from the Office as Directors and therefore, no prosecution can be continued as against those petitioner. 7. At the outset, for the purpose of quashing the proceedings under Section 482 Code of Criminal Procedure, the truth or otherwise of the allegation made in the complaint cannot be gone into. It is the specific case of the complainant that the entire agreement was signed at Chennai and the payments were made at Chennai and the commission of offence also was at Chennai. The hire purchase agreement entered into between the parties dated 27.3.2000 has been executed at Chennai and the same is evidenced from the document filed therein and the witnesses have also signed only at Chennai. Though the promissory note dated 27.3.2000 has been signed at Hyderabad, the attesting witnesses have signed only at Chennai and their addresses are only at Chennai. That apart, letter of guarantee was also executed at Chennai. More importantly in the agreement, it is stated that the courts at Chennai alone shall have jurisdiction. Admittedly, a part of cause of action has arisen within the jurisdiction of Chennai and it would be a matter of evidence to decide as to whether the cause of action arose at Chennai or at Hyderabad. The complaint cannot be quashed merely on the said ground. 8. It is well settled that mere filing of a civil suit or pendency of the arbitration proceedings by themselves would not absolve the criminal court from taking cognizance of the complaint, if the averment in the complaint prima facie make out the offence as alleged. In this case, the allegations made in the complaint disclose a prima facie case of cheating, misappropriation of amount and breach of trust. The allegations that the Respondent believed the representation made by the Petitioners and let all their plant and machineries for hire and use and after availing the said facilities, the Petitioners failed to pay the amount and sold part of the machineries without the knowledge of the Respondent are prima facie sufficient to constitute the offences alleged as against them. Merely because civil proceedings are pending, the complaint cannot be quashed. https://hcservices.ecourts.gov.in/hcservices/ 9. It is also well settled that when the averments in the complaint prima facie make out a case, this court cannot quash the complaint, merely because one or two ingredients of the averments have not been stated in detail. 10. The Hon'ble Supreme Court in the case of Rajesh Bajaj Vs. State NCT of Delhi and Others (1999-SCC-Cri-401) has held as follows:- "11. The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of transaction which would become decisive in discerning whether there was commission of offence or not. The complainant has stated in the body of the complaint that he was induced to believe that the Respondent would honour payment on receipt of invoices, and that the complainant realised later that the intentions of the Respondent were not clear. He also mentioned that the Respondent after receiving the goods had sold them to others and still he did not pay the money. Such averments would prima facie make out a case for investigation by the authorities." 11. The learned counsel for the Petitioners strenuously contend that since the Respondent could not succeed in the arbitration proceedings, they have launched the criminal Prosecution with a view to harass the Petitioners and achieve what they could not achieve in the civil proceedings. As far as this contention is concerned, the averments made in the complaint prima facie show the criminal intention on the part of the accused from the inception and their subsequent conduct that in spite of the symbolic possession taken by the Advocate Commissioner, the Petitioners have sold a part of the plant and machinery without the knowledge of the Respondent would attract the offence of criminal breach of trust. Further on representation made by the Petitioners, the Respondent has hired the plant and machinery to the Petitioners, after making payments to the manufacturers and allowed them to avail the said facility. But, in spite of it, the Petitioners have failed to make the payments and they are alleged to have misappropriated the amounts to their use. 12. It is contended that the Petitioners 3 to 7 have already resigned in the year 1997 and so criminal proceedings as against them cannot be continued. The question as to whether they have executed the letter of guarantee when they were in-charge of the Company as Directors is to be gone into by letting in evidence and the same should be decided only at the time of trial. This complaint cannot be quashed at this stage. It is for the Respondent to prove the involvement of the Petitioners and the complicity in the commission of offence at the trial. The said fact also cannot be decided at this stage. https://hcservices.ecourts.gov.in/hcservices/ 13. On going through the allegations made in the complaint, it is seen that there is nothing wrong on the part of the complainant to have resorted to lodge a complaint against the Petitioners for having not paid the amount and dishonestly sold the part of the plant and machinery and misappropriated the sum to their use, which are not disputed by the Petitioners. The only plea taken on the part of the Petitioners is that they are of civil nature and no criminal offence is attracted. There does not seem to be any ambiguity or irregularity in the registration of the case on the complaint given by the Respondent. This court does not find any valid or tangible reason to cause interference into the registration of the case and this Criminal Original Petition is devoid of merits and deserves to be dismissed. 14. In view of the above said reasons, this Criminal Original Petition is dismissed, as devoid of merits. Consequently, the connected MP is closed. 29.06.2009 After pronouncement of the order in this Criminal Original Petition on 29.06.2009, the learned counsel for the Respondent has prayed this court to direct the court below to expedite the trial and dispose of the matter, expeditiously. Considering the said submissions, the court below is directed to expedite the trial and dispose of the matter, within a period of three months from the date of receipt of a copy of this order. Sd/- Asst.Registrar /true copy/ Sub Asst.Registrar Srcm To: 1. The III Metropolitan Magistrate, George Town, Chennai. 2. -do- Thro' The Chief Metropolitan Magistrate, Egmore, Chennai. 3. The Public Prosecutor, High Court, Madras +1 cc to Mr.A.K.Mylsamy & Associates, SR.No.27832 +1 cc to M/s.Anand,Abdul & Vinodh Associates, SR.No.27063 Order in Crl.OP.No.28591/2006 KSJ {CO} TP/17.7.2009. https://hcservices.ecourts.gov.in/hcservices/