- 1 - IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.19184 of 2007 ANAND KUMAR & ORS Versus STATE OF BIHAR & ANR ----------- WITH Cr.Misc. No.20978 of 2007 VIKASH SHAH & ORS Versus STATE OF BIHAR & ANR ----------- For the Petitioners in both cases : M/S Rana Pratap Singh, Sr.Advocate, Sumant Singh and Aruni Singh , Advocates. For the State in both cases : Mr.Jharkhandi Upadhaya,A.P.P. For Opp.Party No.2 in both cases : Mr.Mrigank Mauli ------------ O R D E R Both these cases have been taken up together as they arise out of the same Complaint Case No.3500 of 2006, wherein officials of Tata Tele Services Ltd. (hereinafter referred to as “the Company”) happen to be the accused and one Rakesh Kumar Singh, the complainant, and having been heard together they are being disposed of by this common order. Both applications are directed against the order dated 13.1.2007 passed by Sri Shobha Kant Mishra, Judicial Magistrate, Ist Class, Patna in the aforesaid complaint case ,whereby he has taken cognizance against the petitioners and others. In short, the complaint case is that Tata Tele Services Ltd. is a limited Company having its Registered Office at New Delhi and its Corporate Office in Mumbai and the accused persons named in the - 2 - complaint are its officials. The complainant Rakesh Kumar Singh, impleaded in both the cases as Opp.Party no.2, runs a business in the name and style of M/S Sagi International ( herein after referred to as “the Complainant”) claiming himself to be the owner and proprietor of the said firm. It is alleged that one Rajni Kant Mani ( petitioner no.2 in Cr.Misc.No.19184) and few other officials of the Company came to the office of the complainant in January,2005 and offered him the non-exclusive distributorship for Patna area stating that it would be very lucrative for the complainant. It is further alleged that another official of the Company, namely, Z.M. Siddiquie (petitioner no.3 in Cr.Misc.No.19184) also met the complainant and asked him to invest Rs. 7 lacs, out of which Rs. 5 lacs would be refundable security deposit. Since the security deposit appeared exorbitant, the complainant did not accept the offer, whereupon the said petitioner nos. 2 and 3 of Cr.Misc.No.19184 asked the complainant to deposit Rs. 1.80 lacs as refundable security deposit and invest Rs.4 lacs for development of office for non-exclusive distributorship at Patna. The complainant accepted the aforesaid offer made on behalf of the company and agreed to deposit Rs.1.80 lacs as refundable security deposit and in fact on 7.6.2005 and 9.6.2005 by two different bank drafts deposited the said security money and in pursuance thereof letter of intent dated 22nd June,2005 was issued by Z.M.Siddiquie for non- exclusive distributorship for Patna for a limited period of three months which was renewable . - 3 - It is said that the complainant asked the Company and its officials to execute agreement of distributorship but he was assured that Tata is a big company and it takes care of its small business associates and, as such, he should not be worried. It is further alleged that the complainant received a letter dated 1st July,2005 from Saminder Bedi ( petitioner no.3 of Cr.Misc.No.20978) ,Senior Manager , Pay Telephone Booth Unit ( “ P.T.B.U.” for short ), giving details of acquisition and Repair and Maintenance ( “R & M” for short ) commission to be paid to the complainant during the period from 1st July,2005 to 30th September,2005. It is further alleged that he was assured that the aforesaid commission rate would be enhanced in future keeping in view the business purpose and induced thereby the complainant invested the amount with a view to improve the business and appointed different assistants and sales agents and also obtained space for running his business in Ashiana Towers. It is said that due to efforts of the complainant more than two thousand connections were installed within a period of eight months in Patna area and up to April, 2006 he was paid as per the agreed rate of commission. The further case of the complainant is that being satisfied with his performance, the Company offered distributorship of Hajipur area to him by its letter dated 24.2.2006 and the complainant further deposited a sum of Rs.1.80 lacs for non-exclusive distributorship for Hajipur area by demand draft dated 7.2.2006 and again invested a further amount of Rs. 4 lacs for establishing his office. It is alleged - 4 - that in course of business transaction, the accused persons asked the complainant to deposit 10 duly signed blank letterhead for the purpose of timely issuance of TDS Certificate from the Company, but it is alleged that all the TDS Certificates were issued by utilizing only one letterhead and only five blank letterheads were returned to the complainant. Hence, the complainant apprehended that the remaining blank letterheads in possession of the accused persons may be utilized against him. It is alleged that the accused persons stopped payment of commission from May, 2006 onwards whereas the complainant had duly submitted the claims for distributorship commission for Patna as also Hajipur area and kept sending E.Mail and reminding on telephone about non-payment of the due amount towards commission, but unfortunately there was no response and the accused persons neither paid the amount nor rejected the same. It is further alleged that a total sum of Rs.11 lacs approximately refundable security deposit of Rs. 3.60 lacs for Patna and Hajipur area is still lying with the accused persons and inspite of several requests the payment of the aforesaid amount has not been made. It is further alleged that on 13.9.2006, petitioner nos. 1 and 2 of Cr.Misc.No.19184 of 2007 asked the complainant to give his acceptance at reduced commission rate and he was told that the said rate had been fixed as per directions of the petitioner nos.1 and 2 of Cr.Misc.No.20978 of 2007. The complainant is said to have raised objections against the same as it was against their offer and understanding and asked for it in writing that the revised rate shall be - 5 - effective prospectively and as he had already done his business on the basis of the accepted rate it would not be possible for him to submit the claim of commission at a reduced lower rate. Due to the dispute regarding the lower reduced rate one Anil Shankar Sinha, head of Access Business Unit of Bihar allegedly abused the complainant in his office on 23.9.2006 and also at his residence and asked the complainant to submit lower rate and when the complainant refused to do so , he got infuriated and perturbed by the aforesaid conduct of the aforesaid persons he submitted his resignation on 25.9.2006 through E-Mail to petitioner nos.1 and 2 of Cr.Misc.No.19184. It is further stated that on 5.10.2006, petitioner no.2 of Cr.Misc.No.20978 came to Patna and after meeting the complainant and other officials he assured to sort out the problem and also to make payment of the commission as early as possible and requested the complainant to continue the distributorship . Notwithstanding the assurances given by petitioner no.2 of Cr.Misc.No.20978 and petitioner no.2 of Cr.Misc.No.19184 the Zonal Office sent E.Mail dated 10th October, 2006 regarding reduction of commission. Since the request of the complainant did not find favour of the accused, he sent a legal notice dated 14.10.2006 requesting for refund of his security deposit of Rs.3.60 lacs and to give payment along with interest and compensation and also return the five signed blank letterheads, which was still in their possession but there was no response from the accused persons. The complainant has alleged that the accused had criminal intention to misappropriate and cheating money of the complainant - 6 - and have committed offence of criminal misappropriation, cheating, criminal breach, forgery, criminal intimidation and corrupt activities punishable under the law. It appears that after holding an enquiry under Section 202 Cr.P.C. the learned Chief Judicial Magistrate took cognizance of offences on 13.1.2007 under Sections 406,420,120B /34 I.P.C. and decided to issue process against the accused persons named in the complaint. It has been submitted on behalf of the petitioners of both the cases that the complainant still continues to be a distributor of the Company and has been doing business, but after May, 2006, he has not submitted any bill for acquisition and R & M commission. The statements made in paragraph nos.22, 23 and 25 of the complaint petition have also been denied. Denying the statements made in paragraph nos.26 to 28 of the complaint petition , it was submitted that on 9.10.2006 the complainant sent an E-Mail addressed to one Dipak Tiwary and petitioner no.2 of Cr.Misc.No.19184, two officers of the Company stationed at Patna , seeking explanation of R & M. commission of June,2006 . This was, in fact, in response to the E.Mail of the Company dated 9.10.2006 with regard to R & M commission of June, 2006 informing the complainant and revised rate of commission in respect of R & M commission for the month of June, 2006. It was further submitted that on 1.7.2005 the complainant had accepted the terms and conditions on being appointed as distributor , which contains the following clause: - 7 - “The commission structure can be changed or modified upward or downward without any prior information.” Thus, it was submitted that the complainant having accepted the terms and conditions as also revision in the structure of commission cannot be allowed to a probate and reprobate and that, too, when he had accepted the payment in terms of the Company policy decision. It was not open for him now to say that the company cannot unilaterally change the commission structure upwards or downwards. The allegation of retaining five signed blank letterheads or Anil Shankar Sinha having threatened him or of petitioner no.2 of Cr.Misc.No.20978 having assured him of making payment at the earlier agreed rate have been denied. The learned counsel for the petitioners further sought to submit that none of the offences whereunder cognizance has been taken appears to have been made out since the ingredients of each of the offence of fraudulent or dishonest intention at the time of making the promise was missing. In respect of the offence under Section 420 I.P.C. it was submitted that existence of fraudulent or dishonest intention at the time of making promise or representation was necessary. In this connection reference was made to the cases of Hira Lal Hari Lal Bhagwati – Vrs. C.B.I., reported in (2003) 5 SCC, 257 , Indar Mohan Goswami – Vrs.State of Uttranchal, reported in 2008(1) PLJR,82 ( SC) and All Cargo Movers( I) Pvt. Ltd –Vrs. Dhanesh Badarmal Jain, reported in 2008 (1) PLJR, 51 (SC). The learned counsel further submitted that where allegations - 8 - contained in the complaint petition even if given at their face value and taken to be correct in its entirety do not disclose an offence the complaint can be quashed. Reference in this connection was made to the case of Vir Prakash Sharma-Vrs. Anil Kumar Agrawal , reported in (2007 )7 SCC, 373 and Indar Mohan Goswami’s Case ( Supra).Finally, it was submitted that at best the entire dispute revolved round the issue of fixation of rate of commission payable to the Complainant by the Company which at best would be a commercial transaction or a contractual dispute for which a civil remedy is available and the learned Magistrate by the impugned order had clearly displayed a non- application of judicial mind. On the other hand, the learned counsel for the complainant argued that from mere reading of the complaint and statements of the witnesses a distinct case of commission of offence under Section 420 and 406 I.P.C. was made out, as there had been a entrustment of Rs.3.60 lacs by demand draft as refundable security and the accused persons were not returning the same and they were also withholding the payment of commission, which had accrued to the complainant. It is by now well settled by a catena of decisions of the Apex Court that inherent power under Section-482 Cr.P.C. though will have to be exercised sparingly, carefully, with great caution and with circumspection and that, too, when such exercise is justified in cases of existence of abuse of the process of the court or /and to otherwise secure the ends of justice. It has also been laid down by the Apex Court that where the allegations made, if taken at their face value , do - 9 - not prima facie constitute any offence , the High Court shall be loath to exercise jurisdiction under Section 482 Cr.P.C. Now coming to the merits of the case, a reading of Section 415 I.P.C. with its Explanation reveals that it is the intention which is the essence 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, one cannot presume that he all along had a culpable intention to break the promise from the very beginning. Similarly, a reading of Section 405 I.P.C. reveals that for an offence of criminal breach of trust the necessary ingredients are (a) entrustment of property and (b) dishonest misappropriation thereof ,i.e. the property has been converted to his own use. It is apparent from the submission of the parties and their respective pleadings that the dispute arose regarding the rate of commission payable by the Company to the distributor. The document filed by the Complainant dated 1.7.2005 shows that “commission structure can be changed or modified upward or downwards without any prior information.” Further, averment of the complainant is that till April, 2006 there had been no dispute and payment was made by the Company. So far as the entrustment of Rs.3.60 lacs is concerned, it was a security deposit which is refundable. Still further, paragraph 36 of the application shows that as the Complainant continued to be the distributor the security deposit was not returned. The further stand of the Company is that if the complainant does not desire to continue as distributor then the Company was ready to settle the account. - 10 - From a plain reading of the substance of the complaint and statement of witnesses no offence either under Section 406 or 420 I.P.C. appears to have been made out. Further, mere non-compliance of any of the terms of the contract cannot by itself give rise to criminal prosecution unless fraud or dishonest intention is shown to be present at the very inception of the transaction. There is nothing in the complaint to show that the petitioners had any dishonest intention to cheat or commit criminal breach of trust. For the reasons discussed above both the application are allowed and the impugned order as also the criminal prosecution as against the petitioners are hereby quashed. Before I part I must reiterate that the Apex Court as also this Court has repeatedly been deprecating the present day growing tendency amongst business circles and private individuals to convert purely civil disputes into criminal cases. This is obviously on account of prevalent impression that civil remedies are time consuming and do not adequately protect their interest and if the offending party could somehow be embroiled into a criminal litigation, there could be likelihood of imminent settlement. In this view of the matter, the cognizance taking courts are required to be very careful at the time of taking cognizance so as to identify the civil disputes as against exclusively criminal offences. ( Abhijit Sinha, J) Patna High Court, Patna Dated: the 10th September,2008 Nawal Kishore Singh/A.F.R. - 11 -