Criminal Revision No. 2424 of 2005 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Criminal Revision No. 2424 of 2005 Date of Decision: 08.03.2010 Punjab State Civil Supplies Corporation Limited, SCO No. 36-40, Sector 34-A, Chandigarh, through Addl. Manager (Legal) Sh. IPS Malhotra. ... Revision-Petitioner Versus 1. Mohinder Pal Singh s/o Sh. Inderjit Singh; 2. Preet Mohinder Singh s/o Sh. Pritpal Singh; both partners of M/s Super Rice Mills, Ajitwal, Tehsil and District Moga. 3. State of Punjab. ...Respondents CORAM: HON'BLE MR. JUSTICE SHAM SUNDER Present: Ms. Simranjeet Kaur, Advocate, for Mr. H.N.S. Gill, Advocate, for the revision-petitioner. Mr. Sharan Sethi, Advocate, for respondents No. 1 and 2. Mr. T.S. Salana, Deputy Advocate General, Punjab, for respondent No. 3 – State. SHAM SUNDER, J. * * * * This revision-petition is directed against the order dated 20.05.04, rendered by the Court of Chief Judicial Magistrate, Moga, vide which, it accepted the application, under Section 321 Cr.P.C., filed Criminal Revision No. 2424 of 2005 2 by the prosecution, and acquitted the accused, for the offence, punishable under Section 406 IPC. 2. FIR No. 71 dated 18.11.95, under Section 406 IPC, was registered, in Police Station Mahna, on the complaint, made by the District Manager, PUNSUP, Faridkot, containing the allegations, that 24339 bags, weighing 15820.35 quintals of superfine PR-106 variety paddy, and, 18290 bags, weighing 11888.50 quintals of fine quality paddy, were entrusted, to M/s Super Rice Mills, Ajitwal (Moga) District Faridkot, in October and November, 1994 respectively, and, Sh. M.P. Singh, partner of the said mill, received the said paddy. He issued receipts dated 28.10.94 and 07.11.94 respectively. M/s Super Rice Mills, Ajitwal, was to deliver 18193.63 quintals of rice, to the Food Corporation of India, till 28.02.95, on behalf of the PUNSUP, as per the specifications, laid down, under Punjab Rice Procurement Control Order, 1983, but, no such rice was delivered, by the said firm. The premises of M/s Super Rice Mills, Ajitwal, was physically inspected, on 04.05.95, and shortage of 24217 bags of paddy was found. When the accused were asked to deposit the cost of the short paddy, they undertook to pay Rs. 5 lacs, per week, till the full cost of short paddy, was liquidated, and, also promised to purchase the remaining paddy, by depositing the stipulated amount, at convenient intervals. Only a sum of Rs. 5 lacs vide cheque dated 22.05.95, was deposited. On 14.08.95, physical verification of the stock revealed that, there was shortage of 32620 bags of paddy. A stack of 9658 bags, containing brokens, kani, tota, sella rice, IR-8 and husk, were not taken Criminal Revision No. 2424 of 2005 3 into account, as the Mill had unauthorisedly milled the paddy of the Corporation, and, did not deliver the rice to the Food Corporation of India, in the account of PUNSUP. It was stated that the accused failed to deposit the price of the paddy, found short, and, thus, dishonestly misappropriated 32620 bags of paddy of the PUNSUP, entrusted to it, valued at Rs. 92,90,577/-. The challan was presented against the accused. 3. During the pendency of the challan, an application, under Section 321 Cr.P.C., for withdrawal of prosecution, was moved, by the Additional Public Prosecutor, for the State, on the grounds that, the case was of civil nature, the matter, had been referred, to the Arbitrator for adjudication, by the Department, and the same is pending before him, as per the arbitration agreement. It was also stated that the case having been registered against the accused, out of political rivalry, did not appear to be well-founded. It was further stated that the prosecution was not likely to succeed, in view of the deficient evidence. It was further stated that continuation of the prosecution of the accused, would adversely affect the administration of public justice. Accordingly, the prayer, referred to above was made. 4. This application, was opposed, by the PUNSUP, the agency, which had entrusted the paddy, to the accused, and, which had been dishonestly misappropriated by them. 5. After hearing the Counsel for the parties, the application, was allowed, by the trial Court, vide the order impugned, and the accused were acquitted. Criminal Revision No. 2424 of 2005 4 6. Feeling aggrieved, the instant revision-petition, has been filed, by the revision-petitioner. 7. I have heard the Counsel for the parties, and, have gone through the record of the case, carefully. 8. The Counsel for the revision-petitioner, submitted that the application, under Section 321 Cr.P.C., moved by the prosecution, was wholly misconceived. She further submitted that the paddy, was the ownership of the PUNSUP. She further submitted that this paddy, was entrusted, by the PUNSUP, to the accused/respondents, for custom milling and supplying the rice, in lieu thereof, to the Food Corporation of India, in its (PUNSUP) account, but, they failed to do so. The paddy worth Rs. 92,90,577/-, was found to be short. She further submitted that, since the accused/respondents, dishonestly misappropriated the paddy, worth Rs. 92,90,577/-, entrusted, to them, by the PUNSUP, they committed the offences, punishable under Sections 406 and 409 IPC. She further submitted that the mere fact, that there was an arbitration clause, in the agreement, executed between the parties, in itself, was not sufficient, to come to the conclusion, that no criminal offence was made out. She further submitted that the Arbitrator, could not adjudicate upon the criminal liability of the accused, and could only decide the civil dispute, if any, arose between the parties. She further submitted that the withdrawal of the case was not in public interest. She further submitted that there was sufficient documentary evidence, for the successful prosecution of the case. She also placed reliance, on Pawan Kumar Vs. State of Haryana, 2006(2), RCR (Criminal), 162, Criminal Revision No. 2424 of 2005 5 Trisuns Chemical Industry Vs. Rajesh Aggarwal, 1999(4), RCR (Criminal), 2236 (SC), Raj Kumar Singla Vs. State of Punjab, 2000 (1), RCR (Criminal), 161 (P&H), S.W. Palanitkar Vs. State of Bihar, 2001(4), RCR (Criminal), 572 (SC), and, Sham Lal Vs. State of Punjab, 2001(3), RCR (Criminal), 535 (SC), in support of her contention. 9. On the other hand, the Counsel for the respondents, submitted that the facts only gave rise to the civil dispute, and no criminal offence was made out. They further submitted that the Additional Public Prosecutor, for the State, was right, in moving the application, under Section 321 Cr.P.C. They further submitted that the Additional Public Prosecutor, for the State, was also right, in stating, in the application, under Section 321 Cr.P.C., that, on account of lack of evidence, there were remote chances of conviction of the accused, and continuation of the proceedings, would lead to abuse of the process of the Court, and adversely affect the public administration of justice. They further submitted that the order impugned, being legal and valid, is liable to be upheld. They also placed reliance, on Kailash Verma Vs. Punjab State Civil Supplies Corporation and another, 2005(1), RCR (Criminal), 727 (SC), and, Punjab State Civil Supplies Corporation (PUNSUP) Vs. Deepak Kumar and another, 2007(2), RCR (Criminal), 550, in support of their contention. 10. After giving my thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, in my considered opinion, the revision-petition, deserves to be accepted, for the reasons Criminal Revision No. 2424 of 2005 6 to be recorded hereinafter. From the allegations, contained in the FIR, it was evident, that 24339 bags, weighing 15820.35 quintals of Superfine PR-106 variety paddy, and, 18290 bags, weighing 11888.50 quintals of fine quality paddy, were entrusted, for custom milling, to the accused/respondents, by the PUNSUP, which was the owner thereof. The accused, were only to shell the same and give back the rice, to the Food Corporation of India, in the account of PUNSUP. On physical verification, 32620 bags of paddy, were found short, worth Rs. 92,90,577/-. The accused, failed to account for the same, and, thus, allegedly dishonestly misappropriated the same, being agents of PUNSUP, and, thereby allegedly committed the offences, punishable under Sections 406 and 409 IPC. The mere fact that there was an arbitration agreement, between the parties, that did not mean, that criminal liability, was also to be decided, by the said Arbitrator. No provision of law, confers jurisdiction, on the Arbitrator, to decide the criminal disputes, between the parties. The Arbitrator, could only adjudicate upon the civil disputes, or the disputes, falling within the ambit of agreement executed between the parties. In Pawan Kumar's case (supra), it was held, that arbitration clause, would not be a bar, if the act of the party, amounted to a criminal offence. It was further held that, both criminal and civil proceedings, could be launched. In Trisuns Chemical Industry's, Raj Kumar Singla's, S.W. Palanitkar's, and, Sham Lal's cases (supra), it was held, that criminal and civil proceedings, can continue together, if the same arise out of the same gamut of facts. No invariable principle of law, was laid down, in Criminal Revision No. 2424 of 2005 7 Kailash Verma's and Punjab State Civil Supplies cases (supra), that if there is an arbitration agreement between the parties, criminal proceedings cannot be launched, if the commission of offence is made out. The grounds, detailed in the application under Section 321 Cr.P.C., were false and frivolous, set up, just with a view to save respondents No. 1 and 2 from criminal liability. The prosecution was not sought to be withdrawn, in the larger public interest, but, on the other hand, it was sought to be withdrawn, for furthering the personal interest of respondents No. 1 and 2. There was sufficient documentary evidence which could reasonably lead to the successful prosecution of the accused. The order impugned suffers from illegality and perversity, and is liable to be set aside. The submission of the Counsel for the petitioners, in this regard, being correct, is accepted. 11. For the reasons recorded above, the revision-petition, is accepted. The order dated 20.05.04, rendered by the Court of Chief Judicial Magistrate, Moga, is set aside. 12. The trial Court, is directed to proceed further, in accordance with the provisions of law, from the stage, when the application, under Section 321 Cr.P.C., was moved, and accepted by it. The parties, are directed, to appear before the trial Court, on or before 30.04.2010, at 10.00 AM. The trial Court, record be sent back at once. 13. Any observation made, in this order, shall not be taken, as an expression of mind, on merits of the case. 08.03.2010 (SHAM SUNDER) Amodh JUDGE