&T y^. ^ Slnj||JeBench 't'ii'i^^' M/s Emars Mining and Construction Pvt. -td 4, LJons RanQe, Fioor,Kolkata (W B.~) " j M/s Emars Mining e Pvt.Ltd., Fiat No.2 C & Nazar Ali Lane, Kolkata n Ai/*T?s' II 3 3. Srnt. Maia Roy, age 59 yrs, w/o iats M.V ^ iiK'sa«"'S-'i taii t-4/(JE p.^-^; 9,^ftw 0^>d- ^ ^...-' and Construction Pvt.Ltd, y^-" Subhssh Chandra Bose Road, Kolkata 'M^r:""""';w'B'i <.ri-''f'- ...4-*"" 4. a ' s -ss Shri Indraieet Rov, aqe 3; Avijit Roy, Director M/s Emars Mining and Construction Pvt.Ltd., 192-D, Netaji Subhash Chsndra Bose Road. Kolkata t;k..-> ^Je '^.^ '- p ^^' i*^' :( a i^u^ 'i £^.-r 6 ?1 <j^ II •^-V ^/ ^.-f fe^' ^a^ 5 '^ ^ta/ t^^ A—fl.^ E L:k V^ 3 £^. ^^ ^ ¥u^i f;^/ % ^ ' • ? ^'L? . Q» Ji Shri Prernieet •T^ 3'/ U ROV'. 3Q8 33 ;y, Director M/s Emars Mining j Construction Pvt.Ltd.. 192-D. Netaii !k-- : ^/^ ^^ ^^ ^^ £ t i ^ l G L-=-^^\^ e ff ^» H^ S^ ^r^ / ? ^J \^/ ^r^i iS E ^j-T c ? &A4i: ^*^ *^ <'^E ^^ fir &:":Tt -^'i p'^ ^^ 5^ '"i ^^ ^^ ''*' ^UDHaSH ^HSHOr^ bGS9 KQ80 Av"it .5 r : ^u <ata ^arsyi 1 (W.B.) Shri Neei Singh @ Neeimani Singh, age 30 yrs, s/o Shri Narendra Pratap Singh, Manager-Saies and Marketina M/s Emars Mining and Construction Pvt.Ltd., F!at No. 2 C & D; Green Acres, 2 Nazar Aii Lane, Koikata (W.B.) ^ ^^ ^si s; =^, ^ jiK^ ^T^ ^-^ [^a ^^ i^ ^^ I] .j rf^ Jrt^ /% .^ ^ ^ ,? ^^1^*^ ^~< / ^*<». .itBsHri J^IGf^E'D ^^SU, BOQ '4.1 VrS» S/0 'u^nri ^ Santosh Kumar Bose, r/o Fiat No. 2 C & D; Gr'een Acres, 2 Nazar Ali Lane, Koikata (W.B.) State of Chhattisgarh, Through Suuerintendent of Poiice. RaiGur-fC.G.'i ttorf*' 'lt^ ^rf: -t^.: ^ tf S 2 *i>^rf 5 ^ '•^A ^wP '6 i '-.rf ^w./ [- I ^trff li ? tur*totf f 5 '<^U t ^u*r r^ric u ^ ^tur q ^x; ;, 5 Station House Officer. P,c». —Saraswat i^/'i ^.--f ^*—j '0' D r .; 'TEt»'^t—I^ J" I' ^ >iuulF H ^^»;^M^I 3 tu>i 1»^ U ^F 't^fl ^ Naaar, ", i F^.-^ v^ 'i y .s " s ^ 3- [/) O c. 3i ^ f n ^; y? (TS < -> =r •< •<: Ul "I ;••» 3 r~r z^?:< s u '>; ui' P- "° ^ ro r<i n •"! :7 ^ {a-^ 'S HIGH COURT OF CHHATTISGARH. BILASPUR S.B^: HON'BLE SHRI MANINDRA MOHAN SHRIVASTAVA, J. ^ PETITIONERS RESPONDENTS Cr.M.P. No.392/2011 Versus M/S. Emars Mining and Construction Pvt. Ltd. State of Chhattisgarh and Others &>. ORDER ^ POST ON ^ "DECEMBER. 2011 l^ Sd/- Manindra Mohan Shrivastava Judge HIGH COURT OF CHHATTISGrARH : BILASPUR S.B. : HON'BLE SHRI MANINDRA MOHAN SHRIVASTAVA.J. Cr.M.P. No.392/2011 PETITIONERS RESPONDENTS Versus M/S. Emars Mining and Construction Pvt. Ltd. State of Chhattisgarh and Others (Petition u/S 482 ofthe Cr.P.CI Appearance: Shri Sayyasach Banerjee, Shri Abhishek Sinha and Shri D.L. Dewangan, counsel for the petitioners. Shri Rakesh Jha, Dy. Govt. Advocate for the State/respondents No. l SB 2. Shri P.K.C. Tiwari, Sr. Advocate with Shri Arvind Singh and Shri Raja Sharma, counsel for respondent No.3. ORDER (Passed on 2. . 12.2011) 1. This petition under Section 482 of the Code of Criminal F>rocedure, 1973 (hereinafter referred to as "the Codd"), has been filed by the petitioners for quashing impugned order dated 6.4.2011 (Annexure P-11), by which the leamed Magistrate has directed the police of Police Station-Sarswati Nagar, Raipur to register FIR, hold investigation and submit proper report, disposing of complainant's application under Section 156 (3) of the Code. The petitioners have also prayed for quashing FIR <^ <S8SB8 '>. -2- No. 105/11 dated 15th April (Annexure P-12) registered by the police and all connected cruninal proceedings initiated against the petitioners pursuant to the complaint filed by respondent No.3 before the learned Magistrate. 2. Brief and necessary facts giving rise to instant petition, as adumbrated in the petition, are that respondent No.3 filed a coniplaint against the petitioners in the Court of Judicial Magistrate First Class, Raipur, alleging commission of offence under Sections 384, 420 and Section 109 read with Section 34 of the IPC. In the complaint, it has been aUeged that the complainant -Coinpany had sent proposal to petitioner No.l- Company for purchasing iron ore from the petitioner -company, in response to which, petitioner/accused-Company gave its acceptance on amended terms and conditions, which was executed by the complainant. It is further averred that in accordance with the terms of sale and purchase, a huge amount of Rs.50,00,000/- was deposited in the accounts of the petitioner-Company and one L.C. Account was also opened in favour of the petitioner-Company. It is further alleged that the petitioner-Company, nurturing dishonest intention from the inception, sent a Performa Invoice for depositing the sale amount in their accounts. Thereafter, the petitioner-Company informed the complainant that the work has stopped and as and when the work starts, goods would be dispatched, but, in spite of several assurances, no supply was made. It is also averred that the petitioners went on giving false assurances fe' «er <'3E. 1 "')• -3- that the mines are closed and as soon as the mines became operative deliveiy would be raade and thereafter on 21.9.2010, a letter was sent that niines aGtivity have been restored to noiTnalcy, but accused-company are unable to supply materiEd at the agreed rates, but they are prepared to supply goods on the rates prevalent as on 21.9.2010. Such act ofthe petitioner- Company and other accused, it is alleged, resulted in colossal loss to the tune of Rs.l,04,00,OOO/- to the coraplainant. It is fi-irther alleged that the advance amount was neither retumed nor fhe accused -Com.pany sold material, nor any supply was made. A legal notice was given to the accused -Company by the complainant. Accused-company responded by stating that if the complainant gives "No Dues/No Glaim Letter", advance of Rs.50,00,000/- would be refunded. Thus, complainant Company alleged in the complaint that the petitioners cheated and thereby comnutted offences aUeged. 3. Along with the complaint, the complatnant also moved application under Section 156 (3) of the Code before the Magistrate. Vide order dated 25.3.2011, leamed Magistrate directed the police of concemed police station to submit inquiry report. Pursuant to the direction of the Magistrate, the police held inquiry and submitted a report before the Magista-ate on 6.4.2011, in which, it was stated that in an inquiry made, statements were recorded and it was fouhd that though an amount of Rs.50,00,000/- was paid, the iron ore was not suppUed nor the amount refimded, which, prima facie, makes •yj -4- out a case of dishonest intention and cheating. After perusing the inquiry report, the leamed Magistrate disposed of the appUcation under Section 156 (3) of the Code, directing fhe police to register FIR, hold investigation and submit proper report. In compliance of the order of the Magistrate, the poUce registered FIR under Crime No.105/11 on 15.4.2011 aUeging commission of offence under Sections 384, 420/34 and 109 of the IPC. The first information report contains allegation as averred and stated in the complaint filed by the complainant- Company before the Magistrate. Aggrieved by the order of the Magistrate, registration of FIR, the petitioners have approached this Court in this petition. 'f<-i 4. Learned counsel for the petitioners contended that the initiation of criminal proceedings against the petitioners is an abuse of the process of law, inasmuch as the present being only a dispute of civil nature relating to breach of contractual obligation, crirained proceedings has been set in motion to pressurize the petitioners to come to the terms of the complainant and pay fhem huge amount against claimed losses for which the appropriate remedy is to approach Civil Court claiming damages. Learned counsel for the petitioners vehemently contended that the entire complaint, on fhe basis of which the crirainal case has been initiated and direction issued to the police to hold inquiry as also the report submitted by the police, ^the statements recorded and admitted and estabUshed !r u facts and circumstances, even if taken on its face value and accepted in its entirety, do not niake out any case of com.mission of offences alleged. It is further contended that the allegation contained in the complaint and in the FIR only shows that though there was an agreeraent of sale and purchase between the parties, the supply could not be made because mines could not operate and after mines became operative, there was escalation in the prices on account of which the petitioners expressed there inability to supply raaterial on the rates as agreed between the parities, offering to refund the amount of Rs.50,00,000/- or if the complainant wanted, to supply material of the cost of Rs.50,00,000/- at the original agreed rates. It is submitted that these facts clearly show that there are no ingredients of commission of offence of cheating, because either in the complaint or in the FIR or any of the material collected by fhe police during inquiry, there is no material to prima facie show that the petitioners nurtured a dishonest and fraudulent intention from the inception to cheat the com.plainant. Leamed counsel for the petitioners went on elaborating his submissions and argued that it is the complainant who had approached the petitioners for supply of iron ore and as against the proposal given by the complainant, the petitioner-Company had given its own terms, on which it agreed to supply, which was accepted by the complainant. The terms included payment of an advance and, therefore, the payment of advance was as per the terms of agreement. It is not the case of the com.plauiant that the petitioners do not 'c^ . "• :ft?!*rf^^- ..^lJ-'^'""'"'"^*^.;,^ ^ :s8g|^>..| ^.,.// l^ r"'.,^ -6- possess the capacity or were not having any mines under their control or possession where from supply could be made. After intimating their acceptance vide e-mail dated 28.7.2010, there was strike in the mines by the labours and because of such labour problems, excavation of iron ore came to a grinding halt on or about 31rt Jiily 2010. The stalemate continued tiU 20& September, 2010. As soon as strike was called off and mines became operative, immediately a letter was sent on 21st September, 2010, clearly stating that the petitioner-Company, due to escalation in prices in the nieantune, is iinable to make supply at the agreed rates, but at the sarne time, stated that quantity eqiuvalent to advance amount wUl be dispatched on ordered rate only, which clearly shows that there was no dishonest or fraudulent intention on the part of the petitioner- Company and its directors, officer and employees to cheat the complainant- Company. When there was no response to letter dated 21st September 2010, another letter dated 23rd November, 2010 was sent requesting to respond to the changed rates offer or to provide bank detaUs so that the advance of Rs.50,00,000/- could be refunded. However, in order to get it unjustly enriched, complainant-Conipany insisted on iron ore on old rates. A legal notice dated 8.2.2011 was sent by the complainant-Company, making allegations regarding intention to cheat, to which, it was replied that there was no intention of cheating and that the petitioners are willing to refund the advance amount of Rs.50,00,000/-, but, suppressing aU these faces, coniplaint was Bled, which resulted in passing of -7- impugned order dated 6.4.2011, directing the police to register offence against the petitioner-Company. Leamed counsel for the petitioners submitted that the impugned order passed by the Magistrate is patently illegal, unwarranted and has set cruninal proceedings against the petitioners, thus, amounting to abuse of the process of law. In support of their contentions, leamed counsel for the petitioners relied upon the decision of Supreme Court in the cases of Murari Lal Gupta Vs. Gopi Singh1, Anil Mahajan Vs. Bhor Industries Ltd. and another2, Inder Mohan Goswanii and another Vs. State of Uttaranchal and Ors.3 and Dalip Kaur and Ors. Vs. Jagnar Singh and another4. 5. On the other hand, learned counsel for the State/respondents No. 1 85 2 and leamed senior counsel appearing for respondent No.3 contended that the order of the Magistrate directing registration of offence after perusing the police report, does not suffer from any illegality or perversity. It was contended that the complaint, taken on its face value and accepted in its entirety, clearly makes out ingredients of commission of offence under Section 420 of the IPC as well as Section 384 and 109 read wifh Section 34 of the IPC. Leamed senior counsel for respondent No.3 with usual vehemence, contended that in the complaint, it has been very clearly alleged that the petitioners/accused nurt-ired fraudulent and dishonest l(2006)2SCC(Cri)430 2 (2006) 1 SCC (Cri) 746 3(2008)lSCC(Cri)259 4 (2009) 14 SCC 696 _r~ ^==^3 -8- intention frora very inception of the agreeinent and they had no intention to make any kind of supply ofiron ore. It is contended that the petitioners-accused made a fraudulent representation that they are suppliers of iron ore, possessed of iron ore mines and acting on such fraudulent representation complainant- Company was induced to enter into an agreement and also to pay an advance of Rs.50,00,000/-. The petitioner- Company thereafter did not make any supply on one pretext or fhe other on false excuses and retained huge amount of Rs.50,00,000/- with them. for months togefher and then for the first time, vide letter dated 21st September, 2010, dishonestly refused to make supply at the old rates and insisted on supply on escalated rates, which clearly amounts to cheating. It is further submitted that on complainant's application under Section 156 (3) of the Code, the leamed Magistrate had directed the police of concerned police station to subm.it inquiry report and in the inquiry report, it has also been stated that a prima facie case of fraud and cheating is made out. The said report was subinitted after making inquiry, in which, statements of number of persons were recorded. It priraa facie made out that the complainant- Company was cheated. The learned Magistrate has carefully and cautiously exercised its jurisdiction and only after submission of inquiry report, having found that a prima facie case was made out, disclosing coinmission of cognizable offence, direction was issued to the police station to register FIR and hold investigation and submit proper report, which does not suffer from any illegality so as to warrant interference by ,^s2Bi%s //-^\ I lis&L-l 1 'T^/ '••^l'^HS'11 ^ l:'!i'.;i"K^'.:?r* -9- w this Court. Learned counsel for respondent No.3 further contended that in fact, there are no iron ore mines held on lease or othenvise by the petitioner- Company and without there being any lease in the name of petitioner-Company, fraudulent misrepresentation was made regarding supply of iron ore, induced by which, the complainant-Company parted with a huge amount of Rs.50,00,OOO/- by paying advance. Learned senior counsel for respondent No.3 further stressed upon the circumstances that if at all the accused-Company was not in a position to supply iron ore because of raines being closed due to labour strike, there was no occasion to ask for opening of Letter of Credit and this clearly inakes out a prima facie case that without there being any means or capacity to supply iron ore, not only a huge amount of advance of Rs.50,00,000/- was taken, but also an attempt was made to receive the entire payment by getting the Letter of Credit opened. It is lastly submitted by learned senior counsel for respondent No.3 that the matter is still under investigation and the entire picture is hazy, therefore, at this stage, no interference is warranted under the law and police should be anowed to investigate the matter. In support of his contention, learned senior coi.msel for respondent No.3 relied upon the decisions in the case of Rajesh Bajaj Vs. State NCT of Delhi and Ors.5, State of Orissa and another Vs. Saroj Kumar Sahoo6, T. Vengama Naidu Vs. T. Dora Swamy Naidu and 5 (1999) 3 SCC 259 6 (2005) 13 SCC 540 fe-, -10- o^- "'8 / ^ ^ 'SS Ors.7, Monica Kumar (Dr.) and another Vs. State of Uttar Pradesh and Ors.8, Union of India and Ors. Vs. B.R. Bajaj and Ors.9, S.M. Datta Vs. State of Gujarat and another10, Mohd. YousufVs. Afaq Jahan (Sint.) and another11, State of A.P. Vs. Vangaveeti Nagaiah12, Srinivas Gundluri & Ors. Vs. M/s. SEPCO Electric Power Construction Corporation fis Ors.13 and K. Neelaveni Vs. State rep. by Inspector of Police & Ors.14. 6. I have considered the rival submissions made by leamed counsel for the parties and perused the records. 7. Before exaraining the submissions made by learned counsel for the petitioners, it is necessary to deal wifh the settled legal position with regard to the scope of interference in exercise of power under Section 482 of the Code. 8. The scope and ambit of the power of High Court under Section 482 of the Code came up for consideration by the Supreme Court in the case of R.P. Kapur Vs. State of Punjabls, wherein categories of cases, where inherent power can and should be exercised to quash the proceedings, were summarized as below: 7 (2007) 12 SCC 93 8 (2008) 8 SCC 781 9 (1994) 2 SCC 277 10 2001 CRI L.J. 4195 " (2006) 1 SCC 627 12 2009 AIRSCW 4071 13 2010 CRI.L.J 4457 14 2010 AIRSCW 2760 " AIR 1960 SC 866 -s^ itli^iBrauB]ii(iuitHuijiiu^;^•f -11- "(i) Where it manifestly appears that there is a legal bar against the institution or continuance of the crim.inal proceeding in respect of the offence alleged. (ii) Where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in fheir entirety, do not constitute theoffence alleged. (iii) Where the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or the evidence adduced clearly or manifestiy fails to prove the charge." 9. The aforesaid principles were again reiterated elaborately and comprehensively in well-known decision of the Supreme Court in the case of State of Haryana & Ors. Vs. Bhajan Lal & Ors.16, wherein the Supreme Court stated categories of cases by way of illustration wherein extraordinary power under Article 226 of the Constitution of India or the inherent powers under Section 482 of the Code could be exercised either to prevent abuse of fhe process of the Court or otherwise to secure the ends ofjustice, as below: "102. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in fheu' entirety do not prima facie constitute any offence or make out a case against the accused. 16 1992 Supp (l) SCC 335 -12- (2) Where the aUegations in the first information report and other matenals, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the com.m.ission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the atlegations made in the FIR or complaint are so absurd and inherentiy improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. y -13- T-^^i^ (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on fhe accused and with a view to spite him due to private and personal grudge." 10. The amplitude of the power and the guiding principles for exercise of such power as laid down in the aforesaid decision have been subsequentiy reiterated in the plefhora of decisions of the Supreme Court, some of them are- 2000 (2) SCC 636 (G. Sagar Suri and another Vs. State ofU.P. and Ors.), 2000 (8)SCC 590 [Roy V.D. Vs. State of Kerala), 2005 (1) SCC 122 (M/s Zandu Pharmaceutical Works Ltd. & Ors.Vs. MD Sharafitl Haque & Anr.), 2006 (6) SCC 736 : 2006 AIR SCW 3830 (M/s Indian Oil Corporation Vs. M/s NEPC India Ltd., Ss Ors.) and so on. 11. The scope and power and limitation in the matter of quashing of criininal proceedings m. exercise of power under Section 482 of the Code again came-up for consideration before a larger Bench of the Supreme Court in the case of Inder Mohan Goswaini (supra), wherein the principles laid down in the aforesaid decision were s^edn reiterated by the Supreme Court while dealing with a case relating to quashing of criminal proceeding in exercise of power under Section 482 of the Cr.P.C. ^:: h ...^1 The Supreme Court again considered the scope and ambit of power under Section 482 of the Code in the case of Hira Lal & Ors. Vs. State ofUttar Pradesh 8s Ors.17 in following words: "12. The parameters of interference with a criminal proceeding by the High Court in exercise of its jurisdiction under Section 482 of the Code eire well known. One of the grounds on which such interference is permissible is that the allegations contained in the complaint petition even if given fa.ee value and taken to be correct in their entirety, commission of an offence is not disclosed. The High Court may also interfere where the action on the part of the coniplainant is mala fide." Similar is the view taken in the case of Harinanpreet Singh Ahluwalia 8s Ors. Vs. State ofPunjab & Ors.18. 12. The contentions made by learned counsel for the parties therefore are required to be exstmined in the light of principles which have been stated and re-stated in the aforesaid decisions, in order to find out whether a case for quashing criminal proceedings instituted upon complaint is made out so as to warrant interference by this Court, invoking power 1-m.der Section 482 ofthe Code. 13. Since the main aUegation is of commission of offence of cheating, it would be relevant to examine the essential I7(2009)11SCC89 " (2009) 7 SCC 712 -15- ingredients of cheating as embodied in relevant provision contained in the I.P.C. 14. Section 420 of the IPC provides for punishment for cheating and dishonestly inducing delivery of property. "Cheating" has been defined in Section 415 ofthe IPC, which is reproduced as below: "415. Cheating- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or oniit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harra to that person in body, mind, reputation or property, is said to "cheat". Explanation- A dishonest concealment of facts is a deception within the meaning of this section." The ingredients and essence of cheating were exam.ined by the Supreme Court in the matter of Inder