Case: Suneet Gupta Vs. Anil Triloknath Sharma

of the fact that even the complainant had informed the principal that there was dispute between the partners of M/s K.M. Agencies and hence no payment should be made to M/s Mangla Agencies till the dispute was finally resolved between the parties. That, however, does not give rise to criminal liability and entitle the complainant to initiate criminal proceedings, particularly when M/s Johnson & Johnson Ltd. substituted in the Company record name of M/s Mangla Agencies in place of M/s K.M. Agencies. The resultant effect of substitution of name was that whatever sums were due to M/s K.M. Agencies were considered to be due to M/s Mangla Agencies. 14. The High Court, in the circumstances, observed as under; "This is really a case of one partner trying to drag the principal company into a criminal litigation to recover dues which the principal had paid to the other partner. The dispute and the relationship inter se has become a tripartite one. Suneet Gupta had a dispute with Shashi Kant Mangla but instead of tackling him he got lodged F.I.R. No. 266 dated September 16, 2003 registered at Police Station Sarabha Nagar, Ludhiana, under Sections 468/406/120-BIPC to pressurize the petitioners to settle the matter. It is not a clear cut and direct case in which any contractual relationship between Suneet Gupta with the company has been breached. Indeed Suneet Gupta had no direct relationship with the company. It was M/s K.M. Aencies of which he was one of the partners which had developed contractual relationship and later in June/July, 2001, M/s Mangla Agencies got substituted in place of M/s K.M. Agencies. Suneet Gupta either ignored this development or remained oblivious of it for nearly 2 years. The first notice was issued after passage of long time on March 4, 2003. This notice was clearly to drag the company into the inter se dispute between two partners." 15. The Court proceeded to state; "The complaint of Suneet Gupta and the steps taken by the police have clearly converted a tri-partite civil dispute into a criminal one and have involved the managers of the principals in a dispute between the partners of the firm." 16. The High Court, therefore, concluded that the steps taken by the complainant Suneet Gupta were in clear abuse of process of law and accordingly allowed both the petitions.17. By passing the impugned order and quashing criminal proceedings, in our opinion, the High Court has neither committed any error of law nor of jurisdiction which deserves interference in exercise of power under Article 136 of the Constitution.18. Our attention has been invited by the learned counsel for the accused to several decisions of this Court. In our opinion, however, it is not necessary to refer to those decisions since we are of the view that the High Court was right in quashing criminal proceedings. 19. We may, however, refer to one aspect. Learned Counsel for the appellant strenuously relied upon an order of this Court in State of Punjab v. Dharam Vir Singh Jethi, 1994 SCC (Cri) 500. In that case, charge-sheet was submitted by Police and thereafter FIR was quashed by the High Court. 20. In the light of the said fact, this Court observed; "Heard learned counsel for the State as well as the contesting respondent. We are afraid that the High Court was not right in quashing the First Information Report on the plea that the said respondent had no role to play and was never the custodian of the paddy in question. In fact it was averred in the counter-affidavit filed in the High Court that the said respondent had acted in collusion with Kashmira Singh resulting in the latter misappropriating the paddy in question. At the relevant point of time the respondent concerned, it is alleged, was in overall charge of the Government Seed Farm, Trehan. This allegation forms the basis of the involvement of the respondent concerned. The High Court was, therefore, wrong in saying that the respondent concerned had no role to play. A specific role is assigned to him, it may be proved or may fail. In any case, pursuant to the First Information Report the investigation was undertaken and a charge-sheet or a police report under Section 173(2) of the Code of Criminal Procedure was filed in the court. If the investigation papers annexed to the charge-sheet do not disclose the commission of any crime by the respondent concerned, it would be open to the court to refuse to frame a charge, but quashing of the First Information Report was not permissible." 21. In our opinion, however, the ratio laid down in the above case will not apply to the facts of the case. As already indicated in the earlier part of the judgment, FIR was lodged by the complainant on September 16, 2003 and immediately within less than a month, the accused invoked the jurisdiction of the High Court under Section 482 of the Code by filing petitions on October 12, 2003. At that time, challan was not filed in the Court. It was after a substantial period of about seven months that on May 13, 2004, charge-sheet was filed by the police authorities. Moreover, in Dharam Vir Singh, the accused was shown to be in possession of property and later on misappropriated it. The High Court, however, quashed the proceedings inter alia observing that the accused was never the custodian of paddy and was not in charge of the Government Seed Farm which was factually incorrect. In the light of factual scenario, this Court set aside the order of the High Court quashing criminal proceedings.22. In the case on hand, the High Court was right in coming to the conclusion that a civil dispute - pure and simple - between the parties was sought to be converted into a criminal offence only by resorting to pressure tactics and by taking police help which was indeed abuse of process of law and has been rightly prevented by the High Court.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. Having heard the learned counsel for the parties and having considered the rival contentions, in our opinion, it cannot be said that the High Court was wrong in quashing criminal proceedings. It is clear from the case put forward by the appellant himself that virtually the proceedings were civil in nature. There were two partnership firms, one M/s K.M. Agencies, consisting of appellant and Shashi Kant Mangla and the other of M/s Mangla Agencies wherein Ravi Kant Mangla (one of the partners of M/s K.M. Agencies) was a partner. It was the case of Shashi Kant Mangla that M/s K.M. Agencies was no more in existence and it had changed its name from M/s K.M. Agencies to M/s Mangla Agencies and all the transactions of M/s K.M. Agencies would thereafter be dealt with by M/s Mangla Agencies. Obviously, therefore, payments which were to be made to M/s K.M. Agencies should be made to M/s Mangla Agencies. It also appears that M/s Johnson & Johnson Ltd. was informed which changed the Code from M/s K.M. Agencies to M/s Mangla Agencies. It is further clear that though payments were made in June-July, 2001 by M/s Johnson & Johnson Ltd. to M/s Mangla Agencies, a notice through an advocate was issued by the complainant only on March 4, 2003, i.e. after substantial period about two years. A complaint was made to Director General of Police, Chandigarh by the complainant in May, 2003. The record further reveals, as stated by respondent Nos. 1, 2 and 3 in the counter-affidavit, that it was contended by the accused that the matter was civil in nature and based on commercial transactions and there was a dispute between the parties and as such there was no element of mens rea. It was also submitted by the accused that the complainant, with an ulterior motive and mala fide intention, used pressure tactics and was harassing them in connivance with local police and filed a complaint on May 2, 2003. The police authorities were convinced about the nature of dispute and after seeking legal opinion from District Attorney closed the proceedings. Subsequently, however, the complainant after making cosmetic changes in the earlier complaint and using undue influence filed FIR No. 266 of 2003 on September 16, 2003 for commission of offences punishable under Sections 468, 406 read with 120B, IPC. According to the accused, it was motivated and the police authorities obliged the complainant by helping him.13. The High Court, in our opinion, rightly considered the facts in their proper perspective and observed that the dispute related to settlement of accounts between principal and its agent; the principal being M/s Johnson & Johnson Ltd. and the agent being M/s K.M. Agencies (earlier) and M/s Mangla Agencies (later). The High Court also noted that it was M/s K.M. Agencies which informed the principal i.e. M/s Johnson & Johnson Ltd. that M/s K.M. Agencies had closed its business and the business was thereafter continued by M/s Mangla Agencies and all drafts be issued in favour of M/s Mangla Agencies. The High Court took note of the fact that even the complainant had informed the principal that there was dispute between the partners of M/s K.M. Agencies and hence no payment should be made to M/s Mangla Agencies till the dispute was finally resolved between the parties. That, however, does not give rise to criminal liability and entitle the complainant to initiate criminal proceedings, particularly when M/s Johnson & Johnson Ltd. substituted in the Company record name of M/s Mangla Agencies in place of M/s K.M. Agencies. The resultant effect of substitution of name was that whatever sums were due to M/s K.M. Agencies were considered to be due to M/s Mangla Agencies.The High Court, therefore, concluded that the steps taken by the complainant Suneet Gupta were in clear abuse of process of law and accordingly allowed both the petitions.17. By passing the impugned order and quashing criminal proceedings, in our opinion, the High Court has neither committed any error of law nor of jurisdiction which deserves interference in exercise of power under Article 136 of the Constitution.18. Our attention has been invited by the learned counsel for the accused to several decisions of this Court. In our opinion, however, it is not necessary to refer to those decisions since we are of the view that the High Court was right in quashing criminal proceedings.proceedings.22. In the case on hand, the High Court was right in coming to the conclusion that a civil dispute - pure and simple - between the parties was sought to be converted into a criminal offence only by resorting to pressure tactics and by taking police help which was indeed abuse of process of law and has been rightly prevented by the High Court.