Ravindra Kumar Madhanlal Goenka & Anr vs M/S Rugmini Ram Raghav Spinners P. Ltd

3. Facts in brief, as alleged by the appellants, are as follows:

4. The respondent through his agents approached the 1st appellant by personally visiting Akola and ordered cotton bales to manufacture yarn. The agents had stayed for about 45 days at Akola and after examining the quality of cotton and after their approval the cotton was transported Page 2 of 14 to the respondent for which the respondent offered 1% commission to the 1st appellant. The 1st appellant by raising bank loan gave the same to the cotton manufacturers and dealers and bought from them and thereafter, as requested by the respondent, transported the same to Coimbatore. It was a practice that entire advance amount was to be paid at the time of ordering cotton. The respondent after gaining confidence of the 1st appellant some time used to send even lesser amount than the actual value of the cotton but even then the 1st appellant used to send cotton bales over and above the advance amount paid by the respondent. The advance amount used to be sent by the respondent by telegraph transfer and every transfer was accounted by both the respondent as well as 1st appellant.

5. During the course of their business transaction the respondent had developed some problem with their two commission agents belonging to Coimbatore with regard to the payment of compensation and other expenses. The appellant had sent a fax message on 12.2.2004 to the respondent giving statement of accounts by showing that the amount lying with him is Rs. 4,74,521/- and requested him to send balance money for sending 100 bales and also requested to send the `C' Form. In response to the above fax, on 15.02.2004, the respondent sent a fax Page 3 of 14 stating that the closing balance with the 1st appellant is Rs. 4,76,521/-. Thereafter, the respondent through his agents requested the 1st appellant to send totaling 145 bales of cotton and it was confirmed by the fax messages dated 18.2.2004 of his agent Mr. Srinivas R. Lele wherein he made specific request to send the 145 bales after receiving the entire amount and also by deducting = % commission payable to him. The 1st appellant, vide his fax message dated 20.2.004 requested the respondent to send the remaining amount for lifting of 145 bales, which was weighed by his new controller and also requested him to settle all the amount by sending the statement of account along with the fax. However, the respondent by return fax disputed the 1st appellant's claim and allegedly made some false statement. Again, the 1st appellant by another fax requested the respondent to send the remaining balance including the late fee in accordance with the terms and conditions. The second condition in the invoice was that 24% interest would be levied upon accounts remaining unpaid 30 days from the date of dispatched goods. The 1st appellant claimed late fee interest in accordance with the above terms. However, the respondent did not make such payment. Some further dispute arose between the parties.

6. Subsequently, the 1st appellant approached the Akola Police for filing a complaint. However, the same was not entertained and registered stating that the transaction was purely commercial and civil in nature and the business disputes cannot be resolved by criminal prosecution. In the meanwhile, the respondent filed a complaint under Section 200 CrPC before the Judicial Magistrate No. 1 at Coimbatore for offences u/s 406, 420 and 384 of the Indian Penal Code (in short `IPC'. The court vide order dated 2.8.2004 issued an order directing the Thudiyalur Police to register a case under Section 406, 420 and 384 IPC and submit their final report within 3 months. The case was registered on 21.8.2004 after receipt of the court order on 9.8.2004. Subsequently, the respondent also filed a private complaint under Section 190 and 200 Cr.PC for offences punishable under Sections 120-B, 406, 420 and 384 IPC by implicating the 2nd appellant, who is the wife of the 1st appellant and one Srinivasa Lele who is the agent of the respondent. The Judicial Magistrate No. 1 at Coimbatore on the basis of such complaint issued summons to the appellants to appear before the court on 17.2.2006.

7. Aggrieved by the aforesaid order of the learned Judicial Magistrate No. 1, the appellants approached the High Court for quashing the criminal proceedings against them by filing Criminal Original Petition No. 4556 Page 5 of 14 of 2006 which was dismissed by the High Court. The High Court held that a perusal of allegations mentioned against the accused show that a prima facie case is made out but only the trial court may have to look into the defence materials produced by the appellants and admittedly, there was business transaction wherein 900 bales of cotton were already dispatched but 100 bales of cotton were yet to be dispatched. Accordingly, the High Court refused to quash the proceeding.

(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.

(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.

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15.While considering the facts of the present case, we are of the considered opinion that the present case is not one of those extreme cases where criminal prosecution can be quashed by the court at the very threshold. A defence case is pleaded but such defence is required to be considered at a later stage and not at this stage. The appellants would have ample opportunity to raise all the issues urged in this appeal at an appropriate later stage, where such pleas would be and could be properly analysed and scrutinized.

16.In view of the aforesaid position, we decline to interfere with the criminal proceeding at this stage. The appeal is consequently dismissed.