Case: Ajay Mitra Vs. State Of M.P.

3. M/s. Cadbury Schweppes Beverages India Private Ltd. entered into three identical Bottling Agreements with the complainant, Sanjiva Bottling Company Private Limited on March 1, 1996 pursuant to a Master Trademark License entered into by associate companies of Cadbury Schweppes plc. United Kingdom and Cadbury Schweppes Beverages India Private Limited. In terms of these three agreements, M/s Sanjiva Bottling Company was authorised to manufacture and sell certain specified beverages under specified trademarks owned by Cadbury Schweppes plc. U.K. or its associate companies. The agreements contained identical clauses with regard to their respective terms and conditions and provided that they shall continue for an initial term of five years and for further successive period of five years, unless terminated by either party by giving to the other not less than 12 calendar months notice in writing to terminate the agreement. On July 29, 1999, Atlantic Industries (a wholly owned indirect subsidiary of The Coca-Cola Export Corporation, USA) purchased about 3500 trademarks in 155 countries from Cadbury Schweppes plc., upon which the bottling agreements between Cadbury Schweppes Beverages India Pvt. Ltd. and Sanjiva Bottling Company were duly assigned to Atlantic Industries and an information regarding the same was given to Sanjiva Bottling Company in writing. On February 14, 2000, Atlantic Industries gave notice in writing to the complainant, Sanjiva Bottling Company that the bottling agreements shall not be renewed after their expiry on February 28, 2001.4. Sanjiva Bottling Company through its Director, Rajiv Mehta filed a criminal complaint against 11 accused including the appellants in the Court of Judicial Magistrate, First Class, Bhopal on July 24, 2000 for their prosecution under Section 420 read with Section 511 IPC. The accused no. 1 arrayed in the complaint is Cadbury Schweppes Beverages India Pvt. Ltd. (A-1) and accused nos. 2 to 5 are Chairman, Managing Director and Finance Director etc. of the said Company. Besides them, Coca Cola India (A-6), Alex Von Behr, President and Chief Executive Officer (A-7), Nitin Dalvi, Vice-President, Strategic Business, Planning and Information Services (A-8) and Samip Shah, Vice-President, Business Development of Coca Cola India, (A-8) Ajay Mitra, Regional Operational Director, Hindustan Coca Cola Beverages Pvt. Ltd. (A-10) and Steve M. Whaley, Vice-President and General Tax Counsel, Atlantic Industries (A-11) have been arrayed as accused nos. 6 to 11. The case set up in the complaint is that the complainant is engaged in the business of bottling soft drinks since 1983 at Bhopal. The complainant was approached by A-1 in 1995 to discontinue its competing brand Sprint and a Memorandum of Understanding was signed on October 9, 1995. Thereafter, an agreement was entered into between the complainant and A-1 on March, 1, 1996 by which the complainant became one of the bottlers of A-1, made investments in the bottling plant and also promoted the sales of A-1 in its area. By a letter dated July 29, 1999, A-1 informed the complainant that the brands Schweppes, Crush and Canada Dry and associated brands in India would be acquired by a member of the Coca Cola group of companies. A-1 had 19 bottlers in the year 1997 but Coca Cola India (A-6) had reduced them to 7 and is installing its own bottling plants in different places. The case of the complainant further is that by the letter dated February 14, 2000, A-6 informed the complainant that they would not renew the agreements on their expiry on February 28, 2001. In paras 47 and 48 of the complaint, it is alleged that A-6 is adopting all sorts of unfair trade practices and that it has made wrongful gain of over Rs. 100 crores. In para 50, it is alleged that A-1 and A-6 have not replied properly to the letters of the complainant and the accused have, therefore, cheated the complainant by making false representation.5. The learned Magistrate before which the complaint was filed passed on order under Section 156 (3) Cr.P.C. on July 27, 2000 directing the police to investigate the offence as the same was cognizance offence. The police thereafter submitted a report on October, 31, 2000 which reads asthe entire inquiry it appears that the Cadbury Schweppes Company and Coca Cola Company have violated the terms and conditions of Business Agreement, as a result, the complainant has suffered financial loss. The complainant was kept in darkness and supplied confusing information, consequently, Complainant suffered economic loss. Prima facie a case of business competition and violation of Agreements is made out and the complainant is advised to approach the Civil Court.After consideration of the report the learned Magistrate was of the opinion that the police had not submitted the same in accordance with Section 173(2) Cr.P.C. and also in the proforma prescribed in the Rules framed by the State Government as the same had been submitted on plain paper. The SHO, PS Govindpura was accordingly directed on November 16, 2000 to submit a report in the prescribed proforma.7. On January, 11, 2001, the Police submitted a report that on the basis of the complaint, Case Crime No.5 of 2001, Case Crime No. 13 of 2001 and Case Crime No. 18 of 2001 has been registered under Section 420, 120-B, 34 IPC. On the same date, the learned Magistrate passed an order that the Police had registered the offence and investigation is being carried on and, therefore, the complainant should make available Hindi translation of the documents and fixed January 30, 2001 as the next date. Thereafter, the appellants filed three Criminal Miscellaneous Petitions under Section 482 Cr.P.C. before the High Court for quashing of the FIR and the proceedings of the case before the learned Magistrate. After hearing the parties, the High Court held that the investigation had not yet commenced in connection with the FIRs which had been registered at the Police Station and, therefore, the Petitions were pre-mature and accordingly all the three Petitions were rejected.

Court's reasoning:
18. So far as the present appellants are concerned, they came into picture much later in July 1999, when various trademarks and brands of A-1 were purchased by A-6. The appellants were not at all in picture at the time when the complainant claims to have spent money in improvement of its bottling plant on the basis of the agreement executed with Cadbury Schweppes Beverages India Pvt. Ltd. (A-1). Since the appellants were not in picture at all at the time when the complainant alleges to have spent money in improving the bottling plant, neither any guilty intention can be attributed to them nor there can possibly be any intention on their part to deceive the complainant. No offence of cheating can, therefore, be said to have been committed by the appellants on account of the fact that a notice was given to the complainant that the bottling agreements will not be renewed any further after expiry of the initial term. Thus, even if the allegations made in the complaint are accepted to be absolutely true and correct, the appellants cannot be said to have committed any offence of cheating as provided in Section 420 IPC.19. The High Court has held that the Petitions filed by the appellants for quashing the complaint and the FIRs registered against them are pre-mature.The question which arises is that where the complaint or the FIR does not disclose commission of a cognizable offence, whether the same can be quashed at the initialstage? This question was examined by this Court in State of West Bengal & Ors. vs. Swapan Kumar Guha and others, AIR 1982 SC 949  and it was held that the First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot from the foundation or constitute the starting point of a lawful investigation. It is surely not within the province of the police to investigate into a Report (FIR) which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases. It was further held that an investigation can be quashed if no cognizable offence is disclosed by the FIR. The same question has been considered in State of Haryana & others vs. Ch. Bhajan Lal & others, AIR 1992 SC 604  and after considering all the earlier decisions, the category of cases, in which the Court can exercise its extra-ordinary power under Article 226 of the Constitution or the inherent power under Section 482 Cr.P.C. either to prevent abuse of the process of any Court or to secure the ends of justice, were sumarised in para 108 of the Report and sub-paras 1 to 3 thereof are being reproducedWhere the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.2. Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. 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 commission of any offence and make out a case against the accused".As mentioned earlier, the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute any offence as against the appellants. Therefore, the complaint filed by the respondent and the FIRs registered in pursuance thereof are liable to be quashed. Trisuns Chemical Industry vs. Rajesh Agarwal & others (1999(8) SCC 686) cited by learned counsel for the complainant is clearly distinguishable as in the said case the allegation in the complaint was that the complainant had paid in advance a price higher than the market price for purchasing "toasted soyabean extracts" but the accused sent the commodity which was of most inferior and substandard quality due to which the complainant suffered a loss of Rs. 17 lakhs. In view of the allegations made in the complaint, the matter required investigation and the proceedings could not have been quashed on the ground that the dispute was of a civil nature.