Case: State Of Maharshtra Vs. Sayed Mohammed Masood

2. The State of Maharashtra is before us aggrieved by and dissatisfied with a judgment and order dated 3rd March, 2008 passed by a Division Bench of the High Court of Judicature at Bombay in Criminal Writ Petition No. 2333 of 2007 quashing a First Information Report ("FIR") lodged by the respondent No.2 herein at the Cuff Parade Police Station, Mumbai.3. The first respondent is the Chairman-cum-Managing Director of M/s City Limouzines (India) Ltd. (hereinafter called and referred for the sake of brevity as, "the said Company"). He established the said Company. A scheme known as "Go/Vehicle on rental basis and earning by sitting at home" was floated. In terms of the said Scheme, assurances were given to the people for earning money in easy way. A public advertisement was also issued in a newspaper. They also issued pamphlets and thereby attracted huge investments. In terms of the said Scheme, Rs.97,907/- was to be invested in `rent a car scheme wherein agreement was executed inter alia providing that the car would be purchased in the name of investor but would be used by the Company on rent to others wherefor the investor would receive a sum of Rs.4,000/- per month for a period of five years. After 60 months, i.e., at the end of the agreement, the investor may take back his car in proper working condition. It was equally provided that an investor was entitled to inspect the vehicle given on lease/rent once in three months upon giving 15 days prior notice.4. Clauses 4, 8, 10 and 15 of the said agreement read asInspection: The Lessor is entitled to inspect the Vehicle given on Lease/rent once in 3 months by giving 15 days prior notice to the above stated address and inspect the vehicle at any of the offices of the Lessee in India.xxx xxx xxx8. Buy Back: The Lessee will have the option at the discretion of the Lessor/registered owner to purchase the vehicle at a fair market value upon mutual consent after the expiry of the agreement. However, this buyback clause is not to be construed to be conferring any enforceable right on the Lessee but the first option to buy the car shall be that of the Lessee herein.xxx xxx xxx10. Completion of contract: Upon successful completion of the terms of this agreement, the Lessor shall receive the leased Vehicle in proper working condition including the tyres and battery in good condition with normal wear and tear acceptable depending on the period of use.xxx xxx xxx15. Issue of Preference Shares: The Lessee undertakes to issue redeemable Preference shares to the Lessor towards the margin money paid (excluding Insurance & RTO Charges) which will be held by the Lessor as security for the entire period of the validity of the agreement being 60 months from the date of issue to ensure smooth installment payments to the bank and the lease/hire charges to the Lessor.The complainant - respondent No.2, pursuant to the said advertisement, invested a sum of Rs.97,907/-. Indisputably, he was paid Rs.4,000/- per month for a period of five years. However, despite demand, he was not given the car. He was, however, given three post-dated cheques of ABN Amro Bank amount to Rs. 25,000/-, Rs.20,000/- and Rs.10,000/- although he had asked for the said amount in cash.6. In the said FIR, it was inter aliamentioned above, Directors of the said Company in their office without listening anything from me, as per their own wishes making changes on the document of agreement, when I noticed that then I enquired about the same in more detail. It is transpired that the said company by showing false inducement about big return in various financial schemes and transferring the motor vehicle in the name of investor, till date has accepted deposits of crores of rupees under various schemes from 25000 investors. But I came to know that said company has purchased motor car only in the name of 500 investors.All aspect of above mentioned schemes are in existence only on paper but in reality not even a single scheme is in force as per the scheme shown on the document. I also came to know that apart from the above mentioned office of the company at Bombay, and other places said company has office on rental basis and Sayyed Masood Jamadar, in collusion with other directors of the Company, induces people for making investment and amount invested by people is being utilized for other purpose, other than the original purpose and is being utilized personally or for some other purposes. The said company on the internet at its website namely www.citylimouzines.com & www.city-money.com has projected the said company as bearing ISO-9001-2000 certification and inducing common poor people to invest money in the said company and thereby cheating the people. If immediate legal action is not taken against the said company then there will be huge financial loss to ordinary investors. Since Directors of the said company threatened investors whenever investors go to ask back money therefore, rein of fear against them is created.Above mentioned persons namely Sayyed Mohammad Masood Jamadar and Geeta Razzaki and other persons have collusively established City Limouzines Ltd. Company and through that company several other companies are established and through them false inducement is given and financial investments is accepted from the people and misappropriation of the same on large scale is done and defrauded citizens and Government.The respondent No.1 filed a writ petition before the Bombay High Court praying for quashing the said FIR.The Division Bench of the High Court keeping in view the various clauses in the agreement entered into by and between the complainant and the said Company opined that although the investor might have been entitled to the car at the end of the period of five years, but as there has been no intention to defraud him at the time of inception of execution of the agreement and the dispute between the parties revolved on interpretation of the clauses of the agreement, no offence under Sections 406, 420 and 120B of the Indian Penal Code has been made out,At the cost of repetition we may mention that the facts in the present case are not at dispute at all that the investment made by each of the consumers to the tune of Rs.97,907/- and in return they received Rs.2,40,000/-. The only question which remained was whether the investors were entitled to the car at the end of the period of five years or not. There has been no intention to defraud at the time of inception of execution of the agreement. There can be made several interpretations of the clauses in the agreement if the agreement is taken as a whole. It is a well accepted principle of interpretation that while interpreting clause of agreement, whole of the agreement has to be taken into consideration. Applying the principles laid down by the various judgments of the Supreme Court hereinabove referred, we do not think that in the facts and circumstances of the case an offence of cheating is madeHigh Court, however, in its judgment only considered the case from the point of view of Section 420 of the Indian Penal Code and not Sections 406 and 120B thereof.

Court's reasoning:
12. There cannot be any doubt or dispute whatsoever that a simple breach of contract or a case involving pure civil dispute would not attract the penal provisions contained in the Indian Penal Code either under Section 406 or Section 420 thereof.13. Had the dispute between the parties rested in the aforementioned premise, probably we would not have interfered with the judgment of the High Court; but then, our attention has been drawn to certain evidences which have surfaced during investigation and disclosed before us by the State in the grounds stated in this Memo of Appeal.The allegation made in the FIR and the materials collected during investigation, in our considered opinion, should be allowed to be taken to its logicalthe petition of complainant did not disclose any criminal offence at all much less any offence either under Section 420 or Section 120B of the Indian Penal Code. It was purely civil in nature.16. We have, however, no doubt in our mind that the Investigating Officer shall conduct the investigation fairly and impartially and shall allow the company to carry on its business without any hindrance whatsoever. If any books of account or other documents are required, the Investigating Officer subject to just exceptions may take the xerox copies thereof duly certified by the accused as also an undertaking that, as and when called upon, they would produce the said books of account in a court of law.Subject to the aforementioned directions, the Investigating Officer shall carry out the investigation in accordance with law.