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THE STATE OF JHARKHAND AND ANR. '' • ~'

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' '" ''1jANUARY 20 2003"'. ,, .. "" 1" ,

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[M.B.' SHAH AND ARUN'KUMAR, 'JJ:J I"'" ' ' t>.

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J~1.,:f'"\;; 11'. ; "'" , i Pena{{:ode, .1860-, Sections,40J,: 406,' 420 and.1208._, cognizance of .offence under Section~Justificqtiortof....Complainantfillng c'"iminal complatnt

againstca company ofl'.ilccount of non payment: qfmoney for; .work done.under C ccnttact...Court, taking .. cognizance and i.Suing, summons~Aggrieved .party filing petiticmfor, quashing iof.order-; Jfigh-Court .dismissing the .same-On .appeal held, ; since.the dispute,.between . .parties is.ofcMl nature and basic .ingredient, of alleged, offence .are not :-satisfied,. no. clls<hmade out far .the

alleged 'ojfence~Hence order of Magistrate as well asBigh Court quashed.

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Bokarp..S!e~I lant ~t.l'¥'te<J .ere.ct\o\I , part of.c9ntraft for certain works to appellant's company who in turn awarded the work to coin'plaimlnt-compalty. After cb'mpleting the work complainant-company

did not receive the payment for the work done under the contract. They filed a criminal complaint against appellant's company under Sections 403, . 406; 420 and 1208 IPC 'alleging t~_at itpellant's company had already E received money from the Steel plant a"lid had mis-appropriated the sam'e for its own use. Judicial Magistrate took cognizance ofthe alleged offence and issued summons to appellants. Appellants filed, petition for quashing the order. High Court dismissed the petition. Hence the present appeal.

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Appellants contended that complaint relates to purely a civil dispute regarding payment of money and no case for criminal complaint for the alleged offencesis made oul.i ,,

Allowing the appeals, the Court ·

'"'HELD: ti. The dispute of Cllmplahiant even a'ssufuing to be correct, G is regarding recovery of money due under the contract which is or'civil nature. [449-G; 450-BJ

'' •I 1.2. Courts below overlooked the fact that the contract regarding

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execu.ti.~.n o, r_ crta.i11 .orks ~t447n the parties r~ separate an.d H

SUPREME COURT REPORTS

[2003) I S.C.R.

A independent of each other and also their contractual obligations are separate, thus payment under one has no relevance qua the other. (450-C, Fl

~ 1.3. The words 'dishonestly' and 'misappropriate' are necessary ingredients of an offence under Section 403 IPC. It cannot be said that -. there is any dishonest intention on the part of appellants nor it can be B said that appellant's company or appellants have misappropriated or converted the movable property of the complainant to their own use. Even if Steel Plant has made the payment to appellant's company under its icontract with the latter, it will not give rise to plea of misappropriation of money because that money is not money or movable property of the c

complainant. Since the basic ingredients of the relevant Settion in the

Penal Code are not satisfied, the order taking cognizance of the offence as well as the issue of summons to appellants is wholly uncalled for. Such an order brings about serious repercussions. Thus when no case is made out for the alleged offences even as per the complaint filed by complainant, + there is no reason to permit appellants to be subjected to trial for the D alleged offences. Hence the impugned orders of Chief Judicial Magistrate " as well as High Court are quashed. (450-D, E, G, H; 451-AI

CRIMINAL APPELLATE JURISDICTION ; Criminal Appeal No.

~ .__ 70 of 2003. .- ' E From the Judgment and Order dated 3.5.2002 of the High Court of Jharkhand in Crl. M.P. No. 4780 of 2001. .•

WITH

Criminal Appeal No. 7112003.

F R.K. Jain and M.K. Dua for the Appellants.

S.K. Dholakia, Gopa Prasad, M.P. Jha, Ram Ekbal Roy, Sanjeev Mishra

~ and Anil Kumar Chopra and Anil K. Jha, for the Respondent.

The Judgment of the Court was delivered by

G ARUN KUMAR, J. Crl.A.No. 70 of 2003 @ SLP(Crl)No.2654 of 2002.

Leave granted. y This Appeal is filed by U. Dhar, Managing Director and Mr. Asis Ray, H Vice President (Operation), both of Tata Construction & Project Ltd. against

U. DHAR v. STATE OF JHARKHAND [ARUN KUMAR,!.) 449

an order dated 3rd May, 2002 passed by the High Court of Jharkhand in A Crl.M.P. No.4780/2001 whereby the High Court dismissed the petition filed by the appellant herein for quashing an order dated 19th June, 200 I whereby cognizance was taken of offence against the appellants under Sections 403, 406, 420 and 1208 of Indian Penal Code by the learned Chief Judicial Magistrate, Bokaro.

Briefly, the facts are that Bokaro Steel Plant, a unit of Steel Authority of India Limited (for short, SAIL) awarded a contract to Mis. Tata Iron & Steel Co. Ltd. (for short, TISCO), Growth Shop for certain works. TISCO growth shop completed supply part of the work and erection part of the work was entrusted by it to M/s. Tata Construction & Projects Ltd. (for short TCPL). TCPL in tum issued Tender Enquiry and awarded the work to Mis. c

Singh Construction Co., the complainant. According to the complainant after + completing the work it demanded payment of the balance amount under the contract from TCPL. The appellants herein are the Managing Director and President (Operations) of TCPL. When the complainant failed to receive the payment for the work done, they filed a complaint on 11th January, 200 I D under Sections 403, 406, 420 and 1208 IPC at Bokaro. The concerned Magistrate took cognizance of the alleged offences and issued summons vide order dated 19.6.2001 to the appellants. The appellants challenged the said order by filing a Crl.M.P.478012001 in the High Court of Jharkhand at Ranchi.

The impugned order was passed by the High Court dismissing the said petition E on 3rd May, 2002.

The present appeal has been filP-d against the said order of the High Court whereby the High court refused to quash the order of the learned Chief Judicial Magistrate taking cognizance of the alleged offences against the appellants. The learned counsel for the appellants argued that a perusal of the F f complaint would show that no case is made out against the appellants for the alleged offences, and, therefore, the order passed by the learned Chief Judicial Magistrate is wholly without jurisdiction. According to the learned counsel for the appellants, the controversy relates to purely a civil dispute regarding payment of money and no case for criminal complaint for the alleged offences G is made out. We have been taken through the complaint as well as our attention has been drawn to the impugned order passed by the Chief Judicial Magistrate and the confirming order of the High Court. After careful consideration of the facts placed on record, it appears to us that the dispute between the parties is of a purely civil nature. The grievance of the complainant is about the failure of TCPL to pay the balance amount under the contract H

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(2003] I S.C.R. . .

A even though according to it the work stands completed. The appellants have disputed this.

In our view, what is relevant is that the contract between TCPL and the complainant is an independent contract regarding execution of certain works and even assuming the case of the complainant to be correct, at best it is a B matter of recovery of money on account of failure t>f TCPL to pay the amount said to be due urider the contract. The complainant has alleged that TCPL has already received the money from SAIL for the work in question and it has misappropriated the same for its own use instead of paying it to the complainant and it is for this reasori that the offences are alleged under C Sections 403, 406 and 420 etc. The courts. below have overlooked the fact that the contract between Bokaro Steel (a unit of. SAIL) and TCPL is a separate and independent . contract. The contract between complainant and _ TCPL is altogether a different . contract. The contractual obligations under both the contracts are separate and independent of each other. The rights and obligations of the parties i.e. the complainant and TCPL are to be governed D . by the contract between them for which the contract between TCPL and .

Bokaro Steel (SAIL) .has no relevance, Therefore, even if Bokaro Steel has made the paymentto TCPL under. its contract with the latter, it will not give rise to plea of misappropriation of money because that money. is not money or movable property of the complainant. Further Section 403 uses the words E 'dishonestly' and 'misappropriate'. These are necessary ingredients of an offence under Section 403, IPC. Neither of these ingredients are satisfied in the facts and circumstance of the case. In para 14 of the complaint, the complainant has stated as under:

" ...... Release of payments to complainant was never depended on the F

I payment released by Bolqtro Steel Plant a Unit of SAIL to TISCO " growth shp and TCPL'.1• . . . . ·. ·. ., .. · ·

U. DHAR v. STATE OF IHARKHAND [ARUN KUMAR, J.) 451

out for the alleged offences even as per the complaint filed by the complainant, A .A there _is_ no reason_ to permit the appellants to be subjected to trial for the alleged offences. Hence, the appeal is allowed. The impugned orders of the High Court as well as of Chief Judicial Magistrate are hereby ordered to be quashed.

CRIMINAL APPEAL NO. 71 OF 2003@ SLP(CRL)N0.269812002: B

Leave granted.

In view of the above judgment, this appeal is also allowed.

N.J.

Appeal allowed.

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