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Jaideo Prasad Minda And Anr vs State Of Bihar And Anr on 9 December, 2019

IN THE HIGH COURT OF JUDICATURE AT PATNA
CRIMINAL MISCELLANEOUS No.9622 of 2015
Arising Out of PS. Case No.-2442 Year-2013 Thana- PATNA COMPLAINT CASE District-
Patna

1. Jaideo Prasad Minda S/o late Chandu Lal Minda Partner M/s Jay Ace
Technologies Ltd. resident of A-9 Ashoka Vihar Phase-1, Near Deep Market,
P.S. Ashoka Vihar, District- New Delhi-110052.

2. M/s Jay Ace Technologies Ltd., G1-48, G.T. Karmal Road, Industrial Area,
P.S. Ashoka Nagar, District- New Delhi-110033 through Tilak Raj Khanna
S/o Late Jialal Khanna Manager, Banking and Administration, Authorized
representative of petitioner No. 2.

… … Petitioner/s
Versus

1. State Of Bihar

2. M/s J.B. Warehousing and Trading Ltd. 17 Ashoka Place Exhibition Road,
P.S. Gandhi Maidan, Town and District-Patna through its Managing
Director, Bimal Bohra.

… … Opposite Party/s

Appearance :

For the Petitioner/s : Mr.Karunesh Tandon, Adv.

: Mr. Gyanand Roy, Adv
For the State : Mr.Shantanu Kumar, APP
: Mr. Jharkhandi Upadhyay, APP
For O.P. No.2 : Mr. Ashok Kumar Choudhary, Adv
: Mr.Chandra Bhushan Prasad, Adv

CORAM: HONOURABLE MR. JUSTICE BIRENDRA KUMAR
CAV JUDGMENT
Date : 09-12-2019
Heard the parties.

2. The petitioners, in this application under Section 482

Cr.P.C., have sought for quashment of the order of cognizance

dated 12.05.2014 whereby the learned Judicial Magistrate, 1st

Class, Patna found sufficient material against the petitioners and

others to proceed with the trial under Sections 406 and Section417 I.P.C.

in Complaint Case No.2442(C) of 2013 brought by opposite party

No.2.

Patna High Court CR. MISC. No.9622 of 2015 dt.09-12-2019
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3. The challenge is on the ground that (a)no part of

cause of action took place within territorial jurisdiction of the

Patna Court. Hence, the impugned order has been passed by a

court having no jurisdiction over the subject matter.(b)The dispute

between the parties arises out of an agreement and for violation of

the terms and conditions of agreement, there is arbitration clause

in the agreement itself and the whole allegation revolves around

compliance and non-compliance of the agreement. Therefore, the

dispute is purely of civil nature and the criminal prosecution has

maliciously instituted to wreak vengeance. (c) The ingredients of

the offences under Sections 406 and Section417 of the I.P.C. namely,

entrustment of property to the petitioners to constitute offence

under Section 406 I.P.C. or dishonest and fraudulent intention on

the part of the petitioners at the inception of the agreement to

constitute offences of cheating under Section 415 I.P.C. are

completely lacking on bare perusal of the complaint petition.

Hence, the criminal prosecution is an abuse of the process of the

court.

4. According to complaint petition, the complainant-

M/s J.B. Warehousing and Trading Ltd. under an agreement with

the accused Company-M/s Jay Ace Technologies Ltd. was

appointed C and F agent for sale of the product of the accused-
Patna High Court CR. MISC. No.9622 of 2015 dt.09-12-2019
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company for the area of Jharkhand. The accused-company was in

the business of manufacturing of lead-acid-storage batteries. The

formal agreement was signed by the complainant and M/s Kaashvi

Industries on 01.12.2009. at Patna. Petitioner No.2 M/s Jay Ace

Technologies Ltd. was known earlier as M/s Kaashvi Industries

especially at the time of agreement with the complainant.

Allegation is that the accused person stopped paying remuneration

and expenses bill of the complainant-company since October 2011

against the terms and conditions of the agreement. The accused

started assurance for settlement of account very soon but the same

proved evasive, as a result whereof, the complainant lost Rs.Thirty

Eight Lacs due to misappropriation by the accused-company

arising out of their fraudulent and dishonest design.

5. Learned counsel for the petitioners submits that in

the complaint petition filed in the year 2013 for the first time,

complainant mentioned his address at Patna though the

complainant had no Office at Patna. In the complaint petition also,

at several places, it is mentioned that the agreement was signed at

Patna whereas the agreement was signed at Delhi where all the

accused person have their office and business and the agreement

was enforceable at Delhi as per agreement or in the State of

Jharkhand at Ranchi where complainant’s office was there and the
Patna High Court CR. MISC. No.9622 of 2015 dt.09-12-2019
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parties had agreed for business performance. Learned counsel for

the petitioners has drawn the attention of the Court towards

Annexure-4 the agreement paper which shows that the address of

Company-M/s Kaashvi Industries is mentioned at Delhi and to that

of the complainant at Ranchi in the State of Jharkhand. The

agreement signed on 01.12.2009 was a period up to 30.11.2011.

6. After 30.11.2011, the agreement lapsed and the

accused-Company handed over C and F agency to some other

concern. The agreement clearly stipulated that the rights and

liabilities of the parties shall unless otherwise here in especially

provided be referred to an arbitration to a single arbitrator to be

agreed between the parties in accordance with the subject to the

provisions of the Arbitration and SectionConciliation Act, 1996 and the

venue of arbitration shall be Delhi.

7. Learned counsel for the petitioners submits that

there is no contrary provision for settlement of dispute. Hence,

only way out was, if there was any dispute arising out of

agreement, to go for arbitration. Learned counsel for the

petitioners submits that the accused-company had written letter to

the complainant-company on 10.06.2013 showing good gesture.

The letter is part of the counter affidavit. The letter clearly

stipulates that the parties agreed that the accused-company shall
Patna High Court CR. MISC. No.9622 of 2015 dt.09-12-2019
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discharge the payment liability of Rs.36,50,000/-(Rupees thirty six

lacs, fifty thousand) through R.T.G.S. in the account of

complainant-company at Ranchi by 15.06.2013 and the

complainant shall return 2102 batteries to Mr. Rakesh Shrivastava-

the authorized person of the accused at Ranchi. Contention is that

neither the battery was returned nor the money was transferred.

Thereafter, the accused was compelled to file Plaint No.2818 of

2015 before the Hon’ble High Court of Delhi against the

complainant claiming a decree of Rs. 54,98,640/-(Rupees fifty

four lacs ninety eight thousand six hundred forty) against the

defendants. A copy of the plaint is at Annexure-7 to the reply to the

counter affidavit. Submission is that the complainant has already

filed written statement in the suit wherein the nature of transaction

between the parties has clearly been admitted. Learned counsel for

the petitioners has referred to different documents prior to the

complaint petition to suggest that no part of cause of action took

place within the territorial jurisdiction of the learned court below

from very inception. Hence, the learned court below had no

jurisdiction to pass the impugned order. As such, the impugned

order is without jurisdiction. Learned counsel for the petitioners

has placed reliance on the judgment of the Hon’ble Supreme Court

in Vesa Holdings P.Ltd. Anr Vs. State of Kerala Ors.
Patna High Court CR. MISC. No.9622 of 2015 dt.09-12-2019
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passing Cr. Appeal Nos. 2341 with 2342-2344 of 2011 on

17.03.2015 and the case of Satishchandra Ratanlal Shah Vs.

State of Gujarat Anr vide Cr.Appeal No.09 of 2019 disposed

of on 03.01.2019.

8. On the other land, learned counsel for opposite

party No.2 contends that at the stage of cognizance, prima facie

material is to be looked into and the complaint petition clearly

discloses that the cause of action for criminal prosecution arose

within the territorial jurisdiction of the Patna court. The contrary, if

any, is to be established during trial by evidence and its rebuttal.

Therefore, on that ground only, the Court cannot interfere with the

impugned order. Moreover, entire facts brought on the record are

hazy and incomplete which requires appreciation of evidence

which is not permissible especially when the said material was not

before the learned court below.

9. On careful appreciation of the material on the

record, it is evident that the dispute arises out of an agreement

between the parties and the claim of the complainant of Rs.Thirty

Eight Lacs was not in respect of any property entrusted to the

accused person rather it was a claim of services rendered by the

complainant. Therefore, this issue could have only been agitated

before a competent civil court especially in view of the agreement
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between the parties to go for arbitration. Since there is no case of

entrustment of property, the important ingredients to constitute

offence of criminal breach of trust is lacking. Hence, the

cognizance order under Section 406 I.P.C. is bad in law. Likewise

the conduct of the parties and the terms and conditions of the

agreement reveals that at no point of time the accused person were

carrying dishonest or fraudulent intention especially at the

inception of the agreement. The agreement was only for a period

of two years. Hence, only after expiry of the period of agreement,

the accused person entered into an agreement with some other

person. So far settlement of accounts is concerned, it is admitted

case of the complainant also that the batteries of the accused are

lying with him. The complainant has admitted in his statement on

solemn affirmation that agreement had expired and it was not

renewed and the complainant had not brought a civil suit for

redressal of his grievance. The complainant is specific that money

due with the accused was of security, commission and stock. The

accused responded for a settlement, however, did not make

payment according to response. Thus, till one month, prior to filing

of complaint petition, the parties were in agreement that the

complainant would return the batteries and the accused would pay

back the entire accounted money. On failure of the parties to
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perform their part, the accused person resorted to civil remedy

whereas complainant filed the present criminal case. Thus the

conduct of the accused person does not establish that they were

dishonest and fraudulent at any point of time. The law is well

settled that every breach of contract would not give rise to an

offence of cheating. Unless there is clear material disclosing

deception played by the accused at the very inception. Reference

may be made to Vesa Holdings P.Ltd. case (Supra). Likewise in

Satishchandra Ratanlal Shah case (Supra), the Hon’ble

Supreme Court held that the law clearly recognizes a difference

between simple payment/investment of money and entrustment of

money or property. A mere breach of a promise does not ipso facto

constitute the offence of criminal breach of trust without there

being a clear case of entrustment.

10. Considering the materials on the record and

aforesaid proposition, this Court is of irresistible conclusion that

offences under Sections 405 and Section415 I.P.C. are not made out in this

case on bare perusal of the complaint petition and the material on

the record. Hence, the cognizance order is bad in law and criminal

prosecution is an abuse of the process of the Court.

11. This Court is not looking into any extraneous

material or the defence of the accused, the Court is simply relying
Patna High Court CR. MISC. No.9622 of 2015 dt.09-12-2019
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on the statement made in the complaint petition and the document

on which the complaint petition is based. The dispute arises of an

agreement between the parties which makes out a case of civil

dispute only.

12. The agreement does not show that the same was

signed at Patna. No subsequent dealing between the parties reveals

that any part of the agreement was performed at Patna including

payment of any money in the account at Patna. Therefore, the

complainant had deliberately, just to create jurisdiction with Patna

court, has made wrong statement that the agreement was signed at

Patna and the complainant had its Office at Patna on the date of

agreement. Therefore, the impugned order is without jurisdiction

as well.

13. There is no documentary support that the petitioner

No.1 was at any point of time from the date of agreement till its

performance and breach was any way involved with the

complainant. Petitioner No.1-Jaideo Prasad Minda is not signatory

of the agreement nor he was responsible for performance of the

agreement on behalf of the accused-company. Therefore, criminal

prosecution of accused No.1 is bad in law otherwise also.

14. Learned counsel for the complainant has relied on

the judgment of the Hon’ble Supreme Court in Trisuns Chemical
Patna High Court CR. MISC. No.9622 of 2015 dt.09-12-2019
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Industry Vs. Rajesh Agarwal Ors, reported in (1999) 8 SCC

686 and on the case of State of M.P. Vs.Awadh Kishore Gupta

Ors, reported in (2004) 1 SCC 691 for contention that civil

dispute is no bar for criminal prosecution and arbitration clause in

the agreement also does not come in the way of criminal

prosecution if the ingredients of criminal offences are made out.

15. As has been held above, the ingredients of offences

for which cognizance has been taken are apparently not made out.

Hence, it is a case of pure and only civil dispute. The case of

State of M.P. Vs.Awadh Kishore Gupta Ors (Suprs) was a

case relating to an offence committed under the SectionPrevention of

Corruption Act, wherein High Court had quashed the investigation

and proceeding initiated thereunder. That case was decided on its

own individual facts.

16. In view of the discussion made above, the

impugned order is hereby quashed in entirety and this application

is allowed.

(Birendra Kumar, J)

Nitesh/-

AFR/NAFR NAFR
CAV DATE 06.12.2019
Uploading Date 09.12.2019
Transmission Date 09.12.2019

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