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.
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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-
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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
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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
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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.
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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
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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
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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