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Jong Seuk Park President Korea … vs State Of U.P. And Another on 13 September, 2019

HIGH COURT OF JUDICATURE AT ALLAHABAD

A.F.R.

Judgment reserved on 13.08.2019

Judgment delivered on 13.09.2019

Court No. – 65

Case :- APPLICATION U/S 482 No. – 24529 of 2015

Applicant :- Jong Seuk Park President Korea Marine Trans.Co.Ltd

Opposite Party :- State Of U.P. And Another

Counsel for Applicant :- Anand Mohan Pandey,Pankaj Jaiswal

Counsel for Opposite Party :- Govt. Advocate,Deepak Agarwal,Shiv Sagar Singh

Hon’ble Dinesh Kumar Singh-I,J.

1. Heard Sri Pankaj Jaiswal learned counsel for the applicant, Sri Shiv Sagar Singh, learned counsel for opposite party no.2 Sri Attreya Dutt Mishra, learned A.G.A. appearing for the State and perused the record.

2. This application under Section 482 Cr.P.C has been moved with a prayer to quash the entire criminal proceedings of the complaint case no.4182 of 2014 (G.K. Traders vs. Sudhir Kumar Shukla and others) under sections 406, 420 IPC, Police Station Fazalganj, District Kanpur Nagar and the summoning order dated 20.02.2015 passed by Additional Chief Metropolitan Magistrate 8th Kanpur Nagar and also a prayer is made to stay the proceedings in this case till the disposal of this application.

3. Learned counsel for the applicant has mainly argued that the offences, which have been mentioned above, had been constituted against the accused-applicant because the material had only been transported in the ship of the applicant, which was about 23 metric tons of copper scrap. No entrustment of the said property was made to him. The matter is of civil nature. The opposite party no. 2 has also filed a claim petition for making good the loss of the goods. Further it was argued that the proceedings are barred by section 468 Cr.P.C. In criminal case no vicarious liability can be imposed against the accused applicant. The applicant was not Indian national. On the date of occurrence, the company of the applicant was not registered in India and even the address of the company of the applicant is shown wrong. The opposite party no. 2 has not made the company of the applicant as a party in this case but has only made the President of the said company to be an accused, which is illegal. Attention was drawn to page 24 of the paper book, which indicates that the same was bill of lading. The goods to be transported were in a sealed container, hence the applicant had no knowledge as to what was kept in them. On 26.9.2009 the ship had moved and had reached its destination on 29.9.2009 and on that date the opposite party no. 2 had gone for collecting the consignment then he came to know that the copper, which was transported, was missing. The complaint has been filed about five years after the occurrence, hence the same is barred by provision of section 468 Cr.P.C. The crime was not committed in India rather the same was committed in the ship. The jurisdiction of Kanpur Nagar has been falsely made in the present case and accordingly it is prayed that the criminal proceedings against the applicant need to be quashed. It was also argued that the bill of lading would indicate that the responsibility of the applicant was confined only upto custom yard to custom yard, which is indicated in the said bill. Therefore, if any of the goods were found less in weight, number and quantity after it had gone out of the custom yard, the accused-applicant cannot be treated to be responsible for the same. When a question was put to the learned counsel for the applicant as to how he was representing the applicant, who is stated to be foreign national, he replied that vakalatnama was got signed and obtained through courier from abroad. He has also relied upon the following case laws:

i). M/s. Indian Oil Corporation vs. M/s NEPC India Ltd. Ors., Appeal (Crl.) No.834 of 2002.

ii). Harishchandra Prsad Mani others vs. State of Jharkhand another, Appeal (Crl.) No.124 of 2007.

iii). Hira Lal Ors. vs. State of U.P. Ors. Crl. Appeal No.662 of 2009.

iv) Arun Bhandari vs. State of U.P. and others, Crl. Appeal No.78 of 2013.

v). Anil Kohli vs. State (NCT of Delhi), 95 (2002) DLT 173.

(vi). M/s. Zandu Pharmaceutical works vs. Md. Sharaful Haque Anr., Appeal (Crl.) No.1241 of 2004.

(vii).R. Kalyani vs. Janak C. Mehta Ors. Crl. Appeal No.1694 of 2008.

(viii).Maksud Saiyed vs. State of Gujarat Ors. Appeal (Crl.) No.1248 of 2007.

(ix). S.K. Alagh vs. State of U.P. Ors., Appeal (Crl.) 317 of 2008.

4. On the other hand, learned counsel for the opposite party no. 2 has vehemently argued that the goods were sealed in the presence of the accused-applicant and number of seal was mentioned as KMB121561 and when the same was received by the opposite party no. 2, the same was found less in quantity/weight. In the present case along with civil liability, it cannot be said that the criminal liability is not made out. There is direct role of the accused-applicant and hence the company was not required to be impleaded as it had no role. It is further argued that the case is not time barred because the offence in which the accused-applicant has been summoned also comprised the offence under section 420 IPC which is punishable for seven years imprisonment, hence it would not be treated to be barred under section 468 Cr.P.C. The goods were to be carried to Kanpur Nagar, hence jurisdiction of Kanpur Nagar would be made out in the present case.

5. In order to appreciate the controversy involved in the present case, it would be appropriate to refer in brief the facts of the case, which are as follows.

6. The complaint was made by the opposite party no. 2 i.e. M/s G.K. Traders through its Proprietor Gopi Krishan Gupta against the accused-applicant (accused no. 3) in the said complaint and two others namely, Sudhir Shukla and Saham Siddiqui alleging therein that the firm of the complainant deals in wholesale business of scrap. The co-accused Sudhir Shukla was Computer Operator in the said firm, who used to deal in communication and business letters in respect of the sale and purchase of scrap on behalf of firm with other traders. The other co-accused Saham Siddiqui was friend of the co-accused Sudhir Shukla who used to come to meet him in the office. The co-accused Saham Siddiqui is expert in establishing contact in foreign countries with respect to business of scrap and he had inspired the complainant that if he begins the business of scrap with the company of accused-applicant namely K.M.T.C. Ship Company, he would earn huge profits. The said company does transportation work in entire world by reaching goods from one country to another and the said company was also registered in India having its office at Mumbai. Since the said company of the accused-applicant was registered in India, proceedings under section 188 (B) Cr.P.C against it can be drawn. The co-accused Sudhir Shukla and Saham Siddiqui in collusion with each other gave proposal to the opposite party no. 2 to purchase copper scrap from the First International Company Ltd., Seoul, Korea whose owner was Jeson Kim, who had copper scrap in large quantity. The co-accused Saham Siddiqui had sent e-mail in this regard to the complainant believing which, he gave consent for the said business and on 22.07.2009 co-accused Sudhir Shukla has sent e-mail to Jeson Kim indicating therein that the complainant wanted 99.9% pure copper and offered him 3500/- US$ per ton, on which it was agreed that at the rate of 3600/-US$ per ton copper scrap would be purchased from Manila Philippines and its sale contract was sent through e-mail in which the terms and conditions were stipulated that not less than 100 metric tons material would be purchased and that of the total material, 20% amount would have to be deposited in the account of Jeson Kim. Thus, the co-accused Sudhir Shukla and Saham Siddiqui after having taken the complainant into confidence, reached Manila on 25.8.2009 and inspected the copper on 27.8.2009 and sent photograph through e-mail on 28.8.2009. The contract for sale of 20 metric tons was agreed upon and 20% amount i.e. 14400/- US$ were to be deposited in the bank of Korea and Rs.30,000/- was to be spent as other expenditure, which were requested to be sent by the opposite party no.2. The opposite party no.2/complainant accordingly deposited 14400/- US$ on 31.8.2009 as per terms and conditions. The co-accused Sudhir Shukla and Saham Siddiqui gave 600/- US$ on 4.9.2009 and 900/- US$ on 20.9.2009 to Jeson Kim in cash, which were sent by the firm of the complainant and remaining amount i.e. 80% of the copper scrap was also paid by way of advance to Jeson Kim. Thereafter, the copper scrap was loaded in the containers in the presence of co-accused Sudhir Shukla and Saham Siddiqui, the weight of which was found to be 23 metric tons, hence the total amount of the said 23 metric tons copper scrap came to be of 84300/- US$ out of which, 14400/- US$ on 31.8.2009 and 1500/- US$ according to the terms and conditions of paragraph nos. 10 and 11 and remaining 6800/- US$ were deposited in the account of Jeson Kim on 19.9.2009. Thus, the whole price of the copper scrap was paid by the complainant where-after the co-accused Sudhir Shukla and Saham Siddiqui had loaded the said scrap in containers and sealed packed them. The applicant-accused had also affixed his seal on the said copper being seal no. KMP1212651 and thereafter the container of the copper scrap which was loaded in the ship of the accused-applicant was handed over to be reached at Kanpur address. On 26.9.2009 the copper container reached Mumbai and then the accused-applicant along with other co-accused told the opposite party no. 2 to get the delivery from Mumbai because if the said container was allowed to be kept there, hourly charges would have to be paid. In pursuance of that, the representative of the opposite party no. 2 namely, Sachin Gupta reached Mumbai and after having paid custom duty assessed on the weight of the container, bill of which is article-14, on weighing the said material, in place of 23 metric tons copper, the same turned out to be 6 metric tons. At this, on 3.11.2009 in the presence of representative of the accused-applicant, Insurance Surveyor, Custom Officer and the representative of the opposite party no. 2, seal of container was opened, out of which, in place of 23 metric tons copper scrap, only four bags of rubbish were taken out. Therefore, the accused-applicant along with other co-accused had caused loss to the complainant/opposite party no. 2 of having swindled of 84300/ US$, which would be equivalent to Rs.41,30,000/- in Indian currency. Apart from this, expenditure incurred by the accused-applicant nos. 1 and 2 Sudhir Shukla and Saham Siddiqui in having gone to Manila and their stay in hotel etc. was also to be borne by the opposite party no. 2 in addition to the rent of shipping company. Thus, over and above, the loss of Rs.10.00 lacs was also caused to the complainant. The opposite party no. 2 made various trips to Mumbai and Kanpur Nagar in order to get the copper scrap and also continued to make correspondence with the accused persons, therefore, delay had occurred in filing the complaint, which was not deliberate, hence the complaint is not time barred.

7. On this complaint, statement of opposite party no. 2 was recorded under section 200 Cr.P.C on 2.8.2014 in which he has repeated the same version which has been given in the complaint and witness Sachin Gupta son of Gopi Krishan Gupta has also been examined as PW1 under section 202 Cr.P.C. and Ravi Gupta son of Gopi Krishan Gupta as PW2 under section 202 Cr.P.C. Both these witnesses have also narrated the same version which has been given in the FIR. Devendra Singh son of Hira Lal Singh has been examined as PW3 and after having considered the entire evidence, the trial court has passed the impugned summoning order dated 20.2.2015 whereby the accused-applicants along with other co-accused Sudhir Sharma and Saham Siddiqui have been summoned to face trial under section 406 and 420 IPC.

8. An affidavit in support of the application has been filed from the side of the applicant and it has been mentioned that there is a Shipping Company in the name and style of Korea Marine Transport Company Ltd. (KMTC) which is registered in South Korea having its registered office at 15th Floor, Hanjin Building 118 2-GA Nem Daem Un-Ro Jung-Gu Seoul Korea which is one of the leading line in South Korea offering total transportation since last 58 years, of which the applicant is President and a foreigner having citizenship of South Korea. The applicant has authorized Mr. Sridhan Subramaniam, General Manager, (deponent) since 2013 to look after the case in India and to file the present application. Copy of the authority letter issued in his favour is Annexure-1 to the affidavit. On 14.9.2009, the complainant/opposite party no. 2 through his shipper had booked his consignment with KMTC and during that period KMTC Lines agents in Nhava Sheva, Mumbai were Sea Horse Ship Agency Pvt. Ltd. who were to be approached for delivery of consignment at Nhava Sheva, Mumbai. Copy of the bill of lading is annexed as Annexure-2 to the Affidavit. On 26.9.2009 complainant’s consignment had reached Nhava Sheva, Mumbai. On the same day it had gone to the custom bounded area in the Yard of Continental Warehousing Corporation (Nhava Sheva Mumbai) Pvt. Ltd. and as per report dated 29.9.2009 of the said Continental Warehousing Corporation (Nhava Sheva Mumbai) Pvt. Ltd, the consignment was delivered to Continental Warehousing Corporation (Nhava Sheva Mumbai) Pvt. Ltd. with normal wear and tear. Copy of the report of Continental Warehousing Corporation dated 29.9.2009 is annexed Annexure-3. As per bill of lading dated 14.9.2009 the consignment was loaded, counted and sealed by shipper at the shipper’s place in Manila. Once the consignment is unloaded from ship/carrier and the same was handed over to the custom bounded area then the carrier would stand released from all his liability. The complainant/opposite party no. 2 has filed his bill of entry with the custom on 23.10.2009 and thereafter the consignment was examined and after weighing the consignment, it was found that it was weighing only 6 metric tons. Copy of the bill of entry dated 23.10.2009 is annexed as Annexure-4 to the affidavit. On 3.11.2009, the said consignment was presented for joint survey and as per surveyor report, the said container was found in normal wear and tear condition due to age and use and seal was found intact. Copy of the same is annexed as Annexure-5. The responsibility of the carrier ceased once, the container was discharged with the seal in intact condition. The complainant/opposite party no. 2 through his counsel sent two notices dated 21.12.2009 and 25.3.310 to the agent of KMTC i.e. Sea Horse Ship Agency Pvt. Ltd. which were replied by the agent of KMTC vide replies dated 10.3.2010 and 6.5.2010. In both the notices of complainant, it has not been alleged that any criminal liability was made out against the applicant which shows that the present complaint is an after thought with a view to coerce the applicant. Copies of the said notices are annexed as Annexure-6. Law laid down by Supreme Court in State of Haryana and others vs. Ch. Bhajan Lal and others, 1992 Suppl. (1) SCC 335, in Madhavrao Jiwahirao Scindia and others vs. Sambhajirao Chandrajirao Angre and others, (1988) 1 SCC 692, State of Karnataka vs. L.Muniswamy and others (1977) 2 SCC 699 are relied upon which have also been mentioned in the affidavit and citing them it is written that in the light of the principles of law laid down in these cases, no offence is made out against the applicant in the present case. Once consignment is unloaded from the ship/carrier and the same was handed over to the custom bounded area then carrier would be released of all his liabilities. The Indian Carriage of Goods by Sea Act, 1925, Article III(5) provides “The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity and weight as furnished by him and the shipper shall indemnify the carrier against all loss, damage and expenses arising or resulting from inaccuracies in such particulars. The right of carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper” Article III (6) says that unless notice, loss or damage and the general nature of such loss, damage be given in writing to the carrier or his agent at the port of discharge before or at the time of removal of the goods into the custody of the persons entitled to delivery thereof under the contract of carriage or if the loss or damage be not apparent, within 3 days, such removal would be prima-facie evidence of the delivery by the carrier of the goods as described in the bill of lading. Therefore, it is further mentioned that in any event, the carrier and the ship shall stand discharged from all the liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. Article IV (2) (a) and (i) provides that neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from the neglect or default of the master mariner, pilot or the servants of the carrier in the navigation or in the management of ship, act or omission of the shipper or owner of the goods, his agent or representative. The doctrine of limitation is founded on considerations of public policy and expediency. The object of limitation is to compel the litigants to be diligent in seeking remedies in courts of law prohibiting state claims. In commercial dealings it is highly necessary that matters of title and rights in general should not be in state of constant uncertainly, doubt and suspense. Several other citations have also been mentioned which are not required to be reproduced here. Further it is mentioned that in the business circle, to convert purely civil dispute into criminal case, now it is growing tendency. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect interest of the complainant. As per section 188 Cr.P.C. Proviso which indicates that no such offence could be enquired into or tried in India except with previous sanction of the Central Government as accused-applicant is a person of foreign nation and also alleged incident occurred outside India during the voyage. The present matter is essentially of civil nature which has been given a cloak of criminal offence. Hence, it is lastly prayed that the said proceedings are liable to be quashed.

9. In rebuttal, a counter affidavit is filed on behalf of the opposite party no. 2 Gopi Krishan Gupta. It has been mentioned in it that the applicant had not mentioned the official address of the company situated in India in authority letter i.e. Annexure-1 of the affidavit. The applicant had affixed its seal copper number KMT 1212651 on the container and in the said bill of lading the gross weight of the container was shown 23,000 kilogram (23.000 metric tons) Copper Millberry Scrap (99% purity of Copper). The representative of the opposite party no. 2 had reached Mumbai for fulfillment and observing necessary formalities for release of the container. As per the bill of lading dated 14.9.2009, it was the obligation of the applicant to deliver and handover the consigned container to the consignee i.e. opposite party no. 2 at I.C.D. Kanpur, India. On weighing the container it was only approximately 06 metric tons instead of 23.00 metric tons. 1*20 FCL container number GLDU-52256399 STC net weight 23,000 kilogram Copper Millberry Scrap after discharge on 26.9.2009 from M.V. “Mare Internum” at J.N. Port Nhava Sheva was shifted to the nominated Continental Warehousing Corporation, CFS, Nhava Sheva, on weighbridge inside the CFS noted net weight 4,720 kilograms, hence the joint survey of the said container was made. Photocopy of the public weighing duplicate ticket dated 28.10.2009 issued by Continental Warehousing Corporation Limited, Navi Mumbai is annexed as Annexure-2. In pursuance of the examination order dated 03.11.20009 passed by Indian Customs EDI System- Imports (ICES/I) JNPT, Nhava Sheva Mumbai-400 707 it is found “—— bags found in the cabins containing with some rusty iron bags and sand—–.” After the examination of container by the Custom Authority the joint survey of the aforesaid container was conducted on 03.11.2009 in the presence of six person, namely, (i) Mr. CRN Reddy of M/s. Scan Container Terminals Pvt. Ltd. (Surveyor appointed by CFS), (ii) Mr. Prashant Mathre of M/s. Pinnacle Marine Services (P) Ltd., (Surveyor appointed by Vessel Agents), (iii) Mr. Sachin Gupta for M/s. G.K. Traders (Consignee representative), (iv) Mr. P.K. Sinha, Appraiser Customs, (v) Mr. Bhaskar of M/s. Wilson Surveyors and Adjusters Pvt. Ltd., (vi) Pankaj Shipping and Transport Company and the report of joint survey specifically stated that ” the seals were cut open in our presence when found 04 nos. jumbo bags, containing rusty iron wires and sand. All the nuts, locking the bolts from inside the door were sealed with a sealant. Only the sealant of the nut locking bolts with tampering marks of catch on door handle retainers of the right door were found resealed and repainted near the nut bolts.” The Scan Container Terminals in its joint survey report dated 03.11.2009 stated that “the seals were cut open in our presence, then found 04 nos. jumbo bags out of 21 jumbo bags (23000 kilograms) containing rusty iron wires and sand. All the nuts bolts locking the bolts inside the door were sealed with sealant. On the sealant of the nuts locking bolts with tampering marks on door handle retainers of the right door were found resealant and repaint near the nut bolts”. Further it is mentioned that joint survey report dated 04.09.2009 submitted by Wilson Surveyors and Adjusters Private Limited, Mumbai also stated that “the seals were cut open in our presence when found only 04 nos. jumbo bags containing rusty iron wires and sand. One bag was found with the label marked with a Exporter name as Proctor and Gamble Distributing Co. Manila Philippines and an empty sachet of Palmolive Shampoo marked as Mukati City, Philippines in another bag. All the ”nuts’ locking the bolts from inside the door were sealed with a sealant. Only the sealant of the nut locking bolts with tampering marks of the catch and door handle retainers of the right door were found resealed and repainted near the nut”. The Pinnale Marine Services Private Ltd. Mumbai in its joint survey report dated 09.11.2009 stated that “the seals were cut open in our presence when found only 04 nos. jumbo bags containing rusty iron wires and sand. One bag was found with the label marked with a Exporter name as Proctor and Gamble Distributing Co. Manila Philippines and an empty sachet of Palmolive Shampoo marked as Mukati City, Philippines in another bag. All the ”nuts’ locking the bolts from inside the door were sealed with a sealant. Only the sealant of the nut locking bolts with tampering marks of the catch and door handle retainers of the right door were found resealed and repainted near the nut”. Photocopies of these reports are annexed as Annexures-3, 4, 5 and 6. On the discharge of the aforesaid container on 26.9.2009 the weight of the container was found much less than its actual weight on which the joint survey of the aforesaid container has been conducted and the fraud committed by the applicant along with the other accused persons with the opposite party no. 2 has been revealed. The applicant had received huge amount of 84,300 US$ (Rs.41,30,000/-INR) from the opposite party no. 2 for the sake of 23000 kilograms of Copper Millberry Scrap (99% purity of copper) but the applicant instead of supplying the same, supplied 04 nos. jumbo bags containing rusty iron wires and sand which amounts to cheating criminal breach of trust. In order to prove his complaint, the complainant and witnesses were examined before the court of A.C.M.M.-VIII, Kanpur Nagar which clearly makes out an offence to have been committed under sections 406 and 420 IPC. The applicant without appearing and seeking bail in Complaint Case NO.4182 of 2014, has presented the application dated 04.06.2015 for cancellation of bailable warrant. The cited case laws are not related and applicable to the present case. There is no lacuna in the summoning order. Further, it is mentioned that normal wear and tear does not mean that it would cover the lost of 23,0000 kilograms of goods i.e Copper Millberry Scrap (99% purity of copper) from the aforesaid consigned container which was shipped by the applicant. The description and quantity of goods mentioned in the bill of lading dated 14.09.2009 were not found in the consigned container because of which joint survey of the consigned container had been made. Article III (4) of the Schedule i.e. Rules relating to Bill of Lading in the Indian Carriage of Goods by Sea Act, 1925, it is provided that a bill of lading shall be prima-facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3(a), (b) and (c) and Article III (3) states that after receiving the goods into his charge, the carrier or the master or agent of the carrier, shall on demand of the shipper, issue to the shipper a bill of lading showing among other things i.e. (a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on cases coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage; (b) either the number of package or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper; (c) the apparent order and condition of the goods. It is further mentioned that one year limitation is not applicable in criminal cases. The act of the applicant and other co-accused attract criminal liability and the case is covered under the purview of definition of criminal conspiracy, criminal breach of trust and cheating punishable under section 120-B, 406 and 420 IPC. The provision of the Indian Carriage of Goods by Sea Act, 1925 is applicable in civil proceedings. It is further mentioned that the accused Sudhir Shukla and accused no. 2 Saham Siddiqui both are residents of Kanpur Nagar which is situated within the local territorial jurisdiction of the trial court, who conspired the commission of the act with the applicant. The accused applicant no. 3’s office was situated in Mumbai and New Delhi. As per provision of section 181 (4) of Cr.P.C.. the offence of criminal breach of trust punishable under section 406 IPC may be inquired into or tried by a Court within whose local jurisdiction the offence was committed or any part of the property which is the subject of the offence, was required to be returned or accounted for, by the accused person. In the present case the accused were required to return or account for the aforesaid Copper Millberry Scrap to the opposite party no.2 at its office/godown situated in Kanpur Nagar. In the present case offence of cheating punishable under section 420 IPC has been committed through letters or telecommunication messages between accused persons which attracts the provision of section 182 of Cr.P.C. which states that in cheating, if the deception is practiced by means of letters or telecommunication messages, the same be inquired into or tried by any court within whose local jurisdiction such letters or messages were sent or were received. In the present case, the communications between the accused persons has been sent from and received at Kanpur Nagar, hence the trial court has jurisdiction to try the present complaint case.

10. I have heard the arguments of both the sides and have given thoughtful consideration to the entire material on record.

11. It is apparent from the facts of the case that the applicant Jong Seuk Park (A-3), President, Korea Machine Transport Company Ltd (KMTC) is the third accused in the complaint made by the opposite party no. 2, in which it is mentioned that co-accused no. 1 Sudhir Shukla (A-1) and co-accused no. 2 Saham Siddique (A-2) had persuaded the opposite party no. 2 to deal in copper scrap business, regarding which the deal was finalized for purchase of the said scrap from Jason Kim of the First International company Ltd. Seoul, Korea, quantity of which was 23 metric ton of the value of 84300 US$ which was to be transported from Manila, Philippines, for which the company of A-3 was engaged which was dealing in transportation business. The said consignment was to be delivered at Kanpur. At the time of loading the consignment and it’s being sealed, A-3 (applicant) was present who had affixed his copper seal no. KMP 121 2651 upon the said container. The said consignment instead of reaching Kanpur, had reached Mumbai on 26/09/2009, where the opposite party no. 2 had gone to take the delivery on being informed from the side of the accused, but when the same was weighed, instead of 23 metric ton copper, the concerned consignment weighed only 6 metric ton. When the seal of the container was opened, only four bags of rubbish were found, therefore it was mentioned in the said complaint that the opposite party no. 2 was cheated of a sum of rupees 41, 30, 000/- in terms of Indian currency which was the value of 23 metric ton copper scrap, hence forgery was committed by the applicant. On the complaint being filed before court, the accused – applicant along with 2 other co-accused named above were summoned to face trial under Sections 406, 420 IPC.

12. The main thrust of the learned counsel for the applicant was that the bill of lading would show that the responsibility of the accused applicant was only from shipyard to shipyard, to reach the consignment safely and in this case the consignment was reached Nhava Sheva, India by his ship from Manila, Philippines, therefore applicant could not be imposed any liability for loss of goods/container once they were reached the destination port.

13. I am not convinced with the above argument of the learned counsel for the applicant because the transporter cannot be absolved of his liability if any item of the consignment is found lost/missing. He would be jointly liable for the said loss with other co-accused if any, involved in its transportation as well as in loading.

14. It was argued in this case that there was no entrustment of the property to the applicant, therefore the ingredient of Section 406 IPC would not be made out. I do not buy this argument of the learned counsel the applicant because it is the case of the opposite party no. 2 that at the time when the consignment was loaded, the applicant was present and his seal was also affixed, which would be treated to be nothing but an entrustment of the said consignment which was due to arrive in India (Kanpur Nagar) but instead the same was delivered at Nhava Sheva, where it was found that the material/consignment which was loaded was not the same which actually was loaded.

15. It was also argued by the learned counsel the applicant that the criminal complaint would be barred because of the provisions of Section 468 Cr. P.C., which provides the limitation of only 3 years while in the present case the occurrence is stated to have taken place on 29/10/2009, when the representative of opposite party no. 2 had gone for taking delivery of the consignment while the complaint has been filed on 21/07/2014, that is after about 5 years. I have gone through the said provision and find that for offences punishable with more than 3 years there is no such limitation prescribed of 3 years and in present case since the accused has been summoned to face trial under Sections 406 and 420 IPC, it is apparent that the offence in recession 420 IPC is punishable with imprisonment up to 7 years and fine, therefore the bar of 3 years would not be applicable in the present matter.

16. It was next argued that the matter is of civil nature, therefore the criminal complaint preferred by the accused applicant would not be maintainable. If at all any loss had occurred in the present kind of commercial transaction, the option to the opposite party no. 2 was available to file a claim petition in Civil court and get the claim/compensation decreed for the loss suffered by him, but instead of doing that, with malafide intention, the present criminal proceedings have been preferred, which need to be quashed. To substantiate his argument reliance has been placed by the applicant upon Appeal (Crl.) 834 of 2002 M/S Indian oil Corp vs M/S NEPC India Ltd, and others, decided on 20 July, 2006 in which in Para 10 following is held by Hon’ble Supreme Court:

“……. It is to be seen if a matter, which is essentially of Civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a shortcut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under the Section has to be exercised to prevent abuse of process of any court or otherwise to secure the ends of justice…….”

17. Reliance is also placed on Appeal (Crl.) 124 of 2007 Harish Chandra Prasad Mani vs State of Jharkhand and another decided on 31 January, 2007, in which following is held:

“We have carefully perused the entire record placed before us and find that there is not even an iota of evidence or any material on record against the appellants. It is true that at this stage it is not necessary that complainant or prosecution must prove its case beyond reasonable doubt, but at least there must be some material on the basis of which cognizance is taken and summon is issued. Cognizance cannot be taken merely on suspicion as has evidently been done in this case.”

18. Further, reliance is placed on Criminal Appeal No. 662 of 2009, Hira Lal and others vs State of U.P. and others decided on April 8, 2009:

“10 . The parameters of interference with a criminal proceeding by the High Court in exercise of its jurisdiction under Section 482 of the Code are well-known. One of the grounds on which such interference is permissible is that the allegations contained in the complaint petition even if given face value and taken to be correct in their entirety, commission of an offence is not disclosed. The High Court may also interfere where the action on the part of the complainant is malafide”

“…….In the State of Haryana and others vs Ch. Bhajan Lal and others (1992 Supp (1) SCC 335, this court, relying on Pratibha Rani vs Suraj Kumar and another, (1985) 2 SGC 370), stated that the purpose of exercising its power under Section 482 of the Code of Criminal Procedure to quash a FIR or a complaint, the High Court would have to proceed entirely on the basis of allegations made in the complaint or the documents accompanying the same.

………..

One of the paramount duties of the Superior Courts is to see that a person who is apparently innocent is not subjected to prosecution and humiliation on the basis of a false and wholly untenable complaint.”

19. Further, reliance is placed on Criminal Appeal No. 78 of 2013 Arun Bhandari vs State of U.P. and others decided on January 10, 2013:

“11 . Mr. Chetan Sharma, learned senior counsel, resisting the aforesaid contentions, canvassed that mere presence of the respondent no. 2 at the time of signing of the agreement to sell does not amount to an offence under Section 420 of IPC as she did not sign the document nor did she endorse the same as a witness. It is urged by him that no criminal liability can be fastened on her, for the sine qua non for attracting criminality is to show dishonest intention right from the very inception which is non-existent in the case at hand. It is submitted by him that if the criminal action is allowed to continue against her that would put a premium on a commercial strategy adopted by the appellant in roping a lady only to have more bargaining power in the matter to arrive at the settlement despite the breach of contract by him. The learned senior counsel would further contend that the appellant has taken contradictory stands inasmuch as in one way he had demanded the forfeited amount and the other way lodged an F.I.R. to set the criminal law in motion which is impermissible. To bolster the said contentions reliance has been placed on the judgements rendered in Hridya Rajan Pd. Verma and others vs State of Bihar and another , Murari Lal Gupta vs Gopi Singh and B. Suresh Yadav vs Sharifa Bee and another.”

“14 . As advised at present we are inclined to discuss the decisions which have been commended to us by the learned senior counsel for the respondent. In Hridya Rajan Pd. Verma (supra) a complaint was filed that the accused persons therein had deliberately and intentionally diverted and induced the respondent society and the complainant by suppressing certain facts and giving false and concocted information and assurances to the complainant so as to make him believe that the deal was a fair one and free from troubles. The further allegation was that the accused person did so with the intention to acquire wrongful gain for themselves and to cause wrongful loss to the society and the complainant and they had induced the complainant to enter into negotiations and get advance consideration money to them. The two Judge Bench referred to the judgment in the State of Haryana vs Bhajan Lal, wherein this court has enumerated certain categories of cases by way of illustration wherein the extraordinary power under Article 226 or the inherent powers under sec. 482 of Cr. P.C. could be exercised either to prevent abuse of the process of the court or otherwise to secure the ends of justice……”

“16 . In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution or cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is, the time when the offence is said to have been committed. Therefore, it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep the promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed.”

“16 . From the aforesaid decision it is quite clear that this court recorded a finding that there was no averment in the complaint that intention to deceive on the part of the accused was absent right from the beginning of the negotiation of the transaction as the said allegation had neither been expressly made nor indirectly suggested in the complaint. This court took note of the fact that only nondisclosure was that one of their brothers had filed a partition suit which was pending and the allegations that such disclosure was not made intentionally to deceive the complainant was absent…..”

17 . In Murari Lal Gupta (supra) 2 Judge Bench quashed the criminal complaint instituted under Section 406 and 420 of the IPC on the following analysis: –

The complaint does not make any averment so as to infer any fraudulent or dishonest inducement having been made by the petitioner pursuant to which the respondent parted with the money. It is not the case of respondent that the petitioner does not have the property or that the petitioner was not competent to enter into an agreement to sell or could not have transferred title in the property to the respondent. Merely because an agreement to sell was entered into which agreement the petitioner failed to honour, it cannot be said that the petitioner has cheated the respondent. No case for prosecution under Section 420 or Section 406 IPC is made out even prima facie. The complaint filed by the respondent and that too at Madhepura against the petitioner, who is a resident of Delhi, seems to be an attempt to pressurize the petitioner for coming to terms with the respondent. In our considered opinion the factual position in the aforesaid case is demonstrably different, hence we have no hesitation in stating that the said decision is not applicable to the case at hand.”

“20 . In GV Rao vs L.H.V. Prasad and others, this court has held thus:

7. As mentioned above, Section 415 has two parts. While in the 1st part, the person must dishonestly or fraudulently induce the complainant to deliver any property; in the second part, the person should intentionally induce the complainant to do or omit to do a thing. That is to say, in the first part, inducement must be dishonest or fraudlunt. In the second part, the inducement should be intentional. As observed by this court in Jaswantrai Manilal Akhaney vs State of Bombay, a guilty intention is an essential ingredient of the offence of cheating. In order, therefore, to secure conviction of a person for the offence of cheating, mens rea on the part of that person, must be established. It was also observed in Madhadeo Prasad vs State of West Bengal that in order to constitute the offence of cheating, the intention to deceive should be in existence at the time when the inducement was offered.

21 . In S.N. Palanitkar and others vs State of Bihar and another, it has been laid down that in order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep a promise subsequently cannot be presumed as an act leading to cheating.

22 . In the said case while dealing with the ingredients of criminal breach of trust and cheating, the Bench observed thus: –

9. The ingredients in order to constitute a criminal breach of trust are: (i) entrusting a person with property or with any dominion over property (ii) a person interested (a) dishonestly misappropriating or converting that property to his own use; or (b) dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust.

10. The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii) (a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and

(iii) in cases covered by (ii) (b), the act of omission should be one which causes or is likely to cause damage or harm to the person induced in body, mind, reputation or property.”

…………

24 . At this stage, we usefully note that sometimes a case may apparently look to be of civil nature or may involve a commercial transaction but such civil disputes or commercial disputes in certain circumstances may also contain ingredients of criminal offences and such disputes have to be entertained notwithstanding they are also civil disputes. In this context, we may reproduce a passage from Mohammed Ibrahim and others vs State of Bihar and another: –

8. This court has time and again drawn attention to the growing tendency of complainants attempting to give the cloak of criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurise parties to settle civil disputes. But at the same time, it should be noted that several disputes of civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes. (See G. Sagar Suri vs State of U.P. and Indian Oil Corp vs NEPC India Ltd).

25 . In this context we may usefully refer to a paragraph from All Cargo Movers (I) Private Limited vs Dhanesh Badarmal Jain and another, where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie cannot notice the correspondence exchanged by the parties and other admitted documents. It is one thing to say that the court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be malafide or otherwise an abuse of process of the court. Superior courts while exercising this power should also strive to serve the ends of justice.

26 . In Rajesh Bajaj vs State NCT of Delhi and others, while dealing with the case where High Court had quashed an F.I.R., this court opined that the facts narrated in the complaint petition may reveal a commercial transaction or money transaction, but that is hardly a reason for holding that the offence of cheating would elude from such a transaction. Proceeding further, the Bench observed thus:

11. The crux of the postulate is the intention of the person who induces the victim of his representation and not the nature of the transaction which would become decisive and discerning whether there was commission of the offence or not. The complainant has stated in the body of the complaint that he was induced to believe that the respondent would honour payment on receipt of invoices, and that the complainant realized later that the intentions of the respondent were not clear. He also mentioned that the respondent after receiving the goods had sold them to others and still he did not pay the money. Such averments would prima facie make out a case for investigation by the authorities.

28 . In R. Kalyani vs Janak C. Mehta and others, after referring to the decisions in Hamida vs Rashid and the State of Orissa vs Saroj Kumar Sahoo, this court eventually culled out the following propositions:

15. Propositions of law which emerged from the said decisions are:

a. The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizable offence.

b. For the said purpose the court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence.

c. Such power should be exercised very sparingly. If the allegations made in the F.I.R. disclosed commission of an offence, the court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus.

d. If the allegations discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceeding should not be allowed to continue.

30. Recently in Gian Singh vs State of Punjab and another, a three Judge Bench has observed that: –

“55. In the very nature of its constitution, it is the judicial obligation of the High Court to undo the wrong in course of administration of justice or to prevent continuation of unnecessary judicial process. This is founded on the legal maxim quando lex aliquid alicui concedit, conceditur et id sine qua res ipsa esse non protest. The full import of which is whenever anything is authorised, and especially if, as a matter of duty, required to be done by law, it is found impossible to do that thing unless something else not authorised in express terms be also done, may also be done, then that something else will be supplied by a necessary intendement. Ex debito justitiae is inbuilt in such exercise; the whole idea is to do real, complete and substantial justice for which it exists. The power possessed by the High Court under sec. 482 of the court is of wide amplitude but requires exercise with great caution and circumspection.”

20. Next, reliance has been placed upon Anil Kohli vs State (NCT of Delhi), 1995 (2002) DLT 173, in which the Delhi High Court held that in the case in hand there was nothing to show that the respondents had dishonest or fraudulent intention at the time the agreement took place to supply goods. Business transaction continued for almost seven years, letters exchanged admitted liabilities and dues by the complainant to Arun Kohli and vice versa. These transactions by no stretch of imagination could be called dishonest inducements. It was purely business transaction of civil nature. It was found that the ingredients of cheating were missing and therefore merely because payment was not made or accounts were not settled, it could not be said that offence punishable under secs. 420/406/34 IPC would be made out.

21. Further, reliance is placed on Appeal (Crl.) 1241 of 2004 ( M/s Zandu Pharmaceuticals Works vs Md Sharaful Haque and another, decided on 1 November, 2004. The facts of the case were that respondent no. 1 (complainant) filed a complaint on 09/08/2002 alleging that the appellants had committed offences punishable under Sections 406 and 409 IPC. The date of occurrence was indicated to be between 12/07/1995 to 08/05/2002. The basic allegations in the complaint were that an advertisement was issued by the appellant no. 1 seeking applications for appointment to the post of area manager. The complainant, who was then working in another concern, applied for the post, was called for the interview on 14/07/1995 and was asked to report at Bombay office of the appellant no. 1 company on 01/08/1995 for training. After completion of the training period, the complainant was asked to report to the Patna depot. He was given appointment from 09/09/1995 by letter dated 01/09/1995, wherein it was indicated that he was appointed as field officer and not area manager. According to the respondent, on receipt of the appointment letter, the complainant asked the concerned official that is, the other accused persons as to how he was being appointed as field officer, when he had appeared at the interview for the post of area manager. He was assured that the letter for the post of area manager will be issued in the 1st week of April, 1996. But no such letter came to be issued and he was not appointed as area manager. Grievance was, therefore, made that the accused persons had initially deceived him by appointing as Field Officer and not as Area Manager, though he was assured that appointment letter in that regard would be issued. Therefore, they were liable to face trial for offences punishable under Section 406 and 409 IPC. The learned Magistrate had issued process in respect of offence under Section 418 IPC, punishment provided for which was imprisoned for 3 years. The limitation period in terms of Section 468 (2) (c) was 3 years. Therefore it was held that unfortunately the High Court did not take note of the guiding principles as laid down in Bhajan’s Singh’s case (1992 Suppl (1) 335), thereby rendering the judgment indefeasible and accordingly the judgment of High Court was set aside and the complaint lodged was quashed.

22. Next, reliance has been placed on the Criminal Appeal No. 1694 of 2008 arising out of SLP (Crl. ) No. 5672 of 2004, R Kalyani vs Janak C. Mehta and others decided on 24 October, 2008. In this case a first information report was lodged by the appellant against the respondents on or about 04/01/2003 under Sections 409 , 420, 468 read with Section 34 IPC. The first and second respondent approached the High Court for quashing of the said F.I.R. as well as the investigation, which was allowed by the impugned order dated 24/04/2004. From the side of the appellant it was argued that the High Court passed an erroneous order as it did not have jurisdiction to enter into disputed questions of fact in regard to the involvement of the respondents as the F.I.R. disclosed an offence of cheating and criminal breach of trust and forgery. The investigation was admittedly did not complete and hence the High Court could not have relied upon the documents furnished by the defendants either for the purpose of finding out absence of mens rea on the part of the applicants for their involvement in the case. The respondent no. 1 and 2 being high-ranking officers of the M/S Shares and Securities Ltd, a company dealing in shares, whether were vicariously liable for commission of the offence being in day-to-day charge of affairs thereof. In view of the fact that the respondent no. 2 forwarded a letter purporting to authorise the accused no. 3 to transfer shares to the National Stock Exchange, he must be held to have requisite intention to commit the said offence along with the respondent no. 3. The respondent no. 3, not being an applicant before the High Court, the entire Criminal prosecution could not have been quashed. From the side of the respondents it was argued that it was admitted fact that the F.I.R. had been lodged by the respondents as against the appellant herein on 20/12/2002, that is, much prior to the lodging of F.I.R. by the appellants, herein, the same was done with mala fide intention. In view of the fact that the appellant herself owed a sum of Rs. 13.28 lakhs to the company and her group, a sum of Rs. 45.00 lakhs which is evident from the balance sheet of the appellants, continuation of the criminal proceedings initiated against the respondents would be an abuse of process of court. The appellants having not entered into any individual transaction with the company as the accounts held by her together with members of the family were treated as group accounts and only because respondent no. 2 had forwarded a letter of the appellant dated 10/01/2002, which is alleged to be forged, to the National Stock Exchange, the same by itself does not show that he was a party to the forgery. In respect of the offences under general law, vicarious liability cannot be fastened on an individual. It was held that if a person, thus, has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused. In any event, it would be a fair thing to do so, as legal fiction is raised both against the company as well as the person responsible for the acts of the company. Therefore, for the reasons aforesaid the Supreme Court did not find any infirmity in the impugned judgment, however it was clarified that the respondent no. 3, arrayed as accused no. 3 in the first information report, had not filed any Application under Section 482 of the Criminal Procedure Code, therefore it could not be known as to under what circumstances the High Court directed service of notice to be effected upon him. Nowhere in the impugned judgment, the High Court found that the allegations contained in the F.I.R. against the respondent no. 3 also did not disclose commission of any cognizable offence. It was one thing to say that he had not committed the same but it was another thing that the High Court’ s jurisdiction under sec. 482 Cr. P.C. could have been invoked at this stage. It was further held that there was no option but to hold that the High Court in its judgment cannot be said to have covered the case of respondent no. 3. The investigation against him, therefore, shall continue. However, it will be open to him to take the appropriate defenses at appropriate stages as are permissible in law.

23. Next, the reliance is placed upon Appeal (Crl.) 317 of 2008, S.K. Alagh vs State of U.P. and others decided on 15 February, 2008. In this case the short question which arose for consideration was whether the complaint petition, even if given face value and was taken to be correct in its entirety, whether it discloses an offence against the appellant under Section 406 IPC. The appellant no. 1 was the Managing Director of the Company. Respondent no. 3 was its General Manager. Indisputably, the company is a juristic person. The demand drafts were issued in the name of the company. The company was not made an accused. The dealership agreement was by and between M/S Akash Traders and the company. In support of the impugned order it was argued that prima facie, the appellant was in charge of and was in control of the business of the company, he therefore, would be deemed to be liable for the offence committed by the company. It was held that admittedly, drafts were drawn in the name of the company, even if appellant was its Managing Director, he cannot be said to have committed any offence under Section 406 IPC. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, Director of the company or an employee cannot be held to be vicariously liable for any offence committed by the company itself. Therefore, the High Court had committed a manifest error in passing the impugned judgment.

24. The citations which have been relied upon by the learned counsel for the applicant mainly hammer on two points that is, that sometimes it may appear that the dispute between the parties is that of civil nature or may involve a commercial transaction, but such civil disputes or commercial disputes, in certain circumstances, may also contain ingredients of criminal offences. In such situation, notwithstanding that the dispute is of civil nature, such a dispute may have to be entertained on the criminal side as has been held in the case of Arun Bhandari (Supra). Although this court would have to see as to whether the ingredients of Section 406 and 420 IPC are made out in the present case or not, on the basis of the averments made in the complaint. Secondly the above offences being of IPC, which is general provision of law and not any specific statute providing for not impleading the company, it was essential that the applicant-accused could not be made an accused vicariously in the present case without impleadment of his company as has been held in S. K. Alagh’s case (supra). This aspect is also required to be analysed in the present case as to whether the applicant could not be made an accused in the present case but for impleadment of his company.

25. In the light of the facts in the present case which have been cited above I am of the view that it emerges from the facts that consignment of 23 metric ton of copper scrap was loaded on the shape of the applicant in presence of the accused applicant and seal on the container was also fixed of the accused applicant, the details of which are mentioned above, but when the said consignment reached Mumbai, the same was not found to have been delivered there rather, in its place four bags of rubbish were found, which resulted in huge loss to the applicant. In such a situation whether there was intention to cheat or not on the part of the applicant and other co-accused cannot be seen at this stage. Certainly in my opinion, the entrustment of the said consignment would be found to have been made of the said consignment to the accused applicant which was to be delivered to the applicant at Kanpur Nagar, but the same was not done. The version of the accused applicant that his liability was only to reach the consignment to the shipyard and that it would extend only from shipyard to shipyard, beyond that he would not bear any liability, is also to be seen only after evidence and not at the preliminary stage when there is no evidence recorded as yet. To say, as argued on behalf of the learned counsel for the applicant that, the applicant had nothing to do with the transaction, would not be appropriate to exonerate him on that count only, because the role of transporting the consignment to the destination as per the bill of lading was that of the applicant. Therefore his involvement cannot be ruled out till the same is found not proved after appreciation of evidence to be adduced at the trial. At this stage it cannot be said that the prima-facie offence is made out against the accused applicant.

26. As regards non-impleadment of the company, of which the accused applicant is stated to be president, in the light of the law laid down in Application U/S 482 No.-12977 of 2018, Usher Agro Ltd. Vs State of U.P. and Another decided on 09.07.2018 I am of the view that this aspect can be seen by the trial court at the stage of trial and the provision of Section 319 Cr. P.C. may be invoked, if so required, in order to implead the company of the accused applicant as well. But solely on the count that the impleadment of the company is not done, the prosecution of the accused should be quashed, does not appeal to reason. In Usher Agro Ltd. Vs State of U.P. (supra) reliance is placed upon the judgment of Madhya Pradesh High Court that is, Manish Kalani and another vs Housing and Development Corp Ltd (HUDCO) and another, M.Cr.C. No. 16285 of 2016 decided on 30. 1. 2018 the relevant paragraphs 22 to 26 of which are reproduced herein below:

“22. The complainant is entitled to amend his complaint filed under Section 138 of the Act as held by this Court in the case of Pandit Gorelal (supra) and also by Hon’ble Apex Court in the case of S.R.Sukumar Vs. S. Sunaad Raghuram, (2015) 9 SCC 609, wherein Hon’ble Apex Court held that “what is discernible from U.P. Pollution Control Board case [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] is that an easily curable legal infirmity could be cured by means of a formal application for amendment. If the amendment sought to be made relates to a simple infirmity which is curable by means of a formal amendment and by allowing such amendment, no prejudice could be caused to the other side, notwithstanding the fact that there is no enabling provision in the Code for entertaining such amendment, the court may permit such an amendment to be made.

23. Although, non-applicant No.1 filed the application before the trial Court under Section 319 of the Cr.P.C read with Section 141 of the Act, wherein neither in Section 141 of the Act, nor in Section 319 of the Cr.P.C provisions for permitting complainant to amend the complaint are mentioned, but it is a settled position of law that a mere non-mentioning or wrong mentioning of a provision in an application is not a ground to reject an application as held by the Hon’ble Apex Court in the case of Adv. Kaptan on Challamance Huchha Gowda v. M.R. Tirumala,2004) 1 SCC 453.

24. Although there is no provision in the Act and Code of Criminal Procedure to permit the applicant to amend the complaint, but there is no bar in the Code of Criminal Procedure as well as in the Negotiable against permitting the complainant to amend his complaint. Where, there is no bar in the Act and in the Code of Criminal Procedure, this Court in the interest of justice may permit the complainant to amend the complaint, as held by the Hon’ble Apex Court in the case of S.R. Sukumar Vs. S. Sunaad Raghuram (Supra).

25. Although, it is admitted that non-applicant No.1 had not sent notice to the Company before filing of the complaint, but prima facie it appears that before filing the complaint non-applicant No.1 gave notice to the applicant No.1 Manish Kalani, the Managing Director of the Company, who issued the questioned cheque on behalf of the company. So, the notice sent by non-applicant No.1 to applicant No.1 Manish Kalani is also notice to the company as held by the Hon’ble Apex Court in the case of M/s Bilakchand Gyanchand Co.(supra) wherein Hon’ble Apex Court held that notice under Section 138 of the Act sent to the Managing Director of the Company who is signatory of the cheque in question, the complaint is not liable to be quashed on the ground that the notice was not served upon the company. Similarly, Hon’ble Apex Court in the case of Rajneesh Agrawal (supra) also held that the demand notice issued in the name of Director, who has signed the cheque is notice to the drawer Company, therefore the prosecution of non-applicant No.2 Company for the offence under Section 138 of the Act would not be invalid for the reason that the notice was not served upon the Company.

26. The judgment of Hon’ble Apex Court passed in the case of N. Harihara Krishnan Vs. J. Thomas (supra) relied by the learned counsel for the applicants also does not help much to the applicant.

In this case Hon’ble Apex Court in pera 32 and 33 of judgement observed as thus :-

32. The scheme of the prosecution in punishing under Section 138 of THE ACT is different from the scheme of the Cr.P.C. Section 138 creates an offence and prescribes punishment. No procedure for the investigation of the offence is contemplated. The prosecution is initiated on the basis of a written complaint made by the payee of a cheque. Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under Section 138. Those ingredients are: (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. It is obvious from the scheme of Section 138 that each one of the ingredients flows from a document which evidences the existence of such an ingredient. The only other ingredient which is required to be proved to establish the commission of an offence under Section 138 is that in spite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand. A fact which the complainant can only assert but not prove, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand.

33. By the nature of the offence under Section 138 of THE ACT, the first ingredient constituting the offence is the fact that a person drew a cheque. The identity of the drawer of the cheque is necessarily required to be known to the complainant (payee) and needs investigation and would not normally be in dispute unless the person who is alleged to have drawn a cheque disputes that very fact. The other facts required to be proved for securing the punishment of the person who drew a cheque that eventually got dishonoured is that the payee of the cheque did in fact comply with each one of the steps contemplated under Section 138 of THE ACT before initiating prosecution. Because it is already held by this Court that failure to comply with any one of the steps contemplated under Section 138 would not provide “cause of action for prosecution”. Therefore, in the context of a prosecution under Section 138, the concept of taking cognizance of the offence but not the offender is not appropriate. Unless the complaint contains all the necessary factual allegations constituting each of the ingredients of the offence under Section 138 , the Court cannot take cognizance of the offence. Disclosure of the name of the person drawing the cheque is one of the factual allegations which a complaint is required to contain. Otherwise in the absence of any authority of law to investigate the offence under Section 138, there would be no person against whom a Court can proceed. There cannot be a prosecution without an accused. The offence under Section 138 is person specific. Therefore, the Parliament declared under Section 142 that the provisions dealing with taking cognizance contained in the Cr.P.C should give way to the procedure prescribed under Section 142. Hence the opening of non-obstante clause under Section 142. It must also be remembered that Section 142 does not either contemplate a report to the police or authorise the Court taking cognizance to direct the police to investigate into the complaint”.

27. While in the instant case in the complaint above-mentioned all the five ingredients are pleaded regarding applicant No.2 company and name of the applicant No.2 company is also mentioned as discussed above.

31. So, in the peculiar facts and circumstances of the case the application filled by the applicants for taking cognizance against applicant No.2 company comes under the purview of Section 190 (1)(a) of the Cr.P.C. and not under Section 319 of Cr.P.C. Because the name of the applicant No.2/company as an accused and the basis of its accusation were already mentioned in the complaint at the time of its filling. It is the fault of the trial Court which only took cognizance against the Director and did not take cognizance against the company, which can be cured by the trial Court at any time. There is no bar under Section 190 of the Cr.P.C. that once the process is issued against some accused, on the next date, the Magistrate cannot issue process to some other person against whom there is some material on record.”

27. Though in Usher Agro Ltd.’s case (supra) matter related to Section 138 of NI Act, in which the question involved was whether prosecution of the Director of the company could be done without impleadment of the company of which he was Director, which had issued the cheque which got dishonoured and whether during course of the proceedings company could be impleaded either under the provisions of Section 190 (1) (a) or under 319 Cr. P.C. and it was held in Para 44. as below:

“44. So, in the peculiar facts and circumstances of the case the application filled by the applicants for taking cognizance against applicant No.2 company comes under the purview of Section 190 (1)(a) Cr.P.C. because the name of the applicant No.2/company as an accused and the basis of its accusation were already mentioned in the complaint at the time of its filling. It is the fault of the trial Court which summoned the Director alone and left the company. Such defect is not an incurable defect and can be cured by the trial Court at any time. There is no bar under Section 190 Cr.P.C. that once the process is issued against some accused, on the next date, the Magistrate cannot issue process to some other person against whom there is some material on record.”

28. In view of above this court is of the view that the impugned order does not suffer from any infirmity and this application deserves to be dismissed, and is accordingly, dismissed.

Order Date:13.09.2019

AU

 

 

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