IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
THE HON’BLE JUSTICE TIRTHANKAR GHOSH
CRAN 3778 of 2018
CRR 1564 of 2015
SectionM/s. MM Carbon Products (Pvt.) Ltd. Ors.
The State of West Bengal Anr.
For the Petitioners : Mr. Sourav Chatterjee
Mr. Asit Kumar Hazra
Mr. Mrinal Kanti Maity
For the Opposite Party No.2 : Mrs. Subhasree Patel
Mr. Abhishek Halder
Heard on : 11/07/2019; 18/07/2019;
Judgment on : 30/08/2019
Tirthankar Ghosh, J:-
The revisional application has been preferred at the instance of the
petitioners challenging the proceeding being Case No. C/422382 of 2014 under
Sections 420/Section406/Section120B of the Indian Penal Code (IPC) pending before the Ld.
Chief Metropolitan Magistrate, Kolkata and the issuance of non-bailable warrant
of arrest in connection with the said case. The case of the complainant as made
out in the petition of complaint is reflected in Paragraphs 6 to 9, which are as
“6. That complainant company in good faith, from time to time,
continued to provide to the accused person, different amounts of
money which were duly received and acknowledged by accused
person to the tune of a sum of Rs. 3, 35, 00, 000/- (Rupees
Three Crores Thirty Five lakhs Only), as an advance for the
purpose of procurement of the requisite proportion of the ordered
material i.e. Calcined Petroleum Coke from Numaligarh
Refineries and then supply to complainant company in between
18.12.2009 to 30.04.2010.
7. That thereafter on 02.11.2011 the accused person have been
supplied Calcined Petroleum Coke for a value of Rs. 2, 35, 88,
241/- (Rupees Two Crores Thirty Five Lakhs Eighty Eight
Thousand Two Hundred And Forty One Only) to the complainant
company and also refunded a sum of Rs. 88, 50, 000/- (Rupees
Eighty Eight Lakhs Fifty Thousand Only), then thereafter a sum
of Rs. 10, 61, 759/- (Rupees Ten Lakhs Sixty One Thousand
Seven Hundred And Fifty Nine) only, remained due.
8. That thereafter complainant company sent repeated emails,
reminder letters, letter dated 11.11.2011 and also made
numerous verbal requests to the accused person and but in spite
of all those efforts they did not pay any hid to repay those due
of Rs. 10,61,759/- to the complainant company. Instead of
returning the said amount of money, held in trust by the
accused persons, by or about the month of June in the year
2012, the accused persons again requested to the complainant
company to give further financial support, with a promise, that
they would definitely return back the entire amount of money,
as soon as possible.
9. That finding no other alternative the complainant company
sent a notice dated 08.12.2014 to the accused persons through
Advocate drawing upon the personal attention of the accused
no. 1 to 5, narrating all the facts and circumstances and therein
demanding immediate payment of Rs. 10. 61, 759/- (Rupees
Ten Lakhs Sixty One Thousand Seven Hundred And Fifty Nine
Only) within not more than 7 days from the date of receipt of the
said demand notice or else the complainant company shall be
constrained to take appropriate legal actions. The said notices
were sent through Speed Post with A/D on 08.12.2014 and
were delivered at the correct and proper address to the accused
persons. Even after due receipt of the said notice the accused
persons inspite of received of the said demand notice accused
person did not pay any amount to the complainant company.”
Mr. Sourav Chatterjee, Ld. Advocate appearing for the petitioners submit
that it is an admitted position from the petition of complaint that there were
continuous transactions between the complainant company and the accused
company. It is also an admitted position that out of Rs. 3, 35, 00, 000/- (Rupees
three crores thirty five lakhs only), only Rs. 10, 61, 759/- (Rupees ten lakhs sixty
one thousand seven hundred and fifty nine only) were due for payment.
According to him, if the allegations made in the petition of complaint are
accepted to be true in its entirety, the same fails to make out any case under the
provisions of Sections 420, Section406 and Section120B of the IPC. The Ld. Magistrate without
applying his mind to the allegations made in the complaint erroneously took
cognizance of the offence and subsequently issued process against the petitioners
who have been arraigned as accused in this case. It was his further argument
that as the petitioners were of Guahati, Assam, the Ld. Magistrate ought to have
abided by the provisions of Section 202 of the CrPC. In support of his contention
he relied upon the following judgments:-
• 2005 (10) SCC 228 : Anil Mahajan vs. Bhor Industries Ltd.
• 2005 (101) SCC 261 : Hotline Teletubes and Components Ltd
Ors. vs. State of Bihar Anr.
• 2005 (10) SCC 336 : SectionUma Shankar Gopalika vs. State of Bihar
• 2005 (13) SCC 699 : SectionMurari Lal Gupta vs. Gopi Singh
• 2007 (7) SCC 373 : SectionVeer Prakash Sharma vs. Anil Kumar
• 2009 (3) SCC 78 : SectionV.Y. Jose Anr. vs. State of Gujarat Anr.
• 2009 (14) SCC 696 : SectionDalip Kaur Ors. vs. Jagnar Singh Anr.
• 2018 (13) SCC 374 : SectionMedmeme, LLC Ors. vs. Ihorse Bpo
Solutions Pvt. Ltd.
• 2018 SCC OnLIne 1741 : SectionS.S. Binu vs. State of West Bengal
• AIR 1968 SC 700 : SectionState of Gujarat vs. Jaswantlal Nathalal.
Mrs. Subhasree Patel, Ld. Advocate appearing on behalf of the
complainant/opposite party No.2 opposes the contentions of the petitioners and
submits that once Ld. Magistrate was satisfied with the allegations made in the
petition of complaint as also the initial deposition under Section 200 of the CrPC,
then only the Ld. Magistrate decided to issue process against the accused
persons. She also submitted that as there were disputes raised regarding the
transactions taking place between the complainant and the accused/petitioners,
there was no scope for conducting further enquiry under the provisions of
Section 202 of the CrPC, in support of her case, she relied upon the following
• (2000) 3 SCC 269 : Medchl Chemicals Pharma (P) Ltd. Vs.
Biological E. Ltd. Anr.
• 2019 SCC OnLine SC 182 : Sau. SectionKamal Shivaji Pokarnekar vs.
State of Maharashtra Ors.
I have perused the allegations advanced by the complainant/opposite party
No.2 in the petition of complaint, wherefrom it is evident that the complainant
company from time to time advanced money to the accused company for
procurement of calcined petroleum coke (hereinafter referred to as coke) from
Numaligarh Refineries and the accused company supplied the same to the
complainant company. It is further contended that out of the total sum
advanced a major portion of the amount was adjusted towards the coke supplied.
A substantial sum was refunded to the complainant company by the accused
persons and a sum of Rs. 10, 61, 759/- remained due. The grievance as reflected
from the petition of complaint is with respect to the non- refund of this amount
which inspite of being demanded was not paid by the accused/petitioners.
In Anil Mahajan vs. Bhor Industries Ltd. reported in 2005 (10) SCC
228, it has been held as follows:-
“….. The allegations are that after making this payment, the
accused did not make further payment despite repeated
demands and started giving reasons such as cash-flow
problems, non-receipt of right type of colour assortment and
sales tax problems, etc., besides raising disputes in respect of
the material purchased six years back being defective. After
making the aforesaid averments in the complaint, it is concluded
that the MOU was signed with mala fide and criminal intention
of grabbing money and goods from the complainant’s Company.
The substance of the complaint is to be seen. Mere use of the
expression “cheating” in the complaint is of no consequence.
Except mention of the words “deceive” and “cheat” in the
complaint filed before the Magistrate and “cheating” in the
complaint filed before the police, there is no averment about the
deceit, cheating of fraudulent intention of the accused at the
time of entering into MOU wherefrom it can be inferred that the
accused had the intention to deceive the complainant to pay.
According to the complainant, a sum of Rs. 3,05,39,086 out of
the total amount of Rs. 3,38,62,860 was paid leaving balance of
Rs. 33,23,774. We need not go into the question of the
difference of the amounts mentioned in the complaint which is
much more than what is mentioned in the notice and also the
defence of the accused and the stand taken in reply to notice
because the complainant’s own case is that over rupees three
cores was paid and for balance, the accused was giving reasons
as above-noticed. The additional reason for not going into these
aspects is that a civil suit is pending inter se the parties for the
amounts in question.”
SectionIn Hotline Teletubes and Components Ltd. vs. State of Bihar reported
in 2005 (10) SCC 261, it has been held as follows:-
“This appeal by special leave has been filed by the appellants
against the order passed by the Patna High Court, refusing to
quash their prosecution under Sections 406 and Section420 of the
Indian Penal Code (for short “SectionIPC”). In the complaint petition, it
has been alleged that the complainant supplied goods to the
accused persons, but they failed to pay the price therefor. There
is no whisper in the complaint that at the very inception of the
contract between the parties, there was any intention to cheat.
It appears from a bare perusal of the complaint that it is a case
of purely civil liability and no criminal offence is disclosed, much
less offences either under Section 406 or 420 SectionIPC. So far as the
High Court is concerned, it has not considered this aspect of the
matter, but has refused to quash the prosecution observing that
it was a fit case where parties should take steps for settlement.
In our view, allowing such prosecution to continue would
amount to an abuse of the process of court and to prevent the
same, it would be just and expedient to quash the same.”
SectionIn Uma Shankar Gopalika vs. State of Bihar reported in 2005 (10) SCC
336, it has been held as follows:-
“…… It is well settled that every breach of contract would not
give rise to an offence of cheating and only in those cases
breach of contract would amount to cheating where there was
any deception played at the very inception. If the intention to
cheat has developed later on, the same cannot amount to
SectionIn Murari Lal Gupta vs. Gopi Singh reported in 2005 (13) SCC 699, it
has been observed as follows:-
“….. Even if all the averments made in the complaint are taken
to be correct, yet the case for prosecution under Section 420 or
Section 406 of the Penal Code is not made out. 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 the 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 titled 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.”
SectionIn Vir Prakash Sharma vs. Anil Kumar Agarwal reported in 2007 (7)
SCC 373, it has been held as follows:-
“…… Non-payment or underpayment of the price of the goods by
itself does not amount to commission of an offence of cheating or
criminal breach of trust.”
SectionIn V.Y. Jose vs. State of Gujarat reported in 2009 (3) SCC 78, it has
been held as follows:-
“…… For the purpose of constituting an offence of cheating, the
complainant is required to show that the accused had
fraudulent or dishonest intention at the time of making promise
or representation. Even in a case where allegations are made in
regard to failure on the part of the accused to keep his promise,
in the absence of a culpable intention at the time of making
initial promise being absent, no offence under Section 420 of the
Penal Code can be said to have been made out.
A matter which essentially involves disputes of a civil nature
should not be allowed to be the subject-matter of a criminal
offence, the latter being not a short cut of executing a decree
which is non-existent. The superior courts, with a view to
maintain purity in the administration of justice, should not allow
abuse of the process of court. It has a duty in terms of Section
483 of the Code of Criminal Procedure to supervise the
functionings of the trial courts.”
SectionIn Medchl Chemicals Pharma (P) Ltd. vs. Biological E. Ltd. Anr.
reported in 2000 (3) SCC 269, it has been held as follows:-
“The ingredients of the offences under Sections
415, Section418 and Section420 cannot be said to be totally absent on the
basis of the allegations in the complaint. We, however, hasten to
add that whether or not the allegations in the complaint are
otherwise correct has to be decided on the basis of the evidence
to be led at the trial in the complaint case but simply because of
the fact that there is a remedy provided for breach of contract,
that does not by itself clothe the Court to come to a conclusion
that civil remedy is the only remedy available to the appellant
herein. Both criminal law and civil law remedy can be pursued
in diverse situations. As a matter of fact they
“are not mutually exclusive but clearly co-extensive and
essentially differ in their content and consequence. The object of
criminal law is to punish an offender who commits an offence
against a person, property or the State for which the accused,
on proof of the offence, is deprived of his liberty and in some
cases even his life. This does not, however, affect civil remedies
at all for suing the wrongdoer in cases like arson, accidents etc.
It is anathema to suppose that when a civil remedy is available,
a criminal prosecution is completely barred. The two types of
actions are quite different in content, scope and import.”
In Sau. SectionKamal Shivaji Pokarnekar vs. State of Maharashtra Ors.
reported in 2019 SCC OnLine SC 182, it has been held as follows:-
“The only point that arises for our consideration in this case is
whether the High Court was right in setting aside the order by
which process was issued. It is settled law that the Magistrate,
at the stage of taking cognizance and summoning, is required to
apply his judicial mind only with a view to taking cognizance of
the offence, or in other words, to find out whether a prima facie
case has been made out for summoning the accused persons.
The learned Magistrate is not required to evaluate the merits of
the material or evidence in support of the complaint, because the
Magistrate must not undertake the exercise to find out whether
the materials would lead to a conviction or not.
Quashing the criminal proceedings is called for only in a case
where the complaint does not disclose any offence, or is
frivolous, vexatious, or oppressive. If the allegations set out in
the complaint do not constitute the offence of which cognizance
has been taken by the Magistrate, it is open to the High Court to
quash the same. It is not necessary that a meticulous analysis
of the case should be done before the Trial to find out whether
the case would end in conviction or acquittal. If it appears on a
reading of the complaint and consideration of the allegations
therein, in the light of the statement made on oath that the
ingredients of the offence are disclosed, there would be no
justification for the High Court to interfere.”
On an analysis of the judgments referred to above, it would be transparent
that in order to make out a prima facie case, the ingredients of the offence must
be spelt out in the complaint. In the case at hand, the complainant in the
complaint stated that the transactions have been taking place continuously for a
considerable period of time, a major sum of the money advanced, was either
adjusted by way of supplying of coke or by being refunded, the grievance of the
complainant is in respect of very small quantum of money being not refunded.
As has been settled by the Hon’ble Apex Court that mere non-payment would not
give rise to an offence of cheating or criminal breach of trust and in this case, it
is seen that there was no occasion for the complainant to be allured by any mis-
representation or by conduct, it can be said by any stretch of imagination that
the accused from the very inception did have any intention to either supply the
goods or refund the amount, which was in excess. The complainant has also
failed to distinguish between mere breach of contract and offence of cheating or
criminal breach of trust. The judgments, relied upon by the Ld. Advocate for the
opposite party No.2, do not support her case, as in Medchl Chemicals
Pharma (P) Ltd. (supra), the Hon’ble Apex Court was dealing with a case where
there were false representations made by the accused which resulted in financial
losses and thereby wrongful loss incurred to the complainant.
In Sau. Kamal Shivaji Pokarnekar (supra) relied upon by the Ld.
Advocate for the respondent, the Hon’ble Apex Court was dealing with a case
where the accused were said to have forged and prepared false documents, on
the basis of which a development agreement came into existance and as such
there were allegations under Sections 420/Section465/Section467/Section468/Section471 and Section 34 of
the IPC. The said two cases are distinguishable in facts and while deciding those
cases the Hon’ble Apex Court has categorically held that if a complaint do not
disclose any offence or it is frivolous, vexatious oppressive and the allegations set
out in the complaint do not construe an offence of which the Magistrate has
taken cognizance it is open for the High Court to quash the same.
Having taken into account, the allegations made in the petition of
complaint and the settled principles of law as referred to above in the series of
judgments of the Hon’ble Apex Court, I hold:
(a) that the complainant/opposite party has failed to make out a case for
the accused persons from the very inception and had any fraudulent or dishonest
intention to deceive;
(b) that there were any mis-representations which allured the complainant
to part with its money;
(c) mere non-payment cannot give rise to a criminal offence until and
unless the complainant prima facie makes out a case that the accused from the
very inception did not have any intention to repay;
(d) the mere use of the words ‘deceive’, ‘mala fide intention’, ‘wrongful gain’,
‘wrongful loss’, ‘wrongfully mis-appropriated’ would not convert a predominantly
civil dispute into a criminal case;
(e) if the allegations made in the complaint is taken as a whole and
accepted in its entirety, the same reveals that the complainant has essentially
given a civil dispute the cloak of a criminal offence.
On a cumulative appreciation of the averments made in the petition of
complaint and the settled position of law, I have no other alternative but to hold
that the complaint case being Case No. C/422382 of 2014 has been initiated
without any foundation of facts so far as the offences under Sections
420/Section406/Section120B of the IPC are concerned and as such the continuance of the
same is an abuse of the process of the Court and as such is liable to be quashed.
As the complaint itself has failed to make out any offence so far as the
petitioners are concerned, I have not gone into the issue of applicability of
Section 202 of the CrPC.
Accordingly, CRR 1564 of 2015 is allowed and the connected application
being CRAN 3778 of 2018 also disposed of.
Urgent Xerox certified photocopies of this judgment, if applied for, be given
to the parties upon compliance of the requisite formalities.
(Tirthankar Ghosh, J.)