IMPORTANT POINT
Although a person has civil as well as criminal remedies in cases of cheating misappropriation and breach of trust which can run simultaneously. But if a criminal proceeding is initiated without alleging and showing ingredients of criminal offences but with an oblique motive of causing harassment to the respondents by seizing the entire articles given under a finance lease for hire purchase of Dental chairs through magisterial proceedings the same are an abuse of the process of Court and High Court was right in quashing than u/s 482 Cr.P.C., 1973.

Headnote:Indian Penal Code, 1860-Sections 420, 406, 423, 424 r/w Section 120-B-Offences of cheating and misappropriation-Cr.P.C. 1973-Sections 200, 93, 482-Private complaint-Cognizance taken, search and seizure done-Petition u/s 482 Cr.P.C. that proceedings are of civil nature and mala fide-Quashed by High Court as mala fide-Appeal to Supreme Court-Hire purchase agreement-Finance-Lease of Dental chairs-No fraud alleged-Payment not made according to contract -Criminal proceedings for cheating and misappropriation-Cognizance taken and search and seizure done-Quashed by Single Judge-Whether learned Single Judge was justified in invoking the powers u/s 482 Cr.P.C. in setting aside the proceedings pending before Magistrate ? (Yes)-Scope and application of Section 482 stated, case law discussed-Appeal dismissed.
Held : The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that respondents committed the offence under Section 420 I.P.C. and the case of the appellant is that respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practicing the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any wilful misrepresentation. Even according to the appellant, parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception. Moreover, the appellant has no case that the respondents obtained the article by any fraudulent inducement or by wilful misrepresentation. We are told that respondents, though committed default in paying some instalments, have paid substantial amount towards the consideration. Having regard to the facts and circumstances, it is difficult to discern an element of deception in the whole transaction, whereas it is palpably evident that the appellant had an oblique motive of causing harassment to the respondents by seizing the entire articles through magisterial proceedings. We are of the view that the learned judge was perfectly justified in quashing the proceedings and we are disinclined to interfere in such matters. The appeal is dismissed with no order as to costs. (Paras 10, 11, 12, & 13)

JUDGMENT

Balakrishnan, J.-Leave granted.

The appellant is a registered company having its head office at Mumbai. It is a non-banking financial institution functioning under the regulation of the Reserve Bank of India. It is carrying on business, inter alia, of leasing and hire purchase. The first respondent is the Chairman and founder trustee of a trust by name Visveswaraya Education Trust . The second respondent, wife of the first respondent is also a trustee. The trust runs a dental college by name Rajiv Gandhi Dental College. The respondents entered into an agreement with the appellant company whereby the appellant agreed to finance the purchase of 100 hydraulically operated dental chairs. The total cost of the chairs was around Rs. 92,50,000/-. The appellant company agreed to finance the respondents for the purchase of these chairs through a lease agreement and as per the agreement, the respondents were liable to pay rentals quarterly. The respondents agreed to pay quarterly a sum of Rs.7,50,000/- for the first year; Rs.12,50,000/- for the second year; Rs.8,00,000/- for the third year and Rs.6,25,000/- for the fourth year. As per the agreement, the appellant company, the lessors would have sole and exclusive right, title and interest in the dental chairs supplied till the entire hire purchase amount was paid. In accordance with the agreement, the appellant made payments to M/s. United Medico Dental Equipments and they delivered the dental chairs to the respondents. The appellant company alleged that the respondents were not regular in making the payments and committed default in payment of the instalments and that the bank had dishonoured certain cheques issued by the respondents. The appellant company also alleged that on physical verification, certain chairs were found missing from the premises of the respondents and thus they have committed cheating and caused misappropriation of the property belonging to the appellant. The appellant company filed a private complaint under Section 200 Cr.P.C. before the Chief Metropolitan Magistrate, Bangalore alleging that the respondents had committed offences under Sections 420, 406 and 423 read with Section 120-B I.P.C. In that proceed ings, the appellant company moved an application under Section 93 Cr.P.C. to issue a search warrant to seize the property in dispute and also to hand over these items to the complainant. The learned Magistrate took cognizance of the alleged complaint and issued summons to the respondents and passed an order on the application filed under Section 93 of the Cr.P.C. to have a search at the premises of the respondents and to take possession of the properties involved in the case. These proceedings were challenged by the respondents under Section 482 Cr.P.C. before the learned Single Judge of the Karnataka High Court at Bangalore. The learned single Judge was pleased to quash the entire proceedings and directed the appellant company to return all the properties seized by the Police pursuant to the warrant issued by the learned Magistrate. Thus, the order of the learned Magistrate taking cognizance and issuing process to the respondents as well as the order of search and the direction for restoration of the property to the appellant company were set aside. Aggrieved by the same, the appellant company has preferred this appeal.

3. We heard the learned counsel on either side. Learned senior Counsel for the appellant company Mr. P.S. Mishra argued in detail and contended that the learned Single Judge has seriously erred in quashing the proceedings under Section 482 Cr. P.C. The learned counsel for the appellant company contended that the allegations in the complaint clearly made out offences punishable under Section 420, 406, 423, 424 read with Section 120-B I.P.C. The learned Counsel for the respondents, on the other hand, contended that the complaint was filed only to harass the respondents and it was motivated by mala fide intention. It was argued that the en

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2001 Supreme(SC) 297

Cases Referred (6)