IMPORTANT POINT
Criminal proceedings cannot be sustained against employees without specific allegations of dishonest intention; the matter is purely civil in nature.

ORDER :

(Venkata Jyothirmai Pratapa, J.)

The instant petition under Section 482 of the Code of Criminal Procedure, 1973,[in short ‘Cr.P.C.’] has been filed, by the Petitioners/Accused Nos.1, 3, 4, 5 & 7, seeking quashment of the proceedings against them in C.C.No.428 of 2018 on the file of the Court of Judicial Magistrate of First Class, Tadipatri, Ananthapuram District for the offences under Sections 420, 406 read with 34 of Indian Penal Code,[in short ‘IPC;].

2. Initially, Respondent No.2/defacto complainant filed a private complaint under Section 200 and 156(1) of Cr.P.C. for offences under Sections 420, 406 read with 34 of I.P.C., against the petitioners herein and two others before the Judicial Magistrate of First Class, Tadipatri, Ananthapuram District on 15.03.2016. The Court forwarded the complaint to the S.H.O., Tadipatri Town P.S. under Section 156(3) Cr.P.C for registration of F.I.R., investigation and report. Thereafter, the Respondent No.1 herein has registered F.I.R.No.107 of 2016 on 31.03.2016 for the said offences.

3. Contents of the complaint in brief:

a. The Respondent No.2/Defacto complainant is the sole proprietor of M/s. Sapthagiri Enterprises situated at Tadipatri Town and he is the distributor of Hindustan Coca-Cola Beverages Pvt. Ltd. since 1994. As per the conditions of the company, Respondent No.2 herein has engaged his work force to market the product through retailers and the Respondent No.2 signed a Distributor Agreement dt.08.09.2014.

b. As per the agreement, the distributor should purchase beverages manufactured/marketed by the company and under its trade mark as a wholesale basis and /in throughout a primary services area. When the de facto complainant has failed to market the products, it has sent the termination letter, dt.30.06.2015 which was returned unserved with an endorsement ‘refused’. As such, the agreement was terminated and Accused No.7 was appointed as its distributor. Notices have been exchanged.

c. Thereafter, the defacto complainant has filed this complaint alleging offence of Sections 420, 406 r/w.34 of I.P.C. before the court which complaint was referred to the police of Tadipatri u/s.156(3) Cr.P.C.

d. When the petitioners received the notices under Section 41-A Cr.P.C., they have approached the High Court on 27.04.2016 and sought quashing of Crime No.107 of 2016 of Tadipatri P.S. which petition was numbered as Crl.P.No.6879 of 2016, and the High Court having granted stay of all further proceedings of Crime No.107 of 2016 finally disposed of the same on 28.07.2016, directing the petitioners to appear before the investigating agency for investigation.

e. After completion of investigation, police filed charge sheet on 30.10.2018 which was numbered as C.C.No.428 of 2018, wherein summons were issued to Accused Nos.1 to 7.

Grounds Sought for Quashment

4. Aggrieved thereby, the petitioners filed the present petition seeking quashment of the case against them on the following grounds:

a. When the de facto complainant failed to sell the products of the company, Petitioners rightly appointed the Accused No.7 as one of its distributor and it has right to terminate the distributor agreement dated 08.09.2014.

b. The defacto complainant has roped in these petitioners in this criminal case with a malafide intention to extract money as they are the employees of the company.

c. There are no specific allegations with regard to the role played by them for the commission of the offences charged in the charge sheet.

d. The ingredients required for the commission of offence under Section 420 of I.P.C. is absence. The breach of contract would amount to cheating only, if intention to cheat was existing at the very inception

e. The petitioners are only the employees of the company and the de facto complainant has not arrayed the company as an accused in the complaint filed before the Court on 15.03.2016. There is a dispute between the company and the de facto complainant.

f. The allegation that the petitio