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IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
H.P. Sandesh, J.
M/s Ray Constructions Ltd. and Ors. – Petitioners
Versus
The State of Karnataka, Rptd. by The Police Sub-Inspector of Police (Law & Order) and Ors. – Respondents
Criminal Petition No.100018 of 2015
Decided On : 10-03-2020
Companies Act, 1956 – Indian Penal Code - Sections 405, 406, 415, 503 and 420 – Criminal Procedure Code - Section 482 - Intention to cheat – Quash of order - Whether allegations under complaint discloses criminal offence or not - Whether this Court can exercise powers under Section 482 of Criminal Procedure Code to quash proceedings initiated against petitioners - Whether allegations in complaint disclose a criminal offence or not - Whether allegations in complaint disclose a criminal offence or not and while exercising powers under Section 482 of Criminal Procedure Code Hon’ble Apex Court categorically held that contents of complaint are to be taken note of - Factual matrix of case is that respondent No.2 who is complainant before trial Court has filed complaint contending that petitioner No.1-Company availed services of complainant and got major work done amounting to an extent for work executed by complainant and thereafter did not pay amount and hence in complaint made an allegation that petitioners have committed offences punishable under Sections 405, 406, 415, 503 and 420 of IPC - Based on said complaint trial Judge referred matter to police under Section 156(3) of Criminal Procedure Code and case was registered and after investigation police have filed charge sheet which is numbered - Trial Judge after filing of charge sheet took cognizance and issued process against petitioners herein and hence present petition is filed invoking Section 482 of Criminal Procedure Code – Held, Learned HCGP appearing for State referring to judgment in case would contend that when given set of facts may make out a civil wrong as well as criminal offence and only because a civil remedy is available to complainant that itself cannot be a ground to quash criminal proceedings - Judgment of Hon’ble Apex Court reported is of same year and same is delivered by two Bench Judges and judgment reported is by three Bench judges and larger Bench forms an opinion that when given set of facts may make out a civil liability as also criminal offence and only because a civil remedy may also be available to complainant that itself cannot be a ground to quash criminal proceedings and it is further observed that real test is whether allegations in the complaint disclose a criminal offence or not - This Court has already pointed out that in Para of complaint a specific allegation has been made and apart from that investigation has been conducted by Investigating Officer and after investigation charge sheet has also been filed and recorded statement of witnesses and taking note of principles laid down in judgment in case Hon’ble Apex Court while coming to conclusion to quash proceedings made an observation that there was no any allegation as to cheating or dishonest intention of appellants in retaining money in order to have wrongful gain to themselves and allegations are very bald and having considered factual aspects of case when specific allegations is made in complaint and thereafter when matter is referred to Investigating Officer and Investigating Officer also after collecting material has filed charge sheet and trial Court had applied its mind while issuing process vide order and passed an order that perused charge sheet and papers filed along with charge sheet and thereafter only cognizance was taken for offence punishable under Section 420 of IPC and police report also discloses that charge sheet is filed only for offence under Section 420 of IPC and when such being case very contention of petitioners that there is no any material before Court to proceed against petitioners and it is only a civil dispute as contended by petitioners cannot be a ground to invoke Section 482 of Criminal Procedure Code - In view of principles laid down in case and also considering facts and circumstances of case on hand and when a specific allegation is made in complaint that with dishonest intention petitioners did not make payment to complainant and also when an allegation is made that they induced to get work done through complainant and after completion of work they did not make payment this Court is of opinion that it is not a fit case to invoke Section 482 of Criminal Procedure Code to quash proceedings initiated against petitioners - Having considered material on record judgment of larger Bench of Hon’ble Apex Court is aptly applicable to case on hand - Petition is dismissed
ORDER :
Heard the petitioners’ counsel, the learned HCGP appearing for respondent No.1-State and the learned counsel for respondent No.2.
2. This petition is filed under Section 482 of Cr.P.C. praying this Court to quash the entire proceedings in C.C.No.948/2014 on the file of the Prl. Civil Judge and JMFC, Hospet.
3. The factual matrix of the case is that the respondent No.2, who is the complainant before the trial Court has filed the complaint contending that the petitioner No.1-Company availed the services of the complainant and got the major work done amounting to an extent of Rs.45,45,000/-for the work executed by the complainant and thereafter did not pay the amount and hence, in the complaint made an allegation that the petitioners have committed offences punishable under Sections 405, 406, 415, 503 and 420 of IPC. Based on the said complaint, the trial Judge referred the matter to police under Section 156(3) of Cr.P.C. and the case was registered and after the investigation the police have filed the charge sheet which is numbered as C.C.No.948/2014. The trial Judge after filing of the charge sheet, took the cognizance and issued process against the petitioners herein and hence, the present petition is filed invoking Section 482 of Cr.P.C.
4. The learned counsel appearing for the petitioners would contend that the trial Judge has failed to appreciate that the said Mr.Mohan Nair who was at the helm of affairs at the material time of petitioner No.1-Company as Managing Director and his son Sri.Rajesh Mohan Nair, as Deputy Managing Director were responsible for any payments made and they did not made the payment. The trial Judge also failed to appreciate that there is no provision under law for conversion of any proprietorship concern into a Company and as on the date of filing of the complaint i.e. on 18th June, 2014 M/s. Rachana Constructions does not exist and the complaint filed by Sri.Nalina Kumar Nair as Chairman and Managing Director of M/s. Rachana Infra Tech Private Limited which was converted from proprietorship operating in the name and style of M/s. Rachana Constructions is not tenable in law. The trial Judge also failed to take note of the fact that it is nothing but civil nature litigation and there is no any prima facie case to initiate the criminal case against the petitioners herein and civil litigation is converted as criminal proceedings and hence, the impugned order is not sustainable in the eye of law. The learned counsel in respect of his contention also relied upon the order passed by this Court in Criminal Petition No.101191/2015 dated 9th October, 2015. Referring to this judgment, the learned counsel would contend that the parties in that petition and the present petition are same and earlier when the matter has come up before this Court, this Court while allowing the petition made an observation that the dispute is purely civil in nature with regard to the payment of the amount and the same does not attract the penal provisions invoked against the petitioners. If there is any dispute between the parties as to the payment of the amount, it is purely a civil dispute for which civil proceedings has to be initiated and not the criminal proceedings.
5. The learned counsel for the petitioner also relied upon the judgment of the Hon’ble Apex Court reported in 2014 AIR SCW 6310 in the case of Binod Kumar and Others Vs. State of Bihar and Another. By referring to this judgment, the learned counsel would contend that the Hon’ble Apex Court in para Nos.18 and 19 of the judgment in detail discussed that there is no any criminal breach of trust or cheating and mere fact that the petitioners did not pay the bill amount to the complainant, it does not amount to criminal breach of trust and hence, the criminal prosecution cannot be continued against the petitioners.
6. Per contra, the learned counsel appearing for the respondent No.2/complainant would contend that in the criminal petition referred supra, this Court whi
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