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IN THE HIGH COURT OF JUDICATURE AT PATNA
Ashwani Kumar Singh, J.
S.K. Education Private Limited & Anr. – Petitioners
Versus
State of Bihar through Principal Secretary, Deptt. of Home & Ors.– Respondent
CWJC No. 987 of 2019
Decided On : 27-08-2019
Indian Penal Code, 1860 – Sections 406 and 420 read with 34 – Constitution of India – Articles 226 and 227 – Criminal breach of trust and cheating – Common intention – Quashing application – For offence of cheating it is imperative that intention of parties at the time of making promise should be dishonest – If a person has invoked terms of agreement and terminated agreement by notice in writing to informant of the case, he cannot be said to have committed offence of cheating – Similarly, to make out a case of criminal breach of trust, it is not sufficient to show that money has been retained by accused persons, it also must be shown that accused persons dishonestly disposed of or dishonestly retained the same – It is case of petitioners that in terms of agreement arrived at between parties, petitioner terminated franchisee of informant and as a consequence thereof, informant was expected not to use trade mark of petitioner – Since informant had violated terms of agreement, suit was instituted in Delhi in which notices were served – He has filed instant case under Sections 406 and 420 of IPC – Action taken by informant appears to be an act in frustration and retaliation – There is nothing on record on the basis of which it can be inferred that petitioners dishonestly retained money given by informant – Mere fact that petitioners terminated agreement on failure of informant to keep up promise as made in agreement it cannot be said that petitioners committed criminal breach of trust – Filing of FIR is malafide and unwarranted – Remedy of informant lies only in civil law and institution of criminal case is nothing but abuse of process of court – FIR quashed. (Paras 44 to 48 and 51)
JUDGMENT :
Ashwani Kumar Singh, J.
Heard Mr. Ansul, learned counsel for the petitioners, Mr. Sheo Shankar Prasad, learned standing counsel for the State and Mr. Vikramdeo Singh, learned counsel for the respondent no.9.
2. The instant writ petition under Articles 226 and 227 of the Constitution of India has been filed by the petitioners for quashing the First Information Report (for short 'FIR') of Begusarai Town P.S. Case No.68 of 2019 dated 03.02.2019 registered under Sections 406 and 420 read with 34 of the Indian Penal Code (for short 'IPC').
3. Mr. Ansul, learned counsel for the petitioners submitted that the present case is out and out a civil dispute for which no FIR could have been registered. The petitioner no. 1 is a Company and is operating Pre-Schools & Formal Schools on franchisee model. It is operating and promoting education across India since 2004 and has been able to set up a chain of over 1100+ Pre-Schools under the brand name Bachpan a Play School. The petitioner no. 2 Mr. Tijay Gupta is one of the directors of the Company. The Company Trade Mark 'Bachpan, a Play School' is registered under the provisions of the Copy Rights Act,1957. The informant approached the petitioners in the month of July,2016 and shown his interest to become franchisee of 'Bachpan a Play School' and intended to open its unit in Begusarai. The respondent no. 9 Dinanath Jha after being satisfied regarding the procedure, filled up personal details form and made payment. After completion of all the formalities, the Company conducted site inspection and entered into a memorandum of understanding with the informant on 01.08.2016. As per the terms and conditions of the said memorandum of understanding, the informant paid one time non-refundable franchisee fees to the Company. Accordingly, a franchisee agreement was entered into between the parties on 08.08.2016. The Company provided all necessary support to the informant for establishing the play school at Begusarai which was made operational in the year 2016. On account of the reputation of the company in the field of play school, the school established by the informant attracted large number of students. However, the informant developed dishonest intention and in complete violation of the terms and condition of the franchisee agreement dated 08.08.2016 stopped paying royalty and stopped purchasing materials from the company. Vide letters dated 12.10.2017, 28.10.2017 and 08.12.2017 reminders were sent by the Company to the informant for payment of royalty but of no avail. Vide letter dated 19.01.2018, the Company sent notice whereafter the informant was asked to clear all outstanding dues failing which termination proceeding would be initiated. The Company sent another letter dated 16.02.2018 whereby the informant was requested to make payment of the outstanding dues, failing which termination proceeding would be initiated. However, the informant failed to comply with the aforesaid letters which compelled the Company to terminate the franchisee agreement dated 08.08.2016 vide letter dated 28.03.2018, which was communicated to the informant through registered post. The informant vide e-mail dated 27.03.2018 and letter dated 29.03.2018 requested the Director, Finance of the Company not to terminate and grant permission for supply of study materials order for new academic session of 2018-19. The Company turned down the request of the informant and vide letter dated 09.05.2018 invoked the procedure for closure of school and clearance of outstanding dues. It sent reminder letters on 17.07.2018 and 31.07.2018 for this purpose. However, the informant did not pay any heed to its request. In the month of the August 2018, the Company came to know that the informant was still illegally running the said school under its franchisee even after its termination. Being aggrieved by the illegal act of the i
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