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High Court Of Calcutta
P. N. Sinha
RAYMOND LTD. - Appellant
Versus
H.V.DOSHI AND BROTHERS PVT.LTD. - Respondent
C. R. R. 852 Of 2004
Decided On : 01/20/2006
CHEATING - SECTION 420 IPC - QUASHING OF COMPLAINT - COMPANY - INDENTING AGENCY - SUPPLY OF UNDATED CHEQUES AS COLLATERAL SECURITY - ENCASHMENT OF CHEQUE - ELEMENTS OF CHEATING - DISHONEST INTENTION - SECTION 482 CR.P.C. - ABUSE OF PROCESS OF LAW - CLEAN HANDS DOCTRINE - PRINCIPLES OF LAW. HELD, (i) The petition of complaint does not contain elements of cheating and does not make out a prima facie case against the petitioner to continue the criminal proceeding. (ii) The complainant filed the petition of complaint in Court suppressing some vital material facts. If the complainant disclosed all the facts and did not suppress material facts the learned Magistrate would have been definitely cautious before issuing process. (iii) It is evident that the complainant came to the court not with clean hands and suppressed material facts which were very vital. If all those facts were disclosed before the learned Metropolitan Magistrate, the learned Magistrate would have been hesitant to issue process against the accused petitioners. Filing of complaint suppressing vital and material facts in this matter amounts to abuse of process of law. (iv) The O. P. complainant can also challenge the jurisdiction of learned Metropolitan Magistrate, 33rd court, Mumbai to take cognizance and also can challenge place of trial. O. P. can also challenge legality and limitation points in the said Court for initiation of the complaint cases against it under section 138 of the NI Act. (v) The suppression of material facts in the petition of complaint is a vital and serious matter for which the Court can treat that the complainant came to court not with clean hands. (vi) The entire matter concerning allegations and counter-allegations of the parties may be considered by the learned Magistrate at Mumbai. (vii) The accused petitioner had no intention to deceive or cheat the O. P. complainant right from beginning. In order to attract element of cheating there must be intention right from beginning of the transaction or agreement to cheat which is absent in the present case. There is nothing in the petition of complaint that the accused company with a false and fraudulent representation made to the O. P. complainant caused him to deliver some valuable property due to such false and fraudulent representation. The complainant itself stated in the complaint that amount of Rs. 5 lacs encashed through first cheque may be retained and if it is taken into consideration it will reveal that accused petitioner had no dishonest intention nor it dishonestly induced the complainant to deliver the cheques.
Fact of the Case:
The petitioner, a company engaged in manufacturing various products, including engineering files and tools, was accused of cheating and criminal conspiracy by the opposite party (OP), who was acting as an 'indenting agent' for the petitioner for decades. The OP alleged that the petitioner's representatives visited their office in December 2000 and intimated that they were accepting collateral securities for indenting agency from other agents and, as such, the OP was also required to pay or provide collateral securities for such indenting agency. It was decided that the OP would pay Rs. 25 lacs as collateral securities in equal instalments by cheque or bank draft in favour of the petitioner. In terms of the agreement, the OP issued five undated cheques in favour of the petitioner. The petitioner encashed one of the cheques for Rs. 5 lacs but did not take any step for finalising the indenting agency in favour of the OP. The OP sent written protests and instructed its banker to 'stop payment' of the cheques. Despite this, the petitioner deposited the remaining cheques and attempted to encash them, but the cheques were not encashed due to the OP's instructions to its banker. The OP filed a complaint in the Court of the learned Additional Chief Metropolitan Magistrate, who took cognizance of the offence and transferred the complaint to the learned Metropolitan Magistrate, 12th Court for disposal. The learned Metropolitan Magistrate, 12th Court issued process against the petitioner.
Finding of the Court:
The High Court allowed the revisional application and quashed the criminal proceeding against the petitioner company. The Court held that the petition of complaint did not contain elements of cheating and did not make out a prima facie case against the petitioner to continue the criminal proceeding. The Court also held that the complainant filed the petition of complaint in Court suppressing some vital material facts and that filing of complaint suppressing vital and material facts in this matter amounted to abuse of process of law. The Court further held that the accused petitioner had no intention to deceive or cheat the O. P. complainant right from beginning and that there was nothing in the petition of complaint that the accused company with a false and fraudulent representation made to the O. P. complainant caused him to deliver some valuable property due to such false and fraudulent representation.
Issues: 1. Whether the petition of complaint contained elements of cheating and made out a prima facie case against the petitioner to continue the criminal proceeding? 2. Whether the complainant filed the petition of complaint in Court suppressing some vital material facts? 3. Whether the filing of complaint suppressing vital and material facts in this matter amounted to abuse of process of law? 4. Whether the accused petitioner had the intention to deceive or cheat the O. P. complainant right from beginning? 5. Whether there was anything in the petition of complaint that the accused company with a false and fraudulent representation made to the O. P. complainant caused him to deliver some valuable property due to such false and fraudulent representation?
Ratio Decidendi: 1. The petition of complaint does not contain elements of cheating and does not make out a prima facie case against the petitioner to continue the criminal proceeding. 2. The complainant filed the petition of complaint in Court suppressing some vital material facts. 3. Filing of complaint suppressing vital and material facts in this matter amounts to abuse of process of law. 4. The accused petitioner had no intention to deceive or cheat the O. P. complainant right from beginning. 5. There is nothing in the petition of complaint that the accused company with a false and fraudulent representation made to the O. P. complainant caused him to deliver some valuable property due to such false and fraudulent representation.
Final Decision: Revisional application allowed. Criminal proceeding quashed.
( 1 ) THIS revisional application under section 482 of the Criminal Procedure code (in short the Code) is aimed at quashing the proceeding of complaint case no. C-1024 of 2003 under sections 420/120b of the Indian Penal Code (in short ipc) now pending before the learned 12th Metropolitan Magistrate, Calcutta and for setting aside the orders dated 8. 12. 03 and 17. 1. 04 passed by the learned magistrate thereby taking cognizance of offence and issuing process against the petitioner.
( 2 ) THE aforesaid complaint Case being Case No. C-1024 of 2003 was initiated on the basis of complaint filed by the opposite party (in short O. P.) namely M/s. H. V. Doshi and Bros. Pvt. Ltd. The gist of the complaint may be summarised as follows.
( 3 ) THE accused No. 1 company incorporated under the Companies Act is engaged in manufacturing various products including manufacture of engineering files and tools and also marketing such products. Accused Nos. 2, 3 and 4 are all working for gain in their respective posts under accused No. 1 company. The complainant is acting as an 'indenting Agent' for and on behalf of accused No. 1 for decades and from time to time whenever renewal of such indenting agency had taken place some changes in the terms, conditions and modalities were introduced. Since November, 2000 accused No. 1 formally started its private office at Calcutta for Eastern Region and accused No. 4 was posted there to conduct and looking after business of accused No. 1. On or about 27th December, 2000 the accused Nos. 2 and 3 while visiting Calcutta for their official business met Sri Sundeep Doshi, Managing Director and Anil doshi, a Director of complainant company at their office for finalising the modalities of indenting agency for the year 2001 onwards. During the meeting, the accused Nos. 2, 3 and 4 intimated the Managing Director and Director of complainant that since they were accepting collateral securities for indenting agency from other agents and as such, the complainant was also required to pay or provide for collateral securities for such indenting agency. It was decided that the complainant would pay Rs. 25 lacs as collateral securities in equal instalments by cheque or bank draft in favour of accused No. 1 and after encashing the first cheque or bank draft, the accused Nos. 2, 3 and 4 would then initiate to fulfil the obligation by providing a formal agreement for indenting agency in favour of the complainant.
( 4 ) IN terms of the aforesaid agreement the complainant issued five undated cheques in favour of 'raymond Limited Division: J. K. Files and Tools' by way of collateral securities as stated under: Sr. No. Cheque No. Drawn on Amount 1. 812567 Allahabad Bank, Stephen House, Calcutta. Rs. 500,000/- 2. 812568 Allahabad Bank, Stephen House, Calcutta. 3. 812569 Allahabad Bank, Stephen House, Calcutta. Rs. 500,000/- Rs. 500,000/- Rs. 500,000/- 4. 812570 Allahabad Bank, Stephen House, Calcutta. Rs. 500,000/- 5. 812571 Allahabad Bank, Stephen House, Calcutta.
( 5 ) THE complainant along with the forwarding letter dated 29. 12. 2000 addressed to accused No. 3 sent the aforesaid five cheques to accused No. 1 and the said letter is marked as Annexure - A in the complaint. In spite of there being no written confirmation from the complainant that the said cheques to be deposited for encashment, the accused Nos. 2, 3 and 4 in conspiracy with each other inserted in the date space, the date 21. 4. 01 in the cheques bearing nos. 812568 and 812569 and submitted the cheques for encashment in the standard Chartered Grindless Bank at 19, N. S. Road, Calcutta-1. The cheque bearing No. 812568 for Rs. 5 lacs was encashed but the cheque bearing No. 812569 was returned by the bank on 21. 4. 01 with remark 'insufficient fund'. The complainant sent written protest to that effect by a letter dated 9. 5. 01 addressed to accused No. 2 and demanded return of the remaining cheques and it was received by accused
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