IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MALASRI NANDI, J.
Smti Teli Kechi W/O Sri Teli Tada Camdir - Appellant
Versus
Vijay Kr. Agarwala, S/O Sri Banwarilal Agarwala and Anr. – Respondent
Crl.Pet./906/2015
Decided on : 21-08-2024
Criminal - Breach of Contract - IPC Sections 406, 420, 447, 294, 506 - The Court analyzed the applicability of various IPC sections concerning criminal breach of trust and cheating, emphasizing the need for prima facie evidence at the cognizance stage.
Fact of the Case:
The petitioner, a contractor, engaged another party to complete a road construction contract. After partial completion, the new party failed to maintain the work, leading to a complaint against the petitioner for various IPC offenses.
Finding of the Court:
The Court found that the trial Court had sufficient grounds to take cognizance of the complaint, as the allegations, if proven, could constitute offenses under the IPC, and the petitioner failed to demonstrate a lack of evidence.
Issues: Whether the trial Court erred in taking cognizance of the complaint against the petitioner under IPC sections related to criminal breach of trust and cheating.
Ratio Decidendi: The Court held that at the cognizance stage, the magistrate only needs to ascertain if the complaint and witness statements disclose a prima facie case, without delving into the merits of the allegations.
Result: The criminal petition is dismissed, allowing the trial Court to proceed with the case.
JUDGMENT :
MALASRI NANDI, J.
Heard Mr. U.J. Saikia, learned counsel for the petitioner. Also heard Mr. B. Sharma, learned Additional PP representing the State, respondent No. 2. None appears for the respondent No. 1.
2. The petitioner is a resident of Taying Tarang in the district of Papum Pare, Arunachal Pradesh. She is a registered contractor under the government of Arunachal Pradesh and she is running her business in the name of M/s Huto Trading Agency at Doimukh, Arunachal Pradesh. She was allotted a contract work to construct the road from old Abali to Ingino via Harupahar, Arango and Denlo, Arunachal Pradesh under PMGSY by the Executive Engineer, Rural Works Department, Roing, Arunachal Pradesh and accordingly, an agreement was executed to do that work.
3. The petitioner entrusted one Mutchu Mithi, proprietor of M/s M. M. Projects to look after and supervise the aforesaid work and to that effect the petitioner executed a power of attorney in favour of Mutchu Mithi. However, three/fourth of the said contract work was completed under the supervision of Mutchu Mithi and thereafter, Mutchu Mithi showed his inability to continue with the work and he introduced the opposite party no. 1 with the petitioner and told that the opposite party no. 1 was willing to do the remaining works including the maintenance for five years.
4. As desired by the opposite party No. 1, the petitioner executed another agreement with Mutchu Mithi and the opposite party No. 1 and thereafter, a special power of attorney was also executed by the petitioner in favour of the opposite party no. 1 to look after all the works of the contract and to collect the amounts of bills from the concerned departments.
5. The opposite party No. 1 had done the remaining 1/4th of the contract work and the maintenance for one and half years. For the work done by the opposite party no. 1, the concerned department had made the necessary payments. Since September 2013, no maintenance works had been carried out by the opposite party No. 1. As the maintenance work was not done, the Assistant Engineer, Roing issued a letter to the petitioner to carry out the same immediately. On receipt of the said letter, the petitioner asked the opposite party no. 1 to complete the work but inspite of doing the work the opposite party no. 1 filed the instant complaint case against the petitioner and the Executive Engineer, Roing.
6. Learned counsel for the petitioner has argued that in the complaint petition as well as in his statement recorded u/s 200 Cr.P.C, the complainant/opposite party No. 1 alleged that the petitioner had given the power of attorney to one Raja Lenggi without revoking the power of attorney given to him but to substantiate the fact, the opposite party No. 1 failed to produce any documents. Further, in the statement of the witness recorded u/s 202 Cr.P.C, he did not state anything against the petitioner.
7. It is further submitted that the trial court had taken cognizance of the case and issued the process in question in a mechanical manner. The trial court before issuing process against the petitioner ought to have satisfied that the complainant/opposite no. 1 whether entitled for the amount and any offence was made out under criminal law. The learned trial court overlooked the fact that if any cause of action arose against the petitioner, the cause of action was at Arunachal Pradesh as the agreement and the power of attorney were executed at Doimukh, Arunachal Pradesh and the place of doing the contract work was also at Arunachal Pradesh.
8. According to learned counsel for the petitioner, even if the complaint and the initial statement of the witnesses are taken on their face value, no offence u/s 406/420/447/294/506 IPC has been disclosed against the petitioner. Hence, the complaint case vide No. CR94/15 is illegal and in violation of the statutory provisions of law which is liable to be quashed.
9. In response, learned Addl.P.P. submits that though it is alleged by the learned
K. Ashoka –vs- N.L.Chandrashekar & Ors reported in (2009) 5 SCC 199
R.Kalayani vs- Janak C.Mehta reported in (2009) 1 SCC 516
AI
The Court reaffirmed that a complaint can only be quashed if it does not disclose a prima facie case of an offense, emphasizing the distinction between civil and criminal matters.
A complaint alleging criminal breach of trust and cheating can proceed even if it arises from a contractual dispute, provided it meets the prima facie standard for criminal offences.
The Court held that the essential ingredients of the offences alleged against the petitioners are not present. The Court also noted that the dispute between the parties is essentially civil in nature....
The court established that inadequate notice to a complainant in criminal proceedings constitutes an abuse of process, and emphasized the distinction between civil and criminal disputes.
A civil dispute may contain elements of criminal wrongdoing, and the existence of a civil remedy does not bar the initiation of criminal proceedings if the allegations suggest potential criminal offe....
Fraudulent intent at the inception of a transaction is essential to establish cheating; mere breach of contract does not constitute a criminal offence.
Criminal intent in property transactions leads to proceedings under IPC, regardless of parallel civil suits.
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