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2022 Supreme(Raj) 2339
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
Birendra Kumar, J.
Pawan Kumar Jain & Ors. – Appellants
Versus
State Of Rajasthan & Ors. – Respondents
S.B. Criminal Miscellaneous (Petition) No. 1985 of 2022
Decided On : 02-08-2022
Ms. Suruchi Kasliwal, Advocate, with Mr. Vikram Singh, Advocate, for the Appellant
Mr. Prashant Sharma, PP, Mr. Pradeep Kumar Choudhary, Advocate, Mr. Karan Avdichya, Advocate, Ms. Saloni Dagur, Advocate, for the Respondent.
Criminal proceedings should not be used to settle civil disputes, and the ingredients of criminal offences must be established.
Headnote:
FIR Quashing - Civil Dispute - IPC 420, 406, 120B - [Mohammed Ibrahim & ors. Vs. State of Bihar & Anr., (2009) 8 SCC 751, G. Sagar Suri Vs. State of U.P. (2000) 2 SCC 636, Binod Kumar & ors. Vs. State of Bihar & Anr., (2014) 10 SCC 663, Prof. R.K. Vijayasarathy & Anr., Vs. Sudha Seetharam & Anr., (2019) 16 SCC 739, Vijayander Kumar & ors. Vs. State of Rajasthan & Anr., (2014) 3 SCC 389, Amit Kapoor Vs. Ramesh Chander & Anr., (2012) 9 SCC 460, Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra & ors., 2021 SCC OnLine SC 315
Fact of the Case:
The petitioners sought quashing of FIR for offences under IPC Sections 420, 406, 120B, alleging a civil dispute being given the cloak of a criminal case.
Finding of the Court:
The court found that the ingredients of the alleged offences were not made out, and the continuation of criminal proceedings would amount to an abuse of the process of the Court.
Issues: Whether the ingredients of the alleged offences were made out and if the continuation of criminal proceedings was justified.
Ratio Decidendi: The court emphasized that criminal courts should ensure proceedings are not used to settle civil disputes and that the ingredients of criminal offences must be established. It also highlighted the importance of distinguishing between civil wrongs and criminal offences.
Final Decision: The court quashed the impugned FIR and subsequent proceedings, allowing the petition.
JUDGMENT
1. The petitioners have sought for quashing of FIR No. 0021/2022 registered at Kaladera Police Station, District Jaipur (Rural) for offences under Section 420, 406 and 120B IPC on the information of respondent No.2.
2. The challenge is on the ground that no ingredients of offences alleged are made out and a pure civil dispute is being given the cloak of a criminal case just to put undue pressure.
3. Undisputed facts of this case are that the petitioners are Directors of M/s. Kotsons Private Limited, Alwar whereas the respondent company is engaged in business of manufacturing and sale of transformers. The petitioners had approached to the complainant, the Managing Director of respondent Company, and the parties agreed that respondent company would supply transformers to the petitioners' company and after sale of the transformers to different customers, the petitioners company would make payment of the purchased transformers within a period of 30 days. The parties were smoothly engaged in the dealing since more than 30 years.
4. Allegation in the FIR is that initially payments were made by the petitioner company on time, however gradually, the petitioners company started making payment of lesser amount with promise to pay the remaining in future and they started putting orders for more supply of the transformers. The petitioners company lastly made payment in January 2020 and thereafter pretending the effect of COVID stopped payment on one pretext or the other, however continued placing orders for supply of transformers and getting the supply till the end of 2021 without payment made to the complainant company. The complainant gathered from the market that the petitioners company is heavily indebted to different banks and financial institutions as well as business dealers. In spite of the aforesaid situation, the petitioners suppressed the aforesaid fact to the complainant and continued placing orders for supply of transformers and getting the supply. As a result whereof the petitioners carry dues of Rs. 1,02,19,924/- of the complainant. The complainant asserts that if the petitioners would have disclosed his financial bankruptcy, the complainant would not have supplied more transformers, therefore, the complainant was misled by the petitioners company.
5. In Mohammed Ibrahim & ors. Vs. State of Bihar & Anr., (2009) 8 SCC 751, the Hon'ble Supreme Court relied on earlier judgment in G. Sagar Suri Vs. State of U.P. (2000) 2 SCC 636 and stated in Para 8 of the judgment as follows:
"7. This Court has time and again drawn attention to the growing tendency of complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurise parties to settle civil disputes. But at the same, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes. [See: G. Sagar Suri v. State of U.P. [2000 (2) SCC 636] and Indian Oil Corporation vs. NEPC India Ltd. [2006 (6) SCC 736]. Let us examine the matter keeping the said principles in mind."
6. Learned counsel for the petitioners submits that it is not disputed that the petitioner had sent a letter dated 18.1.2021 to the respondent informing therein about the financial constraint of the company. A copy of the letter at Annexure-3, the relevant portion is being reproduced below:
"We would like to state that we have the payment due of Rs. 63000029.85 Rs. Sixty three lakh and twenty nine rupees point eighty five only. Outstanding in our books of accounts in our Kostons Private Limited Alwar Unit as date 18.01.2021 of your company. We would like to inform you that we ar
