1. By way of instant petition, petitioners seek quashment of Criminal Complaint No.40 instituted on 21.02.2009 titled “M/s Pharose Remedies Ltd. and Anr. Vs. M/s Manish Pharmaceuticals Pvt. Ltd. and Ors.” for offences under Sections 406, 418, 420, 420-A, 422 read with Section 120-B Ranbir Penal code pending in the court of learned 1st Addl. Munsiff, Jammu. Petitioners also seek quashing of order dated 21.02.2009 by virtue of which cognizance has been taken in the complaint and subsequent proceedings thereto.

2. The main facts as enumerated in this petition are that on 11th March. 2005, an Agreement has been reached between M/s Pharose Remedies Ltd. and M/s Maneesh Pharmaceutical Private Limited at Mumbai regarding getting pharmaceutical products manufactured by the respondents-company. As per the Agreement necessary raw materials including packing materials required by M/s Pharose Remedies Limited for processing and packaging of the finished products were to be supplied by the petitioners. Fulfilling the part of the agreement, petitioners supplied raw material along with all necessary material to the respondents M/s Pharose Remedies Ltd. Petitioners also supplied machinery to respondents to upgrade the yield and quality of product. However, ownership of the new machinery remains with petitioner No.l. It is necessary to mention here that the ledger copy attached with the complaint shows that the total business transactions to the tune of Rs.5.50 crore had taken place between the petitioners and respondents. The accounts also clarified that petitioner No.2 had already paid Rs.3.00 crore apart from supplying raw material/packaging material worth more than Rs.1.00 crore to the respondents during the said period since the business was running good and smoothly between them. In the mean time, respondents in order to get the undue profit because of the high demand of the product, violated the terms and conditions of the agreement and started manufacturing the said product on their own accord without any intimation to the M/s Maneesh Pharmaceutical Private Limited and thus violated the terms of agreement by purchasing raw material directly from the market and fraudulently selling it in the market which was otherwise marketed through petitioner supplier, namely Division Svizera Healthcare. Respondents were time and again intimated by the petitioners to stop such malpractice and remain strict to the terms and conditions of the agreement, but the respondents kept deaf ear and did not respond to the genuine advice of the petitioners. Since petitioners are dealing with pharmaceutical products and their manufacturing requires certain specification, respondents failed to follow the specifications and manufactured low quality products, consequent thereof, petitioners stopped the supply of raw material and taking the finished products from respondent i.e. M/s Pherose Remedies Limited. Respondent’s willful violation and breach of agreement caused huge pecuniary loss to the petitioners. Instead of liquidating the loss occurred to the petitioners, respondents filed complaint in frustration by invoking the jurisdiction of learned court and submitted in the complaint that they have suffered a loss of Rs.74,71,486/-. Instead of approaching the civil court, which is appropriate forum for adjudication of matter, respondents on the one hand preferred shortcut method by initiating criminal proceedings against the petitioners by filing impugned complaint simply to mentally harass and embarrass the petitioners and on the other hand respondents very tactfully escaped the liability of paying Court fee.

3. Feeling aggrieved of the impugned complaint, issuance of process and further proceedings, the petitioners have prayed for quashing of the same, inter alia, on the following grounds:—

i/ That the impugned complaint and the cognizance taken therein and process issued by the learned court below are a gross misuse of law as such deserves to be quashed.

ii/