2019 Supreme(Mad) 2800

IN THE HIGH COURT OF MADRAS
M. Nirmal Kumar, J.
Ashok Giri and Ors. - Appellants
Vs.
State and Ors. - Respondents
Crl. O.P. No. 15780 of 2014 and Crl. M.P. No. 1 of 2014
Decided On : 13-09-2019

Headnote:

Indian Penal Code,1860 - 406, 409, 420, 468 and 471 - Transfer of Property Act, - Section 48 - Indian Evidence Act - Sections 24 to 26 – Quash - Shares have been transferred - Case is that respondent initially started a Proprietary concern in name Infrastructure Engineering Private Limited (VIEPL) in - Later converted Proprietary concern into a company - During petitioner joined respondents company he was looking after Accounts Administration Income Tax Bank Job New Auditors Customers Suppliers Software complainant was taking care unit of company keeping faith and trust on petitioner complainant did not question about Administration of the company - When complainant asked for the accounts of the said company petitioner stated that new software for accounts have been installed hence the accounts could not accessed immediately - By giving such reasons, he was delaying in producing accounts - petitioner by making wrong representation and giving false promises borrowed substantial amount in the name of the company and misappropriated money illegally for his personal benefits –Held, Petitioners property handed over is company for which payments were made following which shares have been transferred which are enlisted in Share Purchase which is not in dispute Likewise grievance of complainant is that property in Nellore and have not been reclaimed from bank by petitioner which cannot be the reason for filing the criminal case - other charge that residential house property of petitioners has been entrusted to Singh by way of ESCROW agreement said Escrow Agreement is non est in law and the entire case is only violation of contractual obligations and not a criminal case - Director of company - Further as per the Escrow agreement third party is to handover the document or property to promise this case petitioner - Admittedly complainant is not third party in Escrow Agreement - Escrow Agreement usually involves an independent third party called as Escrow agent who holds the assets until the specified condition of contract are met - In this case Escrow agent is not an independent third party - Escrow agreement is not binding on complainant since he is not a party to Escrow agreement and there is no contract between petitioners and complainant - Thus looking at any angle the Escrow Agreement is law - Hence entire case of prosecution is based on Escrow Agreement - In view of above no case could be proceeded against petitioners - Court in various cases of breach of trust may be both civil wrong and a criminal offence but in this case it dominantly a civil wrong - But of above case it is only a civil wrong - On factual matrix of case it is found that Court cannot be utilized for any oblique purpose and no useful purpose is likely to be served by allowing a criminal prosecution to continue - Admittedly transaction between petitioners and complainant is only a commercial transaction or a contractual dispute and it is seen that in this matter dispute is essentially civil in nature which has been given a cloak of criminal offence Court would not loose sight of totality circumstances surrounding case and would not hesitate come forward afford relief when it is of view that one is being falsely proceeded against - Supreme Court in case of State of Haryana and others Versus and others reported has by way of illustration indicated that where a criminal proceedings is manifestly attended with mala fides and/or where the proceedings is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge, the proceedings could be quashed Court is of the considered view that matter in issue between parties is purely civil in nature and resort criminal proceedings is mala fide primary document to dispute has been obtained in Central Crime Branch Chennai respondent - In such circumstances continuing proceedings against petitioners would be an abuse of process of Court - Hence the proceedings file of the Special Metropolitan Magistrate for CCB Cases and CBCID Cases - Petition Allowed