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2021 Supreme(Ori) 128
IN THE HIGH COURT OF ORISSA, CUTTACK
S.K. Panigrahi, J.
Jitendra Kumar Behera & Anr. - Appellants
Versus
State Of Odisha & Ors. - Respondents
CRLMP No. 527 of 2021
Decided On : 01-09-2021
M/s. V. Narasingh, S. Das and S. Devi, Advocates, for the Appellant; Mr. Karunakar Gaya, Additional Standing Counsel, Mr. B.K. Satpathy, Advocate; (For Opp. Party No.5) Mr. B.P.B. Bahali, Advocate, (For Intervenor), for the Respondent.
The main legal point established in the judgment is the need for careful application of criminal law into civil disputes, emphasizing that the mere fact that a complaint relates to a commercial transaction or breach of contract is not by itself a ground to quash the criminal proceedings.
Headnote:
Criminal Offence - Possession of Leased Property - IPC 341/294/420/506/34 - The court discussed the nature of civil and criminal disputes in commercial transactions and contractual disputes, emphasizing that the mere fact that a complaint relates to a commercial transaction or breach of contract is not by itself a ground to quash the criminal proceedings. The court highlighted the essential ingredients of Section 420 IPC and emphasized that mere breach of contract does not amount to cheating unless fraudulent or dishonest intention is shown at the beginning of the transaction. The court also cautioned against the trend of criminalizing purely civil matters and emphasized the need for careful application of criminal law into civil disputes.
Fact of the Case:
The dispute concerned the possession of a leased Piling Rig machine between the petitioner-company and the Opposite Party No.5. The petitioner defaulted on monthly payments, leading to the termination of the lease agreement and a subsequent attempt by Opposite Party No.5 to recover the property.
Finding of the Court:
The court found that no case was made out against the petitioner-company under Section 420 IPC as there was no indication of dishonest or fraudulent intention at the time of defaulting on payments. The court also noted the trend of frivolous criminal complaints being filed to settle civil disputes and emphasized the need to prevent abuse of the process of law.
Issues: The primary issue was whether the criminal proceedings against the petitioner should be quashed, considering the nature of the dispute and the allegations under Section 420 IPC.
Ratio Decidendi: The court emphasized that the mere fact that a complaint relates to a commercial transaction or breach of contract is not by itself a ground to quash the criminal proceedings. It also highlighted the essential ingredients of Section 420 IPC and cautioned against the trend of criminalizing purely civil matters.
Final Decision: The application to quash the proceeding in C.T Case No.1460 of 2021 arising out of INFOCITY P.S. Case No.053 dated 08.03.2021 was allowed, and all consequential proceedings pursuant thereto were terminated. The court also clarified that other proceedings connected to the present lis shall be decided on their own merit without being influenced by the observations made in the judgment.
JUDGMENT
S.K. Panigrahi, J. - The petitioners in this petition seek to quash the proceeding in C.T. Case No.1460 of 2021 arising out of INFOCITY P.S. Case No.053 dated 08.03.2021 pending before the court of the learned S.D.J.M., Bhubaneswar under Sections 341/294/420/506/34 of IPC.
2. On perusal of the FIR on record, the facts are such that Shankar Kumar Jha, CEO, Omnitude Services Pvt. Ltd. (hereinafter 'Opp. Party No. 5') purchased a Piling Rig Machine after taking loan from SREI Finance Company (hereinafter 'financer'). Jitendra Kumar Behera, Owner, Trayesh Construction Pvt. Ltd. (hereinafter 'Petitioner-Company') leased the aforementioned machine from Omnitude Services for 48 months at a monthly rent of Rs.12,98,000.00 for the first 12 months and rent of Rs.8,26,000.00 per month for the remaining 36 months.
The petitioner-company also paid Omnitude Services Rs.20,00,000.00 as a security deposit. The petitioner-Company defaulted his monthly payments in March 2020 after paying two instalments. Consequentially, Opposite Party No.5 terminated the lease agreement and intimated the same to the petitioner. On 04.03.2021, Opposite Party No.5 tried to recover the aforementioned property but the petitioner did not let them take possession of the same.
3. Learned counsel for the petitioners refuted the version as presented by the Opposite Party No. 5. He submitted that the financer wanted to recover the leased property from the petitioners because the Opposite Party No. 5 failed to pay the instalments of Finance Company in the first place. He also highlighted Clause 19.8 of the lease agreement wherein it was agreed that in case the Lessor fails to make EMI payments to the financer, the lessee can make direct payment to the financer. Accordingly, the petitioner has paid a sum of Rs.21,02,000.00 directly to the financer on behalf of Opposite Party No.5. Moreover, the lease agreement is self-contained and provides remedy for breach of contract. He, therefore, contended that the matter in question is purely civil/contractual and devoid of any ingredients of criminal nature.
Hence, the impugned FIR and consequential proceedings may be quashed as it is clear abuse of the process of law. 4. Learned counsel for the Opposite Party No.5 submitted that as per Clause 10(iii) of the aforementioned lease agreement, the lessor ('Opp. Party No. 5') has the right to repossess the leased property, without demand or notice, if the lessee ('petitioner') defaults in payment of rent. As the petitioner-Company defaulted in his payments and the agreement was terminated, the Petitioner is obliged to hand over the leased property to Opposite Party No.5.
He urged that in view of the highhanded conduct of the Petitioner, the petition be dismissed.
5. Heard Mr. V. Narasingh, learned Counsel appearing for the petitioners, Mr. B.K. Satpathy, learned Counsel for Opposite Party No.5 and Mr. B.P. Bahali, learned counsel appearing for the intervenor. In addition, this Court perused the case records.
6. There might be a dispute between the parties, which may be, purely civil or criminal in nature. For deciding the dispute purely of civil in nature, the aggrieved person is required to seek civil remedy in a civil court of law whereas for dispute of criminal nature, the aggrieved person has to approach appropriate forum for initiating criminal proceedings against the offender. In a mixed or hybrid kind of case involving both civil disputes and criminal offences, the aggrieved person can file a civil suit as well as approach the concerned authorities or a criminal court for taking criminal action against the offender. These disputes can be personal or private or may relate to commercial transactions or a contractual dispute. In Indian Oil Corporation v. NEPC India Ltd., (2006) 6 SCC 736, it was observed:
'12 (v). A given set of facts may make out: (a) purely a civil wrong; or(b) purely a criminal offence; or(c) a civil wrong as also a criminal offence.
A commercial transaction o
