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1998 Supreme(P&H) 1162
PUNJAB AND HARYANA HIGH COURT
S.C. Malte, J.
Punjab Anand Lamp Industries Limited - Petitioners
Versus
M/s. Asahi Video Pvt. Ltd. - Respondent
Criminal Misc. No. 17023/M of 1998 and Crl. M. No. 17024, 21306, 23314, 24315 of 1996.
Decided On : 15 September, 1998
For the Petitioner:Mr. R.S. Cheema, Senior Advocate with Mr. Naveen Mahajan, Advocate.
For the Respondent:Mr. Pankaj Bhardwaj, Advocate.
The ingredients of the offences alleged under Sections 403, 406, 418, and 427 of the Indian Penal Code were not established in the complaint and the evidence before the court.
Headnote:
CRIMINAL LAW - QUASHING OF COMPLAINT - OFFENCES UNDER SECTIONS 403, 406, 418, 427 READ WITH 120-B OF THE INDIAN PENAL CODE - INTERPRETATION OF AGREEMENT - INGREDIENTS OF OFFENCES NOT ESTABLISHED - COMPLAINT AND SUMMONING ORDER QUASHED.
Fact of the Case:
The petitioners, consisting of Philips Electronics and its Chairman and Directors, and other companies and individuals, were accused of offences under Sections 403, 406, 418, 427 read with 120-B of the Indian Penal Code. The complaint arose from a joint venture agreement between Philips and the complainants, which allegedly entitled the complainants to purchase 10% of the lamps manufactured by Philips. The accused denied the complainants' entitlement, claiming that the agreement was personal to one of the complainants and terminated upon his death.
Finding of the Court:
The court found that the dispute between the parties was based on the interpretation of the agreement and that the ingredients of the offences alleged had not been established. The court held that the accused did not dishonestly misappropriate or convert the property, that there was no criminal breach of trust, that there was no cheating with the knowledge that wrongful loss would ensue, and that there was no damage caused by mischief.
Issues: 1. Whether the complaint and the evidence before the court led by the complainants were sufficient to warrant criminal action. 2. Whether the ingredients of the offences alleged had been established.
Ratio Decidendi: 1. The court held that in a dispute arising from a civil litigation, extra care should be taken to ascertain whether the civil controversy also contained the necessary ingredients to spell out the offences. 2. The court found that the controversy between the parties rested on the interpretation of certain clauses of the agreement and that there was no dishonest intention on the part of the accused. 3. The court held that the basic ingredient of entrustment of property was lacking in the case of the offence under Section 406 IPC. 4. The court held that the offence of cheating under Section 418 IPC was not established as there was no fraudulent or dishonest inducement from the accused to the complainants. 5. The court held that the offence of causing damage by mischief under Section 427 IPC was not established as there was no destruction of property, change in the property, or change in the situation.
Final Decision: The court allowed the petitions and quashed the summoning order and the complaint against the petitioners and the other accused.
S.C. Malte, J. (Oral) - Both these petitions are being disposed of by this common order as the same have arisen out of proceedings in a complaint case.
2. The petitioners have sought quashing of the complaint and the summoning order issued by the Sub-Divisional Judicial Magistrate, Kharar, for the offences under Sections 403, 406, 418, 427 read with 120-B of the Indian Penal Code.
3. The complainant/respondents are the Companies incorporated under the Companies Act. The petitioners, who are 37 in number, consist of M/s. Philips Electronics and their Chairman and Directors, in all 16, who all are shown to be residents of Netherlands. Accused 18, is a Company having office at Mohali, District Ropar, Punjab. Accused 19 is the Chairman of accused 18. Accused 20 to 23 are also the office-bearers of accused 18 M/s. Punjab Anand Lamp Industries Ltd. Accused 24 is Philips India Limited, which was known as Peico Electronics & Electricals Limited. Accused 25 is said to be the Chairman, without clarifying of what concern or institution he is the Chairman of. Accused 26 to 37 are the Directors of M/s. Philips India Limited (accused 24).
4. The contention raised by the complaints is that by a joint venture agreement dated 17.4.1991 between N.V. Philips as the first part, Peico Electronics as the second part, Mr. C.L. Anand as the third part and M/s. Punjab Anand Video Limited as the forth party, it was agreed that 10% of the lamps manufactured by M/s Pali shall be supplied to M/s. Anand and they are entitled to sell it under the trade name owned by and licensed to M/s Anand. At this juncture, it would be necessary to clarify the two terms, namely the terms "Mr. C.L. Anand" which is referred as "Mr. Anand" in his personal capacity, and the term "Anand" which in terms of the agreement referred above, means M/s. Anand as defined in the agreement. A detailed reference to scope of the two terms as referred is not necessary for the disposal of this matter. Suffice it to clarify that the term "Mr. Anand" refers to person; whereas the term "Anand" refers to certain trade name. It appears that this aspect has given rise to some controversy between the parties that ultimately led the complainants to file the complaint in the trial Court.
5. The grievance by the complainants is that 10% products which the accused had agreed to supply to the complainants has been denied by the accused with an intention to cause them loss and thereby offences as mentioned above have been spelt out. It also appears that prior to the filing of the complaint, there was some exchange of notice also between the parties. The counsel for the complainants brought my attention to para 40 of the complaint in which it is alleged that with mala fide and dishonest intention, the accused by their letter dated July 21, 1997, denied the rights of the complainants to buy lamps to the extent of their entitlement, by alleging that the said agreement was personal to Mr. C.L. Anand and upon his death, the said agreement came to an end. It is contended by the complainants that as per terms of the agreement, the right to purchase 10% products of the lamps was not only personal to Mr. C.L. Anand, but the complainants also are entitled to take the benefit of that clause. In the context of that, the counsel from both the sides brought my attention to certain exchange of letters between two sides. One of the letters that pertains to the controversy is Annexure P-13 dated July 21, 1997. It has been informed by Punjab Anand Lamp Industries Ltd. (Accused 18) to the complainants side that the terms of the agreement referred above was personal right available to Mr. C.L. Anand and did not survive upon his death. However, in the concluding para of the said letter, it is clarified that without prejudice to the contentions referred above, M/s. Punjab Anand Lamps Industries Ltd. may consider the supply of goods to the complainants provided the complainants undertake not to sell these lamps under
