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2022 Supreme(MP) 897

IN THE HIGH COURT OF MADHYA PRADESH
Nandita Dubey, J.
Aabid Hussain – Appellant
Versus
State of Madhya Pradesh – Respondent
M.Cr.C. No. 11592/2021
Decided On : 29-06-2022

Advocates Appeared:
Shri Mohan Sausarkar, Advocate, for the Appellant; Shri Aditya Gupta, Panel Lawyer for the respondent/State and Shri Shailendra Singh, Advocate for respondent No.2

Headnote:

Criminal Offence - Quashing of FIR - Sections 409, 420 of I.P.C. - Indian Oil Corporation Vs. NEPC India Ltd. (2006) 6 SCC 736, G. Sagar Suri and another vs State of U.P. and others (2000) 2 SCC 636, Vijayander Kumar and others Vs. State of Rajasthan and another (2014) 3 SCC 389, Dalip Kuar and others Vs. Jagnar Singh and another (2009) 14 SCC 696, Hridaya Ranjan Prasad Verma and others Vs. State of Bihar and another (2000) 4 SCC 168 - The court discussed the legal provisions of Sections 409 and 420 of the I.P.C. and emphasized the distinction between civil disputes and criminal cases, highlighting the need for fraudulent or dishonest intention to constitute an offence of cheating. The court also emphasized the importance of intention at the time of making a promise or representation, and the necessity to show ownership of the property remaining with the transferor. The judgment underscored the growing tendency to convert civil disputes into criminal cases and the need for caution in exercising jurisdiction under Section 482 of the Cr.P.C.

Fact of the Case:

The complainant alleged that the accused destroyed a cable network and started his own, refused to share profits, and did not return the invested money. The accused argued that the agreement was enforceable only until 2010 and that the allegations did not constitute an offence under Sections 409 and 420 of the I.P.C.

Finding of the Court:

The court found that the allegations did not satisfy the basic ingredients of a criminal offence and constituted a civil wrong. It emphasized the importance of fraudulent or dishonest intention at the time of making a promise or representation, and the necessity to show ownership of the property remaining with the transferor. The court also highlighted the growing tendency to convert civil disputes into criminal cases and the need for caution in exercising jurisdiction under Section 482 of the Cr.P.C.

Issues: Whether the allegations constituted an offence under Sections 409 and 420 of the I.P.C.

Ratio Decidendi: The court emphasized the distinction between civil disputes and criminal cases, the necessity of fraudulent or dishonest intention to constitute an offence of cheating, and the importance of intention at the time of making a promise or representation. It also highlighted the growing tendency to convert civil disputes into criminal cases and the need for caution in exercising jurisdiction under Section 482 of the Cr.P.C.

Final Decision: The MCrC was allowed, and the impugned FIR was quashed and set aside.

JUDGMENT

1. This Misc. Criminal Case under Section 482 of the Cr.P.C. has been preferred for quashing the FIR No. 0010/2021 dated 01.01.2021, registered at Police Station Bhalumada, district Anuppur for the offence punishable under Sections 409 and 420 of the I.P.C.

2. The factual background giving rise to present M.Cr.C. reveals that the complainant/respondent No.2 on 02.01.2021, filed a complaint before Police Station Bhalumada, district Anuppur alleging that in 1995, he and Samrendra Das jointly managed a cable network in the name and style of OM Cable Network. On 28.02.2004, an agreement was executed and four new partners including the present applicant were inducted, in the said firm. As per the agreement, Samrendra Das was managing the network, but later on present applicant started looking after the firm's work. It is alleged that he destroyed the cable network and started his own optical fiber network in the name and style of Raj Cable Network.

Till October, 2015, he distributed the profit to the partners, however after November, 2015, stopped sharing any money/profit with the partners and also refused to give details of the accounts.

On these submissions, it was stated that applicant failed to return the money invested by the complainant and also cheated the complainant. On the basis of these allegations, FIR under Section 409 and 420 of the I.P.C. was registered against the applicant.

3. Learned counsel for the applicant submitted that applicant has been falsely implicated. The allegation relates to violation of terms and conditions of the agreement dated 28.02.2004 and recovery of money and for rendition of account. It is submitted that agreement dated 28.02.2004 was for a period of seven years and enforceable upto 31.12.2010. It is submitted that the Government of India, Ministry of Telecommunication, New Delhi vide notification dated 23.12.2006 has cancelled all the cable network system and introduced a new system Digital Addressable System (DAS). It is submitted that on the face of it the applicant did not commit any offence, so as to attract the provisions of Sections 409 and 420 of I.P.C.. He has placed reliance on Indian Oil Corporation Vs. NEPC India Ltd. and others (2006) 6 SCC 736, wherein the Supreme Court has held :- ,

13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged.

4. He has also relied on G. Sagar Suri and another vs State of U.P. and others (2000) 2 SCC 636, wherein the Supreme Court has observed :-

8.......It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code, Jurisdiction- under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice.

5. Further reliance is placed on Vijayander Kumar and others Vs. State of Rajasthan and another (2014) 3 SCC 389, where the Apex Court has held :-

8. On behalf of the appellants reliance has been placed upon judgments of this Court in the c

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