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2025 Supreme(Online)(KER) 15726
IN THE HIGH COURT OF KERALA AT ERNAKULAM
K. Babu, J
Saleem Naduthodi S/o Late Ahammedkutty – Appellant
Versus
State Of Kerala – Respondent
CRL.REV.PET NO. 725 OF 2023
Advocate Appeared:
For the Appellant : ADVS. MARTIN JOSE P THOMAS P.KURUVILLA(K/420-B/2005) M.A.MOHAMMED SIRAJ(K/1227/1999)
For the Respondent: ADVS. FIROZ K.M. M.SHAJNA(K/1017/2006) SRI.G.SUDHEER, PUBLIC PROSECUTOR
The court affirmed that allegations of cheating under Section 420 IPC were not substantiated, deeming the dispute civil in nature, and upheld the Magistrate's acceptance of the refer report.
Headnote:
(A) Code of Criminal Procedure, 1973 - Section 173(2) - Criminal Revision Petition challenging the order of a Magistrate accepting a refer report and dropping proceedings - The revision petitioner alleged cheating under Section 420 IPC due to non-sharing of profits from a partnership agreement - The Investigating agency concluded the dispute was civil in nature, and the Magistrate accepted this finding. (Paras 2.1, 2.6, 6, 10, 13)
(B) Judicial Reasoning - The court emphasized that a Magistrate's acceptance of a refer report does not require extensive reasoning, but must show consideration of the report - The complainant retains the right to file a second complaint if new facts arise or if there is a manifest error. (Paras 4, 12)
Facts of the case:
The revision petitioner, a Non-Resident Indian, invested Rs.50 Lakhs in a partnership with respondent No.2, alleging cheating when profits were not shared. The police initially did not register an FIR, leading to further legal actions. (Paras 2.1, 2.2)
Findings of Court:
The Magistrate found no elements of cheating and accepted the refer report, allowing the complainant to pursue civil remedies. (Paras 6, 13)
Issues: The main issues included whether the allegations constituted a criminal offence or were purely civil in nature and the adequacy of the Magistrate's reasoning in accepting the refer report. (Paras 10, 13)
Ratio Decidendi: The court held that the Magistrate's decision to accept the refer report was justified as there was no evidence of cheating, and the complainant could pursue civil action. (Paras 10, 13)
Result: The Criminal Revision Petition stands disposed of.
ORDER :
The order of a learned Magistrate accepting a report by the Investigating agency under Section 173 (2) Cr.PC and dropping the proceedings is under challenge at the instance of the defacto complainant.
2. The facts leading to the Criminal Revision Petition are as follows:
2.1. The revision petitioner, a Non-Resident Indian working in Abu Dhabi, on 17.02.2012, entered into an agreement with respondent No.2, whereby the former invested a sum of Rs.50 Lakhs in an industrial unit named “K.E Stone Crusher” in the Karnataka State. In 2011, the parties started negotiations. The revision petitioner handed over Rs.40 Lakhs on 30.12.2011 to respondent No.2 at his office at Manjeri. In February, 2012, the revision petitioner paid the balance amount of Rs.10 Lakhs and the agreement referred to above was executed between them.
2.2. On 22.11.2017, the revision petitioner filed a complaint before the Sub Inspector of Police, Manjeri Police Station, alleging an offence punishable under Section 420 of the IPC against respondent No.2. In the complaint, the revision petitioner alleged that respondent No.2 deceived the revision petitioner after dishonestly inducing him to invest in the business agreeing to share profits, but failed to share any profit as promised. The Police did not register an FIR based on the complaint dated 22.11.2017 filed by the revision petitioner. After that, the revision petitioner filed CMP No. 3391/2017 before the Chief Judicial Magistrate Court, Manjeri on 20.12.2017. The learned Chief Judicial Magistrate forwarded the complaint to the Police under Section 156(3) Cr.PC. The Police registered FIR No.588/2017 of Manjeri Police Station.
2.3. The revision petitioner approached this Court filing W.P(C) No.11213/2018, seeking to hand over the investigation to a different agency. This Court allowed the writ petition with a direction to entrust the investigation to the Economic Offence Wing of the CBCID. The revision petitioner filed Crl.MP No.909/2021 before the Chief Judicial Magistrate Court, Manjeri, seeking monitoring of the Court in the investigation. In the petition, the learned Chief Judicial Magistrate directed the Investigating Agency to expedite the investigation. The learned Magistrate, however, observed that the investigation was proceeding in the right direction. The Court directed the Investigating Agency to file reports regarding the progress of the investigation once in a fortnight as per the order dated 11.08.2021.
2.4. The Investigating Officer filed various reports showing the progress of the investigation. One of such report is Anx.I, wherein the Investigating Officer reported that as the revision petitioner specifically alleged that in the partnership agreement dated 17.02.2012 entered into between the revision petitioner and respondent No.2, the latter had misrepresented that he was the owner of the land where the crusher unit was functioning, there was prima facie an element of cheating. However, the Investigating Officer sought time to verify the genuineness of the allegation.
2.5. The Investigating agency, on 28.12.2020, submitted a final report under the caption “refer charge” on the ground that the dispute was purely of civil nature. The revision petitioner filed CMP No.909/2021, raising objections to the final report (refer report) submitted by the Investigating agency. The learned Chief Judicial Magistrate, as per order dated 15.02.2022, returned the report to the Investigating agency under Section 156(3) Cr.PC for further investigation based on the relevant documents, including the partnership agreement and the licence in the name of respondent No.2.
2.6. The Investigating Officer conducted further investigation and submitted a 'refer report' based on the conclusion that the ingredients of the alleged offence have not been revealed. The relevant portion of the report submitted by the Investigating Officer reads thus:
“The accused purchased a crusher at Maldot, Karaya Village, Balthangadi Taluk, Da
