REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 2048 OF 2008

(Arising out of SLP (Crl.) No.1491 of 2007)

V.Y. Jose & Anr.

… Appellants

Versus

State of Gujarat & Anr.

…

Respondents

J U D G M E N T

S.B. Sinha, J.

1.

Leave granted.

2.

This appeal is directed against a judgment and order dated 4.12.2006

passed by the High Court of Gujarat at Ahmedabad dismissing an

application filed by the appellants herein under Section 482 of the Code of

Criminal Procedure.

3.

Appellant No.1 is a partner of a partnership firm known as M/s.

Premionics (hereinafter referred to as ‘the firm’ for the sake of brevity).

Appellant No.2 is an employee of the said firm.

Respondent No.2, the complainant is also a partnership firm. On or

about 18.10.1997, it placed an order on the firm to manufacture and install a

machine to purify and desalt the dyes of a particular quality and quantity

with the firm. The total manufacturing cost of the said machine worked out

to be at Rs.17,96,488/- including excise duty and other incidental charges.

Second respondent paid a sum of Rs.3,00,000/- to the firm as advance and

part payment of the said consideration. There has been a change in the

specifications of the said machine purported to be on the request of the

second respondent in terms whereof two extra modules thereto were

provided. A revised offer was made. The said machine, although was to be

manufactured and supplied within a period of three months, the same was

not complied with.

4.

A partner of the second respondent along with its technical engineer

visited the site of the firm. Allegedly, it was found that the said machine

did not conform to the specifications contained in the order placed with the

firm. It refused to take the delivery thereof. To the said effect, the second

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respondent, by a letter dated 7.4.1998 called upon the firm to return the

amount of advance, stating :

“Please take a trial your Laboratory as discussed

and concentrate between 25 to 30% & collect it in

a new plastic drum after good cleaning. I am quite

sure that this dye has got a molecular wt. around

400 and p/h in between 4.5 to and I am hopeful

that your R.O. Machine should work for this dye

only and you have manufactured for another. This

is not fair and if you cannot manufacture

accordingly, please return our money.

As per specific order an advance 3 lacs of

Rupees in October 1997, please send stamped

receipt which we have not received so far.”

5.

Second respondent by another letter dated 9.7.1999 called upon the

firm to refund the said amount together with interest thereon, stating :

“Please send demand draft payable at Nadiad of

Rs.3,97,674/- as per accounts below :

Rs.3,00,000

Rs. 22,500

Interest of 5 months.

Rs.3,22,500

Rs. 58,050

Interest of 1998-99

Rs.3,80,550

Rs. 17,124

Interest of 1999-200

(April, May & June)

Rs.3,97,674

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We hope you will do the needful

immediately.”

The firm, by its letter dated 14.7.1999, responded to the said letter of

the Second respondent as under :

“We are in receipt of your letter No.KPH/31/99-

2000 dated 9.7.1999 and are surprised to note your

content therein. As per your order we have

manufactured the system and you had inspected

the system also. We have been reminding you to

take delivery of the system but no action had been

taken from your end so far. We have blocked

material worth more than fourteen lakhs for the

last so many months.”

6.

Thereafter, a criminal complaint was filed.

The learned Chief Judicial Magistrate took cognizance of the offences

against the appellants under Section 417, 420 read with Section 114 of the

Indian Penal Code. Summons were issued.

Appellants filed an application for quashing of the said proceedings

before the Gujarat High Court which by reason of the impugned judgment

has been dismissed.

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7.

Mr. Dayan Krishnan, learned counsel appearing on behalf of the

appellant, would submit :

1.

Th