Dismissed

Anil Kunchchal and 5 Others v. State of U.P. and Another

Allahabad HC19 Jul 2019CRLR/2283/2019

Case brief

AI extract

What is this about?

In this criminal revision, the High Court dismissed the petitioner's challenge against the rejection of his discharge application. The Court held that the lower Magistrate committed no illegality as the petitioner had not recorded evidence under Section 244 Cr.P.C., and the proper course was to file a fresh discharge application after recording such evidence.

What did the court decide?

Revision dismissed; no new relief granted.

Anil Kunchchal and 5 Others Vs State of U.P. and Another — Property and Title | Allahabad HC (2019)

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Court No. - 73

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Case :- CRIMINAL REVISION No. - 2283 of 2019

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Revisionist :- Anil Kunchchal And 5 Others Opposite Party :- State Of U.P. And Another Counsel for Revisionist :- Ashwaini Mishra Counsel for Opposite Party :- G.A.

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Hon'ble Om Prakash-VII,J.

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Supplementary affidavit filed today is taken on record.

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This revision has been filed with the prayer to set aside the order dated 8.5.2019 passed by the Additional Chief Judicial-Ist, Moradabad in complaint case no. 527 of 2018 (Ms. Alia Wasim and another Vs. Anil Kunchchal and others), under Sections 420, 462, 468, 478 IPC, Police Station Gal Sahid, district Moradabad.

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Submission of the learned counsel for the revisionist is that impugned order passed by the concerned Magistrate on the discharge application is illegal and without applying judicial mind. Nothing was disclosed in the impugned order about the law laid down in the case laws relied upon by the revisionists. Revisionists have been summoned on the basis of complaint but company has not been arrayed as an accused. Referring to the facts of the complaint as well as facts mentioned in the discharge application it is also argued that until and unless company is prosecuted, revisionists cannot be punished and prosecuted. It is also argued that revisionists had also approached this Court invoking jurisdiction under Section 482 Cr.P.C. against the summoning order and specific direction was given to the revisionists to move discharge application if mediation was not successful. Since mediation between the parties was not successful, discharge application was moved. Concerned Magistrate ought to have considered the entire facts raised in the discharge application but same were not considered and discharge application was rejected on insufficient grounds. Origin of the dispute is based on the agreement entered into between the company and complainant. Four proceedings

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were also started in the State of Rajasthan and same were dropped. At this juncture, learned counsel appearing for the revisionists referred to para no. 7 and 20 of the agreement (Annexure no. 4) and further argued that if the conditions are fulfilled then only flats will be handed over to the buyers. Since only 60% amount was deposited, therefore, possession over the flats was not given. No offence is made out from the complaint. Learned court below has committed illegality in passing impugned order.

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In support of his submissions learned counsel for the revisionists placed reliance on the following case laws :

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2008 (1) G.L.H. 401 (B. Suresh Yadav Vs. Sharfia Bee and another).

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LAWS (SC) 1982 12 1 (Municipal Corporation of Delhi Vs. Ram Kishan Rohtagt).

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LAWS (SC) 2001 2 186 (Alpic Finance Limited Vs. P. Sadasivan).

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LAWS (SC) 2007 9 99 (Maksud Saiyed Vs. State of Gujrat).

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LAWS (SC) 1997 11 120 (M/s. Pepsi Foods Ltd. Vs. Special Judicial Magistrate).

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2006 Law Suit (SC) 421 (Ram Biraji Devi Vs. Umesh Kumar Singh).

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2005 Law Suit (SC) 1435 (Murari Lal Gupta Vs. Gopi Singh)

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LAWS (SC) 2013-3-54 (M/s. Ghel Employees Stock Option Trust Vs. M/s. India Infoline Limited.)

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2002 LawSuit (Mad) 1055 (S. P Shenbagamoorthy Vs. Mr Mu Ka Stalin and another).

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2009 -Laws (SC) 7-154 (Shakson Belthissor Vs. State of Kerala)

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Learned A.G.A. argued that concerned Magistrate has not committed any illegality. Impugned order was passed in accordance with law.

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Before adverting to the facts of the present case, I would like to quote the order passed by another Bench of this Court dated 5.10.2018 in Application U/S 482 No. 35181 of 2018 moved against the summoning

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order:-

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"Heard learned counsel for the applicants, learned AGA for the State and perused the record.

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By way of the instant application, the applicants have sought for quashment of the entire proceeding in Complaint Case No.527 of 2018, under Sections 420, 468, 471, 120B, 504, 506 I.P.C., pending before the Additional Chief Judicial Magistrate, Court No.1, Moradabad.

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The present applicants numbering 6 in all are the Directors, Panchsheel Colonizers Pvt. Ltd. Upper to Red Well Tailor Shop U/5 M.I. Road, Jaipur. They are confronted with the summoning order dated 17.07.2018 passed by the Additional Chief Judicial Magistrate, Court No.1, Moradabad in Complaint Case No.527 of 2018 Smt. Alia Wasim Vs. Shivraj Singh Chauhan and others whereby the applicants have been summoned under Sections 420, 468, 471, 120B, 504, 506 I.P.C. The averments made in the complaint qua cheating committed by the aforesaid directors round up facts that the complainant paid/invested Rs.1,02,90,000/- with the company by account payee cheque of the bank concerned at Moradabad from 01.08.2009 to 03.04.2010.

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The allegation is that the directors of the company in spite of receiving money carried out no construction work as was required of them in order to develop the land for colony. They are conspiring with each other. That way, the complainant claims that she has been duped of her money and nothing has been done by the directors of the company, therefore, they be prosecuted under the aforesaid sections of I.P.C.

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While fact contention has been floated, it has been claimed that initially this is not the forum where the present controversy should be agitated, for the reason that though there is no arbitral clause specified in the agreement entered into between the complainant and the company, still each agreement entered into by the company and also with the complainant or others can be questioned by resorting to the provisions of Real Estate Settlement Procedure Act. The complainant instead resorting to the provisions of the aforesaid Act straightway moved a highly motivated complaint to the harassment of the applicants and the company. Fact is that the daughter of the complainant filed a complaint before the Registrar (Companies) wherein notices were issued and the present directors / company replied to the notice whereupon proceeding initiated before the Registrar (Companies) was dropped. Once the complainant failed to obtain any relief and her endeavour failed to evoke any response in her favour, the complainant

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mischievously has lodged the present baseless complaint which has affected smooth functioning of the company itself and a number of investors who have also invested their money for work have suffered a lot.

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Contention was stretched to the ambit that the entire installments as agreed upon to be paid by the complainant has not been paid. The complainant herself violated terms and conditions of the agreement when she did not pay 90% of the agreed amount of land - as the cost, therefore, she alone is to be blamed for her own inaction and not the company.

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However, learned counsel for the applicants has submitted that the complainant along with others numbering 43 shall be given 43 plots and whatever difficulties are there, that will be sorted out and the company is willing to handover the plots to them. He also added that the plots could not be handed over in time because Writ Petition (PIL) No.1554 of 2004 Gulab Kothari Vs. State of Rajasthan was filed before the High Court of Rajasthan wherein directions were issued staying the proceeding with regard to conversion of the land. Therefore, things were stopped for the time being. This being special circumstance, the company could not proceed with work unless and until worthy direction was received from the High Court of Rajasthan.

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Learned AGA has opposed the prayer for quashment of the summoning order and submitted that the summoning order is just and legal which requires no interference by this Court.

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Considered the rival submissions.

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The contention raised by the learned counsel for the applicant is based on purely factual aspect of this case. It is admitted that both the parties have entered into agreement but something fishy surfaced which polluted the ongoing process of handing over and taking over of the plots in question thus giving rise to the instant trouble. The point is that can such enormous and gorgeous factual aspect be appreciated and adjudicated upon by this Court at this stage. The answer is certainly in the negative.

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The contention raised by the applicants before this Court can be placed before the lower court concerned by the applicants and the court concerned will consider the same on its factual merit and will pass appropriate order. In case the applicants are willing to handover the plot in question, provided the complainant complies with the terms and conditions of payment as per the agreement then amicable settlement of the dispute can be well expected between the parties and the lower court concerned may pay a pivotal role as mediator.

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Therefore, under the facts and circumstances of the case, it would not be appropriate to dispose of this application on merits. However,

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it would be on the safe side of both the parties, particularly the applicants that they may put their case by moving an application before the court concerned and they may also claim discharge before the court concerned, if they so wish. It is provided that in case the applicants move discharge application either personally or through counsel within one month, the same shall be considered and disposed of by the court concerned by speaking and reasoned order after affording opportunity of hearing to the complainant within a period of six weeks from the date of production of the certified copy of this order.

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Till disposal of the application or six weeks after the application is moved for discharge whichever is earlier, no coercive action shall be taken against them.

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However, in case no such application is moved within the stipulated period the court concerned shall be free to proceed further with the case in accordance with law.

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It is clarified that nothing has been observed on merits of the case and gateway is open for the court below to consider the factual merit of the case in case the applicants agitate their claim before it.

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With the above direction, the instant application under Section 482 Cr.P.C. is finally disposed of."

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Before forming an opinion on the issue raised in this matter court also find necessary to quote the law laid down in the following case laws :

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The Apex Court in para nos. 7, 8 and 10 of Alpic Finance Limited Vs. P. Sadasivan reported in LAWS (SC) 2001 2 186 has held as under:

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“7.In a few cases, the question arose whether a criminal prosecution could be permitted when the dispute between the parties is of predominantly civil nature and the appropriate remedy would be civil suit. In one case reported in Madhavrao Jiwajirao Scindia and others Vs. Sambhajirao Chandrojirao Angre and others 1988(1) SCC 692, this Court held that if the allegations in the complaint are both of a civil wrong and a criminal offence, there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. That was a case relating to a trust. There were three trustees including the settlor. A large house constituted part of the trust property. The respondent and the complainant were acting as Secretary and Manager of the Trust and

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the house owned by the trust was in the possession of a tenant. The tenant vacated the building and the allegation in the complaint was that two officers of the trust, in conspiracy with one of the trustees and his wife, created documents showing tenancy in respect of that house in favour of the wife of the trustee. Another trustee filed a criminal complaint alleging that there was commission of the offence under Sections 406, 407 read with Sections 34 and 120-B of the Indian Penal Code. The accused persons challenged the proceedings before the High Court under Section 482 of the Code of Criminal Procedure and the High Court quashed the proceedings in respect of two of the accused persons. It was under those circumstances that this court observed :

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"Though a case of breach of trust may be both a civil wrong and a criminal offence but there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. The present case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offences are wanting. Having regard to the relevant documents, including the trust deed as also the correspondence following the creation of the tenancy, the submissions advanced on behalf of the parties, the natural relationship between the settlor and the trustee as mother and son and the fall out in their relationship and the fact that the wife of the co-trustee was no more interested in the tenancy, it must be held that the criminal case should not be continued."

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8. In another case recently decided by this Court in Trisuns Chemical Industry Vs. Rajesh Agarwal and others 1999(8) SCC 686, the complainant company had alleged that the directors of another company offered to supply "toasted soyabean extractions" for a price higher than the market price. The Complainant Company had to pay the price in advance as demanded by the accused company. Complainant paid the amount through cheques. However, the accused supplied the commodity, which was of most inferior and substandard quality and the complainant suffered a loss of Rs. 17 lakhs. The Complainant alleged that he was induced to pay the price on the representation that the best quality commodity would be supplied. A criminal complaint was filed alleging commission of the offence punishable under Section 420-A. The Magistrate forwarded the complaint for investigation under Section 156(3) Cr. PC. The accused directors moved the High Court for quashing the complaint

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alleging that the dispute was purely of a civil nature and hence no prosecution should have been permitted. The High Court accepted this plea and the complaint was quashed. But this court held in para 8 and 9 of the judgment as follows:

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".........merely because an act has a civil profile is not sufficient to denude it of its criminal outfit.

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We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act, which amounted to an offence, albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases."

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10. The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that respondents committed the offence under Section 420 I.P.C. and the case of the appellant is that respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practicing the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any willful misrepresentation. Even according to the appellant, parties entered into a valid lease agreement and the grievance of the appellant is that the respondents failed to discharge their contractual obligations. In the complaint, there is no allegation that there was fraud or dishonest inducement on the part of the

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respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception.”

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9. Hon'ble Supreme Court in para 17 of B. Suresh Yadav Vs. Sharfia Bee and another reported in 2008 (1) G.L.H. 401 has held as under:-

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17. In Hira Lal Hari Lal Bhagwati v. CBI, New Delhi [(2003) 5 SCC 257], this Court opined :

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It is settled law, by a catena of decisions, that for establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. From his making failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the exemption certificate contained necessary conditions which were required to be complied with after importation of the machine. Since the GCS could not comply with it, therefore, it rightly paid the necessary duties without taking advantage of the exemption certificate. The conduct of the GCS clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as officebearers right at the time of making application for exemption . As there was absence of dishonest and fraudulent intention, the question of committing offence under Section 420 of the Indian Penal Code does not arise. {See also Hira Lal Hari Lal Bhagwati v. CBI, New Delhi [(2005) 3 SCC 670] and Indian Oil Corporation v. NEPC India Ltd. & Ors. [(2006) 6 SCC 736]}.

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Hon'ble Supreme Court in para 18 of Shakson Belthissor Vs. State

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of Kerala reported in 2009 -LAWS(SC)-7-154 has held as under:

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“18. This Court has recently in R. Kalyani Vs. Janak C. Mehta and others (2009) 1 SCC 516, observed as follows:

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"15. Propositions of law which emerge from the said decisions are:

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(1) The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a First Information Report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizable offence. (2) For the said purpose, the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence. (3) Such a power should be exercised very sparingly. If the allegations made in the FIR disclose

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commission of an offence, the court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus. (4) If the allegation discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue.

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16. It is furthermore well known that no hard and fast rule can be laid down. Each case has to be considered on its own merits. The Court, while exercising its inherent jurisdiction, although would not interfere with a genuine complaint keeping in view the purport and object for which the provisions of Sections 482 and 483 of the Code of Criminal Procedure had been introduced by Parliament but would not hesitate to exercise its jurisdiction in appropriate cases. One of the paramount duties of the superior courts is to see that a person who is apparently innocent is not subjected to persecution and humiliation on the basis of a false and wholly untenable complaint."

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Hon'ble Madras High Court in para 46 of S. P Shenbagamoorthy

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Vs. Mr Mu Ka Stalin and another reported in 2002 LawSuit (Mad) 1055 held as under:

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“46. Normally, the powers under Section 156 (3) could be exercised by the court concerned only when the complaint under Section 200 Cr.P.C. is entertained. While entertaining the said complaint, if the court feels that the police investigation is necessary, then the investigation can be ordered under Section 156 (3) Cr.P.C. For instance, if it is a case of forgery or a theft, then it would be necessary for the court to get the help of police for recovery of documents or for recovery the stolen articles. Of late, it is noticed that the persons with vested interest with some oblique motive approach the court to get the direction under Section 156 (3) in order to make the police to arrest the other party and harass him. Even in the cases involving civil nature and in the cases where police do not entertain the complaint, the party concerned rushes to the criminal court and files a complaint making some allegations constituting cognizable offences and wants an order under Section 156 (3) Cr.P.C. The Courts also invariably without application of mind refer the matter for investigation under Section 156 (3) Cr.P.C. Where the police would not normally entertain and register those cases, on the strength of Section 156 (3) order, they would register and investigate those cases in such a manner to achieve the desired results as expected by the complainant party. It is sorry state of affairs that the Courts, now-a-days, shut their eyes while ordering investigation under Section 156 (3) without looking into the allegations in the complaint whether it requires such investigation at all.”

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It is true that High Court in exercise of inherent jurisdiction under Section 482 Cr.P.C. can cure the mistake committed by the courts below but at the same time if a prima facie case is made out from the prosecution/complaint version, High Court should not interfere in the order of the lower court. Revisionist earlier had approached this Court invoking jurisdiction under Section 482 Cr.P.C. against the summoning order passed in the matter and this Court has disposed of the same as has been quoted herein above directing the applicant first to explore the possibility of settlement of the dispute on the basis of mediation and thereafter to move discharge application. As has been argued, mediation was not successful, thereafter, the revisionists have moved discharge application. Offences levelled against the revisionists are warrant trial cases. Discharge application has to be moved in this matter under Section 245 Cr.P.C. after the evidence under Section 244 Cr.P.C. It is admitted case that no evidence under Section 244 Cr.P.C. has come in the complaint. Proper recourse was to the revisionists to move discharge application after recording the statement under Section 244 Cr.PC. If observations recorded by the concerned Magistrate in the impugned order are taken into consideration in the light of settled preposition of law about the procedure followed in warrant trial cases, no infirmity or illegality is found in the impugned order. Revisionists have opportunity to move discharge application during trial at appropriate stage after recording the statement under Section 244 Cr.P.C. again. No new evidence was available before the concerned Magistrate to reconsider the facts and evidence. All the submissions raised at the Bar may be considered at the appropriate stage if raised through discharge application moved again. Since no new evidence has come on the record after passing the order dated 5.10.2018 in the application under Section 482 No. 35181 of 2018, therefore, I am of the considered view that no good ground is shown to admit and allow the revision because concerned Magistrate has not committed illegality, infirmity or irregularity in the impugned order.

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As far as the case laws relied upon by the learned counsel for the revisionists are concerned, in the circumstance noted here-in-above there is no occasion to reconsider this aspect again as all the facts and circumstances were available at the time of disposal of application u/s 482 Cr.P.C. moved by the revisionists against summoning order.

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Thus, on the basis aforesaid discussion, revision being devoid of merit is not liable to be admitted and is dismissed at this stage itself. However, revisionists if move fresh application for their discharge after recording evidence under Section 244 Cr.P.C., trial Court is expected to consider the issue in accordance with law.

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Order Dated : 19.07.2019

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Sachdeva

Anil Kunchchal and 5 Others v. State of U.P. and Another

Case brief

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Anil Kunchchal and 5 Others v. State of U.P. and Another

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