Allowed

Naushadbhai Hasanaalibhai Hunda v. State of Gujarat

Gujarat HC13 Feb 2015CR.MA/10356/2009

Case brief

AI extract

What is this about?

High Court quashed criminal proceedings instituted for cheating and dishonest misappropriation as an abuse of process. The Court held the FIR converted a civil dispute over unpaid goods into a criminal matter without necessary ingredients for criminal offences.

What did the court decide?

Impugned criminal proceedings arising from FIR C.R. No. I-159 of 2008 for offences under Sections 403, 406, 420, 114 IPC were quashed and set aside.

Naushadbhai Hasanaalibhai Hunda Vs State of Gujarat — Cheque Dishonour | Gujarat HC (2015)

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R/CR.MA/4435/2010 JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER) NO. 4435 of 2010

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With

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CRIMINAL MISC.APPLICATION NO. 10356 of 2009

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FOR APPROVAL AND SIGNATURE:

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HONOURABLE MR.JUSTICE M.R. SHAH

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1	Whether Reporters of Local Papers may be allowed to see the judgment?	NO
2	To be referred to the Reporter or not?	NO
3	Whether their Lordships wish to see the fair copy of the judgment?	NO
4	Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or anyorder made thereunder?	NO
5	Whether it is to be circulated to the civil judge?	NO

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ALKARIM HUSAIN ADATIYA....Applicant(s) Versus

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STATE OF GUJARAT & 1....Respondent(s)

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==================================== Appearance:

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MR PRATIK Y JASANI, ADVOCATE for the Applicant(s) No. 1 MR PM LAKHANI, ADVOCATE for the Respondent(s) No. 2 MS.NEHA R RUPARELIYA, ADVOCATE for the Respondent(s) No. 2 MS NISHA M. THAKORE, APP for the Respondent(s) No. 1

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R/CR.MA/4435/2010 JUDGMENT

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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH

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Date : 13/02/2015

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COMMON ORAL JUDGMENT

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As the common question of law and facts has arisen in both these Criminal Misc. Applications and as such, a common prayer has been made to quash and set aside the impugned FIR, both the these applications are hereby decided and disposed of by way this common judgment and order.

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Criminal Misc. Application No. 4435 of 2010 has been preferred by the applicant herein – original accused No. 3 to quash and set aside the impugned FIR being C. R. No. I–159 of 2008 registered with Bavla Police Station for the offences punishable under Sections 403, 406, 420 and 114 of the Indian Penal Code ( for brevity, 'IPC ).

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2.1 Criminal Misc. Application No. 10356 of 2009 has been preferred by the applicant herein – original accused No. 2 to quash and set aside the impugned FIR being C. R. No. I–159 of 2008 registered with Bavla Police Station for the offences punishable under Sections 403, 406, 420 and 114 of the IPC.

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That the respondent No. 2 herein – original complainant has lodged the impugned FIR against the original accused named in the FIR and some unknown persons with the Bavla Police Station on 18/07/2008 for the offences alleged to have been committed between 16/10/2006 and 12/07/2007.

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3.1 That the allegations and the averments made in the FIR lodged by the complainant who was working as an Assistant Accountant in Astra Life Care (India) Pvt. Ltd. are as under:

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3.1.1 The said company is manufacturing different medicines and exporting in different countries. It is alleged that as one of the Directors of Astra Life Care (India) Pvt. Ltd. was relative of the accused Nos. 1 and 2 and as accused No. 3 was a partner of accused Nos. 1 and 2 and doing business of wholesale medicines, visited Bavla office of the respondent No. 2 on 13/07/2006 and 17/07/2006 and by keeping trust on them, they started delivery of medicines as per orders placed by the accused No. 2 for company named Santaplus Depot Pharmaceuticals. The accused No. 3 was also a partner in the said company. It is also alleged in the FIR that transactions between Astra Life Care (India) Pvt. Ltd. and the company belong to the accused were started from

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R/CR.MA/4435/2010 JUDGMENT

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16/10/2006 to 12/07/2007 wherein, US$99,504.24 were paid by the accused to Astra Life Care (India) Pvt. Ltd. for the orders which they had placed and rest of the amount was considered as outstanding. Subsequently, the Director of Astra Life Care (India) Pvt. Ltd. met with the accused and stated them to pay the outstanding amount for that the accused informed him that at present it is not possible due to some difficulty. Thereafter, the accused

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No. 2 was called to the company and was instructed that if you are not in a position to make payment then supply the remaining goods (medicines) to one Unique Pharma to which, the accused No. 2 agreed and he supplied those goods to Unique Pharma and instead of issuing invoice of Astra Life Care (India) Pvt. Ltd., they issued invoice of their company and took the payment from Unique Pharma and it was alleged that the accused had given the goods which were belonged to them to another pharma company namely Unique Pharma and taken the payment from the same. It is also alleged that the accused have not paid for the goods which were supplied to them during the course of time mentioned above.

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3.1.2 Making above allegations and averments, the impugned FIR has

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R/CR.MA/4435/2010 JUDGMENT

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been lodged. Hence, the respective applicants – original accused Nos. 3 and 2 respectively, have preferred the present applications under Section 482 of the Criminal Procedure Code, 1973 ( for brevity, 'Code' ).

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Shri Harshadray A. Dave, learned advocate appearing for the applicant – original accused No. 2 in Criminal Misc. Application No. 10356 of 2009 and Shri Pratik Y. Jasani, learned advocate appearing for the applicant – original accused No. 3 in Criminal Misc. Application No. 4435 of 2010 have vehemently submitted that the impugned FIR is nothing but the abuse of process of law and the Court. It is submitted that, as such, a civil dispute is tried to be converted into a criminal dispute. It is submitted that instead of filing a civil suit for recovery of any amount due towards the goods sold, with a view to pressurize the accused, the original complainant has lodged the impugned FIR.

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4.1 It is submitted that, as such, even from the averments and allegations made in the FIR, the ingredients of the offences punishable under Sections 420, 403 and 406 of the IPC are not satisfied and therefore, no case is made out against the applicants herein - original accused for the offences as alleged in

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the impugned FIR.

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4.2 It is further submitted that so far as the offence punishable under Section 420 of the IPC is concerned, there is no allegation worth the name that any of the accused persons made false representation, false promises, inducement etc. from very inception of the transaction which led the respondent No. 2 to do business or to deliver the goods as stated, which is must and essential for the purpose of constituting the alleged offence.

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4.3 It is further submitted that so far as offence punishable under Section 406 of the IPC is concerned, there has to be dishonest misappropriation of the goods which has been entrusted to the persons i.e. accused by the owner i.e. complainant. In other words, ownership of the goods must belong to someone else then of accused to whom it is entrusted. Here, as per case of the prosecution itself, there is sale and purchase transaction and in the said transaction, as and when sale is performed, ownership gets transferred to the purchaser and therefore, there will be no question of dishonest misappropriation of any entrusted goods as there is no entrustment but there is transfer of ownership. In the said circumstances, basic and essential ingredient of entrustment

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is missing which is must for the purpose of constituting the alleged offence punishable under Section 406 of the IPC.

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4.4 So far as the offence punishable under Section 403 of the IPC is concerned, the said offence is prima facie not made out as basic principle of ownership will remain same as is mentioned above qua Section 406 of the IPC.

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4.5 It is further submitted that, as such, the impugned FIR is nothing but a counter-blast to the FIR being C. R. No. I-260 of 2008 filed before the Malaviya Nagar Police Station by the father of the accused Nos. 1 and 2 against one Azizbhai, who is referred in the impugned FIR as the Director of Astra Life Care (India) Pvt. Ltd. of which, the respondent No. 2 – original complainant is an employee. It is submitted that on 13/07/2008 for the alleged offence punishable under Sections 143, 365, 342, 323, 504 and 506(2) of the IPC, the aforesaid FIR was lodged. It is submitted that immediately after registration of the said FIR on 13/07/2008, the impugned FIR is filed/lodged on 18/07/2008 for the alleged offences for the alleged transactions from 2006 to 2007 i.e. almost after one year. It is submitted that, therefore,

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the initiation of the impugned criminal proceedings is nothing but a counter-blast and the same can be said to the abuse of process of law and the Court. Relying upon the decisions of the Hon’ble Supreme Court in the case of State of Haryana Vs. Bhajan Lal and Others, reported in (1992) (Supp.) 1 SCC 335 and the decision in the case of Anjani Kumar Vs. State of Bihar, reported in (2009) 1 SCC 706, it is requested to allow the present application and to quash and set aside the impugned FIR in exercise of powers conferred under Section 482 of the Code.

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4.6 Shri Jasani, learned advocate appearing for the applicant – original accused No. 3 has further submitted that, as such, the original accused No. 3 has wrongly been implicated in the case as at the relevant time when the transactions have taken place, as such, the original accused No. 3 was at Congo and not in India. In support of his aforesaid submission, he has relied upon the zerox copy of the Passport of the original accused No. 3 ( Annexure 'C' to Criminal Misc. Application No. 4435 of 2010 ).

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Shri P. M. Lakhani, learned advocate appearing for the respondent No. 2 – original complainant, has tried to oppose the

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present application. It is submitted that after the investigation, the Investigating Officer ( for brevity, 'IO' ) has submitted the charge-sheet against the accused persons before the concerned learned Magistrate and therefore it is requested to not to entertain the present applications and grant any relief in exercise of powers conferred under Section 482 of the Code.

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5.1 It is further submitted that considering the fact that though the accused persons placed order for the goods from the company of the complainant and they received the goods and consumed the same, they did not make full payment and against approximately a sum of US$7,78,707.24, only US$99505.24 was paid and received by the company. The intention of original accused from the very beginning was to cheat and not to make payment of the goods. It is therefore submitted that all the ingredients of Sections 420, 406 and 403 of the IPC have been satisfied and attracted and it is requested to dismiss the present applications.

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R/CR.MA/4435/2010 JUDGMENT

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Ms. Nisha M. Thakore, learned Additional Public Prosecutor, has submitted that after conclusion of the investigation and as prima facie case has been made out against the present applicants – original accused, the IO has submitted charge-sheet against the present applicants – original accused and therefore, it is requested not to exercise the powers conferred under Section 482 of the Code and to dismiss the present applications.

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In reply, Shri Dave, learned advocate appearing for the respective applicant – original accused No. 2 has heavily relied upon the decision of the Hon’ble Supreme Court in the case of Sathish Mehra Vs. State of N.C.T. Of Delhi, reported in 2013 Cri.L.J. 411 in support of his request to quash and set aside the impugned FIR and not to relegate the applicants to face the trial. It is submitted that, as observed by the Hon’ble Supreme Court, the powers under Section 482 of the Code are exercisable at the threshold as well as at the advanced stage of trial. Therefore, it is requested to allow the present applications, more particularly when this Court has issued Rule and admitted the present applications.

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R/CR.MA/4435/2010 JUDGMENT

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Heard, the learned advocates appearing for the respective parties at length and perused the impugned FIR and the averments and allegations made in the FIR. Considering the averments and the allegations made in the impugned FIR as they are, it appears that, a civil dispute has been given a colour of a criminal dispute and the civil dispute is converted into a criminal dispute and for non-payment of the alleged dues for the goods supplied to the original accused, the impugned FIR has been lodged. At this stage, it is required to be noted that even from the FIR it can be seen that part payment had been made to the company of the complainant. It appears that even US$4000 was given in cash to the complainant/company of the complainant in India after the transactions had taken place. From the averments in the FIR it does not averred and/or alleged at all that the accused persons made false representation / promises, inducement etc. from the very inception and the transactions which led the company/ complainant to do the business or to deliver the goods. Therefore, it cannot be said that the ingredients of Section 420 of the IPC have been satisfied.

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8.1 Similar is the allegation for the offence punishable under Sections 403 and 406 of the IPC. It appears that instead of filing the suit for recovery of any amount due and payable for the goods supplied, the impugned FIR has been lodged and it appears a counter-blast to the FIR lodged by the father of the original accused Nos. 1 and 2, which was lodged against one Azizbhai – Director of Astra Life Care (India) Pvt. Ltd. of which, the respondent No. 2 – original complainant is an employee. Under the circumstances and considering the decisions of the Hon’ble Supreme Court in the case of Bhajan Lal ( supra ) and Anjani Kumar ( supra ) this is a fit case to exercise powers conferred under Section 482 of the Code to quash and set aside the impugned criminal proceedings arising out of the impugned FIR.

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8.2 Now, so far as the contention on behalf of the respondent No. 2 that now the charge-sheet has been filed and therefore, no relief can be granted to the applicants herein in exercise of powers conferred under Section 482 of the Code is concerned, it is required to be noted that the present applications have been admitted after the charge-sheet has been filed and therefore, as such, the learned Single Judge, while admitting the applications,

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was conscious of the aforesaid. Even otherwise, as observed by the Hon’ble Supreme Court in the case of Sathish Mehra ( supra ), powers under Section 482 of the Code can be exercised at the threshold as well as at the advanced stage of the trial. It is ultimately for the Court to exercise the discretion whether in the peculiar facts and circumstances of the case, as such, the powers are to be exercised or not. For the reasons stated above, when it is found that initiation of the criminal proceedings against the applicants herein – original accused Nos. 2 and 3 is nothing but the abuse of process of law and the Court and that, a civil dispute is tried to be converted in to the criminal dispute by giving it a colour of a criminal dispute, this Court is of the firm opinion that this is a fit case to exercise the powers conferred under Section 482 of the Code and the present applications deserve to be allowed and the impugned criminal proceedings deserve to be quashed and set aside.

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In view of the above and for the reasons stated above, present applications succeed. The impugned criminal proceedings arising out of FIR being C. R. No. I-159 of 2008 registered with Bavla Police Station for the offences punishable under Sections 403, 406, 420 and 114 of the IPC is hereby quashed and set aside

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so far as applicants – original accused Nos. 3 and 2 respectively

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are concerned. Rule is made absolute accordingly.

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[ M. R. Shah, J. ]

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