Allowed

M S Yona Smelters Private Limited And Others v. The State Of Jharkhand And Anr.

Jharkhand HC7 Dec 2020Cr.M.P./100/2017

Case brief

AI extract

What is this about?

This judgment quashes a First Information Report involving Sections 406 and 420 of the IPC. The High Court held that the dispute arose from a business transaction regarding non-payment of coke dues and did not constitute criminal cheating or breach of trust, labelling the criminal filing as an abuse of process.

What did the court decide?

The First Information Report (Bank More Police Station Case No.247 of 2016) and all consequential proceedings are quashed.

M S Yona Smelters Private Limited And Others Vs The State… — Cheque Dishonour | Jharkhand HC (2020)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr. M.P. No. 100 of 2017

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M/s Yona Smelters Private Limited, through its Director Sanjeeva Raju Rayavarapu

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Sanjeeva Raju Rayavarapu

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Venkata Ram Krishna Prasad Muddu

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… Petitioners

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-versus-

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The State of Jharkhand

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Nilesh Kumar Gupta … Opposite Parties

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CORAM : HON’BLE MR. JUSTICE ANANDA SEN THROUGH VIDEO CONFERENCING

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For the Petitioners : Mr. Lukesh Kumar, Advocate For the State: Mr. Veervijay Pradhan, A.P.P. For the O.P. No.2 : Mr. Mukesh Bihari Lal, Advocate

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07/07.12.2020 Heard learned counsel for the petitioners and the learned A.P.P. for the State assisted by the counsel for the opposite party No.2 through Video Conferencing. The lawyers have no objection with regard to the proceeding, which has been held through Video Conferencing today at 11.00 a.m. They have no complain in respect to the audio and video clarity and quality.

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2. Petitioners, in this criminal miscellaneous petition have prayed for quashing the First Information Report being Bank More Police Station Case No.247 of 2016 (G.R. No.4674 of 2016) registered for the offences under Sections 406, 420, 506/120B of the Indian Penal Code.

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3. The first information report being Bank More Police Station Case No.247 of 2016 has been registered on the basis of the Complaint Case No.697 of 2016, on being forwarded by the Court concerned for registering a First Information Report. As per the allegations narrated in the complaint, the complainant-informant Nilesh Kumar Gupta is a reputed coal and coke trader doing business in the name and style of M/s Vishal Trading Co., having office at Madhulika Enclave, Shanti Bhawan, Bank More, Dhanbad. It is alleged that in the year 2011 the accused No.2 to 5 maliciously approached the complainant in his office and represented the accused No.1, stating that they are incharge and looking after the day to day business and transaction of the company as its directors. They offered to purchase coke from the complainant on credit basis. Being convinced, the complainant continuously supplied various quantities of coke till 20.06.2012. It is alleged that an undisputed outstanding dues of Rs.47,38,262/- of the complainant is lying with the accused, which was to be paid by March 2013. On completion of the stipulated

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-: 2 :-

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time, the complainant requested the accused for payment, which they lingered on one pretext or the other. Lastly when the accused did not release the payment even after several requests, the complainant informed them that he will take legal recourse. It is alleged that the accused No.2 to 5 then convinced the complainant and promised to clear the payment within a year. In the year 2014 also, the complainant demanded for payment, but all in vain, as they never made the payment. In December, 2015 when the complainant again demanded his payment, the accused persons outrightly refused to make payment and misbehaved with him as also threatened the complainant to face dire consequence if the payment is asked for. The complainant issued legal notice through his advocate on 10.12.2015 demanding the outstanding dues, to which they neither replied nor paid the dues.

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4. Counsel for the petitioners submits that no offence is made out from bare perusal of the First Information Report, thus, the First Information Report is nothing but an abuse of the process of the Court, which needs to be quashed. He submits that a business transaction has been given colour of a criminal case and merely for recovering money, the first information report has been instituted. He submits that the dispute between the parties arose out of business transaction, which is civil in nature. He submits that there is no material to attract the offence punishable under Section 406 or any other Sections of the Indian Penal Code. It is submitted that the opposite party had a remedy to seek redressal of his grievance in a Civil Court, rather than to file a criminal proceeding.

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5. Counsel appearing on behalf of the opposite party and the learned A.P.P. submit that the petitioners have cheated the informant and thus, the criminal offence is made out and the same cannot be quashed. They submit that at the very initial stage, it cannot be decided as to whether there was any malafide intention on the part of the opposite party to register this case. Thus, at the very initial stage, the First Information Report cannot be quashed.

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6. After hearing the parties, I find that this is a case where the petitioner has sought to quash the First Information Report. The principle has already been set at rest by the Hon’ble Supreme Court. It is well settled by a catena of decisions that when an offence is made out from bare perusal of the First Information, the First Information Report cannot be quashed. The Hon’ble Supreme Court in the case of Anand Kumar Mahatta versus State (NCT of

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Delhi) reported in (2019) 11 SCC 706 had taken note of the growing trend in business circle to convert purely civil dispute into a criminal case. In the aforesaid judgment, reliance was placed on Indian Oil Corporation versus NEPC India Ltd. & Others reported in (2006) 6 SCC 736 wherein the Hon’ble Supreme Court at paragraph 13 observed as follows:-

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“13. ………… Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged.”

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7. Considering the said principle of law, I have gone through the First Information Report. The First Information Report has been registered on the basis of the complaint case instituted by the opposite party No.2, wherein, he has stated that he is a businessman and runs his business in the name and style of M/s. Vishal Trading Co. having office at Madhulika Enclave, Shanti Bhawan, Bank More, Dhanbad. As per the allegations, pursuant to offer and acceptance between the parties, the complainant supplied varies quantities of coke till 20.06.2012 for which an amount of Rs.47,38,262/- is lying as due and outstanding to be paid by the petitioners to the complainant. It is alleged that inspite of repeated requests and demands made by the complainant, not a single rupee has been paid to the complainant.

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8. From the perusal of the aforesaid First Information Report, I find that the entire dispute arose out of business transactions between the parties. The allegation revolves around non payment of amount arising from business transactions between the parties. This fact is admitted by the complainantinformant, which is apparent from the First Information Report itself. This fact clearly gives an impression that the dispute is with regard to the outstanding amount arising out of business transaction.

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9. The First Information Report has been registered for an offence punishable under Section 406 of the Indian Penal Code, which is the punishment for criminal breach of trust. Criminal breach of trust has been defined under Section 405 of the Indian Penal Code, which reads as under: -

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405. Criminal breach of trust. – Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the

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discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust”

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10. Further, Section 415 of the Indian Penal Code defines cheating. To attract the ingredients of offence of cheating, there should be an element of inducement by fraud or dishonesty to deliver a property. In this case I find that there was no such inducement, rather it is a simple business transaction on credit, where some payment remained outstanding. This cannot attract the ingredients of offence of cheating punishable under Section 420 of the Indian Penal Code.

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11. In this case, when I see the facts and the allegations levelled against the petitioners, I find that the only allegation levelled is that the complainant-informant has supplied coke to the petitioners for which a sum of Rs.47,38,262/- is lying as outstanding to be paid by the petitioners to the complainant. Thus, the entire grievance is in respect of non-payment of dues arising out of business transaction. This allegation cannot come within the ambit of Section 405 of the Indian Penal Code. There is no material in the First Information Report to suggest that the petitioners have dishonestly misappropriated or converted the property for their own use. The entire dispute is in respect of non-payment of dues to the informant by the petitioners, which is nothing, but, a money claim. The money claim has been given a colour of criminal offence, which is an abuse of the process of the Court. Thus, in view of the judgment passed by the Hon’ble Supreme Court in the case of State of Haryana & Others versus Bhajan Lal & Others reported in (1992) Suppl. (1) SCC 335 and in the case of Binod Kumar & Others versus State of Bihar & Another reported in (2014) 10 SCC 663 , I hold that this FIR is an abuse of the process of law and cannot be held to be justified. I am inclined to allow this criminal miscellaneous petition. The First Information Report being Bank More Police Station Case No. 247 of 2016 (G.R. No.4674 of 2016) is, hereby, quashed, so are all the consequential proceedings. 12. This criminal miscellaneous petition, thus, stands allowed.

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(Ananda Sen, J.)

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Kumar/Cp-03

M S Yona Smelters Private Limited And Others v. The State Of Jharkhand And Anr.

Case brief

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M S Yona Smelters Private Limited And Others v. The State Of Jharkhand And Anr.

Case brief

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