Allowed

Ajit Gulabchand v. the State of Jharkhand

Jharkhand HC3 Oct 2023W.P.(Cr.)/133/2023

Case brief

AI extract

What is this about?

The High Court of Jharkhand quashed criminal proceedings against the petitioners. The court held that the disputes arose from a civil contract regarding construction work in Rajasthan, lacking initial fraudulent intent, thus constituting an abuse of criminal process.

What did the court decide?

The entire criminal proceeding including the order taking cognizance dated 23.03.2010 in connection with Complaint Case No. 485 of 2009 pending before Chief Judicial Magistrate, Bokaro, is quashed.

Ajit Gulabchand Vs the State of Jharkhand — Contract and Commercial Disputes | Jharkhand HC (2023)

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IN THE HIGH COURT OF JHARKHAND, RANCHI

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W.P.(Cr.) No. 133 of 2023

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1.Ajit Gulabchand @ Ajit Gulab

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2.R. Madhavan @ Madhavan Rajumani

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3.Perwez Alam @ P. Alam .... Petitioners -- Versus --

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The State of Jharkhand and Another .... Respondents

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CORAM: HON’BLE MR. JUSTICE SANJAY KUMAR DWIVEDI

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For the Petitioners :- Mr. Indrajit Sinha, Advocate Mr. Rishav Kumar, Advocate Ms. Sonal Jaiswal, Advocate For the State :- Mr. Deepankar Roy, Advocate ----

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/03.10.2023 By order dated 03.04.2023, notices were directed to be issued upon the respondent no.2 and the matter was directed to be posted on 15.05.2023. In order dated 28.06.2023, it has been recorded that the notice upon the respondent no.2 has been received by his son and in view of that, again notices were directed to be issued. Again, the notice has been received by the son of the respondent no.2 and by order dated 22.08.2023, the notice was directed to be validly served and the matter was further adjourned with a view to provide one more opportunity to the respondent no.2, and in spite of that, respondent no.2 has not appeared.

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It appears that the respondent no.2 has lost interest in the matter and in view of that, the matter is being heard in absence of the respondent no.2.

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Heard Mr. Indrajit Sinha, the learned counsel appearing on behalf of the petitioners and Mr. Deepankar Roy, the learned counsel

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appearing on behalf of the respondent State.

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This petition has been filed for quashing of the entire criminal proceeding including the order taking cognizance dated 23.03.2010 in connection with Complaint Case No. 485 of 2009 whereby the learned court has been pleased to take cognizance under section 418 read with section 120(B) I.P.C, pending in the court of learned Chief Judicial Magistrate, Bokaro.

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The complaint case was filed alleging therein that the respondent no.2 is the Managing Partner of M/s Cecon Associates (hereinafter referred to as "CCA") had filed the complaint case being C.P. No. 485 of 2009 in the Court of Chief Judicial Magistrate, Bokaro, against the petitioners alleging therein that the petitioner no.1 on 23.01.2006 handed over the letter of the agreement / work order in the office of respondent no.2 at Bokaro on certain terms and conditions which contains description for the work to be carried out by the respondent no.2. It is further alleged that the respondent no.2 on the basis of the agreement brought dumpers, poclain etc. and started excavation and transportation of the soil, moorum from the borrowed area of petitioners as directed by the Project Manager of HCC Ltd. The agreement cum work order specifically mentions HCC Ltd. borrowed area as directed by the Project Manager.

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It is further alleged that all the equipments, vehicles and manpower for constructions of sub- grade with approved materials from HCC borrow area upto 5 KM. It is further alleged that the respondent no.2 on the basis of the said agreement dated 23.01.2006 signed and handed over in the head office of the respondent no.2 at Bokaro and started work in the State of Rajasthan by deputing tripper/ dumper/ JCB/ Poclain and man power and started work on the place borrowed by HCC

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as per agreement as well as directed by the Project Manager of HCC.

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It is further alleged that till 01.04.2006 the work was in progress but all of a sudden on 01.04.2006 at about 04:30 PM, Tahsildar and Police officer of Begun Police came and seized six dumpers and Poclain machines and instituted a case being Begun P.S. Case No. 89 of 2006 dated 01.04.2006 under Sections 447 and 379 of Indian Penal Code. The Police registered an First Information Report alleging that the work was done for HCC. The respondent no.2 including his labourers / staffs appeared before the Learned Court and was released on bail.

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It is further alleged that respondent no.2 suffered huge loss on the act done by the petitioners and the petitioners induced the respondent no.2 to deploy the workers by providing dumpers / poclain and on the direction and assurance as per agreement dated 23.01.2006 the respondent no.2 deputed the works by digging the land and cutting the earth and sending the same at the specific place according to the instruction of petitioners.

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It is further alleged that when the Begun police came and registered case at Begun P.S. against the respondent no.2, then he came to know that the petitioners have cheated the respondent no.2 by showing a false place without borrowing the land from the state Government / owner of the land. At the time of agreement dated 23.01.2006 and at the time of starting of the work the petitioners have directed and stated that the land have been borrowed by HCC from the State Government, but, till 01.11.2006 the petitioners have not obtained any borrower agreement from the State Government / owner of the land thus the respondent no.2 have been cheated by the petitioners.

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It is alleged that due to wrong agreement-cum- work order and false assurance given by the petitioners, six tippers driver, khalasi, poclain and other staffs are sitting idle for about 02 (two) months causing loss of Rs. 17,40,000/- including salary of labourers causing

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mental harassment and damage to reputation. It is further alleged that the petitioners have cheated the respondent no.2 by presenting a false agreement-cum-work order at Gujarat Colony, Chas within the jurisdiction of Bokaro Court, though work was done at Rajasthan, but, Sections 179 and 181 (4) of the Code of Criminal Procedure empowered the Court being a continuous offence.

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It is further stated that the respondent no.2 sent a legal notice by registered post on 21.01.2009 demanding damage of Rs.17,40,000/from the petitioners in which the petitioners replied stating that the respondent no.2 company (CCA) shall agree to borrow area without any agreement. Further, it is alleged that the petitioners cheated the respondent no.2 by creating forged documents which led to loss of Rs.17,40,000/-.

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Mr. Sinha, the learned counsel appearing for the petitioners submits that the petitioner no.1 is the Chairman-cum- Managing Director of M/s Hindustan Construction Company Limited (HCC Ltd.), petitioner no.2 has joined the services of H.C.C. Ltd in the year 2002 and working as Construction Head who has resigned from the services of the said company and the last working day was 20.12.2016. He was not working there w.e.f. 21.11.2016. The petitioner no.3 was working as Joint Chief Operating Officer, Engineering and Construction of M/s H.C.C. Ltd. and his last working day was 16.08.2017 and he has resigned from the services of the said company w.e.f. 17.07.2017. He submits that in the entire complaint, there is no specific allegation against the petitioners about the role played by them and in view of that, the intention from the very beginning of cheating is not there and the learned court has wrongly taken cognizance under section 418 and 120(B) of the I.P.C. He submits that in the complaint case the allegation is made for occurrence if any had taken place in the State of Rajasthan and in order to justify the

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territorial jurisdiction of the court at Bokaro, the respondent no.2 has stated that since the work order has been received by him in the city of Chas, Bokaro, the court at Bokaro has jurisdiction to try the case to enquire into the same in terms of the provisions contained in section 181(4) read with section 179 Cr.P.C. He submits that the said sections are not attracted, particularly, in view of that fact that from the very beginning the intention of cheating is not made out. He submits that the work was being made at Rajasthan and the entire allegations are of Rajasthan and only if any case is made out that happened to be at Rajasthan and the only Rajasthan courts are having the territorial jurisdiction. He submits that forum shoping is deprecated by the Hon’ble Supreme Court. He relied in the case of Vijay Kumar Ghai and Others vs. State of West Bengal and Others, (2022) 7 SCC 124 and refers

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to paragraph nos.11 to 14, 24 and 25 of the said judgment, which are quoted hereinbelow:

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“11. Predominantly, the Indian Judiciary has time and again reiterated that forum shopping takes several hues and shades but the concept of “forum shopping” has not been rendered an exclusive definition in any Indian statute. Forum shopping as per Merriam-Webster Dictionary is:

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“The practice of choosing the court in which to bring an action from among those courts that could properly exercise jurisdiction based on determination of which court is likely to provide the most favourable outcome.”

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12. The Indian Judiciary's observation and obiter dicta has aided in streamlining the concept of forum shopping in the Indian legal system. This Court has condemned the practice of forum shopping by litigants and termed it as an abuse of law and also deciphered different categories of forum shopping.

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13. A two-Judge Bench of this Court in Union of India v. Cipla Ltd. [Union of India v. Cipla Ltd., (2017) 5 SCC 262] has laid down factors which lead to the practice of forum shopping or choice of forum by the litigants which are as follows : (SCC pp. 318-20, paras 148-51 & 155)

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“148. A classic example of forum shopping is when litigant approaches one court for relief but does not get the desired relief and then approaches another court for the same relief. This occurred in Rajiv Bhatia v. State (NCT of Delhi) [Rajiv Bhatia v. State (NCT of Delhi), (1999) 8 SCC 525] . The

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respondent mother of a young child had filed a petition for a writ of habeas corpus in the Rajasthan High Court and apparently did not get the required relief from that Court. She then filed a petition in the Delhi High Court also for a writ of habeas corpus and obtained the necessary relief. Notwithstanding this, this Court did not interfere with the order [Priyanka Bhatia v. State (NCT of Delhi), 1999 SCC OnLine Del 192] passed by the Delhi High Court for the reason that this Court ascertained the views of the child and found that she did not want to even talk to her adoptive parents and therefore the custody of the child granted by the Delhi High Court to the respondent mother was not interfered with. The decision of this Court is on its own facts, even though it is a classic case of forum shopping.

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149. In Arathi Bandi v. Bandi Jagadrakshaka Rao [Arathi Bandi v. Bandi Jagadrakshaka Rao, (2013) 15 SCC 790 : (2014) 5 SCC (Civ) 475] this Court noted that jurisdiction in a court is not attracted by the operation or creation of fortuitous circumstances. In that case, circumstances were created by one of the parties to the dispute to confer jurisdiction on a particular High Court. This was frowned upon by this Court by observing that to allow the assumption of jurisdiction in created circumstances would only result in encouraging forum shopping.

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150. Another case of creating circumstances for the purposes of forum shopping was World Tanker Carrier Corpn. v. SNP Shipping Services (P) Ltd. [World Tanker Carrier Corpn. v. SNP Shipping Services (P) Ltd., (1998) 5 SCC 310] wherein it was observed that the respondent/plaintiff had made a deliberate attempt to bring the cause of action, namely, a collision between two vessels on the high seas within the jurisdiction of the Bombay High Court. Bringing one of the vessels to Bombay in order to confer jurisdiction on the Bombay High Court had the character of forum shopping rather than anything else.

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151. Another form of forum shopping is taking advantage of a view held by a particular High Court in contrast to a different view held by another High Court. In Ambica Industries v. CCE [Ambica Industries v. CCE, (2007) 6 SCC 769] the assessee was from Lucknow. It challenged an order [Ambica Industries v. CCE, 2003 SCC OnLine CESTAT 1365] passed by the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) located in Delhi before the Delhi High Court. CESTAT had jurisdiction over the State of Uttar Pradesh, NCT of Delhi and Maharashtra. The Delhi High Court did not entertain the proceedings initiated by the assessee for want of territorial jurisdiction. Dismissing the assessee's appeal this Court gave the example of an assessee affected by an assessment order in Bombay invoking the jurisdiction of the Delhi High Court to take advantage of the law laid down by the

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Delhi High Court or an assessee affected by an order of assessment made at Bombay invoking the jurisdiction of the Allahabad High Court to take advantage of the law laid down by it and consequently evade the law laid down by the Bombay High Court. It was said that this could not be allowed and circumstances such as this would lead to some sort of judicial anarchy.

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***

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155. The decisions referred to clearly lay down the principle that the court is required to adopt a functional test vis-à-vis the litigation and the litigant. What has to be seen is whether there is any functional similarity in the proceedings between one court and another or whether there is some sort of subterfuge on the part of a litigant. It is this functional test that will determine whether a litigant is indulging in forum shopping or not.”

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14. Forum shopping has been termed as disreputable practice by the courts and has no sanction and paramountcy in law. In spite of this Court condemning the practice of forum shopping, Respondent 2 filed two complaints i.e. a complaint under Section 156(3)CrPC before the Tis Hazari Court, New Delhi on 6-6-2012 and a complaint which was eventually registered as FIR No. 168 under Sections 406, 420, 120-BIPC before PS Bowbazar, Calcutta on 28-3-2013 i.e. one in Delhi and one complaint in Kolkata. The complaint filed in Kolkata was a reproduction of the complaint filed in Delhi except with the change of place of occurrence in order to create a jurisdiction.

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24. This Court in G. Sagar Suri v. State of U.P. [G. Sagar Suri v. State of U.P., (2000) 2 SCC 636 : 2000 SCC (Cri) 513] observed that it is the duty and obligation of the criminal court to exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature.

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“ 25. This Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corpn. [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] noticed the prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. The Court further observed that : (Indian Oil Corpn. case [Indian Oil Corpn. v. NEPC India Ltd., (2006) 6 SCC 736 : (2006) 3 SCC (Cri) 188] , SCC p. 749, para 13)

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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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He submits that in view of above judgment, the case of the petitioners is fully covered. He further submits that the entire allegations

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are arising out of contract between the parties and there are allegations of not fulfilling the terms and conditions and if any dispute is there, that is civil in nature. He submits that key ingredients of cheating is not made out and to buttress his such argument, he relied in the case of Sarabjit Kaur v. State of Punjab and Another, (2023) 5 SCC 360 and he

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refers to paragraph no.13 of the said judgment, which is quoted below:

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“ 13. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that Respondent 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property dealers which was in subsequent complaints that the name of the appellant was mentioned. On the first complaint, the only request was for return of the amount paid by Respondent 2. When the offence was made out on the basis of the first complaint, the second complaint was filed with improved version making allegations against the appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal courts are not meant to be used for settling scores or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which FIR was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the proceedings to continue would be an abuse of process of the court.”

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On the other hand, Mr. Deepankar Roy, the learned counsel appearing on behalf of the respondent State submits that it appears that the agreement was at Bokaro and in view of that the complaint case has been filed and the Bokaro court is having jurisdiction and this Court may not interfere at this stage.

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In view of the above submission of the learned counsels appearing on behalf of the parties, the Court has gone through the contents of the complaint petition. In the complaint petition itself the

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place of occurrence is said to be the work order issued for the place of Rajasthan and the allegations are made in the complaint petition that the work was in progress till 01.04.2006 and Tehsildar and the police officer of Begun police station which happened to be in the State of Rajasthan seized the dumper etc. The allegations are made that the said place of digging the morum was identified by the petitioner-company. Thus, it is crystal clear that the occurrence has taken place at Rajasthan where the work order with regard to construction of national highways was being executed. In the complaint case itself, there is mention of agreement and about the loss received by the respondent no.2 which further suggest that the case is arising out of an agreement and the intention of cheating from the very beginning is not asserted therein and in view of that, the two cases relied by the petitioners in the case of Vijay Kumar Ghai and

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Others vs. State of West Bengal and Others and Sarabjit Kaur v. State of Punjab and Another(supra) are in favour of the petitioners.

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In view of above, entire criminal proceeding including the order taking cognizance dated 23.03.2010 in connection with Complaint Case No. 485 of 2009, pending in the court of learned Chief Judicial Magistrate, Bokaro is quashed.

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W.P.(Cr.) No. 133 of 2023 is allowed and disposed of.

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Pending petition, if any, also stands disposed of.

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( Sanjay Kumar Dwivedi, J.)

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SI/,

Ajit Gulabchand v. the State of Jharkhand

Case brief

What is this about?

What did the court decide?

Ajit Gulabchand v. the State of Jharkhand

Case brief

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