Allowed

Ajay Kumar v. the State of Kerala

Kerala HC2 Dec 2021Crl.MC/1616/2021

Case brief

AI extract

What is this about?

The High Court of Kerala quashed an FIR registered for cheating and criminal breach of trust. The court held the matter was a civil dispute resolved via Lok Adalath, noting malafide intent was absent and subsequent cheque dishonor could not convert a civil dispute into a criminal one.

What did the court decide?

FIR No.13/2021 dated 12.01.2021 registered at Ernakulam Town South Police Station is quashed.

Ajay Kumar Vs the State of Kerala — Cheque Dishonour | Kerala HC (2021)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE K.HARIPAL

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THURSDAY, THE 2^ND DAY OF DECEMBER 2021 / 11TH AGRAHAYANA, 1943

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CRL.MC NO. 1616 OF 2021

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(TO QUASH THE FIR NO.13/2021 DATED 12.01.2021 OF ERNAKULAM TOWN SOUTH

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POLICE STATION, ERNAKULAM DISTRICT)

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PETITIONERS/ACCUSED NO.2 TO 4:

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1 AJAY KUMAR AGED 58 YEARS S/O.KRISHNAN NAIR, MANAGING PARTNER, HARELY CARBEI PVT.LTD., VYABHARA BHAVAN, KADAVANTHARA - 682 020. 2 ARUN PUSHPAGATHAN AGED 26 YEARS S/O.PUSPANGATHAN, MANAGING PARTNER, HARELY CARBEI PVT. LTD., VYABHARA BHAVAN, KADAVANTHARA - 682 020. 3 BOBY JACOB MARKOSE AGED 60 YEARS S/O.MARKOSE, KARAKKAT HOUSE, NATTAKOM, KOTTAYAM - 686 013. BY ADVS. K.N.ABHILASH SRI.SUNIL NAIR PALAKKAT SRI.M.A.AHAMMAD SAHEER

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RESPONDENTS/STATE AND DEFACTO COMPLAINANT:

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1 THE STATE OF KERALA REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, COCHIN - 682 031. 2 THE STATION HOUSE OFFICER ERNAKULAM TOWN SOUTH POLICE STATION, ERNAKULAM DISTRICT - 682 013. 3 JOBY N.MATHEW AGED 49 YEARS NEDUMKUZHY, KUNNAKKEL KARA, VALAKOM, MUVATTUPUZHA - 686 661. 4 A.S.ENTERPRISES REP. BY ITS PROPRIETOR YERUVA ANAND REDDY THROUGH POWER OF ATTORNEY HOLDER JOBY N.MATHEW, AGED 49 YEARS, NEDUMKUZHY, KUNNAKKEL KARA, VALAKOM, MUVATTUPUZHA, PIN - 686 661. BY ADVS. SHRI.R.SANJITH

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Crl.M.C.No.1616 of 2021

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SMT.C.S.SINDHU KRISHNAH

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PP - SMT. C.SEENA

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THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON

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02.12.2021, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Crl.M.C.No.1616 of 2021

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ORDER

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Petitioners are the accused in Crime No.13/2021 of Ernakulam South police station registered on 13.01.2021 alleging offence under Sections 406 and 420 read with Section 34 of the IPC. There are four accused in the crime, who are the petitioners including a company and three of its directors. The accused Nos.2 to 4 in the crime are the petitioners in this application filed under Section 482 of the Cr.P.C.

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The crime was registered on the strength of the First Information Statement given by Joby N.Mathew, who is the 3^rd respondent. It is alleged that accused persons, with the intention of cheating the defacto complainant, had on the promise of making remittance of 25% within three days and the balance 75% within 15 days made the complainant to deliver hill produces worth Rs.30,75,975/-. Later cheques were issued for that amount, but were returned dishonored, thus caused the defacto complainant loss of Rs.30,75,975/- and obtained an illegal gain of that much amount by the accused persons. On that basis the

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Crl.M.C.No.1616 of 2021

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crime was registered. Now the petitioners have moved this Court

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for quashing the proceedings.

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I heard the learned counsel for the petitioners and also learned counsel for respondents 3 and 4.

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Learned counsel for the petitioners submitted that it is a civil dispute given the cloak of criminal offence, that the entire dispute was settled through Adalath and an award has been drawn up and if at all any amount is due to the defacto complainant, that award can be executed through civil court. But instead of doing that, they have approached the police and by influencing the police, a case has been got registered with malafide intention. It was also pointed out that the crime was registered after a period of one and a half years, that the cause of action had arisen on 21.06.2019, whereas the crime was registered only on 13.01.2021 which would reflect the malafide intention of the defacto complainant.

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On the other hand, relying on the decision reported in Sindhu S Panicker v A Balakrishnan and another [2019 KHC

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Crl.M.C.No.1616 of 2021

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791] the learned counsel for the party respondents pointed out that delay aspect cannot be considered in a proceedings under Section 482 of the Cr.P.C. Learned counsel also relied on the decision reported in Sangeetaben Mahendrabhai Patel v. State of Gujarat and another [2012 (7) SCC 621] and pointed out that the mere contention that proceedings under Section 138 of the Negotiable Instruments Act has been registered is not a ground for initiating proceedings alleging offence under Sections 406 and 420 IPC. According to the learned counsel, the malafide intention of the petitioners is evident. Product worth more than Rs.30 lakhs was given but its price was not paid. That is the substance of the allegation. The award was obtained as a protracting tactics of the petitioners.

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After hearing counsel on both sides, I have no doubt in my mind that this is purely a civil dispute between the parties, which is very much evident from the face of the allegations. The petitioners are hill produce dealers and had procured items worth more than Rs.30,00,000/- from the party respondents for which

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Crl.M.C.No.1616 of 2021

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cheques were given; when amounts were defaulted, some actions were initiated and that was how the matter had reached before the Lok Adalath at Ernakulam and Annexure A2 indicates that by award dated 31.01.2020 both parties reached a settlement and the petitioners agreed to pay the amount in instalments with interest. The first instalment, for which a cheque for Rs.15,00,000/- was issued and thereafter for the balance amount a second cheque was also issued, which is evident from Annexure A2. Annexure A2 award was passed way back on 31.01.2020. It appears that the cause of action for this transaction had arisen on 21.06.2019.

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After hearing counsel on both sides, at least for three reasons the Court has to think that such a crime was launched with the intention of harassing the petitioners. Firstly, as stated earlier, from the face of the admitted facts it is clear that prima facie it is a civil dispute arose out of non-payment of money on delivering hill produces from the respondents. In other words, items worth more than Rs.30,00,000/- were purchased by the petitioners from the respondents and the amount was not paid. It

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Crl.M.C.No.1616 of 2021

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appears that later cheques were issued, which were dishonoured.

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Whatever it may be, the dispute is purely civil in nature.

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Secondly, it is an admitted case that when disputes

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arose, the first petitioner had moved the Adalath and both the parties sat together and on consensus an award was passed. That means, at least at that stage, both parties agreed that it was a business deal between the parties and the award was passed. An award could be passed by an Adalath only if both the parties sat together and deliberated upon the dispute. After attending the Adalath with open minds and agreeing to pass an award there is no point in turning up on a subsequent point of time alleging the commission of criminal offence by the accused persons, that is the petitioners. Thirdly, Annexure A3 indicates that on the same transaction, the third respondent has instituted a complaint against the petitioners before the V Additional Civil Judge's Court, Guntur where the case has been taken on file as C.C.176/2020. The date of the complaint cannot be discerned. But date of offence is shown as 31.10.2019. Here also from the facts of the case, the

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Crl.M.C.No.1616 of 2021

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cause of action is the same, i.e. the payment of a sum of Rs.30,75,975/- on account of non-payment of money on the items supplied by the respondents.

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From the above, numerous inferences are possible. Firstly, the subject matter of dispute is an amount of Rs.30 lakhs odd payable by the petitioners to the party respondents on account of supply of items. Earlier when the amount was defaulted, the matter reached before the Adalath and parties reached a settlement. That means, till that point of time no one has a case that it has a criminal tone. That was how the matter had reached before the Adalath. One more inference is possible because, in order to attract offence under Section 420 of the IPC, the malafide intention should be there from the very inception. If the petitioners had any such intention to cheat the respondents, they would not have approached the Adalath and facilitate the passing of an award. So the non-payment of the money agreed to by the petitioners cannot be given the stamp of an offence later on point of time. Therefore, the party respondents are trying to give the

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Crl.M.C.No.1616 of 2021

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cloak of a criminal offence for a civil dispute and such a contention has to be upheld.

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Delay in such cases cannot be highlighted as a big

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issue but the delay has to be viewed in this context only. When all these aspects are taken into consideration, I do not think that the petitioners can be justifiably prosecuted, by giving a different connotation by bringing ingredients of offences under Sections 406 and 420 read with 34 of the IPC on the very same cause of action. Therefore, the interference of this Court in exercise of ex-debito justitiae is warranted to do substantial justice. Annexure A1 FIR is liable to be quashed.

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The Crl.M.C is allowed quashing Annexure A1 FIR.

Sd/-

K.HARIPAL

JUDGE

//True Copy// P.A to Judge

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Jms/29.11

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Crl.M.C.No.1616 of 2021

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	APPENDIX OF CRL.MC 1616/2021
PETITIONER ANNEXURE
ANNEXURE A1	THE TRUE COPY OF THE FIR NO.13/2021 DATED 13/1/2021 OF THE ERNAKULAM TOWN SOUTH POLICE STATION.
ANNEXURE A2	TRUE COPY OF THE AWARD PASSED BY THE LOK ADALATH IN PLP NO.27606/2019 DATED 31/01/2020 ALONG WITH TYPED COPY.
ANNEXURE A3	THE TRUE COPY OF THE COMPLAINT DATED NIL IN CC NO.176/2020 ON THE FILES OF V ADDL. JUNIOR CIVIL
	JUDGE COURT GUNTUR, FILED BY THE 4TH RESPONDENT.

Ajay Kumar v. the State of Kerala

Case brief

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Ajay Kumar v. the State of Kerala

Case brief

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