The High Court dismissed a petition under Section 482 Cr.P.C. seeking quashing of an investigation into alleged cheating and forgery involving fake livestock market receipts. The court held that disputed questions of fact regarding fabrication cannot be examined at this stage.
Criminal petition dismissed; investigations to proceed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR
Crl.P.No.788/2014
ORDER:
The petitioner which is private limited company represented by its Authorized Signatory filed the present criminal petition under section 482 Cr.P.C., seeking quashing of investigation in Cr No.496/2013 of Sadasivpet Police Station, Medak District, registered for the offences punishable under section 420 and 468 IPC.
2. The allegations in the report are as under: The petitioner is a licensee of Sadasivpet Agricultural Market Committee, conducting business in livestock such as buffaloes, sheep and goats. As a licensed trader and as per condition No.3 of the licence, the petitioner is required to submit their monthly purchase return statements on the purchases of livestock on or before 25th of the succeeding month and pay market fee at 1% ad valorem on the purchase transactions. The petitioner procures livestock from different parts of the State of Andhra Pradesh and on the basis of the turnover being furnished by them, market fee of 1% is levied every month. With regard to import of livestock, the market committees in transit collect the market fee at their check post and issue receipts. To the extent of such transactions, the Agricultural Market Committee, Sadasivapet accordingly exempts payment of market fee. The present report is based on an enquiry report submitted by a committee constituted by the Commissioner and Director of Agricultural Marketing, consisting of Joint Director of Marketing (Vigilance), Deputy Director of Marketing, Hyderabad and Selection Grade Secretary, Agricultural Market Committee, Bowenpally. The report clearly alleges that the petitioner herein enclosed 2603 fake market committee receipts issued by Agricultural Market committees of Banswada, Veldurthy, Chilakaluripet, Peddapalli, Tiruvuru, Kothavaalsa, Pithapuram, Gajapathinagaram and claimed exemption from payment of market fee. Apart from that, the petitioner is alleged to have unauthorisedly prepared rubber stamp and used the same on the receipts produced before the Sadasivpet Market Committee. It is thus alleged that the petitioner cheated the Government by fabricating documents to an extent of Rs.20,96,710/- for the financial years 2009-10, 2010-11, 2011-12 and 2012-13. 3. Sri E. Manohar, the learned Senior Counsel appearing for the
petitioner mainly submits that even accepting the allegations in the report to be true, no offence is made out against the petitioner. The learned Senior Counsel further submits that the petitioner has produced the receipts furnished to them by the livestock owners which are bought from different places. He further submits that the petitioner has been paying crores of rupees to the Government and as such question of defrauding the Government to an extent of Rs.20,96,710/- for a period of four years is highly unbelievable. He submits that immediately after issuance of show cause notice the petitioner paid the entire amount of Rs.20 lakhs and as such continuation of proceedings would be an abuse of process of law.
4. Per contra, Sri K. Upender Reddy, the learned counsel for the second respondent and the learned Public Prosecutor for the first respondent strenuously opposed the said application contending that a reading of the first information report do prima facie make out a case against the petitioner. The learned Public Prosecutor strenuously contended that the investigating agency is taking steps to probe the returns filed for earlier years and that it may not be proper for this court to stall the investigation which is at its threshold.
5. The power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. As held by the Apex Court in DIVINE RETREAT CENTRE V. STATE OF KERALA[1] the power under section 482 Cr.P.C.,. has to be exercised sparingly, carefully and with caution only where such exercise is justified by the tests laid down in the Section itself. Section 482 does not confer any new power on the High Court but only saves the inherent power which the court possessed before the enactment of the Code. There are three circumstances under which the inherent jurisdiction may be exercised, namely (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of Court, and (iii) to otherwise secure the ends of justice.
[2] 6. In CBI V. RAVI SHANKAR SRIVASTAVA the Apex Court cautioned that the inherent power should not be exercised to stifle a legitimate prosecution and the High Court should refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court.
7. The power to quash criminal complaints should be used sparingly and with abundant caution. The criminal complaint is not required to verbatim reproduce the legal ingredients of the alleged offence. If the necessary factual foundation is laid in the criminal complaint, merely on the ground that a few ingredients have not been stated in detail, the criminal proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is bereft of even the basic facts which are absolutely necessary for making out the alleged offence. (Padal Venkata Rama Reddy v. Kovvuri Satyanarayana Reddy (2011) 2 ALD 948 (SC); Rajesh Bajaj v. State (1999) 3 SCC 259); Indian Oil Corporation v. NEPC India Ltd.(2006) 6 SCC 736).
8. Keeping in view the principles laid down by the Apex Court, I shall now deal with the case on hand.
9. One of the main grounds urged by the learned Senior Counsel for the petitioner is that the receipts which are submitted to the Agricultural Market Committee, Sadasivpet, are the receipts produced before them by the owners of livestock and therefore the question of petitioner fabricating the documents and producing the same before the authorities with a view to evade payment of tax is highly improbable. A reading of the first information report would show that the petitioner submitted market committee receipts issued by the Agricultural Market Committee, Veldurthy and claimed exemption from payment of market fee. It is categorically stated in the first information report that in Medak District there is no market committee in the name of Agricultural Market Committee, Veldurthy. The submission of market committee receipts of Veldurthy made the officers to investigate into the genuineness of other receipts submitted by the petitioner. During the course of enquiry, the Secretaries of the concerned Market Committees verified the alleged market committee receipts submitted by the petitioner and found them to be fake. On receipt of such information, The Commissioner and Director for Agricultural Marketing, Government of Andhra Pradesh, Hyderabad, ordered a detailed enquiry against the petitioner which led to formation of a committee headed by Joint Director of Marketing (Vigilance), Deputy Director of Marketing, Hyderabad and Selection Grade Secretary, Market Committee, Bowenpally. On 20-4-2013 the enquiry committee visited the Agricultural Market Committee, Sadasivpet, verified the receipts submitted by the petitioner on 8-5-2013, summoned the Secretaries of various Market
Committees for verification of alleged fake receipts submitted by the petitioner. On thorough scrutiny of the used receipt books, together with stock register of receipt books and unused receipt books, the enquiry committee found that the receipt books and their receipts on verification with the original receipt books of the Agricultural Market Committee referred to above were incorrect and fake except few. The orders passed by the Assessment Officers for the assessment years 2009-10, 2010-11, 2011-12, 2012-13 would clearly reveal that these receipts were produced by one Mr. Srikar, the Production Manager of the petitioner company.
10. The main ground urged by the learned Senior Counsel that even accepting the allegations in the report to be true, ingredients constituting the offences punishable under sections 420 468 IPC are not made out against the petitioner.
‘Cheating’ as defined in Section 415 of the Indian Penal Code reads as under:
415. Cheating : Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so, deceived, and which act of omission causes is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".
Explanation : A dishonest concealment of facts is a deception within the meaning of this Section."
The second part speaks of intentional deception which is not only to induce the person deceived to do or omit to do something but also to cause damage or harm to that person in body, mind, reputation or property. As held by the Apex [3] Court in G.V. RAO V. L. H.V.PRASAD that intention and deception pre-supposes the existence of a dominant motive of the person making the inducement. Such inducement should have laid the person deceived or induced to do or omit to do anything which he would not have done or omitted to do if he were not deceived. The further requirement is that such act or omission should have caused damage or harm to body, mind, reputation or property. As mentioned above Section 415 of IPC has two parts. While in the first part, the
person must "dishonestly" or "fraudulently" induce the complainant to deliver any property and the second part need not necessarily relate to property. In the second part, the person should intentionally induce the complainant to do or omit to do a thing. That is to say, in the first part, inducement must be dishonest or fraudulent. In the second part, the inducement should be intentional.
11. The averments constituting the offence of cheating are inherent in the facts itself. Fake receipts claiming exemption to a tune of Rs.20,96,710/were submitted by the petitioner along with their monthly returns relating to purchase of livestock. Whether the petitioner has really fabricated and produced these receipts or whether the sellers of livestock have produced those receipts at the time of selling their livestock need to be investigated by the police. Since 2603 market committee receipts which are produced by the petitioner are found to be fake, at this stage, it cannot be said that the petitioner has no dishonest intention to cause wrongful loss to the Government. Further, the issue as to whether the petitioner has fabricated the receipts or whether their livestock holders have fabricated and produced them before the petitioner requires to be investigated by the police. Apart from that, the petitioner herein filed Crl.M.P.No.19/2014 seeking anticipatory bail. By an order dt. 18-1-2014, the learned Special Judge for trail of offences under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989–cum-V Additional Sessions Judge, Medak at Sangareddy rejected the said application holding that a prima face case is made out against the petitioner. Being unsuccessful in the said application, the present criminal petition is filed on 27-1-2014 seeking quashing of investigation in Cr.No.496/2013 of Sadasivapet Police Station.
12. The next ground urged by the learned Senior Counsel for the petitioner is that the petitioner has been paying huge amount by way of tax to the Government and it is highly improbable to believe that the petitioner would have cheated the Government to a tune of Rs.20 lakhs. In view of the payment of the demanded amount, he submits that continuation of proceedings would be an abuse of process of law.
13. The petitioner claimed exemption from payment of 1% ad valorem on purchases made by producing certain receipts, which were found to be fake. On noticing the alleged fraud, notices were issued for payment of money. Merely because, the petitioner has repaid an amount of Rs.20,96,710/- towards
market fee without raising any protest to the objection raised by the Assessing Officer during their assessment, the same cannot be a ground to exonerate the petitioner from the crime. The petitioner might have paid huge amounts by way of tax but in view of the submission made by the Public Prosecutor that receipts submitted along with earlier returns is also being investigated; the said plea of the petitioner cannot be accepted. Even otherwise, repayment of defalcated amount cannot be a ground to quash the proceedings.
14. The last ground urged by the learned counsel for the petitioner is that the receipts which were issued by the market committees were in the name of the owners of livestock and it cannot be presumed that the petitioner has cheated the Government since the petitioner is not the owner of the livestock. But one fact which remains undisputed is that these receipts which are alleged to have been produced by the owners of livestock were in turn produced by the representative of the petitioner before the Agricultural Market Committee, Sadasivapet, Medak District. Whether these receipts are produced by the holders of the livestock or whether the petitioner has fabricated these documents in the names of holders of livestock cannot be decided in an application under section 482 Cr.P.C., As the issue involves disputed questions of fact, this court while exercising its inherent power under section 482 Cr.P.C,, has no authority or jurisdiction to go into the matter or examine their correctness. Since the allegations in the report have to be accepted on the face of it, the truth or falsity of the said allegation cannot be gone into by this court at this stage.
15. Viewed from any angle, this court is of the view that there are no merits in the criminal petition.
16, Accordingly, the criminal petition is dismissed. Miscellaneous petitions, if any, shall stand dismissed
______________________ C.PRAVEEN KUMAR,J
Dt. 21-3-2014 kmr
2 issues framed by the court
Whether the High Court should quash criminal proceedings under Section 482 Cr.P.C. where the FIR alleges fabrication of fake market receipts.
Whether repayment of the alleged defrauded amount exonerates the petitioner from the crime or warrants quashing of the investigation.
Colour shows how this judgement treated each authority
DIVINE RETREAT CENTRE V. STATE OF KERALAReferred¶8
(2008) 3 SCC 542 · Who else cites this
CBI V. RAVI SHANKAR SRIVASTAVAReferred¶8
(2006) 7 SCC 188 · Who else cites this
Padal Venkata Rama Reddy v. Kovvuri Satyanarayana ReddyReferred¶8
(2011) 2 ALD 948 (SC);
Rajesh Bajaj v. StateReferred¶8
(1999) 3 SCC 259 · Who else cites this
Indian Oil Corporation v. NEPC India Ltd.Referred¶8
(2006) 6 SCC 736 · Who else cites this
G.V. RAO V. L. H.V.PRASADExplained¶9
(2000) 3 SCC 693 · Who else cites this
3 provisions across 2 enactments
Petitioner (Private Limited Company)
State of Andhra Pradesh
CPRAVEEN KUMAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
