Kailash Chandra Agrawal vs Ayaappa K.N

S.Pujahari     Â

This is an application filed under Section 482 of Cr.P.C. seeking for quashment of the order dated 7. 03.2018 passed by the learned J.M.F.C.,

Kesinga in 1. C.C. No.1 of 2018 taking cognizance of the offences under Sections 420, 341, 403, 405, 425, 426 and 506 of I.P.C., so also the

consequential proceeding, qua the petitioner-accused.

Background facts may be briefly stated as follows:-

The opposite party-company, represented by its Authorized Signatory, namely, Ayaappa K.N. had leased out two number of fusion machines in favour

of the accused â€" Chandrodaya Sampathy under an agreement on a condition, inter-alia, that the said machines shall not be sub-let to any other

party/person without approval of the complainant-company. The Authorized Signatory of the complainant-company filed a complaint before the

learned J.M.F.C., Kesinga registered as I.C.C. No.20 of 2016 against the present petitioner and co-accused persons alleging, inter-alia, that without

the knowledge and permission of the opposite party-company, Chandrodaya Sampathy sub-let the machines to another co-accused, namely, M.

Venkatesh Reddy in violation of the condition of the lease, and thereafter, when the complainant-company demanded return of the machines, there

was no response from Chandrodaya Sampathy and M. Venkatesh Reddy. It is further alleged that belatedly on 21.06.2016 Chandrodaya Sampathy

returned one machine out of the two in a damaged condition while the other machine was held captive by the present petitioner in his godown.

Alleging all the three accused persons to have dishonestly misappropriated the aforesaid machine in violation of the terms of the agreement, and also

that Chandrodaya Sampathy refused to pay the outstanding dues to the tune of Rs.35,04,337/-, and indulged in other criminality, the Authorized

Signatory of the complainant-company lodged a report with the I.I.C., Kesinga Police Station, and since there was no proper action by the police, the

complainant-company through its Authorized Signatory filed a complaint registered as I.C.C. No.20 of 2016 before the learned J.M.F.C., Kesinga.

Since the said complaint was dismissed by the learned J.M.F.C., Kesinga as per the order dated 23.09.2016, the complainant approached this Court in

CRLMP No.1182 of 2016 which was disposed of vide the order dated 03.01.2017 with the observation and direction as follows:-

“8. Learned counsel appearing for opposite party no.7 submits that in the complaint petition, there is no allegation of commission of any offence by opposite party

no.7 and that the dispute has been rightly held by the J.M.F.C., Kesinga to be civil in nature relating to breach of contract and therefore, the impugned order calls for

no interference.

A mere breach of contract would not give rise to a criminal complaint, but subsequent action and conduct of the parties, though arising out of breach of contract,

sometimes may constitute an offence. Retaining a pledged machine by lessee or disposing it of otherwise after termination of contract of pledge in violation of the

terms of the contract amounts to offence of breach of trust as defined in section 405 of the Penal Code. The averments made in paragraph-8 (ii) to (vi) read as a whole

do allege commission of some offences. Therefore, instead of rejecting the complaint outright, the J.M.F.C., Kesinga should have considered either to send the

complaint under section 156(3), Cr.P.C. to the Police Station for registration as F.I.R. and investigation or to conduct inquiry in order to decide the question of

cognizance and issuance of process. Without doing so, the learned magistrate has simply jumped to the conclusion that the dispute is civil in nature arising out of

breach of contract and, therefore, no complaint lies, which was uncalled for.

In the light of the aforesaid discussion, I set aside the impugned order and direct the J.M.F.C., Kesinga to consider either to send the complaint under section

156(3), Cr.P.C. to Kesinga P.S. or to inquire it himself as per Section 202, Cr.P.C. and pass appropriate order in accordance with law.â€​

As it appears, pursuant to the aforesaid order passed by this Court, the earlier complaint (I.C.C. No.20 of 2016) was referred to police under

Section 156(3) of Cr.P.C. giving rise to registration of Kesinga P.S. Case No.48 of 2017 which after completion of investigation ended with

submission of a final report on the ground that no case was made out against the accused persons. In the wake of the aforesaid, and upon being

noticed, the complainant filed a protest petition before the learned J.M.F.C., Kesinga and the said protest petition was treated as complaint and

registered as I.C.C. No.1 of 2018. The learned J.M.F.C., Kesinga recorded initial statement of the complainant followed by an enquiry under Section

202 of Cr.P.C., and on the basis of the materials so placed, passed the impugned order dated 07.03.2018 taking cognizance of offences under Sections

420, 341, 403, 405, 425, 426 and 506 of I.P.C. against the petitioner and the co-accused persons directing them to be proceeded against for the said

offences. Hence, the present application by the petitioner challenging the said order.

Heard the learned counsel appearing for both the sides.

It is the contention of the learned counsel for the petitioner that the materials on record, even if are taken at their face value, make out no case

against the petitioner. According to him, the case has been cooked up mischievously and frivolously, and the learned Magistrate without application of

judicial mind has taken cognizance of the offences mechanically vis-Ã -vis the petitioner. It is his further submission that even assuming for the sake

of argument that there was violation of any condition of contract between the complainant and the co-accused persons, no criminality therefor can be

attributed to the petitioner, inasmuch as the dispute between the parties was that of a civil nature, and that the present petitioner in good faith had

allowed the machine in question being kept inside his godown premises in safe custody, on the request of the co-accused persons.

Per contra, the learned counsel appearing for the complainant-opposite party submits that the materials on record well make out a case of dishonest

intention on the part of the petitioner in furtherance of violation of the terms of the contract between the parties giving rise to the criminal breach of

trust.

This Court has already observed vide the order dated 03.01.2017 in CRLMP No.1182 of 2016 that retention of a pledged machine in violation of the

terms of contract, PER SE prima-facie amounts to an offence of breach of trust as defined in Section 405 of I.P.C. It is the own version of the

petitioner that one of the machines had been kept by him in his godown premises, and that it was only after police intervention, the same was produced

at the Police Station. It needs no mention that at the stage of taking cognizance, the Magistrate is not required to resort to any threadbare analysis of

the materials produced, or to take into account any probable defence plea. Although it cannot be denied that for the selfsame dispute, there can lie a

civil action, but when the ingredients of the criminal offence are prima-facie made out from the facts and materials on record, there is no bar for

launching of a criminal prosecution. In the context, a reference may be made to Sau. Kamal Shivaji Pokarnekar vrs. The State of Maharashtra

and others (Criminal Appeal No.255 of 2019), decided on 12.02.2019. In paragraph-9 of the said judgment, the Apex Court have held as follows:-

“9. Having heard the learned Senior Counsel and examined the material on record, we are of the considered view that the High Court ought not to have set

aside the order passed by the Trial Court issuing summons to the Respondents. A perusal of the complaint discloses that prima-facie, offences that are alleged

against the Respondents. The correctness or otherwise of the said allegations has to be decided only in the Trial. A the initial stage of issuance of process it is not

open to the Courts to stifle the proceedings by entering into the merits of the contentions made on behalf of the accused. Criminal complaints cannot be quashed

only on the ground that the allegations made therein appear to be of a civil nature. If the ingredients of the offence alleged against the accused are prima facie

made out in the complaint, the criminal proceeding shall not be interdicted.â€​

Having regard to the materials on record and for the discussions made hereinbefore, this Court does not find it to be a fit case to exercise the power

under Section 482 of Cr.P.C.

In the result, this CRLMC being devoid of merit stands dismissed.

As the restrictions due to resurgence of COVID-19 situation are continuing, learned counsel for the parties may utilize a printout of the order available

in the High Court’s website, at par with certified copy, subject to attestation by the concerned advocate, in the manner prescribed vide Court’s

Notice No.4587, dated 25th March, 2020 as modified by Court’s Notice No.4798, dated 15th April, 2021.

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