Mohinder Jain and Another vs State of Haryana

Gurdev Singh, J.—Petitioners, Mohinder Jain and Vakil Jain both sons of Bhagat Ram Mahajan, have filed this petition u/s 482 of the Criminal Procedure Code (hereinafter referred to as ''the Code''), invoking the inherent jurisdiction of this Court for quashing FIR No. 50 dated 11.2.2010 registered at Police Station Narwana City, under Sections 420, 419, 406, 467 and 471 IPC. According to them, they are partners in Mahindra Tractor Agency being run under the name and style of Ajay Trading Company, Patiala Road, Narwana. For running their business they availed loan facilities from the complaint-bank/respondent No. 2, including cash credit facility. By way of security, they mortgaged their three properties and also hypothecated their stock. The value of those mortgaged properties and hypothecated stock is much more than the loan amount. The bank has concealed the factum of two of the said properties and hypothecated stock while lodging the FIR. The FIR is patently malafide and abuse of process of criminal justice system. The same has been got registered with an intention of harming their image.

For proper appreciation of the matter, relevant portion of the FIR is reproduced below:

...That the accused aforementioned have availed Rs. 80 lacs cash credit limit from our bank, bank guarantee of Rs. 50 lacs and cash loan of Rs. 4 lacs and as security deposited title deed of agricultural land measuring 8.0 kanal viz 4840 square yards in Khasra No. 82/4, Khewat Khatta No. 140/186, as per jamabandi of the year 73-74 for the first time on 24.8.2006. Thereafter, the accused kept on increasing the limit of cash credit and guarantee and finally this property has been mortgaged to secure cash credit limit of 80 lacs and bank guarantee of 50 lacs. 3. That the aforementioned property was purchased by accused No. 1 Mohinder Jain vide sale deed No. 53 dated 11.4.l1978 mutation No. 2055. This was also certified by the Advocate of our Bank Sh. M.P. Gupta. 4. That presently, the accused owe the bank approximately Rs. 1 crore 40 lacs. When the bank took steps to reover this amount, it was revealed that this property had been sold by accused Mohinder Jain to one Rishala son of Tutiya, resident of Uchana vide sale deed No. 340 dated 9.9.1981 mutation No. 2147 prior to deposit of title deed with the bank. 5. That in this way, the accused have defrauded the bank by mis-utilizing the original sale deed which was in possession of the accused of the property which had already been sold by them in collusion with advocate of the bank and availed a loan of approximately 1 crore 30 lacs by defrauding the bank because they have got prepared false documents although the aforementioned mortgaged property was owned by somebody else. Thus, by keeping the bank in the dark crores have been obtained which is a serious offence. 6. That when the accused were approached regarding the same, they threatened to kill me and said that we have defrauded your bank and you are at liberty to do whatsoever you felt like....

Counsel for the petitioners cited judgment in Indian Oil Corporation Vs. NEPC India Ltd. and Others, and submitted that the dispute between the parties is of civil nature and in order to pressurize the petitioners to re-pay the loan, the present FIR has been got registered with a malafide intention. Such misuse of criminal procedure cannot be permitted and the FIR is liable to be quashed on that ground.

The principles relating to exercise of jurisdiction u/s 482 of the Code to quash a complaint and criminal proceedings were laid down in the said ruling. The following principles were laid down therein.

(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint is warranted while examining prayer for quashing of a complaint.

(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.

(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.

(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.

(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed of, is not by itself a ground to quash the criminal proceedings. The text is whether the allegations in the complaint disclose a criminal offence or not.

Counsel for the petitioner has placed reliance on principles No. (ii) and (v), reproduced above.

The above reproduced portion of the FIR makes it very much clear that the offences mentioned in the FIR are clearly made out against the petitioners. They got prepared false documents regarding the property which was owned by some else. While deciding this petition, it is not to be seen whether those contentions are correct or not, as held in the above said ruling. All those allegations are to be taken on their face value and all to be accepted in their entirety. The other properties of the petitioners may be worth crores but from that fact alone, it cannot be held that criminal proceedings have been initiated against them malafide or with malice to wreak vengeance or to cause harm to them. As is clear from the above principles, the same set of facts may make out a civil wrong as well as criminal offence. The facts stated in the FIR show that besides committing civil wrongs, the petitioners have also committed offences mentioned therein.

There is no ground for quashing the FIR and the petition is dismissed.