M/S Venkateshwara Hatcheries Pvt. Ltd And Anr vs State Of Assam And Ors

Heard Mr. A. Goyal, learned counsel for the petitioners; Mr. B.J. Dutta, learned Additional Public Prosecutor for respondent no. 1, State of Assam

and Mr. S. Chouhan, learned counsel for respondent nos. 4 â€" 10.

This criminal petition under Section 482, Code of Criminal Procedure, 1973 (‘the Code’ and/or ‘the CrPC’, for short) is filed seeking

quashing of the First Information Report/complaint, registered in connection with Dispur Police Station Case no. 757/2008 and the consequential

proceeding arising therefrom and the criminal proceeding of G.R. Case no. 4080/2008 arising out therefrom.

Mr. Goyal, learned counsel for the petitioner has submitted that initially 17 no. of persons joined together as complainants and a complaint was filed

before the Court of learned Chief Judicial Magistrate, Kamrup (M), Guwahati on 28.05.2008. The grievances of all the complainants were similar and

the complaint was filed ventilating there common grievances and accusations. On receipt of the complaint, the same was forwarded by the learned

Chief Judicial Magistrate to the Officer In-Charge, Dispur Police Station under Section 156(3), CrPC for registration of a case and to submit a report

after investigation. Mr. Goyal has further submitted that even if the averments and the allegations made in the complaint/FIR are considered and

accepted as true in its entirety then also none of the ingredients for the offences under Sections 406/420/384 of the Indian Penal Code (IPC) can be

said to have been disclosed. He has further submitted that though the complaint was made against the company, M/s Venkateshwara Hatcheries Pvt.

Ltd. as the accused, while registering the case, the police had registered the case against the petitioner no. 2 as one of the accused in the FIR. In such

view of the matter, this criminal petition has been preferred on behalf of the company and the petitioner no. 2.

Mr. Dutta, learned Additional Public Prosecutor has submitted that on a reading of the FIR/complaint, it cannot be said that ingredients of the

offence under Section 384, IPC and Section 406, IPC are disclosed. The question that is to be decided is to whether the offence of cheating as

defined under Section 420, IPC, is made out or not on the basis of the averments and accusations made in the FIR/complaint.

Mr. Chouhan, learned counsel for the informant has submitted that though it cannot be said that the ingredients for the offence under Section 384,

IPC are said to be disclosed, but on a reading of the complaint/FIR, it cannot be said that the ingredients for the offences under Section 406, IPC and

Section 420, IPC are also not made out. The complainants were made to enter into individual agreements on the promise that they would be growing

broiler chicks and they would be paid broiler growing charges. Acting on that assurance, the complainants had gone ahead to invest their money to

start the business of broiler farms. But after about 3 (three) years, the accused no. 1 company had suddenly and surreptitiously decided to shift their

business from its earlier location at Guwahati. As such, the complainants were deceived because of the actions on the part of the accused company

and their officials.

I have considered the submissions of the learned counsel for the parties and perused the materials available on record.

The inherent jurisdiction under Section 482, CrPC can be exercised in three situations;

(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. The

inherent powers though very wide, have to be exercised only in appropriate cases for the purpose of doing real and substantial justice and the powers

must be exercised with utmost care and caution. The wide powers available under Section 482 of the Code should not be exercised to stifle a

legitimate prosecution. The Court while exercising powers under Section 482, CrPC does not function as a court of appeal or revision. While

exercising its inherent jurisdiction under Section 482 of the Code, the Court is, therefore, not supposed to undertake an exercise to find out the

correctness of the allegations made in an FIR/complaint and it does not embark upon an enquiry as to the reliability, genuineness, etc. or otherwise of

the accusations made in the FIR/complaint. It is also true that at the same time, the Court should not hesitate to quash a criminal proceeding in certain

situations and a criminal prosecution which would amount to an abuse of the process of the court should be interdicted. The principles to be followed

with regard to quashing of a First Information Report or a complaint have been discussed in a catena of decisions of the Supreme Court and of this

Court. In State of Haryana vs. Bhajan Lal, reported in 1992 Supp. (1) SCC 33,5 the Supreme Court has identified 7 (seven) categories of cases, by

way of illustration, where the inherent powers under Section 482 of the Code can be exercised. It is settled that inherent jurisdiction can be exercised

to quash criminal proceeding arising out of an First Information Report/complaint where the allegations made in the First Information Report or 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 a case against

the accused.

To appreciate the rival submissions of the parties, it is necessary to look into the averments and accusations made in the complaint by the

complainants jointly.

The complaint was made against M/s Venkateshwara Hatcheries Pvt. Ltd., a company incorporated under the Companies Act, 1956. In the

complaint, the complainants had stated that the petitioner no. 2 and another person, Dr. Ajit Kumar Nath used to represent the petitioner no. 1

company (hereinafter also referred to as ‘the accused no. 1 company’, at places, for easy reference) in its dealings with the complainants. The

petitioner no. 2 (hereinafter referred to as ‘the accused no. 2’) is mentioned as General Manager of the accused no. 1 company.

9.1. The complaint has further mentioned that about 3 (three) years earlier, the accused no. 1 company’s Branch Manager approaching the

complainants, advised them that if they were interested then they could start broiler farm business individually. Accordingly, the complainants

constructed houses to set up farms and purchased necessary furnitures and equipments at their own cost to start the broiler farm business. The

complainants made separate agreements with the accused no. 1 company which contained a condition to the effect that the accused no. 1 company

would pay Rs. 3/- only per Kg as broiler growing charge to the complainants. The complainants had accordingly, started their business without any

pre-conditions with the accused no. 1 company and in that manner, the complainants had been maintaining themselves.

9.2. Reference is made to a date, 27.05.2008 as the date for cause of action. It is alleged that on that day, the complainants came to know that the

accused no. 1 company had started the process of shifting their office from the location where it was earlier located. Alleging malafide intention, the

criminal breach of trust and criminal conspiracy, the complainants have lodged the complaint jointly stating that if the company manages to leave

Guwahati then all the complainants would suffer a lot as they had incurred expenses to set up their business of broiler farms. It is further alleged that

at the time of making the agreement, signature of each of the complainants was taken on a blank stamp paper and additionally, blank cheque was also

taken from each of them.

On receipt of the complaint, the complaint was forwarded by the learned Chief Judicial Magistrate, Kamrup (M), Guwahati under Section 156(3)

to the Officer In-Charge, Dispur Police Station for registration of a case and to submit a report after investigation. On receipt of the complaint, the

Officer In-Charge, Dispur Police Station treating the complaint as First Information Report (FIR) registered it as Dispur Police Station Case no.

757/2008 on 02.06.2008 for offences under Sections 120B/420/406/384, IPC and investigation was entrusted to an officer accordingly.

Correspondingly, G.R. Case no. 4080/2008 has been registered.

Before proceeding further, as the FIR has been registered, inter-alia, for substantive offences punishable under Section 406, IPC, Section 420, IPC

and Section 384, IPC respectively, it is necessary to look into the ingredients required to attract the afore-mentioned offences.

11.1. Section 405, IPC defines criminal breach of trust and an offence of criminal breach of trust is punishable under Section 406, IPC. Section 405,

IPC and Section 406, IPC read as under :-

“405. Criminal breach of trust.â€"Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly

misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing

the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust,

or wilfully suffers any other person so to do, commits “criminal breach of trustâ€​.â€​

“406. Punishment for criminal breach of trust.â€"Whoever commits criminal breach of trust shall be punished with imprisonment of either

description for a term which may extend to three years, or with fine, or with both.â€​

11.2. While Section 415, IPC is an offence of cheating, Section 420, IPC is cheating and dishonestly inducing delivery of property. Section 415, IPC

and Section 420, IPC read as under : -

“415. Cheating.â€"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 or omission causes or is likely to cause damage or harm to that person in body, mind,

reputation or property, is said to “cheatâ€​. Explanation.â€" A dishonest concealment of facts is a deception within the meaning of this section.â€​

“420. Cheating and dishonestly inducing delivery of property. - Whoever cheats and thereby dishonestly induces the person deceived to deliver any

property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is

capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven

years, and shall also be liable to fine.â€​

11.3. On the other hand, the offence of extortion is defined in Section 383, IPC and punishment for extortion is prescribed in Section 384, IPC. Section

383, IPC and Section 384, IPC read as under :-

“383. Extortion.â€"Whoever intentionally puts any person in fear of any injury to that person, or to any other, and thereby dishonestly induces the

person so put in fear to deliver to any person any property or valuable security, or anything signed or sealed which may be converted into a valuable

security, commits “extortionâ€​.â€​

 “384. Punishment for extortion.â€"Whoever commits extortion shall be punished with imprisonment of either description for a term which may

extend to three years, or with fine, or with both.â€​

For ready reference, it is apt to refer to the decision in S.W. Patanitkar and others vs. State of Bihar and another, reported in (2002) 1 SCC 241

where the ingredients of the offences of criminal breach of trust and cheating have been explained in the following manner :

“9. The ingredients in order to constitute a criminal breach of trust are: (1) entrusting a person with property or with any dominion over property,

(ii) that persons entrusted (a) dishonestly misappropriating or converting that property to his own use: or (b) dishonestly using or disposing of that

property or wilfully suffering any other person so to do in violation (i) of any direction of law prescribing the mode in which such trust is to be

discharged (ii) of any legal contract made touching the discharge of such trust.

The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii) (a) the

person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person

so deceived should be intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) in cases

covered by (ii) (b), the act of omission should be one which causes or is likely to cause damage or harm .to the person induced in body, mind,

reputation or property.â€​

12.1. In R.S. Nayak vs. A.R. Antulay and Another, reported in (1986) 2 SCC 716 the main ingredients to attract the punishment for the offence of

extortion are stated and the same are as under :

“(i) the accused must put any person in fear of injury to that person or any other person;

(ii) the putting of a person in such fear must be intentional;

(iii) the accused must thereby induce the person so put in fear to deliver to any person any property, valuable security or anything signed or sealed

which may be converted into a valuable security; and

(iv) such inducement must be done dishonestly.â€​

As the complainants themselves have referred to an agreement, all similar in nature, which they had executed with the accused no. 1 company,

the terms and conditions of the said agreement can be looked into by this Court. In Sharon Michael and others vs. State of Tamil Nadu and another,

reported in (2009) 3 SCC 375, it is observed that if the first information report refers to certain documents, those documents can be taken into

consideration by the Court while exercising the inherent jurisdiction under Section 482, CrPC for the purpose of ascertaining as to whether the

allegations made in the complaint read as whole, even if taken to be correct in its entirety, disclose commission of any cognizable offence or not.

The agreement states that the accused no. 1 company is involved in the business of Poultry and has ventured into growing broiler chicks under a

franchisee scheme. When it wished to appoint agents for the limited purpose of growing, developing, maintenance and supervision of their chicks into

full grown broiler birds, the accused no. 1 company and the complainants had agreed to enter into an agreement as the master and the franchisee with

certain agreed terms and conditions. As per the agreement, the master would deliver broiler chicks, feeds and medicines to the franchisee and the

franchisee would be the custodian of the chicks, feeds and medicines. The franchisee would be responsible to handover all the grown up chicks/birds

to the master as per delivery schedule. The master would be the legal owner of the chicks and the franchisee would be the custodian of the

chicks/birds. The parties had reserved the right to renew the agreement. The franchisee agreed to bear the necessary costs and to provide manpower.

In terms of the agreement, as per the complainants themselves, after executions of the agreements, the business relationship between the accused

no. 1 company and the complainants continued for a period of 3 (three) years. It was on 27.05.2008, when the complainant got the information that the

accused no. 1 company had started a process of shifting their location from Guwahati the complainant had filed the complaint alleging as above.

There is a fine distinction between a mere breach of contract and an offence of cheating. Mere breach of contract cannot give rise to criminal

prosecution for cheating in all the cases. It depends upon the intention of the accused at the time of inducement which can sometimes be judged by his

subsequent conduct but such subsequent conduct alone is not the sole test. The accused must have fraudulent or dishonest intention right at the

beginning of the transaction, that is, the time when the offence is said to be committed. Thus, it is the intention at the inception which is the gist of the

offence. To hold a person guilty of cheating, it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise.

From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made a promise cannot be

presumed. To deceive is to induce a person to believe that a thing is true which is false and which the person practicing the deceit knows or believes

to be false. It is not every breach of trust which results in an offence of criminal breach of trust. To term an act as criminal breach of trust, there shall

be evidence of dishonest misappropriation.

As it is evident from the complaint itself that the business relationship between the accused no. 1 company and the complainant continued for a

period of about 3 (three) years. The business relationship was entered into between the accused no. 1 company and the complainants on agreed terms

and condition. There is no allegation of any deception on the part of the accused no. 1 company and its officials at the time of entering into the

agreements. The complainants were aggrieved by the decision of the accused no. 1 company to shift and/or to close down its business office in

Guwahati, after continuance of their business relationship for a period of 3 (three) years. Such a decision to shift the location of the office and/or to

close down its office on the part of the accused company cannot be attributed as an act of dishonest intention. Such a decision can be for many

reasons. It can be due to financial reasons or it can be due to logistical reasons or for many other myriad reasons. Thus, the decision on the part of the

accused no. 1 company for closing down its business without anything further cannot be imputed with dishonest or fraudulent intention. It may be true

that if there is breach of any of the conditions of the agreements entered into between the accused company with the complainants, the complainants

might suffer loss in monetary terms and/or any other aspects. Such loss or damage, if any, resulting from breach of contract, cannot give rise to any

cause of action for launching criminal prosecution for cheating, criminal breach of trust or extortion imputing fraudulent or dishonest intention behind it.

The dispute between the parties, arising out of agreements laying down the terms and conditions of their business relationships, at the most, can be

treated to be a civil dispute but the same cannot be converted to a dispute of criminal nature.

In the above fact situations obtaining in the case in hand, this Court is of the considered view that are no allegations in the FIR/ complaint which

prima facie constitute the ingredients of the offences either under Section 406, IPC or under Section 420, IPC or under Section 384, IPC. In the

absence of such ingredients for the aforesaid offences, there could not be any presence of the ingredients of the offence of criminal conspiracy,

punishable under Section 120B, IPC.

Thus, the initiation and continuance of the criminal prosecution arising out of the complaint/First Information Report in respect of Dispur Police

Station Case no. 757/2008 (corresponding G.R. Case no. 4080/2008) would amount to abuse of the process of the Court. The interests of justice will

be sub-served if the criminal proceeding of G.R. Case no. 4080/2008, arising out of the First Information Report/complaint lodged in connection with

Dispur Police Station Case no. 757/2008, are quashed. Accordingly, the criminal proceeding of G.R. Case no. 4080/2008 arising out of Dispur Police

Station Case no. 757/2008 and the First Information Report (FIR) registered as Dispur Police Station Case no. 757/2008 are hereby quashed.

Resultantly, this criminal petition is allowed. There shall, however, be no order as to cost.