Pardeep Kumar Grover and Another vs J and K Bank Limited

Mansoor Ahmad Mir, J.—Petitioners have invoked the jurisdiction of this Court in terms of Section 561-A Criminal Procedure Code for

quashing tin: order dated 11th May, 2002 passed by learned Chief Judicial Magistrate, Srinagar, in the complaint titled as Jammu & Kashmir Hank

Limited v. Pardeep Kumar Grover and Anr. and order dated 6th October, 2003 passed by Principal Judge, Srinagar in the revision petition titled

as Pardeep Kumar Grover and Anr. v. Jammu & Kashmir Bank Limited, on the grounds taken in the petition.

Heard. Perused. Considered.

Learned Counsel for petitioners argued that the complaint as well as the statements recorded do not disclose the commission of any offence and

all the ingredients which are necessary for constituting offence u/s 420, 418 and 406 of RPC are lacking. In terms of the allegations contained in

the complaint, the Courts at Srinagar are not having jurisdiction to entertain the complaint. If at all it could be said that complaint discloses the

commission of offence(s) then it was to be filed before, and tried by, the court of competent jurisdiction at Delhi but the allegations contained in the

complaint disclose a civil wrong. Complainant had already filed a suit for recovery before the Debts Recovery Tribunal, New Delhi. Thus, drawing

of cognisance and issuance of process are abuse of the process of law.

Learned Counsel for respondent/complainant argued that the allegation contained in the complaint prima facie disclose commission of offence

punishable u/s 420, 418 and 406 of RPC and the Courts at Srinagar are having jurisdiction to try the case in terms of the allegations contained in

the complaint.

In order to determine the controversy, it is necessary to reproduce the allegations contained in the complaint precisely herein as under;-

It is alleged in the complaint that the accused made a request for sanction of loan which was acceded to by the complainant bank and

accordingly documents came to be executed at Delhi and accused availed and utilized the loan facility from complainant's branch office at Saddar

Bazar, Delhi but failed to repay the same. Accused were asked to repay the loan amount. Accused have dishonestly made the complainant bank to

sanction loan. In support of the complaint statements of complainant, Mohammad Farooq Rather and one witness Abdul Hamid Banday, came to

be recorded on 11th May, 2005.

Abdul Hamid Banday had deposed that he knew the accused as borrowers who had obtained loan from the bank and met personally them at

Delhi and requested/asked them at Delhi to repay the loan but they failed to do so. Accused refused to repay the loan. Their intentions were not

clear from the very beginning.

Mohammad Farooq Rather had stated that he is, working as Manager Law and, holding attorney on behalf of the bank and is empowered to

present the complaint. He has signed the complaint. The averments contained in the complaint are correct.

After recording preliminary statement of complainant and one witness, the trial court has drawn cognizance and issued process against the

accused (petitioners). While going through the complaint and statements recorded, it appears that loan came to be sanctioned at Delhi and accused

availed the same at Saddar Bazar, Delhi branch office. Accused failed to repay. Complainant made demand at Delhi to repay but accused failed to

do so. Thus, it appears that entire transaction had taken place at Delhi. If at all, there would have been ground(s) for presuming that accused

dishonestly induced the complainant to sanction loan then the Courts at Delhi would have the jurisdiction. It was duty of the trial court to have

addressed to the said facts/issues but it appears that without addressing to the said fact the trial court had taken cognizance and issued process and

thus cognizance taken and process issued is without jurisdiction.

Apex Court has observed in so many judgments that summoning of an accused in a criminal case is a serious matter and criminal court cannot

be set into motion as a matter of course. While passing orders of drawing cognizance and issuing of summons, the trial court has to apply its mind

to the facts of the case and law applicable thereto.

Learned Session Judge had also not addressed to the said fact and, dismissed the revision petition while giving liberty to the

accused/petitioners to raise the plea of jurisdiction before the trial court which is, on the face of it, illegal and the orders, suffer from perversity

while keeping in view the facts and circumstances, discussed hereinabove.

It is admitted fact that the complainant filed a suit for recovery of the loan amount which is pending disposal before Debts Recovery Tribunal,

New Delhi. Thus, at the best it can be said that it is a civil liability. Even otherwise while going through the contents of the complaint and preliminary

statements of complainant and witness recorded, one comes to inescapable conclusion that it constitutes a civil liability and not a criminal liability.

Mere breach of contract and the ingredients which constitute the offence of, cheating punishable u/s 420 RPC or 418 RPC or criminal breach

of trust punishable u/s 406 of RPC are all together different. There is a mark distinction in between the two which is a fine one.

To hold a person guilty of cheating, it is necessarily to be indicated or shown that accused had fraudulently or dishonest intention from very

beginning. Mere failure to repay of loan amount subsequently cannot be said that accused had dishonest intention from the very beginning. While

going through the complaint and statements recorded, all the ingredients for constituting offence which are punishable u/s 420, 418 and 406 RPC

are lacking. The complaint and statements recorded nowhere disclose that accused had dishonest intention, from the very beginning.

The Apex Court, has in a case titled as Vijaya Rao v. State of Rajasthan and Anr. reported in 2005 (7) SCC 69, held that if the ingredients of

offence in question are lacking in the complaint, the cognizance taken and process issued are abuse of process of Court. It is profitable to

reproduce para-5 of the said judgment herein:

Except using the expressions ""fraudulent misappropriation"" and ""malafide intention"", the allegations in the complaint do not at all disclose as to

how the appellant can be found guilty of the offence u/s 420 RPC, The ingredients constituting Section 420 are conspicuously lacking in the

complaint. All the courts have failed to address themselves to the crucial question whether as far as the appellant is concerned any offence u/s 420

or for that matter any offence u/s 409 has been committed. Even going by the allegations in the complaint, allowing the criminal proceedings to go

on against the appellant would result in abuse the process of the court. Hence, the proceedings in Complaint Case No. 10 of 2000 on the file of

the Chief Judicial Magistrate, Sikarare quashed as against the appellant. The appeal is allowed accordingly.

Apex Court has also held in a case titled as G. Sagar Suri and Another Vs. State of U.P. and Others, , that it is the duty of the Criminal Court

to exercise great deal of caution before issuing process and it is the duty of the Court to see and ascertain that whether the matter has been given a

cloak of criminal offence which is essentially of civil nature. And it is to be borne in mind that Criminal proceedings are not short cut of other

remedies of law. It is profitable to reproduce para-8 of the said judgment herein:

Jurisdiction u/s 482 of the Code has to be exercised with a great care. In exercise of its jurisdiction High Court is not to examine the matter

superficially. It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not

a short cut of other remedies available, in law. Before issuing process a criminal Court has to exercise a great deal of caution. For the accused it is

a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction u/s 482 of the Code.

Jurisdiction under this Section has to be exercised to prevent abuse of the process of any Court or otherwise to secure the ends of justice.

Before taking cognizance and issuing process, it must be shown that a false representation was made and complainant was made to believe

and induced to part with the property with dishonest intention from the very outset. In order to record satisfaction that there must be grounds to

presume that the accused are involved in the commission of offence(s).

Apex Court has also held in a case titled as Hira Lal Hari Lal Bhagwati Vs. C.B.I., New Delhi, , that in order to establish offence of cheating,

the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. It is

profitable to reproduce para-45 of the said judgment herein:

It is settled law, by catena of decisions, that for establishing the offence of cheating, the complainant is required to show that the accused had

fraudulent or dishonest intention at the time of making promise or representation. From his making failure to keep up promise subsequently, such a

culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the

exemption certificate contained necessary conditions, which were required to be complied with after importation of the machine. Since the GCS

could not comply with it and, therefore, it rightly paid the necessary duties without taking advantage of the exemption certificate. The conduct of

the GCS clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as office-bearers

right at the time of making application for exemption. As there wan absence of dishonest and fraudulent intention, the question of committing

offence under S. 420 of the Indian Penal Code does not arise. We have read the charge sheet as a whole. There is no allegation in the First

Information Report or the charge sheet indicating expressly or impliedly any intentional deception or fraudulent I dishonest intention on the part of

the appellants right from the time of making the promise or misrepresentation. Nothing has been said on what those misrepresentations were and

how the Ministry of Health was duped and what where the roles played by the appellants in the alleged offence. The appellants, in our view, could

not be attributed any mens rea of evasion of customs duty or cheating the Government of India as the cancer society is a non-profit organization

and, therefore, the allegations against the appellants leveled by the prosecution are unsustainable. Kar Vivad Samadhan Scheme Certificate along

with the Duncan's and Sushila Rani's judgments clearly absolve the appellants herein from all charges and allegations under any other law once the

duty so demanded has been paid and the alleged offence has been compounded. It is also settled law that once a civil case has been compromised

and she alleged offence has been compounded, to continue the criminal proceedings thereafter would be an abuse of the judicial process.

Applying the test to the instant ease, it was bounden duty of the trial court to have applied mind to the facts of the case and applied law.

Learned Session Judge was also under legal obligation to decide the point of jurisdiction without dragging the petitioners from pillar to post and

post to pillar.

In the given circumstances, the order passed by the learned Session Judge, order dated 11.05.2002 passed by the trial court and proceedings

initiated are hereby quashed.

Registry is directed to send down the record along with the copies of this order.