Pratap Kedia and Others vs Dilip Kumar Agarwal and Others

R.K. Bag, J.—1. The petitioners have preferred this revision under Section 482 of the Code of Criminal Procedure praying for quashing of the proceeding of C.R. No. 203 of 2013 under Sections 420/500/34 of the Indian Penal Code pending before the court of learned Judicial Magistrate, 3rd Court, Siliguri, Darjeeling.

It appears from the materials on record that the opposite parties filed a petition of complaint before the court of learned Additional Chief Judicial Magistrate, Siliguri praying for issuance of process against the petitioners for the offence under Sections 120B/406/420/500/506 of the Indian Penal Code. Learned Additional Chief Judicial Magistrate took cognizance of the offence and transferred the case to the court of learned Judicial Magistrate for enquiry under Section 200 of the Code of Criminal Procedure. On September 27, 2013 learned Judicial Magistrate issued process against the petitioners for the offence under Sections 420/500/34 of the Indian Penal Code after conducting the enquiry. I am informed that the evidence has not been adduced by the opposite parties before the trial court before consideration of charge. Now, I have to decide whether the opposite parties have made out prima facie case against the petitioners for the offence under Sections 420/500/34 of the Indian Penal Code for continuation of criminal proceeding against the petitioners.

Mr. Siladitya Sanyal, learned counsel for the petitioners contends that the allegations made by the opposite parties do not constitute offence under Sections 420/500/34 of the Indian Penal Code. By referring to the averments made by the opposite parties in the petition of complaint, Mr. Sanyal argues that the petitioners paid Rs. 11.22 lakh in cash and Rs. 1,58,000/- in cash to the opposite parties for execution of sale deed in respect of three rooms in a building named "Milestone" and the sale deed was executed on March 30, 2013. According to Mr. Sanyal, the two post dated cheques of Rs. 5,00,000/- and Rs. 2,00,000/- respectively issued by the petitioners in favour of the opposite party No. 1 were not for payment of consideration money, but as security deposit of the transaction between the parties. The specific submission of Mr. Sanyal is that there was no intention on the part of the petitioners to deceive the opposite parties from the inception of the transaction and the entire consideration money was paid at the time of execution of the sale deed and as such the liability of the petitioners for violation of contract, if any, cannot come within the ambit of cheating. Mr. Sanyal submits that cash credit limit of Rs. 3.7 crore of the opposite parties was reduced to zero by the State Bank of India, Siliguri Court Branch on the basis of conduct and performance of the opposite parties and the same cannot cause any harm to the reputation of the opposite parties before the business community and as such no offence punishable under Section 500 of the Indian Penal Code is made out. The gist of submission of Mr. Sanyal is that the opposite parties have failed to make out prima facie case against the petitioners for the offence punishable under Sections 420/500/34 of the Indian Penal Code and as such continuation of the criminal proceeding against the petitioners is an abuse of the process of the court.

Mr. Sandipan Ganguly, learned counsel for the opposite parties has also referred to various paragraphs of the petition of complaint in support of his submission that the petitioners earned the confidence of the opposite parties by making payment of Rs. 1,58,000/- for procuring execution of sale deed in their favour by the opposite parties without payment of full consideration money for purchase of three flats in a building by name "Milestone". Mr. Ganguly argues that the petitioners issued two cheques of Rs. 5,00,000/- and Rs. 2,00,000/- respectively in favour of the opposite parties as part of consideration money knowing it very well that those cheques will be dishonoured and the money will not be paid to the opposite parties. According to Mr. Ganguly, the conduct of the petitioners clearly indicates that the petitioners earned the confidence of the opposite parties and deceived the opposite parties without making payment of full consideration money for purchase of three rooms in the building by name "Milestone". Mr. Ganguly contends that the petitioner No. 1 made false allegation before the State Bank of India, Siliguri Court Branch taking advantage of his professional relationship with the opposite parties and thereby persuaded the bank to stop cash credit limit of Rs. 3.75 crore standing in the name of the opposite parties for running the business. He further submits that closure of cash credit facility of the opposite parties has caused harm to the reputation of the opposite parties before the business community and has also discredited the opposite parties before its several clients to whom cheques were issued for payment. The gist of submission of Mr. Ganguly is that the averments made by the opposite parties in the petition of complaint indicate prima facie case against the petitioners for the offence under Sections 420/500/34of the Indian Penal Code. He also submits that the court must consider the stage of the proceeding for invoking the inherent power under Section 482 of the Code of Criminal Procedure, because the parameters for quashing a criminal proceeding at the initial stage may not be applicable for quashing a criminal proceeding at a later stage. He has also urged that a criminal proceeding may not be quashed even if no prima facie offence is made out under the provisions of the penal law for which process was issued by the trial court, if any other offence is made out from the contents of the petition of complaint. According to Mr. Ganguly, the contents of the petition of complaint disclose commission of offence under Section 417 of the Indian Penal Code and as such the petitioners are liable to be prosecuted at least for the offence under Section 417 of the Indian Penal Code.

The criteria laid down by the Supreme Court in paragraph 102 of "State of Haryana V. Bhajanlal" reported in , 1992 SCC (Cri.) 426 for quashing of the criminal proceeding are as follows:

"102 .................

(1) 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.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

On consideration of the criteria laid down by the Supreme Court for quashing the criminal proceeding, I find that the criminal proceeding is liable to be quashed if the contents of the petition of complaint do not disclose any offence. It is, therefore, relevant to consider the allegations made by the opposite parties against the petitioners in the petition of complaint. The petitioner No. 1 is a chartered accountant by profession and the petitioner No. 2 is the brother of the petitioner No. 1 and the petitioner No. 3 is the wife of the petitioner No. 1. The opposite parties constructed one building by name "Milestone" and the petitioners wanted to purchase three rooms in the said building on payment of consideration money. It appears from the petition of complaint that the petitioners paid Rs. 1,00,000/- on August 6, 2011, Rs. 50,000/- on January 2, 2013 and Rs. 8,000/- on January 13, 2013. On March 30, 2013 the opposite parties executed the sale deed in favour of the petitioners in respect of three rooms in the first floor of the building by receiving Rs. 11.22 lakh in cash and Rs. 7 lakh by two cheques dated March 31, 2013. It is alleged that the petitioners assured the opposite parties that the cheques will be cleared within April 3, 2013. The possession of the three rooms were handed over in favour of the petitioners by the opposite parties. It is also alleged that both the cheques were dishonoured. I am informed that separate proceeding was initiated against the petitioners by the opposite parties under Section 138 of the Negotiable Instruments Act for realisation of Rs. 7,00,000/-. I am also informed that the petitioners challenged the said proceeding under Section 138 of the Negotiable Instruments Act before the High Court by way of revision and the High Court quashed the said proceeding against the petitioner Nos. 2 and 3, but directed the trial court to proceed against the petitioner No. 1 for the offence under Section 138 of the Negotiable Instruments Act.

The averments made by the opposite parties in the petition of complaint indicate that the cash credit limit of Rs. 3.75 crore standing in the name of the opposite parties was reduced to zero by the State Bank of India, Siliguri Court Branch on the basis of complaint given by the petitioners. It is further alleged that the seizure of cash credit facility of the opposite parties has caused harm to the reputation of the opposite parties among the business community. It is also alleged that the opposite parties have been discredited for closure of cash credit facility by the State Bank of India, Siliguri Court Branch among the creditors to whom cheques were issued by the opposite parties relying on fund available under cash credit facility of the State Bank of India.

On consideration of allegations made by the opposite parties in the petition of complaint, I find that the petitioner No. 1 being a chartered accountant used to provide professional service to the opposite parties. It is agreed by and between the parties that the petitioners will purchase three rooms in the first floor of the building constructed by the opposite parties on payment of consideration at the rate of Rs. 2,000/- per square feet. It appears from the averments made by the opposite parties in the petition of complaint that the petitioners paid Rs. 1,58,000/- on different dates as advance consideration money before execution of sale deed. On March 30, 2013 the opposite parties executed the sale deed in favour of the petitioners in respect of the said three rooms of the building on receiving Rs. 11.22 lakh in cash and Rs. 7 lakh by two cheques dated March 31, 2013 drawn upon State Bank of India, Ektiasal Branch, Sevoke Road, Siliguri. Admittedly, the opposite parties have started the proceeding against the petitioners under Section 138 of the Negotiable Instruments Act for dishonour of two cheques to the tune of Rs. 7 lakh and the High Court gave direction to the trial court to proceed against the petitioner No. 1 for the offence under Section 138 of the Negotiable Instruments Act, though the said proceeding was quashed against the petitioner Nos. 2 and 3.

On consideration of the allegations made by the opposite parties against the petitioners in its entirety, I do not find that the petitioners deceived the opposite parties in any way or the action of the petitioners caused any damage to the reputation or property of the opposite parties except issuance of two cheques which were dishonoured and thereby the opposite parties suffered loss to the tune of Rs. 7 lakh. Admittedly, the petitioner No. 1 is facing trial for the offence under Section 138 of the Negotiable Instruments Act, which was initiated by the opposite parities against the petitioners before the court of learned Magistrate. In my opinion, the contents of the petition of complaint do not disclose any offence of cheating punishable either under Section 417 of the Indian Penal Code or under Section 420 of the Indian Penal Code.

On consideration of the averments made by the opposite parties in the petition of complaint, I find that cash credit limit of the opposite parties to the tune of Rs. 3.75 crore was reduced to zero by the State Bank of India, Siliguri Court Branch on the basis of imputation made by the petitioners. According to the opposite parties, the closure of cash credit limit of Rs. 3.75 crore by the State Bank of India has caused harm to the reputation of the opposite parties before the business community and before the creditors to whom cheques were issued by the opposite parties. The cash credit limit of Rs. 3.75 crore was given to the opposite parties by the State Bank of India and the said facility is closed by the State Bank of India. The State Bank of India is a statutory body which must have conducted proper enquiry for closure of cash credit facility of the opposite parties. Had there been any genuine grievance of the opposite parties against the closure of cash credit facility given to the opposite parties by the State Bank of India, the opposite parties would have ventilated their grievances before the appropriate forum against the State Bank of India. Without ventilating grievances against State Bank of India, Siliguri Court Branch for closure of cash credit facility of the opposite parties, the opposite parties have made allegation that the said facility is withdrawn by the State Bank of India on the basis of false complaint given by the petitioners. I fail to understand how closure of cash credit facility of the opposite parties by the State Bank of India can cause harm to the reputation of the opposite parties before the business community. Accordingly, I cannot persuade myself to hold that the closure of cash credit facility of the opposite parties by the State Bank of India can cause any harm to the reputation of the opposite parties and thereby no offence of defamation punishable under Section 500 of the Indian Penal Code is made out against the petitioners. Nor is there any iota of allegation in the petition of complaint to indicate common intention of all the petitioners in order to rope all of them for the offence under Section 34 of the Indian Penal Code. The upshot of my entire above observation is that the contents of the petition of complaint filed by the opposite parties against the petitioners do not disclose any offence punishable under Sections 420/500/34 of the Indian Penal Code, except offence under Section 138 of the Negotiable Instruments Act. Since proceeding under Section 138 of the Negotiable Instruments Act has already been initiated against the petitioners by the opposite parties, and since the allegations made by the opposite parties against the petitioners do not disclose any offence under the Indian Penal Code, I am inclined to invoke my inherent power under Section 482 of the Code of Criminal Procedure to quash the instant criminal proceeding.

As a result, criminal proceeding being C.R. No. 203 of 2013 under Section 420/500/34 of the Indian Penal Code pending before the court of learned Judicial Magistrate, 3rd Court, Siliguri is quashed.

Criminal revision is, thus, allowed.

The Department is directed to send down a copy of this judgment to the learned court below for favour of information and necessary action.