Sudashcho Technohub Private Limited and Others vs City Infosysy

Sankar Acharyya, J—This application has been filed by two petitioners against the opposite party with a prayer for quashing the complaint proceedings being No. 879 of 2013 in the Court of learned 6th Judicial Magistrate at Alipore which has been filed by the opposite party of this application.

In substance, admittedly the petitioner No. 1 is a registered company and petitioner No. 2 is a director of that company. The sole opposite party is a partnership firm who is the complainant in Complaint Case No. 879 of 2013 under Sections 406/120B of the Indian Penal Code in the 6th Court of learned Judicial Magistrate at Alipore. Said complaint has been filed against the present petitioners and some others as accused persons. Admittedly, an agreement between the complainant opposite party in one part and the petitioners with two others on the another part was executed on 14.09.2011 for supply of 32 computer sets with accessories and other attachments for smooth running of the computers on higher charges against payments of advance higher charges and security deposit for the said computers. The opposite party agreed to install those computers. Petitioners agreed to make payment of higher charges regularly. Inter alia, the parties agreed that the installed computers will remain under exclusive ownership of the opposite party and in the event of physical damage after installation of the said computers in the premises of petitioner No. 1 and in case of failure on negligence in paying monthly higher charges or service charges for consecutive two months, then, the opposite party of this case would have liberty to uninstall the computer sets along with other accessories from the said place where the computers were installed. It is almost undisputed that the petitioners failed to make payment of higher charges after installation of the computers as per agreement although some payments were made.

The opposite party lodged a petition of complaint in the Court of learned Chief Judicial Magistrate at Alipore alleging that the petitioners of this case with dishonest intention of misappropriation closed the operation of their business at their registered office but they were operating those computers in an another place and in that way the breach of agreement and breach of trust has been committed by the petitioners.

On receiving the petition of complaint learned Chief Judicial Magistrate at Alipore took cognizance of the offence under Section 406/120B of the Indian Penal Code and, thereafter, transferred the case to the 6th Court of learned Judicial Magistrate at Alipore for disposal.

Learned Judicial Magistrate, 6th Court at Alipore recorded evidence under Section 200 of the Code of Criminal Procedure and, thereafter, passed the order for issuing process against the accused persons for the alleged offences.

Said order of issuing process has been challenged by the petitioners in this case. Contending inter alia, the petitioners have contended that the allegations brought in the petition of complaint are false and the ingredients of criminal breach of trust are not fulfilled for issuing process under Section 406/120B of the Indian Penal Code against the petitioners and other accused persons for which the impugned order is bad in law. Petitioners have further alleged that the opposite party took back its all articles from the petitioners on 27.04.2012 issuing a valid acknowledgement receipt which has been marked annexure P- 3 of the application under Section 482 of the Code of Criminal Procedure. According to the petitioners, as per agreement dated 14.09.2011 there was no clause of not changing the address of business of the petitioner No. 1. Challenging the commencement of the proceedings in the Court below, the petitioners have contended that the learned Magistrate has failed to consider that in the said agreement there is clause that if the petitioners fail or neglect to pay the monthly higher charges or service charges for consecutive two months. Then, the opposite party shall have the liberty to uninstall the computer sets along with other accessories from the said place where the computers were installed and the petitioners of this case would also pay compensation or penalty money equivalent to hire charges for six months including service charges after adjusting dues, if any. They have claimed that at best violation of the contract might have attracted civil suits for breach of contract and not the petition of complaint for any offence under Section 406/120B of the Indian Penal Code.

At the time of hearing learned Advocate for the petitioners has argued that the whole dispute between the parties is a civil dispute and in no way it may attract any offence as alleged for want of mens rea. Learned Advocate for the petitioners has relied upon the three judgments of the Hon''ble Supreme Court in the cases of S.W. Palanitkar and others Vs. State of Bihar and another, AIR 2001 SC 2960 : (2001) CriLJ 4765 : (2001) 9 JT 151 : (2001) 7 SCALE 430 : (2002) 1 SCC 241 : (2001) AIRSCW 4435 : (2001) 8 Supreme 216 , Binod Kumar Vs. State of Bihar, (2014) 4 CCR 507 : (2014) 4 Crimes 305 : (2014) 4 RCR(Criminal) 881 and the case of Thermax Ltd. and Others Vs. K.M. Johny and Others, (2012) CriLJ 438 : (2011) 4 Crimes 179 : (2011) 4 RCR(Criminal) 409 : (2011) 13 SCC 412 : (2011) 11 SCC 412 : (2011) 11 SCC 128 : (2011) 6 UJ 3695 . He has argued that the case pending in the learned Court below is harassing one for the petitioners and that proceeding may be quashed.

On the other hand, learned Advocate appearing for the complainant opposite party has relied upon the two decisions of the Hon''ble Supreme Court in the case of Rajesh Bajaj Vs. State NCT of Delhi and Others, AIR 1999 SC 1216 : (1999) CriLJ 1833 : (1999) 1 Crimes 136 : (1999) 2 CTC 243 : (1999) 2 JT 112 : (1999) 1 SCALE 697 : (1999) 3 SCC 259 : (1999) 1 SCR 1012 : (1999) 1 UJ 685 : (1999) AIRSCW 881 : (1999) 2 Supreme 442 and Trisuns Chemical Industry Vs. Rajesh Agarwal and others, AIR 1999 SC 3499 : (1999) CriLJ 4325 : (1999) 6 JT 618 : (1999) 5 SCALE 609 : (1999) 8 SCC 686 : (1999) 2 SCR 686 Supp : (2000) 1 UJ 392 : (1999) AIRSCW 3492 : (1999) 8 Supreme 53 . He has advanced his arguments that learned Magistrate has rightly issued process against the accused persons as being satisfied about prima facie case of the complainant and the case made out in the complaint is sufficient to make out a case under Sections 406/120B of the Indian Penal Code for going to trial.

Learned Advocate for the petitioners in reply has drawn my attention to annexure P- 3 stating that articles supplied by opposite party to the petitioners were received back by the complainant petitioner on 27.04.2012 issuing receipt and, therefore, no offence was committed by the accused persons as alleged in the petition of complaint which was filed long after return of those goods.

In summing up the arguments advanced by the learned Advocates and on going through the materials on record it appears to me that the moot question for determination is whether the taking of cognizance by the learned Magistrate in Complaint Case No. 879 of 2013 for the offence under Sections 406/120B of the Indian Penal Code is bad in law. Learned Advocate for the petitioners has submitted for quashing the criminal proceedings. On the other hand, learned Advocate for the opposite party has submitted that the proceedings should be continued in accordance with law.

In the cited judgment of Thermax Limited and Ors. Vs. K.M. Johny and Ors. it has been discussed in paragraph 37 that "it is settled law that the essential ingredient for an offence under Section 420, which we have already extracted, is that there has to be dishonest intention to deceive another person. We have already quoted the relevant allegations in the complaint and perusal of the same clearly shows that no such dishonest intention can be seen or even inferred inasmuch as the entire dispute pertains to contractual obligations between the parties. Since the very ingredients of Section 420 are not attracted, the prosecution initiated is wholly untenable. Even if we admit that allegations in the complaint do make out a dispute still it ought to be considered that the same is merely a breach of contract and the same cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction. Inasmuch as there are number of documents to show that the appellants Company had acted in terms of the agreement and in a bona fide manner, it cannot be said that the act of the appellant Company amounts to a breach of contract".

In the said reported judgment the facts of the case was not similar to this case. In the said case there were number of documents to show that the appellant company had acted in terms of the agreement and in a bona fide manner. In the instant case, according to the allegations of the complainant opposite party prima facie there was no bona fide on the part of the accused petitioners for performing their part of contract. In the instant case, question of legality of taking cognizance under Sections 406/120B of the Indian Penal Code against the present petitioners has been challenged. Section 406 of the Indian Penal Code relates to the punishment for criminal breach of trust. Criminal breach of trust has been defined in Section 405 of the Indian Penal Code as "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 trust''".

In the instant case, according to the written agreement dated 14.09.2011 relied by both the parties there were some express terms of contract with some conditions by necessary implication. At the time of hearing arguments learned Advocate for the petitioners has given emphasis that there is nowhere in the written agreement that the petitioners would not have been able to shift the computers from the place of its installation and, therefore, shifting of the same cannot be attracted by the term ''misappropriation''. On going through the copy of written agreement it appears that there is no express barring clause against shifting of the computers from the place where installed by the opposite party on higher charges but from para 5 of the agreement it is crystal clear that in case of violation of other terms of the contract by the petitioners the opposite party would have liberty to uninstall the computer sets along with other accessories from the place where the computers were installed. By necessary implication prima facie it can be said from that para that shifting of the computers were not the intention of the parties to the agreement. From the averments of the revisional application and the agreement between the parties together with annexure P- 3 prima facie there is scope of belief of the learned Magistrate that the complainant opposite party supplied computer sets with accessories to the accused petitioners at office at E2, 4, Block - GP, Sector - V, Netguru Building, Salt Lake, Calcutta - 700091, P.S. Bidhannagar (East) as stated in para 6 of the petition of complaint. In annexure P- 3 petitioners have claimed that the opposite party has received back the articles from the opposite parties from Systrom Building, Plot No. J5, 5th Floor, Block EP and GP, Sector - V. Although the opposite party has neither admitted nor denied the annexure P- 3 as yet, still if it be believed as bona fide document then it will be obvious that articles namely computers and its accessories were shifted from E2, 4, Block - GP, Sector V, Netguru Building, Salt Lake, Calcutta-700091, P.S. Bidhannagoar (East) to Systron Building Plot No. J5, 5th Floor, Block EP and GP, Sector - V. There is no whispering on the part of petitioners that before shifting of the computers any intimation was given to its owner opposite party. Moreover, as per petition of complaint the office where the computers were supplied was closed by the petitioners without intimation to the opposite party. It indicates prima facie to dishonest intention of the petitioners to fulfil the ingredients of Section 405, Code of Criminal Procedure at the initial stage. As such, the ratio of the reported judgment is distinguishable in the instant case.

In the case of S.W. Palanitkar and others Vs. State of Bihar and another, AIR 2001 SC 2960 : (2001) CriLJ 4765 : (2001) 9 JT 151 : (2001) 7 SCALE 430 : (2002) 1 SCC 241 : (2001) AIRSCW 4435 : (2001) 8 Supreme 216 the Hon''ble Apex Court has been pleased to observe in para 8 that "every breach of trust may not result in a penal offence of criminal breach of trust unless there is evidence of a mental Act of fraudulent misappropriation. An act of breach of trust involves a civil wrong in respect of which the person wronged may seek his redress for damages in a civil court but a breach of trust with mens rea gives rise to a criminal prosecution as well". As per discussion in para 20 of the reported judgment there is no case of entrust of any property at all. Here in the instant case entrustment of computers and accessories of the opposite party upon the petitioners is admitted. I like to reiterate that in substance the allegations of complaint speaks violation of the terms of agreement and the installed computers and accessories were shifted from the place where the same were installed behind the back of its owner opposite party. Although there was agreement that in case of non-payment of higher charges the opposite party herein would have liberty to uninstall the computers and accessories from the place where it were installed when those were shifted without intimating the opposite party there was no scope of owner opposite party to uninstall the computers and accessories from the place where the same were installed. As such, it cannot be said that in the absence of mens rea and fulfilment of ingredients to attract criminal breach of trust the cognizance was taken by the learned Magistrate and process was issued under Sections 406/120B of the Indian Penal Code against the accused persons in Complaint Case No. 879 of 2013.

In the judgment of the case of Binod Kumar Vs. State of Bihar, (2014) 4 CCR 507 : (2014) 4 Crimes 305 : (2014) 4 RCR(Criminal) 881 the case which has been discussed also does not fortify the petitioners in the instant case. I like to reiterate that in the instant case it has been prima facie shown that the petitioners were entrusted with computers and accessories of opposite party and the petitioners closed their office at the place where the computers were installed without intimating the opposite party and shifted the computers to another office of the petitioners without consent of the owner of the computers and accessories. From the said facts learned Magistrate has rightly believed about prima facie case of the opposite party complainant. As such, in the instant case, like the case discussed in the judgment of Binod Kumar Vs. State of Bihar, (2014) 4 CCR 507 : (2014) 4 Crimes 305 : (2014) 4 RCR(Criminal) 881 it cannot be said that the ingredients for issuing process against the petitioners under Sections 406/120B of the Indian Penal Code were not fulfilled.

In the case of Thermax Ltd. and Others Vs. K.M. Johny and Others, (2012) CriLJ 438 : (2011) 4 Crimes 179 : (2011) 4 RCR(Criminal) 409 : (2011) 13 SCC 412 : (2011) 11 SCC 412 : (2011) 11 SCC 128 : (2011) 6 UJ 3695 in paragraph 7 it has been mentioned by the Hon''ble Apex Court ''Time and again this Court has been pointing out that quashment of FIR or a complaint in exercise of inherent powers of the High Court should be limited to very extreme exceptions". This Court follows the said principle.

Since the case discussed in the judgment of Rajesh Bajaj Vs. State NCT of Delhi and Others, AIR 1999 SC 1216 : (1999) CriLJ 1833 : (1999) 1 Crimes 136 : (1999) 2 CTC 243 : (1999) 2 JT 112 : (1999) 1 SCALE 697 : (1999) 3 SCC 259 : (1999) 1 SCR 1012 : (1999) 1 UJ 685 : (1999) AIRSCW 881 : (1999) 2 Supreme 442 is totally different in nature from this case the said cited judgment is not discussed herein. From the materials on record and from my above discussions prima facie it is established that there were prima facie materials for issuing process against the petitioners as accused on the basis of complaint lodged by the opposite party against them before the learned Magistrate in the Court below.

Before concluding my discussion I like to mention a latin maxim ''factum infectum fieri nequit'' which means - a thing done cannot be undone. Relating to the arguments advanced on behalf of the petitioners about return of the articles by petitioners to complainant opposite party, the said maxim may be followed and following that maxim it cannot be said that learned Magistrates in the Court below committed any error in taking cognizance of offences under Sections 406/120B of the Indian Penal Code or in issuing process against the accused petitioners. As a result, I do not find submission materials in the instant case for quashing the proceedings in the Court below.

Consequently, the revisional application stands dismissed.

A copy of this judgment be sent to the learned Court below for disposal of Complaint Case No. 879 of 2013 in accordance with law without being influenced by any observation made in this judgment.

Certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities.