V.S.Sasidharan vs Nand Kishore Parihar

N.K. Agrawal, J.

This is a petition under Section 482 of the Code of Criminal Procedure for quashing the criminal complaint filed by Nand Kishore Parihar alleging offences under Sections 406 and 409, Indian Penal Code,

The complainant, Nand Kishore Parihar, is Manager (Sales) in Pawan Tyres Ltd., Ludhiana. The said Company is engaged in the business of manufacture and sale of bicycle and auto tyres and tubes at Ludhiana. The petitioner accused was appointed as an agent for the State of Kerala for the purposes of promoting the sales of the products of the Company. Goods were despatched to the petitioneraccused from time to time on F.O.R. consignee basis. The petitioneraccused was required to keep the goods in his godown and was responsible for its safe custody. He was to get commission @ 5 per cent on the sale price of the goods sold by him to the customers. Several consignments were sent to the accused. On December 23, 1987, the Company came to know that the petitioneraccused had sold goods worth Rs. 4,78,562.78 but did not remit the payment and utilised the same.

A criminal complaint dated September 13, 1989 was filed by Nand Kishore Parihar on behalf of Pawan Tyres Ltd., Ludhiana. It was alleged that the accused had misappropriated the sale price of the goods worth Rs. 4,78,562.78 without the consent of the Company. It was also alleged that the accused had the dishonest intention from the very beginning.

The Judicial Magistrate, Ludhiana recorded the statements of five witnesses under Sections 200 and 202, Criminal Procedure Code, and thereafter summoned the accused by order dated March 14, 1991.

Shri Satinder Khanna, learned counsel for the petitioner, has argued that the case was in the nature of a civil liability and a criminal complaint was not maintainable. He has pointed out that a civil suit for the recovery of money was also filed by Pawan Tyres Ltd. on September 23, 1989. The same amount, which has been mentioned in the criminal complaint, has been sought to be recovered from the petitioner. He has also argued that Nand Kishore Parihar, the complainant, was not authorised to file the complaint on behalf of the Company and, therefore, the complaint was filed by an unauthorised person on behalf of the Company. Shri Khanna has further argued that an agreement between the parties took place, under which the petitioner was required to pay off the outstanding dues in instalments of Rs. 40,000/ per month or in default of payment, to pay interest @ 18 per cent per annum. The learned counsel has, therefore, contended that the petitioner was not liable under criminal law and has simply defaulted in the payment of money due to nonrealisation of the sale price from the customers. He has stated that it was a case of abuse of the process of the Court and, therefore, the criminal complaint should be quashed.

Shri Satinder Khanna, learned counsel for the petitioner, has placed reliance on a decision of this Court in Ranjit Singh and others v. State of Punjab, 1991(1) Recent C.R. 262 . That was a case where a report was lodged with the Police that a sum of Rs. 39,000/ had been invested in a firm but neither any partner of the firm nor any agent was now available and the office of the firm had also been closed. A case was registered by the Police. The accused persons challenged the registration of the case with the plea that they had been making payments to the depositors regularly till the police intervened and locked their premises. It was held that the amount of Rs. 39,000/ was, in fact, a kind of deposit and there was nothing to show misappropriation of money.

Learned counsel for the petitioner has argued that in the present case also, there was nothing to show that the petitioner had misappropriated the sale price of the goods entrusted to him for sale.

Learned counsel for the petitioner has also placed reliance on another decision of this Court in Vinod Kumar and others v. The State of Haryana and another, 1991(3) Recent C.R. 209 . It has been observed in that case that where a civil suit regarding the same matter was already pending, a criminal case under Section 420, Indian Penal Code, may be stayed, as the decision of the Civil Court would be binding on the Criminal Court. That was a case where the buyers had placed orders for the purchase of certain material through their partner. Supplies were received for a period of four years. The suppliers served a notice on the buyers in respect of the outstanding bills. After receipt of the notice, the buyers lodged a report with the police under Sections 420, 467 and 471, Indian Penal Code. It was also noticed that the suppliers had instituted a civil suit for the recovery of money against the buyers, which was pending in Delhi High Court. The question for determination in the civil suit was whether the goods were supplied according to the orders placed and its specification and whether any excess amount was charged by the suppliers. In the criminal complaint, the allegation was that the market rate of the goods supplied was lower than the rate at which the suppliers had given the bill. This Court observed that it would be expedient to stay the criminal proceedings to save embarrassment to the petitioner.

Learned counsel for the petitioner has argued on the strength of the decision in Vinod Kumar''s case (supra) that the matter is before the Civil Court so as to determine the civil liability of the petitioner and, therefore, the criminal complaint should not be allowed to proceed at all.

Reliance is also placed on yet another decision of this Court in Bhagwant Singh v. State of Punjab, 1996(2) Recent CR 145 . That was also a case where a civil suit had been filed for declaration that the sale was not valid as the power of attorney was forged by the accused. It was noticed that the accused had sold certain property by forging the power of attorney. F.I.R. under Sections 420, 468 and 471, Indian Penal Code, was lodged against the accused. It was held that criminal proceedings may be stayed till the decision of the civil suit as ultimately it would be the decision of the Civil Court which would be final between the parties and could also be binding upon the Criminal Court.

Mr. M.S. Ratta, learned counsel for the respondentcomplainant has, on the other hand, argued that the petitioneraccused had been appointed to promote sales of the goods manufactured by the Company. The petitioneraccused did not remit payments to the Company after November, 1987. He, thus, misappropriated the sale proceeds. A prima facie case has been rightly found by the Judicial Magistrate. It also pointed out by the learned counsel that the petitioneraccused agreed to pay the outstanding amount by way of monthly instalments, but after paying one instalment of Rs. 10,000/ by demand draft and another sum of Rs. 20,000/, nothing was paid. The learned counsel has, therefore, contended that despite the civil suit having been filed, the criminal liability could not disappear if the accused is found to have misappropriated the sale proceeds with dishonest intention.

Learned counsel for the respondentcomplainant has placed reliance on a decision of this Court in Ravinder Pal Singh v. Punjab Tractors, 1987(1) Banking Commercial Law Reporter 184. It has been held therein that mere pendency of a civil suit for the recovery of an amount received by the opposite party by cheating is no ground to bar proceedings in the Criminal Court in respect of such cheating. Consequences that flow from the decisions of the two Courts are quite separate and distinct. The Criminal Court will punish the offender for the wrong committed, but it will not and cannot compensate the victim of such cheating for what he has lost thereby.

Learned counsel for the respondentcomplainant has contended that in view of the above decision, the criminal complaint may proceed simultaneously as there was no legal bar to it.

Reliance is also placed on another decision of this Court in Mohinder Singh Randhawa v. Harbhajan Singh, 1998(2) Recent CR 464 . There also, a similar view has been taken that where civil suits as well as a criminal complaint were pending in the same matter, it would be appropriate that the criminal complaint and the civil suits may be tried separately but simultaneously by the same Judge having jurisdiction to try the civil suits as well as the criminal complaint and dispose of at the same time.

The Supreme Court in Sushil Kumar Gupta v. Joy Shankar Bhattacharjee, AIR 1971 SC 1543, examined a matter relating to criminal breach of trust. It was held that when a person, who is interested in any manner with property or with dominion over it, dishonestly misappropriates it, or converts it to his own use, or dishonestly uses it or disposes if of, in violation of any direction of law prescribing the mode in which the trust is to be discharged, or of any lawful contract, express or implied, made by him touching such discharge, or wilfully suffers any other person so to do, it would amount to criminal breach of trust.

In P. Vijayapal Reddy and others v. The State (Govt. of India), AIR 1978 SC 1590, it has been held that the High Court does not ordinarily interfere at an interlocutory stage of a criminal proceedings pending in a subordinate Court. The inherent powers possessed by it under Section 482, Criminal Procedure Code, can be invoked and exercised only when the facts alleged in the complaint, if they are accepted to be correct at their face value, do not make out an offence with which the accused is charged.

In Pratibha Rani v. Suraj Kumar and another, AIR 1985 SC 628, the question for quashing of a complaint again came up for consideration before the Supreme Court. That was a matter regarding allegation of entrustment and misappropriation of stridhan properties by a married woman. It was held by their Lordships of the Supreme Court that where the allegations were clear, specific and unambiguous and all the facts stated in the complaint constituted the offence under Sections 405/406, Indian Penal Code, the right to prove the case could not be denied to the complainant.

Learned counsel for the respondentcomplainant has argued on the strength of the aforesaid decisions of the Supreme Court that the summoning order passed by the learned Magistrate should not be interfered with inasmuch as the complainant has been able to show prima facie that the accused did commit breach of trust.

On a consideration of the matter, it is found that the entrustment of goods by the complainant to the petitioneraccused is not in dispute. The only question which would arise for determination is whether the petitioner accused has withheld the money with any dishonest intention and had misappropriated the sale proceeds of the goods. It would be on the basis of the evidence led by the complainant, that the question would be answered. It would now be appropriate to reach a finding as to whether there is an element of dishonest intention on the part of the petitioneraccused or not. Suffice it to say that the matter required evidence. The pendency of the civil suit would also not debar the respondentcomplainant from proving dishonest intention in the course of the trial before the Magistrate. It appears that the petitioneraccused has not yet repaid the money out of the sale proceeds. Learned counsel for the petitioneraccused has not been able to state as to whether the petitioneraccused was ready and willing to discharge his liability with regard to the outstanding amount payable to the respondent complainant. It would, therefore, be appropriate that the matter is first settled in the civil suit and till then the proceedings before the learned Magistrate instituted on the basis of the complaint remain stayed.

In the result, the present petition under Section 482, Criminal Procedure Code, is disposed of with the direction that the proceedings before the learned Magistrate on the criminal complaint against the petitioneraccused shall remain stayed till the civil suit filed against him is disposed of by the Civil Court where the said suit is pending. The learned Magistrate shall proceed with the complaint further after the decision of the civil suit. There is no need to mention that the finding given by the civil Court in the matter may have bearing on the proceedings in the Criminal Court.