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Atul Jain and Business Line Ispat (Pvt.) Ltd. v/s The State of Bihar, Rashtriyha Ispat Nigam Ltd


Company & Directors' Information:- ATUL LIMITED [Active] CIN = L99999GJ1975PLC002859

Company & Directors' Information:- 'K' LINE (INDIA) PRIVATE LIMITED [Active] CIN = U74900MH2008PTC189715

Company & Directors' Information:- P V LINE PRIVATE LIMITED [Active] CIN = U32100KA2003PTC032767

Company & Directors' Information:- JAIN ISPAT BUSINESS PRIVATE LIMITED [Active] CIN = U70200MH2006PTC163382

Company & Directors' Information:- JAIN ISPAT PRIVATE LIMITED [Active] CIN = U27109PB1997PTC019591

Company & Directors' Information:- BUSINESS LINE (ISPAT) PRIVATE LIMITED [Active] CIN = U00332DL1996PTC284583

Company & Directors' Information:- NIGAM & NIGAM PVT LTD [Strike Off] CIN = U35921WB1987PTC042595

Company & Directors' Information:- BUSINESS CORPN PRIVATE LIMITED [Strike Off] CIN = U15429UP1945PTC001335

Company & Directors' Information:- R A S ISPAT PRIVATE LIMITED [Strike Off] CIN = U51420DL2005PTC132909

Company & Directors' Information:- JAIN AND CO PVT LTD [Strike Off] CIN = U65921UP1925PTC000288

    Cr. Misc. 25536 Of 2002

    Decided On, 04 January 2007

    At, High Court of Bihar

    By, THE HONOURABLE MR. JUSTICE SHEEMA ALI KHAN

    For the Appearing Parties: Tara Kant Jha, Kaushal Kumar Jha, Rajeev Ranjan, Amod Kumar Singh, Advocates.



Judgment Text

SHEEMA ALI KHAN, J.

(1.) Heard learned Counsel for the petitioner and learned Counsel for the opposite party No. 2.

(2.) The petitioner has challenged the order of cognizance dated 23.7.2002 passed by the Judicial Magistrate, 1st Class, Patna, by which he has taken cognizance for the offence under Sections 420, 120B, 468 and 471 of the Indian Penal Code.

(3.) The petitioner is the proprietor of M/s United Enterprises Pvt. Ltd. which has a registered office at Loha Godown Compound, Digha Ghat, Patna. The complainant is the Branch Manager of M/s Rashtriya Ispat Nigam Ltd. which is a company owned by the Government of India within the meaning of the Companies Act.

(4.) The complaint petition reveals the following facts. The petitioner was appointed as a Consignment Agent of the Rashtriya Ispat Nigam Ltd. (hereinafter referred to as the 'Company'). The work of the accused-petitioner was to handle arrival, storage including security stocking and the delivery job of iron and steel materials dispatched from plant as directed by the company or its authorised representative in accordance with the terms and agreement between the parties. The petitioners were also obliged to keep proper record of all the materials despatched to the yard and to allow inspection of the same by the officers of the Company when demanded as per Clause-9 of the agreement. Clause-10 of the agreement specified that railway receipts (RRs) had to be raised showing the Company as consignee and the same, along with Plant consignment advices was to be handed over to the consignment agent or his authorised representative, on receipt at the Company's Branch Office.

(5.) It would be relevant to note certain allegations made in different paragraphs of the complaint petition. In paragraph-5 the complainant states that one of the important terms and conditions in Clause-19 was the consignment agent shall weigh and load the iron and steel materials on the transport placed by the Company's customers for the purpose only against and as per valid delivery orders issued by the Company and after acknowledgment of the customers or their duly authorised representative on the challans for the materials actually delivered. Any deliveries other than as aforesaid, shall be considered as irregular and unauthorised and the consignment agent shall be responsible for any consequent loss to the Company...." It is further stated that the consignment agent had no authority to deal with those materials on his own for any reason whatsoever. The delivery of materials to the customers of the Company had to be given only on receipt of valid delivery orders.

(6.) The allegation further is that B. Sahu visited stockyard of the petitioner and in course of inspection he observed a shortage of 254 tons and it was reported by him that wire rods, the total value of which was 43 lacs was missing and as per the terms and conditions of the agreement, in case, material is found short, an amount equal to 1.5 tons value of the materials is recoverable from the consignment agent. The complainant further states at paragraph-8 that " it could be noticed at this stage that the Accused No. 1 had entered into unauthorised deal and taking benefit of the possession over the materials kept in the stockyard of the Accused No. 1, he lifted materials and gave delivery of the same to the firm/company M/s Business Line Ispat (Pvt.) Ltd. in which he had his own monetary interest and was related to and managing the affairs of the said company. Accused No. 2 is the Private Limited Company formed and managed by the Accused No. 1. The Accused No. 1 shifted the materials to the business premises of accused No. 2 without valid delivery orders and without payment to the complainant. The accused No. 1 thus committed criminal breach of trust punishable under Section 409 of the Indian Penal Code."

(7.) It is also alleged that petitioner No. 1 acted in the contravention of breach of terms and conditions of the agreement and in fact committed fraudulent act by delivering the materials of the Company to the company on which the petitioner No. 1 had its control without any valid delivery order and also without making any payment in lieu of materials lifted because the Government company had suffered all financial loss on account of such lifting of materials. Further the complaint petition specifies as follows, " Accused No. 1 has misused some of those delivery Challan-cum-Invoice without taking into care that those delivery challans would have been filled up & used only on the basis of valid delivery orders. When unauthorised lifting was pointed out to the accused No. 1 and he smacked strict action for this irregularity, the accused No. 1 used some of the delivery challans, tilled up the same and on those challans a later date was shown to assure that those materials were Lifted after 16.1.1999. However, fact remains in course of inspection on 16.1.1999 there had been a shortage of 254 tonnes of materials." I further quote: In view of the meeting and discussions between then and when the accused No. 1 found that irregularities have been committed, he paid a sum of Rs. 38,42,400/- under 4 different cheques for Rs. 10 lacs and Rs. 11,42,400/-, 10 lacs and 7 lacs issued by M/s business Line (Ispat) Private Ltd. and again M/s Business Line (Ispat) Pvt. Ltd. respectively. It was thus crystal clear that there was delivery of materials to these parties even without valid delivery orders. The two cheques of Rs. 10 lacs and 11,42,400/- issued by M/s Batuk Enterprises stood dishonoured on presentation thereafter the accused No. 1 again arranged payment against those dishonoured cheques from M/s Business Line (Ispat) Ltd. which was leas than the cheque dishonoured.

(8.) In the complaint petition it has also been stated that to recover the loss and damages against the accused, the complainant invoked the Bank Guarantee for which Title Suit No. 238 of 1999 was filed by the petitioners. In the Title Suit an application was filed under Order 39 Rule 1 and 2 for grant of temporary injunction for invoking the bank guarantee. The injunction petition was allowed by the order dated 16.8.1999 by the Sub-Judge-1, Patna. Much emphasis has been laid by the petitioners on the order passed in the injunction application by which the court issued ad interim injunction to restrain the defendant No. 2, Punjab National Bank, for making payment to defendant No. 1 (the complainant) of Rs. 20 lacs. The petitioners drew the Court's attention to the findings of Sub-Judge-I, Patna, which are as follows: The alleged inspection note of Mr. Sahu is undated and looks suspicious. When judged in the background of aforesaid fact so 233 and odd M T wire rods coil had been lifted under the authority of Branch Manager of the Defendant No. 1 through delivery Challen cum invoice as is evident from the computer statement dated 25.2.1999 filed by the defendant No. 1 himself. So the claim that there was shortage of 254 M T on 16.1.1999 is not prima facie established.

(9.) 46.05 MT of wire rods were there on 26.1.1999. It is not the case of defendant No. 1 that there was subsequent removal also. Therefore, prime facie no shortage has been established as alleged. The learned Advocate for the plaintiff also drew attention to Clause 28 of the Agreement dated 26.4.1990 under this Clause in case of unauthorised removal of stock by consignment agent the agreement is to be terminated by 15 day notice and loss was to be recovered by enforcing the B/G. In this case when no loss or damage to the stock is proved according to the plaintiff. The B/G could not have been invoked. This point has also force. Therefore, considering all these facts together the plaintiff has been able to make out a good prima facie case. "

(10.) It is a well settled principle of law that findings arrived at by the Court in an application for injunction is only for a very limited purpose. It may be relevant to point out that the order of ad interim injunction dated 16.8.1999 was challenged by filing a Misc. Appeal before this Court which was disposed of on 11.9.2001 and this Court upheld the order dated 28.6.1999. Against the order passed in the Misc. Appeal No. 498 of 1999 the aggrieved parties have moved the Apex Court and no doubt the question will be finally adjudicated by the Hon'ble Supreme Court.

(11.) It has been contended that on the basis of the findings of the order of the court below i.e. Sub-Judge, Patna, that since there is a finding that there was no shortage on inspection by Mr. B. Sahu, it cannot be said that the petitioners have committed any offence of cheating or misappropriation and the allegation in the complaint can only be adjudicated by a competent civil court.

(12.) The submissions that the contents in the complaint do not make out allegation of criminal nature and the matter can only be considered by a civil court is not correct in view of the allegations made in the complaint petition which have been quoted in detail. In the light of the allegations quoted and mentioned in this order, this Court comes to a finding that a prima facie case is made out under Sections 420, 120B, 468 and 471 of the Indian Penal Code.

(13.) The petitioners have referred to several documents which are purportedly delivery Challan cum invoice (Annexure-2/3 series and Annexure-7 (series). These documents are by way of an explanation and defence of the petitioners regarding the facts that no case of cheating or forgery could be made out against the petitioners as they have a perfect explanation regarding the delivery of goods. The opposite party on the other hand, had vehemently submitted that these documents are not authentic and have to stand the scrutiny of the court in a full-fledged trial and therefore the petitioners on the basis of the documents annexed in the quashing application cannot contend that there was no shortage, or that the materials were supplied by the petitioners to other companies and further state that the challans so annexed were genuine and have been brought into existence to create a deference and, as such, at this stage the petitioners are not entitled to rely on these documents.

(14.) The petitioners and the opposite party have made several arguments. One of them being that the institution of the complaint case is malicious as it had been done after two years of the occurrence and after the filing of Title suit No. 238 of 1999 by the petitioners in the court of Sub-Judge-I, Patna. All these questions cannot be seen at this stage of the case and the petitioners ere entitled to raise and put forward the

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ir defence at the stage of framing of charges. (15.) As far as this Court is concerned, it has inherent powers under Section 482 of the Indian Penal Code, these powers have to be exercised carefully and with caution. The Apex Court has already laid down the principle and circumstances under which the Court made interference with the order of cognizance in the case of R.S. Kapur v. State of Punjab 1960 SC 866 wherein inherent power can and should be exercised to quash the proceeding. "i) Where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction. ii) Where the allegations in the First information Report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged. iii) Where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge. (16.) The facts of this case do not come within the aforesaid exception and as such, This Court is unable to interfere with the order of cognizance under challenge dated 23.7.2002. (17.) This application is thus dismissed.
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