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M/s Halonex Limited & Others v/s State of U.P. & Another


    Criminal Misc. Application No. 12174 of 2013

    Decided On, 27 February 2014

    At, High Court of Judicature at Allahabad

    By, THE HONOURABLE MR. JUSTICE MANOJ MISRA

    For the Applicant: Rajul Bhargawa, Advocate. For Opposite Party: Abhijit Banerjee, Govt. Advocate.



Judgment Text

Manoj Misra, J.

Heard Sri Rajul Bhargawa, learned counsel for the applicants, Sri Abhijit Banerjee for opposite party no.2 and the learned AGA for the State.

By the present application under Section 482 Cr.P.C., the applicants have sought for quashing of the proceedings of complaint case no.806 of 2012, pending in the Court of Additional Chief Judicial Magistrate, Court No.10, Agra, under Section 406 IPC.

A perusal of the record reveals that the opposite party no.2 filed a complaint against M/s. Halonex Limited (applicant no.1), hereinafter referred to as the Company, alleging therein that the complainant is the proprietor of M/s. Shiv Enterprises, which was a distributor of the Company, for the city of Agra. It is alleged that the Company is a producer and distributor of electrical equipments, like CFL and tube lights, etc. under the distributorship agreement, there used to be a warranty for the products of 18 months from the date of its production and of 12 months from the date of its sale. It has been alleged that so long the distributorship agreement was in operation, the customers of the products, in case of any defect, could get the same replaced from the Company and in normal practice such replacements took place within 30-40 days.

In para 3 of the complaint, it has been alleged that in the month of July, 2010, the accused Company appointed another distributor in the city of Agra, in addition to the complainant, and authorized the new distributor to receive goods for replacement under warranty and gave instructions to the complainant not to receive goods for replacement, under warranty. It has been alleged that on representation of the complainant, the Director of the accused Company, namely, Rakesh Zutsi (applicant no.2) and its National Distribution Manager Chetan P. Trivedi (applicant no.3) (whose name has been typed as Dwivedi instead of Trivedi) agreed that in respect of last supply of goods by the Company to the complainant, there would be a warranty of 14 months and in case those goods are found to be defective, the same would either be replaced or in lieu thereof new goods of the same value would be given. It has been alleged that despite the above agreement, the accused Company refused to accept the faulty goods for replacement and in respect of faulty goods already received by the Company, up to December, 2010, no payment was made.

In para 4 of the complaint, it has been stated that for the faulty goods supplied by the Company to the complainant firm, a sum of Rs.2,81,730/- remains to be paid by the Company to the complainant and the Company was also guilty of not receiving back faulty goods, under the warranty, worth Rs.3,54,172/- and, as such, the accused Company caused a loss of Rs.6,35,902/- to the complainant. It has been further alleged that when the complainant made a demand for his claim, the accused threatened the complainant.

In support of the complaint allegations, the statement of the complainant Rajeev Garg as well as his brother Sunil Garg was recorded under sections 200 and 202 Cr.P.C, respectively. In his statement, under Section 200 Cr.P.C., the complainant stated that he was a distributor of CFL products of the accused Company; the accused Company stopped receiving back faulty goods for replacement and failed to send back goods or the money equivalent to its value, amounting to Rs.2,81,000/- for which the complainant made several demands, but to no avail; and instead the accused threatened the complainant of filing cases against him. The statement recorded under section 202 is more or less the same.

The Court of Additional Chief Judicial Magistrate, Court No.10, Agra, vide its order dated 28thJanuary, 2013, summoned Rakesh Zutsi (applicant no.2) and Chetan P Trivedi (applicant no.3) under Section 406 IPC.

Challenging the complaint and the proceedings in pursuance thereof, Sri Rajul Bhargawa, learned counsel for the applicants, submitted that even if the allegations made in the complaint read with the statement recorded under Sections 200 and 202 Cr.P.C. are accepted at their given face value, no offence including the offence punishable under Section 406 IPC is made out for proceeding against the applicants 2 and 3, particularly when they were not even arrayed as accused, although the Company was made an accused through the applicants 2 & 3. It has been submitted that from the statement recorded under Sections 200 and 202 Cr.P.C. as also the complaint allegations, the necessary ingredient i.e. dishonest intention on the part of the accused is not made. Relying on the demand notice dated 02.05.2011 issued on behalf of the complainant, at page 30 of the paper book, and the reply notice dated 19.05.2011 sent on behalf of the Company, at page 34 of the paper book, Sri Rajul Bhargawa submitted that there is a serious dispute with regards to the amount payable to the complainant from the Company and, in fact, it is the Company, which is entitled to a sum of Rs. 10,21, 797.11 from the complainant. Accordingly, the dispute is of a civil nature. It has also been submitted that in respect of the goods that were not accepted for replacement, no offence punishable under Section 406 IPC could be made out, inasmuch as, there would be no entrustment in respect of Company to the complainant against his claims though, according to the complainant, certain claims are still pending. There is nothing in the statement, recorded in support of the complaint, which may suggest that there had been a dishonest intention on the part of the accused persons including the Company. When from the own document of the complainant i.e. Annexure CA-'2' to the counter affidavit, it appears that some payment was received by the complainant against his claims from the Company. Therefore, in absence of clear allegation of a dishonest intention on the part of the accused Company in not making the full payment, the dishonest intention on the part of the accused cannot be presumed. Further, it is not the case of the complainant that his goods have been dishonestly misappropriated/ converted or disposed of by the accused contrary to the terms of the agreement. This court is, therefore, of the considered view that the necessary ingredient for an offence of criminal breach of trust, that is a dishonest intention on the part of the accused, is lacking. Accordingly, there is no justification to draw proceedings against the applicants for an offence punishable under section 406 IPC.

Even otherwise, from the statement recorded under sections 200 and 202 CrPC, it is not even prima facie established that the goods were entrusted to the applicants 2 and 3, who are alleged to be Director and National Distribution Manager respectively of the Company, inasmuch as it is not the case of the complainant that the goods were handed over to the applicants 2 & 3 or that they received and held the same. In such circumstances, no proceeding can be drawn against them by invoking principle of vicarious liability in the light of decision of the apex court in the case of S.K. Alagh (supra)

No doubt, in the complaint, the complainant made allegations that the accused threatened the complainant, but, such allegation would not be of much help to the complainant to draw proceeding against the applicants 2 & 3, inasmuch as, in the complaint the accused is only the Company impleaded through the applicants 2 & 3. Further, the allegation in that regard is completely vague, without any material particulars with regards to the place, time and date of the alleged threats. Even otherwise, the court bel

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ow did not find sufficient ground to proceed against the applicants for an offence other than the one punishable under section 406 IPC. For the reasons given above, this Court is of the view that the dispute between the parties is purely of a civil nature and the necessary ingredients of a criminal offence are not disclosed by the complaint and the statements in support thereof so as to justify proceeding against the applicants. The application is, accordingly, allowed. The complaint and the consequential proceedings of complaint case no.806 of 2012, pending in the Court of Additional Chief Judicial Magistrate, Court No.10, Agra, under Section 406 IPC are hereby quashed. It goes without saying that this order will not come in way of the complainant to pursue civil remedies in respect of his claim.
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