1. This is an application under Section 401 read with Section 482 of the Code of Criminal Procedure filed by the petitioners praying for quashing of the orders dated 17.05.2017 and 22.06.2017 passed by the Learned Additional Chief Judicial Magistrate, Siliguri, District-Darjeeling, in connection with C.R.No.320 of 2017 under Sections 406/420/120B of the Indian Penal Code pending against the present petitioners. Petitioners have also prayed for quashing of the entire proceedings of said C.R.Case No.320 of 2017.
2. In a nutshell the facts of the case are that on 22.02.2016, the present petitioner company viz the Superwave Communication and Infra Solution Private Limited, a company incorporated under Company Act placed their work order for work regarding supply, installation, testing and commissioning of Electrical System for Toll Plaza Work at Lumding Maibong Road Project (NH54E) to be carried out under certain terms and conditions as mentioned in the said work order in favour of the M/s. B. Enterprise. Complainant i.e present opposite party no.2 himself is one of the partners of the said M/s. B. Enterprise. From the said work order dated 22.02.2016, it appears that the said work order was issued with reference to the quotation of M/s. B. Enterprise and LOI, Ref:001/LOI/E1-2016, issued by the accused/company and on the basis of discussion held between the parties. The said work order mentioned the terms of payment and contained a schedule of item-wise rate.
3. Complainant has claimed that as per work order the firm had started supplying the materials on and from 17.03.2016 and within a period from 17.03.2016 to 27.06.2016 complainant supplied materials amounting to Rs.1,67,07,802.00/- (Rupees One Crore Sixty Seven Lakh Seven Thousand Eight Hundred and Two). It has been alleged by the complainant that accused instead of paying Rs.20,00,000/- (Rupees Twenty Lakh) as per work order paid only a sum of Rs.10,00,028.62/- (Rupees Ten Lakh and Twenty Eight and Sixty Two paise) on 03.03.2016, in violation of the terms of payment of the work order. Complainant also has claimed that it supplied materials amounting to Rs.1,67,07,802/- (Rupees One Crore Sixty Seven Lakh Seven Thousand Eight Hundred and Two) and accused paid only Rs.41,00,000/- (Rupees Forty One Lakhs) instead of paying 75% in terms of the work order. Complainant has also claimed that the complainant also supplied materials valued at Rs.3,44,000/- (Rupees Three Lakh Forty Four Thousand) and Rs.1,70,51,802/- (Rupees One Crore Seventy Lakh Fifty One Thousand Eight Hundred Two) was due and payable to the firm of the complainant. It has also been alleged by the complainant that the accused petitioners in violation of the work order deducted 10% performance Bank guarantee and paid Rs.27,28,000.62/- (Rupees Twenty Seven Lakh Twenty Eight and Sixty Two Paise). Complainant has stated that a joint meeting held on 26th August, 2016 in presence of one Mujib Ansari of Simplex Infra Structure Limited and Complainant was compelled to agree that an amount at the rate of 7.5% would be held from each invoice raised by the complainant as performance Bank guarantee including 5% of Security deposit. It was also agreed that said held amount would be released on completion of 12 months from the date of commissioning and hand over of the project to Simplex Insfra Structure Ltd. and payment would be made within 30 to 40 days from the date of delivery at site inspection and acceptance of material at site by the authorized person of the accused member. It has been alleged by the complainant that the accused received payment more than the actual material supplied by the complainant and accused persons did not pay the amount to the firm of the complainant without any reason. It is the specific allegation of the complainant that from the very inception accused persons had intention of cheating and accused persons making conspiracy with each other have committed the offence of cheating and misappropriated an amount of Rs.83,23,945.26/- (Rupees Eighty Three Lakhs Twenty Three Thousand Nine Hundred Forty Five and Twenty Six Paise).
4. Opposite party no.2 being one of the partners of M/s. B.Enterprise, on 07.04.2017 filed a petition of complaint before the Learned Additional Chief Judicial Magistrate, Siliguri, Darjeeling, against the present petitioners and the said petition of complaint was registered as C.R.Case No.320 of 2017. After taking cognizance, the Learned Additional Chief Judicial Magistrate transferred the said petition of complaint to Learned Judicial Magistrate, 3rd Court, Siliguri, for disposal. On 17.05.2017, Learned Magistrate examined the complainant i.e. present opposite party no.2 under Section 200 of the Code of Criminal Procedure. Thereafter, Learned Magistrate considered the statement of the complainant under Section 200 of the Code of Criminal Procedure and the documents filed in connection with the complaint and observed in favour of existence of prima facie case against the present petitioners and issued summons under Section 204 of the Code of Criminal Procedure against the petitioners to face trial for commission of alleged offences under Sections 420/406/120B of the Indian Penal Code.
5. Learned Advocate for the petitioners has contended that the allegations contained in the complaint if one reads as a whole then he does not find any willful deception on the part of the petitioners right from the very beginning of the transaction. He has vigorously submitted that the allegations made by the complainant do not constitute an offence punishable under Section 420 of the Indian Penal Code or allied offences in respect of which Learned Magistrate issued process against the present petitioners. Learned Advocate for the petitioners has further contended that the dispute between the parties is purely civil in nature and the continuation of the present criminal proceeding against the petitioners would amount to an abuse of process of the Court.
6. On the contrary, the Learned Advocate appearing for the opposite party no.2/complainant has invited the attention of the Court to Section 482 of the Code of Criminal Procedure and submitted that the inherent power of the Court under Section 482 of the Code of Criminal Procedure would be used only in respect of three purposes as mentioned in the section itself and those three purposes are i) to give effect to an order under the Code; ii) to prevent abuse of the process of the Court; and iii) to otherwise secure the end of justice. It is the specific contention of the Learned Advocate for the opposite party/complainant that the present case does not come within any of the purposes as mentioned in Section 482 of the Code of Criminal Procedure. In the complaint, the complainant has alleged inter alia that by conspiring with each other the petitioners/accused have committed the offence cheating and misappropriated an amount of Rs.83,23,945.26/-.
7. Now I have to see whether the contents of the complaint, if taken at their face value accepted in their entirely constitute alleged offences under Sections 420/406/120B of the Indian Penal Code.
8. Before proceeding further in the matter, it would be reasonable to deal with the offences alleged in the complaint.
9. Section 415 of the Indian Penal Code which defines cheating requires:-
1) Deception of any person;
2) (a) Fraudulently or dishonestly inducing that person;
i) To deliver any property to any person, or
ii) To consent that any person shall retain any property;
(b) Intentionally inducing that person to do or omit to do anything which would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.
In Hridaya Ranjan Prasad Verma and Others-Appellants Versus State of Bihar and Another- Respondents, (2000) 4 SCC 168 our Hon'ble Apex Court was pleased to hold as under:-
"On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent of dishonest."
(In Paragraph 14 of the judgment)
In paragraph 15 of the said judgment Hon'ble Apex Court was pleased to observe as under:-
"In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed."
10. The factual matrix would be relevant in the matter of assessment of the situation as to whether the allegations as made by the complainant come within the purview of civil dispute. It has been alleged by the complainant that the petitioners did not make payment in terms of the work order dated 22.02.2016 and subsequent in terms of the decision taken in the joint meeting dated 26th August, 2016. On the other hand, the petitioners have claimed that averments made in the petition of complaint disclosed a dispute of civil nature and there was part payment of the bills raised by the petitioners. It has also been claimed by the petitioners that the ingredients of the alleged offences are not disclosed in the averments of the complaint.
11. In paragraphs 19,20 and 21 of the complaint, it has been alleged that being induced by the assurance and promise of the petitioners/accused, the complainant accepted the work order and supplied the materials taking on credit from the market and erected the 100 numbers of poles and from the very beginning the petitioners had intention of cheating. It has been specifically stated by the complainant that complainant would not accept the work order, would not supply the materials and would not erect the poles if the complainant were not so induced or deceived by the assurance and promise of the accused. Complainant has specifically stated in his complaint that the complainant would not have accepted the work order if he were not so deceived by the petitioners/accused. It has been specifically claimed by the complainant that the complainant was cheated an amount of Rs.83,23,945.26/-. I have carefully gone through the complaint. It is true that the complaint discloses that there was a commercial transaction between the parties, but at the same time it cannot be overlooked that the averments made in the complaint prima facie reveal the commission of an cognizable offence. Allegations contained in the FIR involve appreciation of evidence. Moreover, when complainant discloses that the commercial transaction between the parties involves criminal offence, then the question of quashing the complaint cannot be made only because the transaction was commercial in nature.
12. In order to exercise the power under Section 482 of the Code of Criminal Procedure, the only requirement is to see whether continuation of the criminal proceeding would be a total abuse of the process of Court.
13. A plea was taken by the petitioners that the work order dated 22.
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02.2016, contained an arbitration clause and the complainant could have referred the dispute to Arbitration for adjudication. 14. Now, the question comes whether the provision contained in the work order for referring the dispute to Arbitration is an effective substitute for a criminal prosecution when the disputed acts prima facie make out an offence. Function of Arbitrator is quite different from the function of criminal Court. In the instant case, averments of the complaint prima facie discloses the commission of alleged offences. 15. In view of above, I am of the view that continuation of criminal proceeding against the petitioners/accused would not be an abuse of the process of the Court. Hence, the prayers for quashing of the proceeding and setting aside the impugned orders are hereby dismissed. 16. Before parting with the case, I would like to clarify that the observations as made in this judgment should not be taken as an expression of any opinion regarding the merit of the criminal proceedings pending before the Learned Magistrate. The Learned Trial Magistrate shall proceed with the complaint and dispose of the same in accordance with the law with utmost expedition. 17. Urgent Photostat certified copy of this judgment be supplied to the parties, if applied for, upon compliance of all formalities.