Chhajuram Agarwal Son of Sri Maman Chandra Agarwal Proprietor of Peeruka Textiles Vs. the State of Bihar and Urmila Agarwal W/O Sri Satya Narayan Agarwal Proprietor of Weltex India - Court Judgment

Excerpt:
- orderabhijit sinha, j.1. the petitioner, the proprietor of peeruka textiles, ichal karanji, p.s. shivajee nagar, district kolhapur, maharashtra, who along with his brother has been arrayed as accused in complaint case no. 2059(c) of 2005 has prayed for the quashing of the entire criminal proceeding arising therefrom including the order dated 26.7.2005 passed therein by the learned sub-divisional judicial magistrate, patna, whereby he has taken cognizance under sections 406, 420 and 120b ipc against both the accused.2. the complainant, one urmila agrawal, proprietor of weltex (india) rajendranagar, patna, impleaded herein as o.p. no. 2, filed the aforesaid complaint inter alia stating that her firm deals in wholesale supply of clothes and in the year 2003 both the accused came to her office in rajendranagar, and disclosing their identity requested her to supply clothes to them. it is alleged that both the accused thereafter kept visiting her office and on each occasion tried to explain the nuances and benefits of dealing with them and enticed by their assurances she became ready to supply clothes to them and in accordance there with she directed her kanpur branch to supply goods to them which was duly carried out. it is said that an agreement had been reached according to which the accused were required to pay in advance 25% of the value of the goods to be supplied but even when after the bill had been prepared and the advance money had not been paid the complainant expressed her inability to send the goods. however, on pleading and assurances the goods were supplied. it is alleged that in all goods worth rs. 17,02,197.10 paise were supplied to the accused on 01.03.2003 but neither has any payment therefor been made nor the goods have been returned by the accused. it is also alleged that on 15.7.2005 the complainant along with her husband went to the delhi office of the accused demanding payment which was refused.3. it has been submitted on behalf of the petitioner that he has been falsely implicated in this case in order to grab the money of the petitioner as also to put pressure on the accused persons. it has also been submitted that it would be apparent from the recital in the complaint petition that the entire matter relates to commercial transaction and accounting between the parties and at best would amount to a civil cause of action and with the settled law being that civil dispute cannot be adjudicated in a criminal proceeding, the present prosecution was an abuse of the process of the court.4. the complainant - o.p. no. 2 has appeared and though no show cause or written statement has been filed on her behalf oral submissions have been advanced to justify the impugned order. it was submitted that if allegations in the complaint, taken at their face value, discloses a criminal offence, then neither can the complaint or the cognizance taken on the basis thereof be quashed merely because it relates to a commercial transaction or breach of contract for which civil remedy is available.5. a commercial transaction or dispute may also involve a criminal offence. if it is found that from the very initial stage mens rea to cheat or commit criminal breach of trust is manifest, then even in matters of commercial transaction a criminal proceeding is maintainable.6. it appears that prior to filing of the instant complaint the self - same complainant had filed complaint case no. 1716(c) of 2005 where similar allegations had been made against the petitioner and cognizance had been taken under sections 420, 406, 120b ipc and the said cognizance order was quashed by the high court vide order dated 27.2.2007 passed in cr. misc. no. 29662 of 2006.7. the allegation made in the instant complaint case is identical and similar to the allegations made in complaint case no. 1716(c) of 2005. it is only the period of supply of goods and amount which differs. in the instant case the goods are said to have been supplied on 1.3.2003 whereas in complaint case no. 1716 (c) of 2005 the goods are said to have been supplied during the period 9.5.2003 to 17.5.2003.8. in view of the allegations made and the nature of the two cases being identical and parties thereto also being identical, similar result as in cr. misc. no. 29662 of 2006 must follow for similar reasons namely no offence under sections 406 or 420 i.p.c. is made out.9. accordingly, the impugned order as also the entire criminal proceedings, so far as the petitioner is concerned, is quashed and the application is allowed.

Judgment:
ORDER

Abhijit Sinha, J.

1. The petitioner, the proprietor of Peeruka Textiles, Ichal Karanji, P.S. Shivajee Nagar, District Kolhapur, Maharashtra, who along with his brother has been arrayed as accused in Complaint Case No. 2059(C) of 2005 has prayed for the quashing of the entire criminal proceeding arising therefrom including the order dated 26.7.2005 passed therein by the learned Sub-Divisional Judicial Magistrate, Patna, whereby he has taken cognizance under Sections 406, 420 and 120B IPC against both the accused.

2. The complainant, one Urmila Agrawal, proprietor of Weltex (India) Rajendranagar, Patna, impleaded herein as O.P. No. 2, filed the aforesaid complaint inter alia stating that her firm deals in wholesale supply of clothes and in the year 2003 both the accused came to her office in Rajendranagar, and disclosing their identity requested her to supply clothes to them. It is alleged that both the accused thereafter kept visiting her office and on each occasion tried to explain the nuances and benefits of dealing with them and enticed by their assurances she became ready to supply clothes to them and in accordance there with she directed her Kanpur Branch to supply goods to them which was duly carried out. It is said that an agreement had been reached according to which the accused were required to pay in advance 25% of the value of the goods to be supplied but even when after the bill had been prepared and the advance money had not been paid the complainant expressed her inability to send the goods. However, on pleading and assurances the goods were supplied. It is alleged that in all goods worth Rs. 17,02,197.10 paise were supplied to the accused on 01.03.2003 but neither has any payment therefor been made nor the goods have been returned by the accused. It is also alleged that on 15.7.2005 the complainant along with her husband went to the Delhi office of the accused demanding payment which was refused.

3. It has been submitted on behalf of the petitioner that he has been falsely implicated in this case in order to grab the money of the petitioner as also to put pressure on the accused persons. It has also been submitted that it would be apparent from the recital in the complaint petition that the entire matter relates to commercial transaction and accounting between the parties and at best would amount to a civil cause of action and with the settled law being that civil dispute cannot be adjudicated in a criminal proceeding, the present prosecution was an abuse of the process of the court.

4. The complainant - O.P. No. 2 has appeared and though no show cause or written statement has been filed on her behalf oral submissions have been advanced to justify the impugned order. It was submitted that if allegations in the complaint, taken at their face value, discloses a criminal offence, then neither can the complaint or the cognizance taken on the basis thereof be quashed merely because it relates to a commercial transaction or breach of contract for which civil remedy is available.

5. A commercial transaction or dispute may also involve a criminal offence. If it is found that from the very initial stage mens rea to cheat or commit criminal breach of trust is manifest, then even in matters of commercial transaction a criminal proceeding is maintainable.

6. It appears that prior to filing of the instant complaint the self - same complainant had filed complaint case No. 1716(C) of 2005 where similar allegations had been made against the petitioner and cognizance had been taken under Sections 420, 406, 120B IPC and the said cognizance order was quashed by the High Court vide order dated 27.2.2007 passed in Cr. Misc. No. 29662 of 2006.

7. The allegation made in the instant complaint case is identical and similar to the allegations made in Complaint Case No. 1716(C) of 2005. It is only the period of supply of goods and amount which differs. In the instant case the goods are said to have been supplied on 1.3.2003 whereas in Complaint Case No. 1716 (C) of 2005 the goods are said to have been supplied during the period 9.5.2003 to 17.5.2003.

8. In view of the allegations made and the nature of the two cases being identical and parties thereto also being identical, similar result as in Cr. Misc. No. 29662 of 2006 must follow for similar reasons namely no offence under Sections 406 or 420 I.P.C. is made out.

9. Accordingly, the impugned order as also the entire criminal proceedings, so far as the petitioner is concerned, is quashed and the application is allowed.