Rajinder Chand Abrol Vs. State of Him. PrA. and anr. - Court Judgment

Excerpt:
criminal - quashing of complaint - section 420 of indian penal code, 1860 - appellant charged for offence under section 420 - during pendency of investigation appellant sought quashing of complaint by respondent no. 2 on ground that transaction complained was purely civil in nature and it can only be tried for breach of contract - high court not to interfere with investigations and criminal proceedings - allegations made by respondent no. 2 prima facie makes a case under section 420 - respondent no. 2 had very clearly averred that appellant had every intention to defraud company - appreciating case of appellant in middle of investigation will prejudice investigation - no reason to interfere with investigation. - ordera.l. vaidya, j.1. shri mahesh arora, manager (project)-cum-secretary, m/s. auro spinning mills, baddi-nalagarh, a unit of vardhman spinning and general mills ltd., ludhiana, the present respondent no. 2, submitted a complaint under section 420 ipc against the present petitioner before the sub divisional judicial magistrate, nalagarh, on 28th january, 1993. the learned magistrate on that very day ordered the complaint to be forwarded to the s.h.o. police station, barotiwala, under section 156(3) of the code of criminal procedure for further action as per law. f.i.r. no. 23/93 dated 24th february, 1993 under section 420 ipc at police station, barotiwala, as such, was registered against the present petitioner on the basis of the accusations made in the complaint.2. in order to.....

Judgment:
ORDER

A.L. Vaidya, J.

1. Shri Mahesh Arora, Manager (Project)-cum-Secretary, M/s. Auro Spinning Mills, Baddi-Nalagarh, a unit of Vardhman Spinning and General Mills Ltd., Ludhiana, the present respondent No. 2, submitted a complaint under Section 420 IPC against the present petitioner before the Sub Divisional Judicial Magistrate, Nalagarh, on 28th January, 1993. The learned Magistrate on that very day ordered the complaint to be forwarded to the S.H.O. Police Station, Barotiwala, under Section 156(3) of the Code of Criminal Procedure for further action as per law. F.I.R. No. 23/93 dated 24th February, 1993 under Section 420 IPC at Police Station, Barotiwala, as such, was registered against the present petitioner on the basis of the accusations made in the complaint.

2. In order to appreciate the controversy between the parties the relevant accusations made against the present petitioner in the complaint which have been made the base of the F.I.R., referred to above, are essential to be taken note of at the very out-set.

3. Shri Mahesh Arora, the complainant, submitted the complaint who was authorised by the Company to file the said complaint as per averments made in the complaint itself. Paras 3 to 8 of the complaint are reproduced hereunder which, in detail, explain the criminal accusations levelled against the present petitioner:

3. That for the expansion project of the said Unit, the job of over-deck insulation and water proofing was to be undertaken. In this regard Mr. Raj Abrol alias R.C. Abrol who represented himself as Managing Director of M/s Hammer & Forts (India) Pvt. Ltd., Bombay, approached us in our factory premises at Baddi on 8-7-92 and met the complainant and offered his services to do the job. He, however, asked the complainant and firm that if advance money is paid to him he would be getting the job completed within 60 days and in that direction would mobilise resources within two weeks. He further represented that Rs. 8,45,000/- i.e. 25% of the total cost of job he paid in trust and the same would be used to mobilise resources, purchases of material and sending the same to Baddi. The complainant firm believed the accused to be a genuine person from a genuine company paid the said amount to the accused.

4. That the complainant firm on the representation of the accused organised a meeting with the accused on 8-7-92 at Baddi. Consequently, the accused quoted and accepted the rate of executing the job at Rs. 260/- per sq. meter inclusive of all duties and taxes and the mode of payment was fixed as follows:

(a) 25% amount for the execution of the work to be paid at the time of placing of order.

(b) 55% after the receipt of material.

(c) 10% amount on the completion of job and 5% amount with three months thereafter and the balance 5% against the Bank Guarantee valid for two years were settled.

5. That accordingly a letter placing the order thereby confirming the rate, mode of payment, the manner of job completion and other things etc. was issued on 9-7-1992 to the accused. Annexure 'A' of the said letter is enclosed. The accused before leaving from Baddi on said date asked the complainant that the advance of Rs. 8,45,000/-should not be, delayed as in turn the same would delay the execution of work. On good faith a draft No. 508399 dated 16-7-1992 for a sum of Rs. 8,45,000/- was sent to the accused vide letter No. ASM/42/93 and the said amount was encashed by the accused in the account of accused company and then the accused acknowledged the receipt of the draft money credited to his account. However, the indemnity bond and other papers sent vide letter dated 9-7-1992 by the complainant firm were not returned by the accused.

6. That the complainant was surprised and astonished when the accused sent a fax dated 11-8-92 putting up a demand of opening of an irrevocable letter of credit in the accused firm for Rs. 20,28,000/-. The complainant on behalf of the Company through various fax messages asked the accused at least to do the job to begin with for which purpose the accused has taken a sum of Rs. 8,45,000/- and if the accused is unable to do so then as per initial letter dated 9-7-1992 he should return the amount of Rs. 8,45,000/-. It is plain that the accused had no intention to execute the job and he had obtained the advance of Rupees 8,45,000/- just to deceive fraudulently and dishonestly the complainant firm and by his dishonest representation to do the job he induced the complainant company and thus obtained Rs. 8,45,000/- with the intention not to fulfil job and just to cause damage, or harm to the complainant firm by misappropriating the aforesaid amount.

7. That again on 29-9-1992 the complainant on behalf of the Company sent a fax message intimating the accused the cancellation of the order placed with his Company with him on 9-7-1992 and asked him to refund the said amount. The accused has not done so and rather informed the complainant Company vide letter dated 10-11-92 that the said amount has been adjusted.

8. That the accused has thus cheated the complainant company and with deception, fraudulently and dishonestly and on mala fide intention received Rs. 8,45,000/- with the intention from the very beginning that the accused is not going to do the job and thus has misappropriated the aforesaid amount of the aforesaid complainant company and by doing so he has committed an offence punishable under Section 420 IPC. The intention of the accused was dishonest at the time of making such contract with the complainant company as the accused in fact never wanted to execute the work which is quite discernible from the aforesaid facts. Ultimately now from the conduct of the accused it is quite visible that the accused only wanted to defraud the complainant company and thus he has received Rs. 8,45,000/- and converted the same into a valuable security for him and his company and thus is liable for the offence punishable under Section 420 IPC.

4. The complainant, on the basis of the aforesaid allegations, prayed that the court be pleased to direct the SHO, Police Station Barotiwala, to register a case under Section 420 IPC against the accused and that complaint may kindly be sent to do the same under Section 156(3) Cr.P.C. as the offence was serious and the accused was living at Bombay and was not within the control of the complainant Company.

5. As pointed out earlier, FIR on the basis of the aforesaid complaint was registered. After the registration of the FIR the same has been partly investigated. The investigation was still on when the present petition under Section 482 of the Code of Criminal Procedure has been preferred by the accused-petitioner with the prayer to quash the complaint filed by respondent No. 2 and also the F.I.R. No. 23/93 dated 24-2-1993 under Section 420 IPC registered at Police Station Barotiwala, District Solan, HP in pursuance to the order passed by the S.D.J.M., Nalagarh, under Section 156(3) of the Code of Criminal Procedure.

6. The reliefs of quashing of the FIR, complaint and staying the investigation have been based by the petitioner on various grounds. The main ground taken in this behalf has been that on true interpretation of the complaint it was abundantly clear that the transaction complained of was purely of civil nature and at best it could be said to be a case of breach of contract.

7. The respondents have contested the petition and in their replies submitted separately it has been pleaded that the present petition was not within the ambit of Section 482 of the Code of Criminal Procedure as the case was still in preliminary stage and the investigation was still on which was within the exclusive jurisdiction of the police in order to come to a conclusion whether criminal case had been made out or not. It was further alleged that on the basis of the accusations made in the complaint a prima facie case under Section 420 IPC was made out and on that sole ground the FIR as well as the complaint could not be legally quashed. The averments made in the petition describing the alleged transaction to be of civil nature, being a breach of contract, have been disputed.

8. Learned Counsel for the parties have been heard at length and they have tried to put forward the respective stands taken by their clients in this petition in an effective manner.

9. Learned Counsel for the petitioner has stressed that, no doubt, the competent drafting of the complaint by an expert discloses an offence under Section 420 IPC but that would not stand in the way of the court to quash the complaint and the FIR in case the material on record produced on behalf of the petitioner discloses the transaction to be of a civil nature, being a breach of contract. The learned counsel's line of contention in this behalf has been that in case the court was satisfied on the basis of the material on record that no criminal offence was ever committed, as alleged by the respondent, the interference by this Court, as sought for, would be available to the petitioner.

10. On the other hand it has been contended by the learned Advocate General as well as by Mr. T.R. Chandel, Advocate, appearing on behalf of respondent No. 2 that in case of present nature where the FIR at the very face of it disclosed the commission of an offence under Section 420 IPC by the present petitioner, the investigation should not be interfered with and the statutory function of the Police in investigating the present case should be allowed to be completed and the independence of that agency for coming to a specific inference, on the basis of the material collected during the investigation, should not be eroded by interfering with the investigation. It has further been contended on behalf of the respondents that let the investigation be completed and let the Investigating Officer come to a specific conclusion whether on the basis of the material collected during the investigation a criminal case was made out or the case was of a civil nature. Thus, learned counsel's submission in this behalf has been that in the aforesaid context the interference by the present court, as prayed for on behalf of the petitioner, would not be legal and constitutional.

11. In order to appreciate the aforesaid contentions put forth on behalf of the parties, more so to appreciate the material brought on record it would be in the best interest of the case to refer the law in this particular behalf as laid down by the apex court of the country in various decisions.

12. In AIR 1974 SC 301: (1974 Cri LJ 352), Hari Prasad Chamaria v. Bishnu Kumar Surekha, on the basis of the facts involved in the case it was held that no offence under Section 420 IPC was made out and the transaction involved was a mere breach of contract. In this reported case the appellant intended to start business giving in full faith a large amount to the respondents for the same but the respondents started business in their own names and refused to render accounts or return money. There was nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time the appellant parted with the money nor did the complaint indicate that the respondents had induced the appellant to pay them the amount parted with. The appellant also did not allege the respondents making any representation to him for parting with the money. In these circumstances it was held that the mere fact that they did not abide by their commitment as to starting of the business in complainant's name as agreed to would not fasten them with criminal liability. It was also observed that the complaint did not disclose the commission of any offence on the part of the respondents under Section 420 IPC and on that count the order passed by the High Court quashing the proceedings pending in the trial court were upheld and the appeal was disallowed.

13. In Trilok Singh v. Satya Deo Tripathi, AIR 1979 SC 850: (1980 Cri LJ 822), the dispute between the parties related to the purchase of a truck by the complainant (respondent) and a hire-purchase agreement was entered into between the respondent and a Finance Corporation accused (appellants). The loan was payable in monthly instalments. According to the agreement, on default of any one instalment the financier had the right to terminate the hire-purchase agreement even without notice and seize the, truck. The complainant's case was that only a blank form was got signed by him and that on default of the third instalment the truck was forcibly seized and removed by the appellants. The respondent on the basis of these circumstances filed a complaint against the appellants in this connection for certain offences under Sections 395, 468, 465, 471, 412, 120-B/34 IPC and after enquiry the Magistrate directed the issue of summons. The appellants moved an application under Section 482 of the Code of Criminal Procedure and their case in nutshell was that the respondent's case that they had committed any offence was absolutely false and the proceedings should be quashed.

14. It was held that the proceedings initiated was clearly an abuse of the process of the Court as it was not a case where any process ought to have been directed to be issued against the accused. It was further held that on the basis of well-settled principles of law it was a very suitable case where the criminal proceeding ought to have been quashed by the High Court in exercise of its inherent power. The dispute raised by the respondent was purely of a civil nature even assuming the facts stated by him to be substantially correct. It was further observed that obtaining signature of a person on blank sheet of paper by itself was not an offence of forgery or the like. It becomes an offence when the paper is fabricated into a document of the kind which attracts the relevant provisions of the Penal Code making it an offence or when such a document is used as a genuine document. It was also observed that even assuming that the appellants either by themselves or in the company of some others went and seized the truck from the house of the respondent they could and did claim to have done so in exercise of their bona fide right of seizing the truck on the respondent's failure to pay the third monthly instalment in time. The court held that under the circumstances it was a bona fide civil dispute which led to the seizure of the truck.

15. The apex court in AIR 1982 SC 949: (1982 Cri LJ 819), State of West Bengal v. Swapan Kumar Guha, has dealt with the legal aspect of the matter in a very detailed manner. The relevant portions of the judgment are reproduced hereunder for the sake of the guidance:

If an offence is disclosed, the High Court under Article 226 of the Constitution will not normally interfere with an investigation into the case and will permit investigation into offence alleged to be completed; if, however, the materials do not disclose an offence, no investigation should normally be permitted. Justice requires that a person who commits an offence has to be brought to book and must be punished for the same. If the Court interferes with the proper investigation in a case where an offence has been disclosed, the offence will go unpunished to the serious detriment of the welfare of the society and the cause of the justice suffers. It is on the basis of this principle that the court normally does not interfere with the investigation of a case where an offence has been disclosed. But it cannot be said that an investigation must necessarily be permitted to continue and will not be prevented by the Court at the stage of investigation.

Whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case. If on a consideration of the relevant materials, the Court is satisfied that an offence is disclosed, the Court will normally not interfere with the investigation into the offence and will generally allow the investigation in the offence to be completed for collecting materials for proving the offence. If, on the other hand, the Court on a consideration of the relevant materials is satisfied that no offence is disclosed, it will be the duty of the Court to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual.

A First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot form the foundation or constitute the starting point of a lawful investigation.

An investigation can be, quashed if no cognizable offence is disclosed by the FIR. It is surely not within the province of the police to investigate into a report (FIR) which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases.

The conditions precedent to the commencement of investigation under Section 157 of the Code is that the F.I.R. must disclose, prima facie, that a cognizable offence has been committed. It is wrong to suppose that the police have an unfettered discretion to commence investigation under Section 157 of the Code. Their right of inquiry is conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot, reasonably, have reason so to suspect unless the F.I.R. prima facie, discloses the commission of such offence. If that condition is satisfied, the investigation must go on. The Court has then no power to stop the investigation, for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences. On the other hand, if the F.I.R. does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of the information as laid or received. The power to investigate into cognizable offences must, therefore, be exercised strictly on the condition on which it is granted by the Code....

16. This reported case was pertaining to the violation of Section 3 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, punishable under Section 4 of the said Act. It was held that the FIR itself did not disclose any offence against the accused persons and with that background quashing of investigation by the High Court was upheld.

17. In AIR 1985 SC 1668: (1985 Cri LJ 1858), Eastern Spinning Mills, Shri Virendra Kumar Sharda v. Shri Rajiv Poddar, it was held that interference under Section 482 of the Code of Criminal Procedure by the High Court would be permissible only if non-interference would result in miscarriage of justice. What would be the miscarriage of justice will depend upon the facts and circumstances of an individual case. Para 4 of the judgment of this reported case is very much relevant in order to appreciate the facts and circumstances under which the aforesaid principle was laid down. That para runs as under:

4. There were two informations of cognizable offences lodged against respondents Nos. 1 and 2, one at Barasat Police Station bearing No. 63 of 1984 and another at Serampore Police Station bearing No. 14/84 on March 12, 1984 and March 15, 1984 respectively. On an oral petition followed by a written petition by respondents Nos. 1 and 2 a learned single Judge of the Calcutta High Court on March 15, 1984 made an order granting interim injunction in terms of prayers (g) & (i), which would imply that respondent No. 3, State of West Bengal and respondents No. 4 to 14, the various Police Officers and their servants and subordinate officers were restrained from taking any step or further step or any action or carrying on the investigation on the basis of or in pursuance of, or, in furtherance of two aforementioned FIRs lodged against respondents Nos. 1 and 2. The order had the effect of interfering and staying investigation of offences by investigating officer performing statutory duty under the Code of Criminal Procedure. We consider it absolutely unnecessary to make reference to the decision of this Court and they are legion which have laid down that save in exceptional case where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences. And frankly such is not the case. This is a routine case where information of an offence or offences has been lodged, investigation commenced, search and seizure followed and the suspects arrested. Prompt came the unusual procedure of oral applications and oral appeals and interim order interfering with investigation. And these oral applications and oral appeals followed by such orders as interim relief prayed for granted in terms of prayer which leave us guessing about prayers made, the case for granting the prayer, appreciations by a judicially trained mind and what appealed to the Court. We have serious reservations about the procedure of oral applications and oral appeals. We do not propose to finally pronounce on these vital points. On an oral appeal, the appellate Bench modified the order made by the learned single Judge and the injunction restraining investigation was vacated. However, the investigation Officer was directed not to detain the writ petitioner i.e. respondents Nos. 1 and 2 more than one hour each on any day for the purpose of investigation. We are of the opinion that investigation must proceed unhampered by court orders. Investigation shall proceed unhindred and uninterrupted by any order made by the High Court of Calcutta subject to the following conditions....

18. In (1985) 1 Chand LR (Cri) 666 (SC): (1985 Cri LJ 817), Pratibha Rani v. Suraj Kumar, it was held that inherent powers of the High Court to quash proceedings under Section 482 of the Code of Criminal Procedure must be exercised very sparingly. It was also held that where allegations in the complaint or FIR makes out a prima facie case for proceeding against the accused, in that event complainant is entitled to an opportunity to prove his case and in such circumstances quashing of proceedings at the very behest is not justified. Further observations in this behalf have been that the High Court while exercising jurisdiction under the said provision has to proceed entirely on the basis of the allegations in the complaint or the accompanying documents. The High Court has no jurisdiction to examine the correctness or otherwise of those allegations.

19. The aforesaid reported case arises out of a complaint preferred under Section 405 IPC by a married woman against her husband and in-laws. The complainant averred that the accused had been entrusted with dominion over property which constituted Stridhan of the complainant and it was further alleged that the accused have dishonestly misappropriated the same. All the ingredients of the offence under Section 405 IPC had been pleaded in the complaint. However, the complaint was quashed by the High Court in exercise of its inherent powers under Section 482 Cr.P.C. on the ground that the property in dispute being in joint possession of the complainant and the accused, the question of entrustment of dominion over the same or its misappropriation did not arise. The apex court under the circumstances held that the view taken by the High Court was erroneous and, as such, was set aside and as a consequence thereof the complaint was directed to be restored and proceeded with in accordance with law.

20. In this very case Pratibha Rani v. Suraj Kumar, (1985 Cri LJ 817 (SC)), (supra) it was further held that civil and criminal remedies are not mutually exclusive but clearly co-extensive and can run side by side. It was also observed that the two types of actions are quite different in Content, scope and import.

21. In State of Bihar v. P.P. Sharma IAS, 1992 Supp (1) SCC 222: (1991 Cri LJ 1438), the apex court dealt with the powers of the High Court under Articles 226/227 of the Constitution of India with respect to the quashing of criminal proceedings. The relevant portions of the judgment run as under:

At a stage when the police report under Section 173 Cr.P.C. has been forwarded to the Magistrate after completion of the investigation and the material collected by the Investigating Officer is under the gaze of judicial scrutiny, the High Court would do well to discipline itself not to undertake quashing proceedings in exercise of its inherent jurisdiction. In this case the High Court fell into grave error in appreciating the documents and affidavits produced before it by treating them as evidence, delving into the disputed questions of fact in its jurisdiction under Articles 226/227 and pronouncing the respondents to be innocent and quashing the criminal proceedings by converting itself into a trial court. This was not at all a case where High Court should have interfered in the exercise of its inherent jurisdiction. The appreciation of evidence is the function of the criminal courts the special Judge was seized of the matter. He had heard the arguments on the question of cognisance and had reserved the orders. The High Court did not even permit the Special Judge to pronounce the orders. The High Court, under the circumstances, could not have assumed jurisdiction and put an end to the process of investigation and trial provided under the law.

Entertaining the writ petitions against charge-sheet and considering the matter on merit on the guise of prima facie evidence to stand an accused for trial amounts to pre-trial of a criminal trial under Article 226 or 227 even before the competent Magistrate or the Sessions Court takes cognizance of the offence. The charge-sheet and the evidence placed in support thereof form the base to take or refuse to take cognizance by the competent court. It is not the case that no offence had been made out in the charge-sheets and the first information report. Grossest error of law has been committed by the High Court in making pre-trial of a criminal case in exercising its extraordinary jurisdiction under Article 226. Once the proceedings are entertained the further proceedings get stayed.

The documents relied on by the accused-respondents were subject to proof at the trial and if proved to be true and relevant, then only they might serve as a defence for the respondents at the trial. The Commission of offence cannot be decided on affidavit evidence. The High Court has taken short, course 'in annihilating the still born prosecution' by going into the merits on the plea of proof of prima facie case and adverted to those facts and gave findings on merits.

Expeditious trial of a criminal case is the cardinal rule. Delay feeds injustice to social order and entertaining writ petitions would encourage to delay the trial by diverse tricks. It is not to suggest that under no circumstances a writ petition should be entertained. But an accused with a view to delay the trial, resorts to writ proceedings, raises several contentions including one on merit and have the proceedings kept pending. The result would be that the people would lose faith in the efficacy of rule of law.

22. AIR 1992 SC 1930: (1992 Cri LJ 3450), Jayant Vitamins Ltd. v. Chaitanyakumar, is another case dealt with by the apex court dealing with the powers of the High Courts under Sections 482/156 of the Code of Criminal Procedure. The facts giving rise to this case were that the appellant-Company preferred a complaint dated 14th November, 1988 with reference to an incident in October 1986 against the first respondent and four others before the police under Sections 420, 408 read with Section 34 IPC on the allegations of criminal conspiracy, cheating, criminal breach of trust. On the basis of the complaint a case was registered in Crime No. 286 of 1988 of Ratlam Police Station and the investigation proceeded with. A number of documents were seized. However, after nine months it appeared that the Investigating Officer arrived at a conclusion that as the allegations were found to be of internal dispute of the company and as there was no basic evidence, there was no hope of success and consequently he closed the investigation. Thereafter, under the direction of the Superintendent of Police, further investigation in respect of the said offences was carried on which was admittedly not yet complete till date.

23. The first respondent then filed an application under Section 482 Cr.P.C. for quashing the investigation carried on in pursuance of the crime registered so far as he was concerned. The High Court after holding that the necessary ingredients to make out an offence under Section 415 have not been made and after making reference to the decisions of the Supreme Court in State of West Bengal v. Swapan Kumar, AIR 1982 SC 949:(1982 Cri LJ 819), and R.P. Kapur v. State of Punjab, AIR 1960 SC 866:(1960 Cri LJ 1239), allowed the application and concluded thus:

The investigation in pursuance of registration of Crime No. 286/88 registered against the petitioner is quashed..

24. The apex court after carefully examining the record and submissions of both the learned counsel came to the conclusion that the High Court was not justified in quashing the investigation which was still on its way. It was observed that needless to emphasis that the further investigation in the case was legally permissible as contemplated by Section 173(8) of the Code of Criminal Procedure and the learned counsel, appearing for the State, when asked represented that the investigation was not yet complete and the State would come to a definite conclusion as to the culpability of the appellant only on the completion of the investigation. Their lordships observed that 'as repeatedly pointed out by various decisions of this Court that the investigation into an offence is a statutory function of the police and the superintendence thereof is vested in the State Government and the Court is not justified without any compelling and justifiable reason to interfere with the investigation.

25. The legal aspect of the matter dealt with by the Supreme Court in 1993 Cri LJ 600: (AIR 1993 SC 892), Janata Dal v. H.S. Chowdhary, is very much relevant even to appreciate the points involved in the present case. The relevant paras are reproduced hereunder (Paras 130 and 135):

The criminal courts are clothed with inherent power to make such orders as may be necessary for the ends of justice. Such power though unrestricted and undefined should not be capriciously or arbitrarily exercised, but should be exercised in appropriate cases, ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist. The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Courts must be careful to see that its decision in exercise of this power is based on sound principles.

The inherent power conferred by Section 482 should not be exercised to stifle a legitimate prosecution. The High Court being the highest Court of a State should normally refrain from giving a premature decision in a case wherein the entire facts are extremely incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved whether factual or legal are of great magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to the cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceedings at any stage.

26. In (1994) 1 SCC 463, Chetan Anand v. State of Punjab, the accused Chetan Anand was a film-maker who took a loan from a bank for which the State of Punjab stood as a guarantor. The accused had undertaken to utilise the entire amount of income in repayment of loan. The allegations in the FIR against the accused were that he misappropriated the entire proceeds of picture thereby committing offences under Sections 406 and 420 IPC. In this case various opportunities were given by the Court to settle the matter amicably but no settlement was reached. It was, as such, held that on perusal of the order of trial court and other documents on record, no ground to quash criminal proceedings was made out. Their lordships observed that there was no ground to interfere with the order of the Magistrate, as upheld by the High Court since the criminal proceedings are pending against the appellant, the learned Judges refrained from going into the merits of the allegations contained in the FIR.

27. 1994 SCC (Cri) 63: (1993 Cri LJ 3537), State of Bihar v. K.J.D. Singh, was another case wherein the powers of the High Court under Section 482 of the Code of Criminal Procedure to quash criminal proceedings have been dealt with. In this reported case it has been held that the power of the High Court to quash proceedings should not be arbitrarily exercised to cut short normal process of a criminal trial except in exceptional cases. It was further held that it was not permissible to quash proceedings or appreciate evidence at the stage when the trial had not even commenced.

28. In the aforesaid reported case the High Court of Patna quashed the prosecution against the respondent in respect of offences under Sections 120-B, 420, 468 and 471 of the Indian Penal Code in exercise of its inherent jurisdiction under Section 482 Cr.P.C. before the commencement of the trial. Their lordships, after going through the records and hearing the learned counsel for the parties, came to the conclusion that it was not a case in which the High Court should have cut short the normal process of the criminal trial and the exercise of powers by the High Court under Section 482 Cr.P.C. to quash the prosecution launched against the respondent at the stage when the trial had not even commenced was not proper.

29. On the basis of the aforesaid law laid down by the Supreme Court of India in various cases referred to above the powers of the High Court under Section 482 Cr.P.C. or under its writ jurisdiction to quash criminal proceedings at the stage of loading of FIR/complaint, investigation and trial can safely be summarised as under:

1. There cannot be any hard and fast rule for quashing the FIR, complaint, investigation/criminal proceedings as primarily it would depend upon the facts involved in a particular case;

2. The High Court in a particular case and under special circumstances established therein can interfere at any stage of the proceedings;

3. High Court's powers under Section 482 of the Code of Criminal Procedure and under its writ jurisdiction are vast but to be exercised sparingly in a particular established circumstances in order to impart substantial justice. In this behalf the Court is to avoid giving pre-mature decision in a case where entire facts are incomplete and entire evidence has not yet been collected;

4. The High Court's interference for quashing the FIR would be followed when the First Information Report, even if accepted as true, discloses no reasonable suspicion of the commission of cognizable offence;

5. The High Court would be competent to interfere in case when the material subsequently collected in the course of investigation further disclosed the commission of no cognizable offence;

6. The High Court can exercise this power when it is established that the power of investigation has been exercised with mala fide motive; and

7. The High Court can also interfere if it is proved that further investigation would amount to abuse of powers by the police;

30. Generally the High Court will not interfere with the investigation and the criminal proceedings. In case to continue with the investigation and criminal proceedings would amount to abuse of power interference can be there. The statutory functions of the police and of various authorities are required to be completed in case the same are being complied with in accordance with law, not resulting in substantial injustice to the aggrieved person.

31. The aforesaid circumstances are not exhaustive. As earlier pointed out, the interference of the High Court in criminal matters will depend upon the facts and circumstances of an individual ease.

32. Learned Counsel for the petitioner's submissions that on the basis of the averments made in the complaint/FIR coupled with the material brought on record on behalf of the petitioner in the present petition, no scope is left for continuing with the investigation inasmuch as the transaction alleged in the complaint against the accused spells out to be a dispute of civil nature, more so, the matter being of breach of contract.

33. Needless to say, a transaction can under set circumstances give rise to a civil as well as criminal liability or to civil liability alone. The facts of a particular case in order to arrive at any inference in this behalf have to be taken note of. Therefore, there cannot be a general rule made that a transaction even of the present nature which is the subject matter of the present petition always will give rise to a civil action.

34. In so far as the allegations in the complaint are concerned they definitely make out a prima facie case under Section 420 IPC against the present petitioner. Those averments may not be repeated which have been fully described above.

35. The complainant in the complaint very specifically averred that the intention of the present petitioner from the very beginning was not to do the job and misappropriate the said amount of the complainant-Company and thus the accused was alleged to have committed an offence under Section 420 IPC. It was again averred that at the time of the entering into the contract the accused had absolutely no intention to execute the work and he only wanted to defraud the complainant-Company and thus received Rs. 8,45,000/- which he converted into a valuable-security for him and his Company. It was also very specifically averred in the complaint that the accused through a communication informed the complainant-Company vide letter dated 10th November, 1992 that the said amount had been adjusted against the sister concern of the complainant-Company.

36. It is being argued on behalf of the petitioner that as per Annexure-P7, a communication addressed to respondent No. 2, purported to be dated 17th March, 1993 it was communicated that the petitioner tried to adjust the sum of Rs. 8,45,000/- paid by respondent No. 2 as advance in respect of the aforesaid job to be carried out at Baddi as part payment of the said sum of Rs. 17,11,653/- due and payable by the sister concern of respondent No. 2 to the petitioner in respect of respondent No. 2's contract with the petitioner and also that the sister concern of respondent No. 2 objected to the said adjustment to be made and, therefore, the petitioner was adjusting the said amount towards the aforesaid contract which was placed by respondent No. 2 with the petitioner and thus on the basis of this communication the bona fides of the petitioner were reflected and the dispute was rendered only of civil nature and no criminal liability under the circumstances, was involved.

37. During the course of argument the receipt of the aforesaid communication was not admitted on behalf of respondent No. 2. Any way in order to appreciate the aforesaid submission some other relevant material brought on record is to be referred to.

38. The complaint was filed on 28th January, 1993. The FIR was registered on 24th February, 1993 on the basis of the complaint. The agreement under reference was entered into in July 1992 and the amount which is the subject matter of the complaint was also sent to the petitioner in July 1992.

39. During investigation certain documents have been taken into possession by the Investigating Officer which revealed that Rs. 8,45,000/- were sent to the petitioner through a draft as advance on 24th July, 1992. A communication dated 28th September, 1992 was addressed to the petitioner vide which the petitioner was informed that as he had backed out of the contract by insisting upon terms different from what were settled earlier, the complainant had left with no alternative but to cancel the contract dated 9th July, 1992 for undertaking the insulation and water proofing work at Baddi. The petitioner was requested to treat the said order as cancelled and to return the amount along with interest.

40. The Investigating Officer also took into possession a communication dated 10th November, 1992, sent by the petitioner to the complainant, whereby it was informed that 'kindly note that Rs. 8,45,000/- received by draft dated 16th July, 1992, stands adjusted' against the bills detailed in the communication which were amounting to Rs. 17,11,653/- of some other concern, alleged to be the sister concern of the complainant.

41. Admittedly, the Investigation has not been completed. The complaint/FIR, as per allegations made therein, definitely disclosed an offence under Section 420 IPC alleged to have been committed by the present petitioner. There is a communication sent by the petitioner informing the complainant that the amount of Rs. 8,45,000/- paid by them, has been adjusted in the amount of the sister concern of the complainant meaning thereby that in so far as the contract under reference was concerned, this communication clearly referred that the said amount was not utilized in the execution of the contract under reference.

42. There is no doubt that some communication dated 17th March, 1993, as referred to above, was sent to the complainant the receipt of which was being disputed but the fact remains that by the time this communication dated 17th March, 1993 was sent the complaint had already been filed and by the time of the filing of the complaint the letter informing the complainant to have adjusted the amount in the account of sister concern of the complainant was still there and had not been withdrawn.

43. Any way the fact remains that the investigation is still incomplete and to appreciate the case of the petitioner on the basis of the documents filed in this petition at this stage would I definitely prejudice the investigation. In the circumstances, I do not find any reason whatsoever to interfere at this stage in the aforesaid context of the case, in the statutory functioning of the police.

44. It may be pointed out here that the Investigating Officer after collecting the entire evidence may come to a conclusion that the dispute was of a civil nature alone or that it was of a criminal nature. In case of I.O's coming to the conclusion that the dispute was of a civil nature he was competent, under the Code of Criminal Procedure, to submit a report for cancellation. In this view of the matter it would not be in the interests of justice for this Court to come to a definite conclusion, at this stage of the investigation, which function, in the circumstances of the case, would be premature.

45. In view of the foregoing reasons, I, do not find any occasion whatsoever to interfere with the investigation of the FIR which definitely discloses a cognizable offence alleged to have been committed under Section 420 IPC. The petitioner should wait for the result of the investigation. Without appreciating the evidence collected by the Investigating Agency until today and the material brought on record on behalf of the petitioner, it is directed that the investigation of the FIR be completed without any undue delay which has been stayed during these proceedings. The petition, as such, is disallowed and the record of the Investigating Agency be sent back immediately for further investigation.