IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No. 1141 of 2006
1. M/s Zee Interactive Learning Systems Limited
2. Arun Kumar Khaitan
3. Ashish Deb
4. Shankarshan Roy
5. Aiyaz Ahmad Shafi
6. Siladitya Sen ....... ........ ........Petitioners
Vs.
1. The State of Jharkhand
2. Sitaram Agarwal ... ...Opposite Parties
CORAM: HON'BLE MR. JUSTICE PRASHANT KUMAR
For the Petitioners: Mr. B.P. Pandey, Sr. Advocate
Mr. A.K. Sahani
For the Sate: Mr. S.N. Roy, APP
For the O.P. No. 2: Mr. L.C.N. Sahdeo
C.A.V. ON 24.08.2009 Delivered On 03.09.2009
5/ 03/09/2009
This is an application for quashing the entire criminal
proceeding in connection with Adityapur P.S. Case No. 252 of 2004
dated 8.11.2004 (G.R. No. 815 of 2004) under sections 406 and 420 of
the IPC pending in the court of CJM, Seraikella.
2 The case of complainant in short is that in pursuant to an
advertisement published in the Newspaper the complainant entered into
an agreement with the petitioners for starting IT Enabled Education
through Zed Career Academy. It is further alleged that the said project
based on Computer Education and a sum of Rs. 3 lakhs was charged as
franchisee fee besides an amount of Rs. 44,000/- for start up kits and the
duration of the said agreement was for five years. It is further stated that
the said project of the Zed Career Academy was inaugurated on
4.6.2000 with complete arrangements and requirements after incurring
huge expenses by the complainant. It is further alleged that in the
meanwhile another advertisement issued in the daily Telegraph by the
petitioners for launching zee Livewire Project. It is further stated that the
complainant and the petitioners signed a memorandum of understanding
for the second project i.e. Zee Livewire on 01.09.2000. Thereafter as
demanded, complainant paid Rs. 4, 00,000/- to the petitioners for Zee
Livewire Project vide Demand Draft No. 010853. It is further stated that
2
the petitioners refunded Rs. 65,000/- to the complainant as an excess
amount paid to him towards franchisee fee of Zee Livewire Project and
retained a total sum of Rs. 3,55,000/-. It is further alleged that as
required by the petitioners, complainant had build up the entire
infrastructure for launching of the project Zee Livewire but in spite of the
same, the petitioners had delayed the installation of Zee Livewire project
in the complainant’s company. It is stated that even on several reminder,
the petitioners did not launch aforesaid Zee Livewire project and
ultimately in the end of January 2002, terminated the current I-Cell
service. It is alleged that due to failure of the petitioners in launching Zee
Livewire/I-Cell Project, complainant sustained huge loss, therefore asked
the petitioners to return the franchisee fee. It is further stated that out of
Rs. 3,55,000/-, the accused-petitioners returned Rs. 1,92,600/- in three
consecutive dates, but still Rs. 1,62,400/- is due with the petitioner which
has not been refunded to the complainant. It is further alleged that due to
the non fulfillment of promise by the petitioners, the complainant
sustained huge loss. Accordingly, it is alleged that the accused-
petitioners committed an offence under section 406 and 420 of the IPC.
3. It is submitted by learned counsel for the petitioners that
from the allegations made in the FIR; a civil dispute is made out for non
performance of contractual obligation by the petitioners. It is further
submitted that in order to avoid civil litigation and huge court’s fee, the
complainant has adopted a circuitous method by filing a complaint
petition and with a view to blackmail the petitioners. It is further submitted
that from the perusal of complaint petition, it is clear that there is no
allegation against any of the petitioners that they have criminally
misappropriated any money of the complainant (O.P. No. 2). On the
contrary, there are materials to show that the petitioners returned the
parts of franchisee money to the complainant (O.P. No. 2) and they are
still ready to return the rest of the amount, but the complainant is refusing
to take back the said amount in the guise of the present FIR for extorting
3
more money. It is further submitted that there is no allegation in the
entire complaint petition that the petitioners had induced the complainant
and thereby fraudulently taken delivery of property which are the
essential ingredients of the offence of cheating. Hence offence under
section 420 of the IPC is also not made out.
4. On the other hand, learned counsel for the Opposite Party
submits that still the petitioners were not refunding Rs. 1,62,400/- to the
complainant which they have misappropriated for their own use.
Therefore an offence under section 406 of the IPC is made out. It is
further submitted that the petitioners had given the attractive and
impressive advertisement in the Newspaper for launching Zee Livewire
Project and thereby induced the complainant for paying Rs. 4, 00,000/-
as franchisee fee. The said promise has not been fulfilled by the accused
petitioners; therefore the offence of cheating is made out against
accused-petitioners.
5. Having heard the submission, I have gone through the
record of the case. From the perusal of FIR, it is apparent that there was
an agreement between the parties for launching Zee Livewire Project at
Jamshedpur. It further appears that for the said purpose, complainant
had initially paid Rs. 4, 00,000/- to the petitioners. It is stated in the
complaint petition that the petitioners’ company returned Rs. 65,000/- to
the complainant as an excess amount paid to it and retained only an
amount of Rs. 3,55,000/- with it for launching the new project, namely,
Zee Livewire. It further appears that due to some reason, the said Zee
Livewire project has not been launched. In the complaint petition itself, it
is mentioned that the complainant had sent a letter on 17.9.2002 to the
petitioner no. 3 stating the details of franchisee fee paid by the
complainant. It is further stated in the complaint petition that the
petitioners had returned altogether Rs. 1, 92,600/- out of Rs. 3, 55,000/-
paid to the petitioners as franchisee fee and still the amount of Rs. 1,
62,400/- is due with the accused -petitioners.
4
6. Thus, from the plain reading of entire complaint petition, it
appears that there is dispute between the party regarding the non
fulfillment of contractual obligation as mentioned in the agreement which,
in my view, involves a dispute of civil nature. From the complaint petition,
it does not transpire that at the time of signing agreement, the petitioners
have no intention to implement the Zee Livewire project, rather the
correspondences between the parties, the details of which given in the
complaint petition, shows that till the termination of the project both the
parties are taking active interest for launching the Zee Livewire Project. It
is admitted by complainant at paragraph 22 that on 21.2.2002 the
petitioners had sent to the complainant an operational manual related to
Zee Livewire project. Thus, the aforesaid statement of the complainant
shows that at the time of agreement between the parties, the petitioners
have no fraudulent or dishonest intention to deceive the complainant
(O.P. No. 2).
7. It has been held by their Lordships of Supreme Court in V.Y.
Jose Vs. State of Gujrat reported in 2009(2)JLJR 1 (SC) that ;-” For the
purpose of constituting an offence of cheating, the complainant is required
to show that the accused had fraudulent or dishonest intention at the time
of making promise or representation. Even in a case where allegations
are made in regard to the failure on the part of the accused to keep his
promise, in absence of a culpable intention at the time of making initial
promise being absent, no offence under section 420 of the IPC can be
said to have been made. ”
In my view, the aforesaid decision of their Lordship of
Supreme Court covers the case in hand. In the instant case, as noticed
above, the accused-petitioners had no fraudulent or dishonest intention at
the time of agreement. Hence, in my view, the offence under section 420
of the IPC is not made out.
8. So far the offence under section 406 of the IPC is concerned,
the complainant himself admitted at paragraph 34 that after termination of
5
Zee Livewire Project the petitioners had refunded Rs. 1, 92,600/- to the
complainant and Rs. 1,62,400/- is still due. It further appears from
annexure-4 to the supplementary affidavit that on 19th January,2005 the
accused-petitioners had refunded Rs. 25,000/- to the complainant vide
Cheque No. 023592 dated 31.1.2005 and had acknowledged that still an
amount of Rs. 1,25,358/- is payable to the complainant by the I-Cell.
9. Under the said circumstance, it can not be said that the
accused-petitioners had misappropriated the franchisee amount paid by
the complainant to the petitioners. In the present Cr. Misc. Application, at
paragraph no. 19, it is stated by the petitioners that they are ready to pay
Rs. 1, 37,400/- to the complainant, but the complainant is refusing to
receive the same.
10. For constituting an offence of criminal breach of trust it is
mandatory for the prosecution to show that the accused person to whom
the property was entrusted had dishonestly misappropriated or converted
the said property to his own use. Dishonest intention is the gist of the
offence. Any breach of trust is not an offence. The offence of criminal
breach of trust is completed only when the misappropriation or the
conversion of the property, dishonestly, took place.
11. In the instant case, as noticed above, the complainant
himself admitted that out of Rs. 3,55,000/- paid to the petitioners, till the
date of the filing of the complaint petition, he received Rs. 1,92,600/-. It
further appears from annexure-4 that in the year 2005 another Rs.
25,000/- has been paid to the complainant. In the present petition, the
petitioners stated that they are ready to return the remaining of Rs. 1,
37,400/- but the complainant himself is refusing to take back the said
amount. Under the said circumstance, I find that the accused-petitioners
have no dishonest intention to misappropriate the remaining franchisee fee
deposited by the complaint. In that view of the matter, in my considered
opinion, offence under section 406 of the IPC is not made out.
6
12. In the aforesaid V.Y Jose Case ( Supra) their Lordships of
Supreme Court has further held that “Section 482 of the Code of Criminal
Procedure saves the inherent power of the court. It serves the salutary
purpose vig. a person should not undergo harassment of litigation for a
number of years although no case has been made out against him. It is
one thing to say that a case has been made for trial and as such criminal
proceeding should not be quashed but it is another thing to say that a
person should undergo a criminal trial despite the fact that no case has
been made out at all.
13. As discussed above, in my view, no offence under section
406 and 420 of the IPC is made out from the allegation made in the
complaint petition. In my view, dispute between the parties appears to be
civil in nature for non fulfillment of promise made in the agreement which
resulted into huge loss to the complainant. For resolution of the said
dispute the venue is not the criminal court.
14. Accordingly, this application is allowed. The entire criminal
proceeding arising out of Adityapur P.S. Case No. 252 of 2004 dated
8.11.2004 corresponding to G.R. No. 815 of 2004 under section 406 and
420 of the IPC pending in the court of CJM, Seraikella is hereby quashed.
(Prashant Kumar, J.)
Jharkhand High Court, Ranchi
Dated 03/ 09 /2009
Sharda/NAFR