ORDER
Deo Narayan Thanvi, J.
1. This criminal misc. petition under Section 482 Cr.P.C. has been filed by the Chairman and Managing Director of M/s Bhatia Shipping & Agencies Pvt. Limited, Mumbai for quashing of FIR No. 269/2003 under Sections 407, 420, 424 and 120B IPC, registered at Police Station Basni, District Jodhpur in pursuance to the directions issued by the Judicial Magistrate, First Class No. 4, Jodhpur under Section 156(3) Cr.P.C. on the compliant of one Ghevar Chand Kanoongo, Managing Director of firm Alcobex Metals Pvt. Ltd. situated at industrial area, Jodhpur, against M/s Bhatia Shipping & Agencies Pvt. Ltd. Mumbai along with their three Directors and Sai Shipping Company Pvt. Ltd., Mumbai with their three Directors. In all, two companies and its six Directors were made accused in the complaint. The allegation in the compliant was that complainant firm is producing and dealing in non ferrous metals at its Jodhpur factory. It is alleged in the complaint that on 12.4.01, M/s. Salem Tube International Ltd., England placed order for the purchase of copper alloy tubes (aluminium bronze) with a condition that delivery of the goods shall be made on payment i.e. cash against the documents. The petitioners M/s Bhatia Shipping & Agencies Pvt. Ltd. sent the goods through M/s. Sai Shipping and Agency Pvt. Ltd., as both the companies are doing carrier business. It is further alleged in the complaint that the complainant firm sent 25,800 kilogram copper alloy tubes contained in eight wooden boxes to Bombay through truck at its agent M/s Bhatia Shipping & Agencies Pvt. Ltd. and for its onward transmission to M/s Salem Tube, England through Sai Shipping Agencies vide Invoice No. AMI/EXP/2001-02/154 dated 19.1.02, costing G.R. Pounds 96,620 (equivalent to Rs. 78 lacs approximately Indian currency). The said goods were sent from Bombay port to Avonmouth (England) and thereafter at West Midland and Stayford through roads by sending bill of lading to its Bank. In the complaint, it is also alleged that one of the condition was cash against document basis i.e. on presentation of the bill of lading to its shipping agent, the goods will be delivered to the buyer. When complainant enquired from National West Minister Bank, Gray Street, England through his Bank of India at Jodhpur, he came to know that purchaser has not made the payment. After considerable lapse of time, when he made an enquiry, he came to know that the directors of accused Carrier Companies with dishonest intention and to put loss to the complainant made delivery without original bill of lading, whereby, till the date of filing of the complaint, he has been put to a total loss of Rs. 1 crore 34 lacs and thereby they committed offence under Sections 407, 420, 424 & 120B IPC.
2. Upon this compliant, police registered a case and commenced investigation. Though, the police has not submitted its result of investigation to the concerned court but it is revealed from the investigation file produced for the perusal of the court by learned Public Prosecutor that in this case, the Addl. Superintendent of Police has also recommended final report being case of the civil nature and approved by the Inspector General of Police but for one or the other reason, the result has not been submitted to the concerned court despite there being clear opinion of the Assistant Public Prosecutor of case being of civil nature.
3. Mr. B.S.Rathore, learned Counsel appearing on behalf of the petitioners has vehemently argued that the petitioners are put under mental torture for the last five years without there being any mens rea on their part and there business in Bombay is being affected on account of influential hands of the complainant and because of this despite there being no material on record so as to warrant criminal action against the petitioners, as the matter being of civil nature, police has not submitted its final report. According to the learned Counsel neither the territorial jurisdiction exists in Rajasthan nor any criminal act has been committed by the petitioners in this State. According to him, even if the allegations as it stands in the complaint or in the FIR are accepted to be true, it is a case of simple breach of contract for which the matter is sub judice in the Bombay High Court, where, the complainant firm has filed suit in the original side of the Bombay High Court being original suit No. 437/04. According to the learned Counsel, having exercised original civil jurisdiction of the High Court of Bombay, the criminal proceedings initiated on the complaint of the firm cannot be continued and if it is continued, it will be an abuse of the process of law and also will not serve the ends of justice. In support of his contentions, learned Counsel has placed certain documents on the record and also relied upon various pronouncements, which will be referred at the appropriate stage.
4. Per contra, Mr. M.D. Purohit, learned Senior Advocate and Mr. J.S. Choudhary, learned Counsel, appearing on behalf of the complainant/respondent have submitted that it is a fit case for criminal breach of trust and misappropriation of property, because the goods were required to be delivered to the English Company on payment as per the condition stipulated in the agreement. On non payment of the 100% amount which was the condition precedent for delivery on cash against documents complainant has been put to a loss of Rs. 78 lacs, which now comes to Rs. 1 crore and 34 lacs and thereby the petitioners have cheated the complainant firm. In support of their contentions, learned Counsel for the complainant have also placed reliance on some of the judgments, which will be referred later on.
5. Having bestowed consideration on the rival submissions made at the bar and the case diary placed for the perusal of this Court it is to be seen from the various documents as to whether one of the pre-condition of delivery of goods was cash against documents. If so, to what extent petitioners are liable. It is undoubtedly clear from the documents filed with the petition that on the one hand dispute is sub judice in the High Court of Bombay by way of civil suit filed by the complainant in the original side being civil suit No. 437/04 against the petitioners, concerned buyers and agents as defendants and on the other hand petitioners Bhatia Shipping & Agencies Pvt. Ltd. claim was declared to be time barred on 20th October, 2004 in the High Court of Justice, Queen’s Bench Division, Commercial Court. In the said civil suit before the High Court of Bombay, in para 14 of the plaint, it has been pleaded by the plaintiff complainant as under:
The plaintiffs state that the entrustment of the said cargo to the Defendant Nos. 1 to 4 took place at Mumbai. The contract of carriage, as evidenced inter alia by the receipts issued in the form of Multi-Modal Transport Documents and the Liner/Ocean Bill of Lading, was executed and/or entered into at Mumbai. A material part of the cause of action has thus arisen within the jurisdiction of this Hon’ble Court. The Defendant Nos. 1 and 2 carry on business within Mumbai, as does Defendant No. 3, through Defendant No. 1. By virtue of Defendant No. 4 being a sham entity controlled by Defendant Nos. 1 and 3, it is liable to be treated as carrying on business within Mumbai, through Defendant Nos. 1/3. The correspondents of Defendants Nos. 1 to 5 underwriters, each of which correspondents inter alia act as claim settling agents, carry on business in Mumbai. The Plaintiffs submit that with Leave granted by this Hon’ble Court under Clause XII of the Letters Patent, this Hon’ble Court will, in any event, have jurisdiction to receive, entertain try and dispose of this suit.
6. Whereas in the judgment of Queen’s Bench, petitioner’s claim was negatived with no liability against Alcobex in pursuance to the Indian Multi Modal Transportation of Goods Act, 1993. Conditions No. 22 and 23 of the Multi Modal Transport document referred in the document of complainant/consignor and referred in the order of Queen’s Bench at para 3 of the approved judgment are as under:
On the reverse of each of the MTDs were Standard Conditions governing MTDs issued in accordance with that Act. For present purposes, the pertinent Conditions are as follows:
12 Liability for loss or damage when the stage of transport where loss or damage occurred is known:
(1) When the (MTO) is liable to pay Compensation in respect of loss of or damage to the goods between the time of taking them into his charge and the time of delivery and the stage of transport where such loss or damage occurred is known, the liability of the (MTO) in respect of such loss and damage shall be determined by the applicable Indian law if the loss and damage occurs in Indian (sic) or by the provisions of the applicable law of the country where the loss or damage occurred….
22 Limitation of action:
Any action relating to multimodal transport under these condition (sic) shall be time barred if judicial proceedings have not been instituted within a period of nine months after:
(1) the date of delivery of the goods, or
(2) the date when the goods should have been delivered, or
(3) the date on and from which the party entitled to receive has the right to treat the goods as lost.
23 Jurisdiction:
In judicial proceedings relating to the contract for (MTD) under these condition the plaintiff, at his option may institute an action in a court which according to the law of the country where the court is situated, is competent and within the jurisdiction of which is situated one of the following places:
(c) the place of taking charge of the goods for multimodal transportation or the place of delivery thereof….
7. Thus, prima facie when the goods were sent to Bombay by the complainant as self consignee and from there they were to be transported by ship to the United Kingdom as revealed from the documents of case (police) file and the payment was to be made on delivery of the goods, the jurisdiction of the complainant firm was either in Bombay or UK.
8. Leaving aside the question of jurisdiction for the sake of argument, there is a letter of the complainant company written to the petitioner company on 3.7.2002, which is marked as Ex.B and at page 3 of the annexed petition, in which the petitioners have been authorized to take any action in this regard whatever they feel is justified for recovering the dues either from the shipping line or from the customer by serving a notice for the loss of Rs. 75 lacs. The various correspondence also reveals that the efforts have been made by the petitioners by filing claim in Queen’s Bench as well as by the complainant company for realization of the dues and when the complaint lost chance to recover dues from English Company they approached the civil court as well by filing this FIR in the court of Judicial Magistrate at Jodhpur under various Sections of the Indian Penal Code.
9. Under these circumstances, the first question to be seen is that from the allegations levelled in the complaint, whether it can be said that offence under the Indian Penal Code has been made out or not. Criminal breach of trust has been defined in Section 405 IPC as under:
405. Criminal breach of trust. – Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust”.
10. The letter written by the complainant company to the petitioners on 3.7.02 clearly indicates that the complainant firm has authorized the petitioner’s company to take appropriate amount for recovery of the dues and for the goods which have been supplied in the year 2001. There is no allegation in the compliant that the petitioners have misappropriate the amount due from the English Company where the goods have been sent for their own use and violated any directions of law. The only allegation is that the goods were delivered on non presentation of the original bill of lading i.e. breach of the term about cash against the documents. This breach of condition of agreement which is nothing except in the invoice cannot be said to be misappropriation of property or its conversion for the petitioners own use or discloses any violation of directions of law specially when M.T. Document does not contain any condition of “cash against document”. When there is no criminal breach of trust, there is no offence under Section 407 IPC.
11. So far as cheating under Section 420 IPC is concerned, it is defined under Section 415 IPC, which reads as under:
415. Cheating.-Whoever, by deceiving any person, fraudulently or dishonestly the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he 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, is said to “cheat”.
12. The complainant has no where stated in the compliant that by any act complainant had been cheated. Had it been so, the complainant would not have entered into numerous correspondence with the petitioners as well as original buyer at United Kingdom. On the contrary police papers reveals that complainant company agreed to replace defective tubes by sending his representative at U.K., as Salem Tubes informed the Company about consignment being defective and not confirm with the specifications. When cheating is not established then Section 424 IPC is also not established, sine quo non there is also no conspiracy punishable under Section 120 IPC.
13. This is a simple case of breach of condition of the contract for the delivery of goods on cash against document, if at all it is to be construed for the sake of argument, for which the complainant has already filed the legal remedy by way of a civil suit in the original side of the High Court of Bombay. From the bare perusal of the compliant itself and the finding of the Investigating Agency arrived at so far when the jurisdiction is not falling in the State of Rajasthan and the matter is of a civil nature, continuance of the criminal proceedings will certainly be the abuse of the process of the law and which is going on for the last five years. In such cases, this Court can very well interfere under Section 482 Cr.P.C. under its inherent powers. Though the scope and ambit of powers under Section 482 Cr.P.C. are to be exercised very sparingly but when there is an abuse of the process of law than to secure the ends of justice, the Court can certainly interfere, whereby, life and liberty of a citizen is questioned. While drawing support from the guidelines laid down by the Hon’ble Supreme Court in State of Haryana v. Bhajan Lal and other authoritative pronouncements, the broad principles for exercise of inherent powers under Section 482 Cr.P.C. can be under any of the following contingencies:
(i) Where from its face value or bare reading of the complaint or FIR no offence is disclosed.
(ii) If such allegations, discloses the offence have been leveled on concealment of certain facts, which if brought on record, will not constitute an offence.
(iii) Allegation in the complaint or FIR are without any mens- rea or criminal intention of the alleged wrong doer, but levelled to put harm to his reputation in the eyes of public for curtailment of his life and liberty guaranteed under Article 21 of the Constitution.
(iv) Complainant does not come forward with clean hands but to deprive other party from social, political and economic justice, being the basic structure contained in the preamble of the Constitution.
(v) Authority exercising power acts wholly either expressly or impliedly without jurisdiction.
14. Present complaint and FIR lodged at the police station, if taken at its face value, discloses no offence, then the High Court under its inherent powers can quash these proceedings. The High Court should also adhere to the principle of equity, which says that the person who does not come before the court for exercise of such powers with clean hands, where discretion is used by any authority, the inherent powers cannot be exercised nor the wrong decision can be questioned by way of inherent powers. When the matter is sub judice in the civil court and no mens rea is established for dragging a person for criminal investigation, enquiry or trial it would amount to violation of Article 21 of the Constitution and non exercise of such powers under Section 482 Cr.P.C. by the High Court right from the filing of the complaint or the FIR till the decision of the case, will result in failure of justice, by not protecting the life and liberty of a citizen except by procedure accepted by law i.e. where the remedy is available to a party through other legal process i.e. appeal, revision, review etc.
15. Here it would be worthwhile to quote para 11 of the approved judgment of the High Court of Justice, Queen’s Bench Division, Commercial Court, London dt. 20th Oct. 2004:
One other matter which the application does mention is certain criminal proceedings which Alcobex commenced against the Claimant, three of its directors and Sai Shipping, the former First Defendant to these proceedings and three of its directors, alleging criminal conspiracy with the receivers in England to defraud Alcobex. On about 23 September 2003, Alcobex took out a “non-bailable warrant” of arrest in those criminal proceedings against Mr. Shailesh Bhatia, one of the directors of the Claimant. Because the warrant was not backed for bail, Mr. Bhatia unfortunately was held in custody until an application for his release could be made. He was not released until 14 October 2003. It would appear that this warrant (and in all probability the criminal proceedings themselves) were designed to put improper pressure on the Claimant in relation to the present proceedings. At all events, from the materials before the Court, the criminal proceedings seem to be wholly without merit.
16. Hence the present case as discussed above in the light of five contingencies necessary for the exercise of inherent powers, if the FIR is allowed to be continued, which is purely based on so called breach of condition for payment of money regarding which the matter is sub judice in the High Court of Bombay, it will not only be the abuse of process of law but it will also violate fundamental right under Article 21 of the Constitution as against the petitioners and in such cases if the High Court fails to exercise jurisdiction under Section 482 Cr.P.C. by way of inherent powers, it will be the denial of justice to a citizen.
17. The citations referred by learned Counsel for the respondents are not helpful to the facts of the present case. In K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. , it was a case under Section 138 of the Negotiable Instruments Act and the question was about the territorial jurisdiction of the Court to be exercised at any of the 5 places relating to components of the said offence.
18. In M.S. Sheriff and Anr. v. State of Madras and Ors. , it has been held that when there are both the criminal and civil remedies, the criminal remedy should be given precedence and in such cases, the civil proceedings should be stayed till the criminal proceedings are finished. In this case, the question was whether an appeal lies under Section 476B of the old Criminal Procedure Code from an order of the Division Bench of the High Court directing filing of the complaint for purgery. Here in the present case, no criminal case as discussed above is made out.
19. In H.V. Jayaram v. Industrial Credit and Investment Corporation of India Ltd. and Ors. , it was held that compliant for offence under Section 113(2) and Section 53 of the Companies Act for non-delivery of share certificates within prescribed time can be filed only where registered office of Company is situated and not where the purchaser is residing.
20. In M.L. Bhatt v. M.K. Pandita and Ors. reported in JT 2002 (3) SC 89, FIR was quashed by the High Court in exercise of powers under Section 482 Cr.P.C. on the basis of the statement recorded under Section 161 Cr.P.C. In this case, the High Court of Delhi appreciated the evidence recorded under Section 161 Cr.P.C. and quash the FIR, which was not held to be justified.
21. Thus, the above citations referred by learned Counsel for the respondents are not helpful to the present case.
22. This Court in Mrs. Arnavaz (Anu) and Ors. v. Alcobex Metals Ltd. and Anr. reported in 2005 CRI. L.J. 610 has held that when a complaint is filed after a period of more than five years for alleged non payment of Rs. 16 lacs it be quashed. In this cited case complainant-company was informed by the petitioner company as early as on 25.2.1998 that the total cost of rework on the machines as a result of defective tubes supplied by the complainant company would be Rs. 17.95 lacs. Thereafter, a civil suit was also filed by the petitioner-company as back as in the year 1999. It was held that even if the allegations made in the complaint are taken to be true on its face, it does not show fraudulent or dishonest intention on the part of the petitioner at the time of making of the promise. It also does not appear to be a case of failure to keep promise or breach of contract by the petitioner. The stand of petitioner herein from the beginning has been that the tubes supplied were defective entailing loss to the company. Similarly no offence under Section 406 is also made out. The transaction was in the nature of sale and not of entrustment. In this case cited by the learned Counsel for the petitioners, respondents are the same party as a complainant who filed the FIR at Police Station Basni, where the present FIR has been lodged in the year 2003 and in the same court of Judicial Magistrate No. 4 at Jodhpur. While, allowing the petition the learned Judge of this Court also relied upon the observations of the Hon’ble Supreme Court in Medchl Chemicals and Pharma (P) Ltd. v. Biological E. Ltd. . The observations at para 8 of the judgment are as under:
Mens rea is one of the essential ingredients of the offence of cheating under Section 420. As a matter of fact illustration (g) to Section 415 makes the position clear enough to indicate that mere failure to deliver in breach of an agreement would not amount to cheating but is liable to only a civil action for breach of contract.
23. In Lalita Devi and Anr. v. State and Anr. reported in 2007(2) RLW1503, the Single Judge of this Court while quashing the FIR held that breach of contract would amount to cheating only if intention to cheat was existing act the very inception.
24. Thus, from the above citations and discussions, it is abundantly clear that the present complaint has been filed for the realization of an amount for which the civil remedy is also pending by putting fear on the petitioners through criminal investigating agency and in such cases if the investigation is allowed to be continued, it will be a gross abuse of the process of law and will not serve the ends of justice in the light of the above referred five contingencies for exercise of inherent powers by the High Court, which are fully applicable to the facts and circumstances of the present complaint.
25. Consequently, this misc. petition filed under Section 482 Cr.P.C. is allowed and the FIR No. 269/2003 of Police Station Basni, District Jodhpur is quashed.