Criminal Misc. No. 13732-M of 2008.
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In the High Court of Punjab and Haryana at Chandigarh.
Criminal Misc.No.13732-M of 2008.
Date of decision:10.12.2008.
Shashi Chhabra and others.
...Petitioners.
Versus
Sublime Chit Fund Company Private Limited.
...Respondent.
...
Coram: Hon'ble Mr. Justice K. C. Puri.
...
Present; Mr. Pankaj Bhardwaj Advocate for the petitioners.
Mr.Pardeep Rajput Advocate for the respondent.
...
K. C. Puri, J.
Judgment.
In this petition, the prayer of the petitioners is for
quashing complaint dated 3.4.2007, bearing No.20/10.4.2007,
pending in the Court of Ms.Lakhwinder Kaur, Judicial Magistrate
Ist Class, Amritsar, Annexure P-6 and the subsequent summoning
order dated 4.12.2007, Annexure P-7, passed by the said Court.
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Concisely, the facts of the case are that respondent/complainant filed a complaint under Sections
406/420/506/34 IPC, Annexure P-6, against the petitioners on the
allegations that they approached the complainant Company for
availing financial assistance for promoting their business and
house hold requirements. The Company after taking surety of
Shashi Chhabra, Vijay Chhabra and Prabhjot Singh, advanced loan
of Rs.6,00,000/- to the accused on 26.6.2001. The accused persons
assured to repay the said amount to the complainant within a short
span of time along with interest at simple rate of 18% per annum.
The accused executed loan documents, a voucher dated 26.6.2001,
demand promissory note and receipt dated 26.6.2001, surety bond
dated 26.6.2001, personal statement and declaration by Shashi
Chhabra, personal statement and declaration by Vijay Chhabra by
putting their signatures and thumb impressions on the documents
for due payment of the said amount along with interest.
It has further been averred that the accused gave
assurance and took liability of the repayment of the loan amount
received by them. On the surety of accused, the complainant
Company advanced the amount to the accused and the accused
received the amount with the connivance of each other.
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In the presence of complainant, the accused persons
received the amount of Rs.6 lacs in cash and accused Shashi
Chhabra, Vijay Chhabra put cash currency notes in two bags and
after that the accused persons took away money to their home. The
accused made part payment towards monthly interest of Rs.9,000/-
per month. The said payment was made through cheques by Shashi
Chhabra, Vijay Chhabra. The accused did not pay the principal
amount inspite of repeated demands and also stopped making
payment of interest after April, 2004. In January, 2007, the accused
flatly refused to repay any amount to the complainant.
It has further been alleged that the accused persons by
false persuasions, assurance and promises under inducement
received the said amount from the complainant. The accused also
undertook to repay the said amount in a short span of time but they
failed to repay the same. The accused have,thus, breached the trust
of complainant and have committed criminal breach of contract.
They have caused wrongful loss to the complainant. They have
also cheated and defrauded the company with mala fide and
ulterior motive and intention.
Ms.Lakhvinder Kaur, Judicial Magistrate Ist Class,
Amritsar vide impugned order dated 4.12.2007, Annexure P-
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7,ordered the summoning of the accused to stand trial for an
offence punishable under Section 420 IPC.
The petitioners have sought quashing of the complaint
dated 3.4.2007, Annexure P-6, and summoning order dated
4.12.2007, Annexure P-7, on various grounds which will be dealt
with in the later part of the judgment.
Powers under Section 482 Cr.P.C can be invoked in
case the allegations taken on their face value make out a case for
proceeding criminally. Law has been enunciated in State of
Haryana and others v. Ch.Bhajan Lal and others, AIR 1992
Supreme Court 604 in which it has been held as under:-
“1) Where the allegations made in the First Information
Report or the complaint, even if they are taken at their
face value and accepted in their entirety do not prima
facie constitute any offence or make out a case against
the accused.
2. Where the allegations in the First Information Report
and other materials, if any, accompanying the F.I.R do
not disclose a cognizable offence, justifying an
investigation by police officers under S.156(1) of the
Code except under an order of a Magistrate within the
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purview of S.155(2) of the Code.
3. Where the controverted allegations made in the FIR
or complaint and the evidence collected in support of
the same do not disclose the commission of any offence
and make out a case against the accused.
4. Where, the allegations in the F.I.R, do not constitute
a cognizable offence but constitute only a non-
cognizable offence, no investigation is permitted by a
police officer without an order of a Magistrate as
contemplated under S.155(2) of the Code.
5. Where the allegations made in the FIR or complaint
are so absurd and inherently improbable on the basis of
which no prudent person can ever reach a just
conclusion that there is sufficient ground for proceeding
against the accused.
6. Where there is an express legal bar engrafted in any
of the provisions of the Code or the concerned Act
(under which a criminal proceeding is instituted) to the
institution and continuance of the proceedings and/or
where there is a specific provision in the Code or the
concerned Act, providing efficacious redress for the
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grievance of the aggrieved party.
7. Whether a criminal proceeding is manifestly attended
with mala fide and/or where the proceeding is
maliciously instituted with an ulterior motive for
wreaking vengeance on the accused and with a view to
spite him due to private and personal grudge. (Para
108).
Where allegations in the complaint did constitute a
cognizable offence justifying registration of a case and
investigation thereon and did not fall in any of the
categories of cases enumerated above,calling for
exercise of extraordinary powers or inherent powers,
quashing of FIR was not justified.”
In the present case,the allegations against the petitioner
are that they have taken loan of Rs.six lacs in the year 2001 on a
simple rate of interest of 18% and they have not returned the said
amount. The petitioners have been summoned under Section 420
IPC . Even if the entire allegations are taken on their face value, it
is merely a transaction of borrowing the money and no criminal act
is made out. In authority Anil Mahajan Versus Bhor Industries
Limited and another, (2006)1 Supreme Court Cases (Criminal)
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746, it has been held that fraudulent and dishonest intention must
be shown to be existing from the very beginning of the transaction.
From mere failure to keep the promise at a subsequent stage,
offence of cheating cannot be made out. Distinction between
offence of cheating and mere breach of contract should be kept in
mind. Mere use of words cheating in the complaint would not be
sufficient. Substance of the complaint has to be seen. In the present
case, even if the substance of complaint is taken as it is, it pertains
to civil case of breach of contract and not a criminal case of
offence of cheating.
One another circumstance which militates against the
case of the petitioners is that petitioner No.2 got registered FIR
No.38 dated 14.3.2007 under Section 420 IPC at Police Station C
Division, Amritsar against complainant Kulwant Singh Nagi. The
accused in that case approached Additional Sessions Judge for
grant of anticipatory bail and offered to deposit Rs.30,000/- but the
said amount was not deposited and ultimately the petition was
dismissed by the Additional Sessions Judge. However, later on, he
was granted anticipatory bail by the High Court and the present
complaint was subsequently filed on 3.4.2007 after the registration
of said case. No doubt, the disputed question of fact, whether one
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party owes money to the other cannot be adjudicated upon in the
present petition but it is made out from the record that there is civil
liability and criminal proceedings cannot be used as an oppressive
measure to settle civil score.
Consequently, this petition stands accepted. The
complaint dated 3.4.200- bearing No.20 of 10.4.2007, Annexure P-
6, and the subsequent order dated 4.12.2007, Annexure P-7, issued
by the Court of Ms.Lakhwinder Kaur, Judicial Magistrate Ist Class,
Amritsar stand quashed. Further proceedings in pursuance of said
complaint also stands quashed.
December 10,2008. ( K. C. Puri ) Jaggi Judge