ORDER
1. The petitioners are arrayed as accused in CC No. 8142 of 1999 on the file of the IV Additional Chief Metropolitan Magistrate, Bangalore and they are seeking to challenge the registration of the case against them under Sections 406 and 420 of the IPC by the order dated 2-3-1999. The respondent-Naresh Kumar filed a private complaint on 18-1-1999 against the petitioners stating that the accused-petitioners herein may be got arrested by way of non-bailable warrant and secured before the Court and made to pay a lawful due of Rs. 10.5 lakhs to the complainant-respondent in the interest of justice and equity.
2. Briefly stated, the allegations in the complaint are that the accused 1 to 5 are members/partners of the Fuel Corporation of India and amongst them, the 5th accused-Naval Kishore Agarwal negotiated with the petitioners in respect of the transaction in question. The respondent herein acted for and in favour of the Fuel Corporation of India for transportation of 17,596 metric tonnes of coal from Singareni Collieries Company Limited, Andhra Pradesh to Mysore Paper Mills Limited, Bhadravathi. The business of transport of coal as aforesaid, fetched a profit of Rs. 18 lakhs at the rate of Rs. 100/- per metric ton of coal transportation. It is alleged that the 5th accused deliberately cheated and denied to the respondent, the profits due. The complainant-Naresh Kumar who had good influence with Public Sector Units, came across the 5th accused who was intent on securing the coal transportation business and secure contract, as a result of which 25,000 metric tonnes of coal was transported to consumption of Mysore Paper Mills Limited. The 5th accused had orally promised to take the respondent as a partner and also promised 40% of the net gains as payment to the complainant from the business in question. Consequent on the promise as aforesaid, the complainant-Naresh Kumar moved and secured the contract for the supply of coal in connection with the business. The complainant also handed over blank signed cheque leaves to the 5th accused for being used in connection with the business. The complainant having negotiated with the Mysore Paper Mills Limited, the quotation was accepted which resulted in supply of 17,596 metric tonnes of coal being transported to Mysore Paper Mills Limited. The complainant claims that for purpose of contract of supply as aforesaid, he spent nearly three and half to four lakhs from his own resources. The transportation, it is stated, last till 15-12-1994 for a period of two years. The 5th accused is accused of not having paid a single pie by way of profit to the complainant. All efforts at securing the legitimate due to the complainant failed. By end of January 1995, the 5th accused walked away in the middle at the negotiating table. Notice issued to the accused making the demand was refused and returned to the sender. Hence the petition to the Magistrate with a prayer which reads as follows:
“Therefore knowing FCOI’s disrespect to due process of law it is prayed that they (A-1 to A-5) be issued with NON-BAILABLE WARRANTS in order that they will be made to appear before this Hon’ble Court and also to pay the lawful dues of Rs. 10.5 lakhs to Mr. Naresh Kumar, in the interest of Justice and Equity”.
3. The learned Magistrate on the basis of this petition, recorded the sworn statement of the respondent-complainant and came to the conclusion that the complaint and the sworn statement disclosed offences under Sections 406 and 420 of the IPC and issued summons to the accused.
4. The accused have sought to challenge the taking of cognizance by the Magistrate for offences under Sections 406 and 420 of the IPC on the ground that the complaint does not disclose any offence either under Section 406 or under Section 420 of the IPC.
5. The respondent has sought to support the order as being validly made.
6. The question regarding quashing of the proceedings at the initial stage came to be examined in a decision in (amongst others) Madhavrao Jiwaji Rao Scindia and Another v Sambhajirao Chandrojirao Angre and Others, and the relevant portion of the judgment at para 7 reads as follows:
“That when a prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the Court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the Court cannot be utilised for any oblique purpose and where in the opinion of the Court chances of an ultimate conviction are bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the Court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage”.
These observations would have to be applied to the circumstances of the case to find out whether proceedings are liable to be quashed under Section 482 of the Cr. P.C.
7. The substance of the allegations made in the petition filed before the Magistrate as already recited is that the respondent-complainant and the 5th accused, representing the Firm-Fuel Corporation of India, entered into a oral agreement that the respondent would be made a partner in his business and he would be paid 40% of the net profits that are earned from the transaction relating to transport of 17,596 metric tonnes of coal from Singarine Collieries Company Limited, Andhra Pradesh to Mysore Paper Mills Limited, Bhadravati. After two years of effort by the complainant-respondent, despite spending over three and half to four lakhs of his own money, was not paid the promised share of 40% of the net profits and when a demand was made at Nagpur, the 5th accused walked away. Whether these allegations constitute any offence under Section 406 or 402 of the IPC requires examination.
8. Section 405 contemplates criminal breach of trust. In order that an offence of criminal breach of trust takes place, the accused should have been entrusted with property or with any dominion over the property and that property should have been dishonestly misappropriated or converted to the use of accused or should have been dishonestly used or disposed of 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 wilfully suffers any other person so to do. In the instant case all that the
complainant-respondent is seeking from the accused is his 40% share of the profits in the business of transportation of coal from Singarine Collieries Company Limited, Andhra Pradesh to the Mysore Paper Mills at Bhadravati. It is clear that there was no entrustment of the property belonging to the complainant-respondent to the accused which was misappropriated or otherwise dealt with as enumerated under Section 405 of the IPC. Obviously the allegations made in the complaint could not and did not disclose any offence under Section 405 of the IPC which was required to be punished under Section 406 of the IPC. Similar are the allegations so far as it relates to offence under Section 415 of the IPC. The question of respondent-complainant being deceived by the accused to deliver any property of the complainant to the accused or to the respondent-complainant consenting to the accused person retaining any property or the accused intentionally inducing the respondent-complainant to do which he would not do or omit if he had been so deceived and such act or omission if it causes or likely to cause any damage to the complainant in body, mind, reputation or property in order to make out an offence of cheating as defined under Section 415 of the IPC is not shown. Apparently, the case that is sought to be made by the respondent-complainant was one of refusal to take him as a partner and to pay the promised commission by the accused to the petitioners herein.
9. The learned Magistrate who also recorded the sworn statement of the respondent-complainant could not, and did not, record any additional information which could have brought the case of the respondent-complainant within the purview of either under Section 406 or under Section 420 of the IPC. What is surprising is that the Magistrate still found that a case under Sections 406 and 420 of the IPC had been made out. Obviously, the Magistrate never really sought to find out whether the allegations made in the complaint brought the allegations within the ambit of Section 406 or Section 420 of the IPC. This shows that the learned Magistrate acted mechanically and without any application of mind to decipher what offence had been made out in the complaint.
10. Curiously, all that the prayer that is made in the complaint is to get the accused by issuing a non-bailable warrant and get the profit of Rs. 10.5 lakhs. Apparently the complaint could not be regarded as a complaint as defined in the Code of Criminal Procedure, inasmuch as, it did not contain a prayer that the accused be secured with a view to action being taken under the Code. The action that could be taken under the Code is to hold a trial, for the offence alleged and according to law convict and sentence or acquit the accused depending on proof of the charge. Though there are other remedies such as restoration of possession of properties etc., provided under the Code, the one that is relevant for the situation on hand is an order for payment of compensation on conviction of an accused under Section 357. But the provision does not stipulate payment of any money equivalent to the amount claimed in the complaint being the agreed share of the complainant in the contract. Thus the prayer made by the complainant in the complaint for recovery of Rs. 10.5 lakhs is not really one that could be regarded as ‘action under the Code’. Viewed in this light the complaint filed by the respondent
cannot be regarded as complaint coming within the ambit of Section 2(d) of the Code of Criminal Procedure, 1973. The Magistrate could not really take cognizance of a petition like the one on hand for trial.
11. Obviously the grievance made out in the petition filed before the Magistrate is that of an apparently helpless person seeking to recover what he claims to be legitimately due to him by the process of criminal law and cannot ask the Magistrate to act as a executing Court without examining the right of recovery of money allegedly due to the respondent-complainant. The case that is sought to be made out in the petition filed by the respondent-complainant is essentially one of a civil nature and the complaint does not disclose any offence. The taking of cognizance by the learned Magistrate for the offence under Sections 406 and 420 of the IPC clearly constitutes abuse of process of law and should have to be quashed under Section 482 of the Cr. P.C. In the circumstances, the criminal petition is allowed and the proceedings initiated in CC No. 8142 of 1999 is quashed.