TaxTMI 
TaxTMI 
2022 (3) TMI 1527
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....the High Court dismissed the prayer for quashing of the proceedings and held that continuance of criminal proceedings against the present appellant/accused would not be an abuse of the process of the court. 3. Brief facts necessary for the disposal of this appeal are as under: 3.1 M/s. Priknit Retails Limited a public limited company having its registered office at BXXV, 539A, 10, Jalandhar, Bye Pass Road, Ludhiana, Punjab was incorporated in the year 2002 and subsequently changed its name to Priknit Apparels in 2007. The company is engaged in the manufacture and trade of apparels through chain of retail stores under the brand name and style of Priknit. Appellant No. 1 is the Managing Director of the Company and Appellant Nos. 2 and 3 are the Directors of the said Company. The company has been arrayed as proforma Respondent No. 3. 3.2 In January 2008, Respondent No. 2 an authorized representative of SMC Global Securities Ltd, Delhi desired to make an investment on its behalf with the appellants. It was mutually decided between the parties that Respondent No. 2 will invest an amount of Rs. 2.5 crore with the company in lieu of which they will be issued 2,50,000 equity share....
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....gal and the same was converted into an FIR bearing No. 168 under Section 406, 420, 120B IPC. A final closure report dated 04.03.2014 was filed by the concerned Police Station recommending closure of the case since the entire dispute was found to be civil in nature. 3.9 That Respondent No. 2 filed a protest petition being GR No. 1221/2013 with the Chief Metropolitan Magistrate (hereinafter referred to as "CMM"), Kolkata against closure report dated 04.03.2014 and vide order dated 08.03.2016, the CJM allowed the protest petition and directed for further investigation. 3.10 In the meantime, the authorized representative of Respondent No. 2 made a statement before the MM, Tish Hazari, New Delhi for withdrawing the complaint case. 3.11 Appellant No. 1 received a notice dated 14.11.2016 under Section 41(a) Cr.P.C for appearance before the Investigation Officer (hereinafter referred to as "IO") at PS Bowbazar, Kolkata. In his reply to the said notice, Appellant No. 1 stated that a complaint has already been filed with the same cause of action before the Tis Hazari Court and further sought time to produce the documents sought in the notice. Thereafter, Appellant No. 1 sent a lette....
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.... that the commercial transaction between involve criminal offences, then the question of quashing the complaint cannot be allowed." Contentions on behalf of Appellants 4. Ms. Menaka Guruswamy, learned senior advocate appearing on behalf of the appellants has vehemently submitted that Respondent No.2 indulged in the practice of forum shopping by filing 2 complaints i.e., a complaint u/s 156(3) Cr.P.C before the Tis Hazari Court, New Delhi on 06.06.2012 and a complaint which was eventually registered as FIR No. 168 u/s 406, 420, 120B IPC before PS Bowbazar, Calcutta on 28.03.2013. FIR in connection with PS Bowbazar, Calcutta was lodged during the pendency of the complaint case at Tis Hazari Court, New Delhi and the said fact was cleverly supressed by Respondent No. 2. 4.1 It was further submitted that initially police submitted a closure report. However, Respondent No. 2 filed an application under Section 173(8) of Cr.P.C for further investigation which was allowed and after further investigation, charge sheet was filed against the Appellants herein. 4.2 It was vehemently submitted that the complaint filed in PS Bowbazar was the exact reproduction of the complaint filed i....
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....ch the complainant cannot be barred from making a fresh complaint. 5.1 It was further submitted that the complaint at Kolkata had been filed only after the prayer u/s 156(3) Cr.P.C was rejected by the Delhi Court on 28.02.2013 in order to avail legal remedies available and when the Calcutta Court on 08.03.2016 allowed further investigation, the Respondent in order to avoid multiplicity of proceedings, withdrew the complaint in Delhi on 09.09.2016. 5.2 It was further submitted that it is an established proposition of law that two complaints can co-exist simultaneously if the scope of two complaints are different. Reliance in support of the contention was placed on the judgment of this Court in K. Jagadish Vs. Udaya Kumar G.S. & Anr. [(2020) 14 SCC 552], wherein it was reiterated that two remedies ie. civil and criminal are not mutually exclusive but can co-exist since they essentially differ in their context and consequence. 5.3 It was also submitted that the established principle of quashing is that at the stage of cognizance all that a Court is required to see if prima facie an offence is made out and courts should restrain itself from throttling legitimate prosecutions a....
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....get the required relief from that Court. She then filed a petition in the Delhi High Court also for a writ of habeas corpus and obtained the necessary relief. Notwithstanding this, this Court did not interfere with the order passed by the Delhi High Court for the reason that this Court ascertained the views of the child and found that she did not want to even talk to her adoptive parents and therefore the custody of the child granted by the Delhi High Court to the respondentmother was not interfered with. The decision of this Court is on its own facts, even though it is a classic case of forum shopping. 149. In Arathi Bandi v. Bandi Jagadrakshaka Rao & Ors. [(2013) 15 SCC 790] this Court noted that jurisdiction in a Court is not attracted by the operation or creation of fortuitous circumstances. In that case, circumstances were created by one of the parties to the dispute to confer jurisdiction on a particular High Court. This was frowned upon by this Court by observing that to allow the assumption of jurisdiction in created circumstances would only result in encouraging forum shopping. 150. Another case of creating circumstances for the purposes of forum shopping....
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....int u/s 156(3) Cr.P.C before the Tis Hazari Court, New Delhi on 06.06.2012 and a complaint which was eventually registered as FIR No. 168 u/s 406, 420, 120B IPC before PS Bowbazar, Calcutta on 28.03.2013. ie., one in Delhi and one complaint in Kolkata. The Complaint filed in Kolkata was a reproduction of the complaint filed in Delhi except with the change of place occurrence in order to create a jurisdiction. 11. A two-Judge bench of this Court in Krishna Lal Chawla & Ors. Vs. State of U.P. & Anr. [(2021) 5 SCC 435] observed that multiple complaints by the same party against the same accused in respect of the same incident is impermissible. It held that Permitting multiple complaints by the same party in respect of the same incident, whether it involves a cognizable or private complaint offence, will lead to the accused being entangled in numerous criminal proceedings. As such he would be forced to keep surrendering his liberty and precious time before the police and the courts, as and when required in each case. 12. The legality of the second FIR was extensively discussed by this Court in T.T. Antony Vs. State of Kerala & Ors. [(2001) 6 SCC 181]. It was held that there can b....
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....considered in detail the scope of the High Court powers under Section 482 Cr.P.C. and/or Article 226 of the Constitution of India to quash the FIR and referred to several judicial precedents and held that the High Court should not embark upon an inquiry into the merits and demerits of the allegations and quash the proceedings without allowing the investigating agency to complete its task. At the same time, this Court identified the following cases in which FIR/complaint can be quashed: "102. (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 FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do no....
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....ing a prima facie decision in a case where all the facts are 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 such magnitude that they cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceedings at any stage" 18. In Indian Oil Corpn. v NEPC India Ltd. & Ors. [(2006) 6 SCC 736], a two-judge Bench of this Court reviewed the precedents on the exercise of jurisdiction under Section 482 of the Code of Criminal Procedure 1973 and formulated guiding principles in the following terms: "12. ... (i) A complaint can be quashed where the allegations made in 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 the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis....
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.... allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under Section 482 of the Code." 20. This Court in G. Sagar Suri & Anr. Vs. State of UP & Ors. [(2000) 2 SCC 636] observed that it is the duty and obligation of the criminal court to exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature. 21. This Court has time and again cautioned about converting purely civil disputes into criminal cases. This Court in Indian Oil Corporation (Supra) noticed the prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. The Court further observed that:- "13. ...any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure through criminal prosecution should be deprecated and discouraged." 22. At the outset, Respondent No. 2/Complainant alleged that the Appellants were responsible for the offence punishable under Section 420, 405, 406, 120B IPC. Therefor....
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....it was observed that the act of criminal breach of trust would, Interalia mean using or disposing of the property by a person who is entrusted with or has otherwise dominion thereover. Such an act must not only be done dishonestly but also in violation of any direction of law or any contract express or implied relating to carrying out the trust. 27. Section 415 of IPC define cheating which reads as under: - "415. Cheating. -Whoever, by deceiving any person, fraudulently or dishonestly induces 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"." The essential ingredients of the offense of cheating are: 1. Deception of any person 2. (a) Fraudulently or dishonestly inducing that person- (i) to deliver any property to any person: or (ii) to consent that any person shall retain any property; or....
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....person cheated must be dishonestly induced to; a) deliver property to any person; or b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. Thus, cheating is an essential ingredient for an act to constitute an offence under Section 420 IPC. 33. The following observation made by this Court in the case of Uma Shankar Gopalika Vs. State of Bihar & Anr. [(2005) 10 SCC 336] with almost similar facts and circumstances may be relevant to note at this stage:- "6. Now the question to be examined by us is as to whether on the facts disclosed in the petition of the complaint any criminal offence whatsoever is made out much less offences under Section 420/120-B IPC. The only allegation in the complaint petitioner against the accused person is that they assured the complainant that when they receive the insurance claim amounting to Rs. 4,20,000, they would pay a sum of Rs. 2,60,000 to the complainant out of that but the same has never been paid. It was pointed out that on behalf of the complainant that the accused fraudulently persuaded the complainant to agree so that the accused persons may ....
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....t the very inception there was any inception on behalf of an accused person to cheat which is a condition precedent for an offence u/s 420 IPC. In our view, the complaint does not disclose any criminal offence at all. Criminal proceedings should not be encouraged when it is found to be mala fide or otherwise an abuse of the process of the courts. Superior courts while exercising this power should also strive to serve the ends of justice. In our opinion, in view of these facts allowing the police investigation to continue would amount to an abuse of the process of the court and the High Court committed an error in refusing to exercise the power under Section 482 Cr.P.C to quash the proceedings." 36. Having gone through the complaint/FIR and even the chargesheet, it cannot be said that the averments in the FIR and the allegations in the complaint against the appellant constitute an offence under Section 405 & 420 IPC, 1860. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making promise being absent, no offence under Section 420 IPC can be said to have been made out.....
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....hi, Respondent No. 2/complainant stated that:- "(c) That, thereafter Mr. Vijay Kumar Ghai and Mr. Mohit Ghai started visiting the office of the complainant company every now and then in order to persuade the complainant company to invest in their company. It is pertinent to mention herein that they stated the complainant company that the retail business of the apparels under the PRIKNIT brand through a network of exclusive brank outlets was witnessing a growth.." 10. That it is submitted that this court has jurisdiction to try and entertain the matter as the complainant company is situated within the jurisdiction of this court. Moreover, all the business activities/transactions are being regulated and controlled at Delhi. Furthermore, the complaints filed by the complainant company are lying before the concerned police station, which also falls within the jurisdiction of this Hon'ble Court." This clearly demonstrates that the jurisdiction has been created in Delhi as the Appellants used to visit Respondent No. 2 in order to persuade them to invest in their company and special emphasis can be laid on the fact that Respondent No. 2 himself accepted/agreed to the ....
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....filed in Bowbazar PS was the exact reproduction of the complaint filed before Tis Hazari Court, New Delhi with the only difference or what may be termed as 'Jurisdictional improvement' being in point (c) of the facts. It is reproduced in bold below:- "(c) That, thereafter Mr. Vijay Kumar Ghai and Mr. Mohit Ghai started visiting the office and regional office of the complainant company every now and then in order to persuade the complainant company to invest in their company..." 10. That the facts mentioned above clearly disclose the commission of cognizable offences under Sections of the Indian Penal Code mentioned herein. That the accused persons approached the regional office too to persuade the head office for the aforesaid purposes therefore the cause of action also arose the local jurisdiction." 42. The order of the High Court is seriously flawed due to the fact that in its interim order dated 24.03.2017, it was observed that the contentions put forth by the Appellant vis-à-vis two complaints being filed on the same cause of action at different places but the impugned order overlooks the said aspect and there was no finding on that issue. At the sam....