TaxTMI 
TaxTMI 
2025 (8) TMI 635
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....to understand what is wrong with the Indian Judiciary at the level of High Court. At times we are left wondering whether such orders are passed on some extraneous considerations or it is sheer ignorance of law. Whatever it be, passing of such absurd and erroneous orders is something unpardonable. 4. It all started with a private complaint lodged by the respondent no.2 herein in the Court of Additional Chief Judicial Magistrate-I, Kanpur Nagar, which came to be registered as Complaint Case No. 113283 of 2023. The complaint reads thus: "1. That the complainant is engaged in the wholesale and retail business of yarn (thread) used in fabric manufacturing, through his firm M/s Lalita Textile Concern. The respondent, through her firm M/s Shikhar Chemicals, is involved in the business of manufacturing and selling cloth made from yarn supplied by the complainant. 2. That since both parties are in the same trade, they have had business relations for the past 4-5 years. In this regard, the complainant, through his firm, supplied goods (yarn) to the respondent's firm worth a total of Rs.52,34,385/- (Fifty-two lakhs thirty-four thousand three hundred eighty-five only) betw....
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.... accept." (Copy of postal refusal is enclosed.) 6. That the complainant submitted written complaints to the Station Officer, P.S. Badshahi Naka, and the Police Commissioner, requesting registration of FIR against the respondent under applicable sections for fraud, cheating, and criminal conspiracy. However, no FIR was registered. (Copies of the complaint applications are enclosed.) 7. That the GST department has already found the respondent guilty under Section 73(9) of the GST Act and penalized her accordingly. Hence, there is no further doubt about the criminal conduct of the respondent, as established by facts and evidence mentioned herein. Therefore, it is just and proper that this Hon'ble Court may take cognizance of the matter, summon the accused, and punish her as per law." (Emphasis supplied) 5. The statement of the complainant recorded by the Magistrate upon verification reads thus: 1. That I am the proprietor and authorized signatory of the complainant firm mentioned in the complaint and have full knowledge of the facts stated in this affidavit. 2. That I, through my firm M/s Lalita Textile Concern, am engaged in the wholesa....
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.... from the business and has now absconded. (All claim notices along with postal tracking documents are annexed.) 6. That again, through my advocate, I sent recovery notices and legal notices for initiating criminal action for fraud and cheating. These were sent to both GST- registered addresses of the opposite party (factory/home/office). The notice sent to home/office at 127/536 W-2 Damodar Nagar was returned with the remark "No one found," and the factory notice at E-52, Site No. 1, Industrial Area, DahiChowki, Unnao was returned with the remark "Refused to accept." (Returned envelopes with refusal remarks are enclosed.) 7. That I submitted written complaints to the SHO, Badshahi Naka Police Station, and the Commissioner of Police requesting registration of FIR under relevant sections for fraud, cheating, and criminal conspiracy against the opposite party, but no FIR was registered. (Copies of complaints enclosed.) (Emphasis supplied) 6. Thus, the Magistrate thought fit to take cognizance upon the complaint but at the same time postponed the issue of process, as he thought fit to initiate magisterial inquiry under Section 202 of the Criminal Procedure....
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....dings. It appears that the complainant in the first instance tried to lodge a FIR but the police declined to register the FIR saying that it was purely a civil dispute. 13. The Magistrate unfortunately remained unmindful of the fact that even as per the complainant's own say the case is one of sale of goods and recovery of some balance amount. 14. It was expected of the Additional CJM to know that in a case of sale transaction where is the question of any entrustment of goods so as to bring the case within the ambit of criminal breach of trust punishable under Section 406 of the IPC. This position of law came to be explained by this Court almost six decades back in the landmark decision titled "State of Gujarat vs. Jaswantlal Nathalal" reported in 1968 (2) SCR 408, wherein this Court stated that a mere transaction of sale cannot amount to an entrustment. We quote the relevant observations made by this Court as under:- "8. The term "entrusted" found in Section 405 IPC governs not only the words "with the property" immediately following it but also the words "or with any dominion over the property" occurring thereafter - see Velji Raghvaji Patel v. State of Maharashtra....
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....atya Sunder Mitra. The High Court allowed their appeal, holding that there was no entrustment of the cement in question within the meaning of the term as used in Section 405 of Indian Penal Code. In the course of the judgment it was observed: "The permit was granted in accordance with the system of control established under the Defence of India Rules, under which an order has been issued by the Government of India preventing selling agents such as Balmer Lawrie and Company from delivering any cement except under instructions from the Government or from the Cement Adviser. The transaction, so far as the contractor is concerned, was one of purchase and the property in the cement clearly passed to him. No doubt he could not have obtained the permit through the Executive Engineer if it had not been intended that the cement should be used for the purpose directed by the Engineer, but, in our opinion, in no sense can it be said that there was any entrustment either of the property or of any dominion over the property." We are of the opinion that the legal position is as explained in that decision. 10. The decision of the Kings Bench Division in King v. Grubb [[....
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....ll have to put more money to pursue the litigation. To be more precise it would seem like good money chasing bad money. If this Court allows the matter to be referred to civil court on account of civil dispute between the parties, it would amount to travesty of justice and O.P. no.2 would suffer irreparable loss and he might even not be in a position to emerge from the financial constraints to pursue the matter." ( Emphasis supplied ) 19. The Judge has gone to the extent of saying that asking the complainant to pursue civil remedy for the purpose of recovery of the balance amount will be very unreasonable as civil suit may take a long time before it is decided and, therefore, the complainant should be permitted to institute criminal proceedings for the purpose of recovery of the balance amount. 20. Is it the understanding of the High Court that ultimately if the accused is convicted, the trial court would award him the balance amount? The observations recorded in para 12 are shocking. It is an extremely sad day for one and all to read the observations contained in para 12 of the impugned order. It was expected of the High Court to know the well-settled position of la....