TaxTMI 
TaxTMI 
2022 (7) TMI 1627
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....ssued in favour of the said company and several attempts were made to take possession of the vessel. Despite several attempts the accused company illegally occupied the vessel after termination of contract and continued without contract or agreement and instigated crew on board to stop all work and refused to allow the Tug to function. A committee was constituted by the CPA to take back the possession of the vessel but the same was disobeyed. On 09.09.2021 an incident occurred as it was sought for manning of the said Tug MT Andaman, however the crew members being the crew deployed by the private company refused to leave the ship. The CPA discussed the matter with them as well as the private company but they refused to leave and once again on 10.09.2021, the CPA together with the security personnel attached to the CISF boarded the vessel and asked them to leave the vessel but once again they refused to comply with it and remained docked at Haddo, Knuckle Jetty and could not be utilized nor was it being maintained and was suffering damage. All port activity regarding ship movements and Tug related works were paralyzed and in an emergency situation PMB had to hire the Tug from the Ind....
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....s quo to cause further damage to the ship through non maintenance and keeping it inoperative in violation of all commands. The company thus sought to abuse the process of legal authority for their illegal actions and the Court was never apprised of the entire situation, legal background or issues involved and the consequences of the same. On 03.11.2021 the PMB issued notice to the company to hand over the Tug, on 06.11.2021 finally the company handed over the vessel to the PMB officers, Master, Crew of the PMB. The vessel could only be brought up to date on maintenance/documents and put in service on or about 25.11.2021. The extremely serious consequence of this situation which developed at the behest of the company under the control and supervision of its Directors, and which was put in to direct execution through its CEO Captain Ram Kumar and Gurmeet Singh, acting in collusion with its Master K.P. Jai Kumar and officers resulted in huge financial loses to the Government by practically paralyzing the movements having cascading detrimental effect on economic, trade and passengers with losses, and forcing the Government to incur heavy expenditure on alternative arrangements with the....
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....gum, acting through the CEO Captain Ram Kumar and Manager Gurmeet Singh, and with the active collusion of its crews have acted pursuant to a well planned conspiracy to commit offences punishable ...................." According to the learned Advocate the word "appears" is vague and a conspiracy is supposed to happen and an individual cannot be implicated in a Criminal case on vague surmises. 6. The further arguments advanced by the learned Advocate appearing for the petitioners is that the offences complained of under the Merchant Shipping Act are all non cognizable offences and the same cannot be investigated by police authority without prior permission of the Court of law. It has also been contended that the FIR do not state that which property has been misappropriated and a case under Section 409 of the Indian Penal Code has been registered by the police authority which is against the basic postulates of law. Attention of the Court was drawn to the formal FIR and period during which the alleged offence was committed i.e. 01.03.2021 to 0811.2021 and it was submitted that no reason have been assigned for delay in reporting such incident and the authorities have with ulterior....
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....e against the accused. (4) Where, the allegations in the FIR 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 Section 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 grievance of the aggrieved party. (7) Where 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." 10. Attention of this Court was ....
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....uashed though the victim or the family of the victim have settled the dispute. Such offences are, truly speaking, not private in nature but have a serious impact upon society. The decision to continue with the trial in such cases is founded on the overriding element of public interest in punishing persons for serious offences. 16.7. As distinguished from serious offences, there may be criminal cases which have an overwhelming or predominant element of a civil dispute. They stand on a distinct footing insofar as the exercise of the inherent power to quash is concerned. 16.8. Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations fall for quashing where parties have settled the dispute. 16.9. In such a case, the High Court may quash the criminal proceeding if in view of the compromise between the disputants, the possibility of a conviction is remote and the continuation of a criminal proceeding would cause oppression and prejudice; and 16.10. There is yet an exception to the principle set out in propositions 16.8. and 1....
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....estly misappropriates or converts to his own use the property, or dishonestly uses or disposes of the 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. 15. Thus, in "criminal breach of trust", the intention of the accused cannot be dishonest or mala fide at the time, when he comes into possession of the property or comes to acquire dominion over the property; but, having come into possession of, or having acquired dominion over, the property, the accused develops dishonest intention and actuated by such mensrea, he converts to his own use the property or dishonestly uses or disposes of the 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. 16. Contrary to what happens in "criminal breach of trust", the intention of the accused, in a case of "cheating", is d....
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.... and dishonest misappropriation or use thereof in the manner illustrated under Section 405 are a sine qua non for making an offence punishable under Section 409 IPC. The expression 'criminal breach of trust' is defined under Section 405 IPC which provides, inter alia, that whoever being in any manner entrusted with property or with any dominion over a property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property contrary to law, or in violation of any law prescribing the mode in which such trust is to be discharged, or contravenes any legal contract, express or implied, etc. shall be held to have committed criminal breach of trust. Hence, to attract Section 405 IPC, the following ingredients must be satisfied: (i) Entrusting any person with property or with any dominion over property; (ii) That person has dishonestly mis-appropriated or converted that property to his own use; (iii) Or that person dishonestly using or disposing of that property or wilfully suffering any other person so to do in violation of any direction of law or a legal contract. 43. It ought to be noted ....
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....capable of being converted into a valuable security, shall be liable to be punished for a term which may extend to seven years and shall also be liable to fine. 47. It is paramount that in order to attract the provisions of Section 420 IPC, the prosecution has to not only prove that the accused has cheated someone but also that by doing so, he has dishonestly induced the person who is cheated to deliver property. There are, thus, three components of this offence, i.e., (i) deception of any person, (ii) fraudulently or dishonestly inducing that person to deliver any property to any person, and (iii) mensrea of the accused at the time of making the inducement. It goes without saying that for the offence of cheating, fraudulent and dishonest intention must exist from the inception when the promise or representation was made. 48. It is equally well-settled that the phrase 'dishonestly' emphasizes a deliberate intention to cause wrongful gain or wrongful loss, and when this is coupled with cheating and delivery of property, the offence becomes punishable under Section 420 IPC. Contrarily, the mere breach of contract cannot give rise to criminal prosecution unde....
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....g absent, no offence under Section 420 of the Penal Code, 1860 can be said to have been made out." 16. In Ajay Aggarwal vs. Union of India and others reported in (1993) 3 SCC 609 petitioners referred to paragraph No. 8 which is set out as follows :- "The question is whether prior sanction of the Central Government is necessary for the offence of conspiracy under proviso to Section 188 of the Code to take cognizance of an offence punishable under Section 120-B etc. IPC or to proceed with trial. In Chapter V-A, conspiracy was brought on statute by the Amendment Act, 1913 (8 of 1913). Section 120-A of the IPC defines 'conspiracy' to mean that when two or more persons agree to do, or cause to be done an illegal act, or an act which is not illegal by illegal means, such an agreement is designated as "criminal conspiracy". No agreement except an agreement to commit an offence shall amount to a criminal conspiracy, unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof. Section 120-B of the IPC prescribes punishment for criminal conspiracy. It is not necessary that each conspirator must know all the details of the ....
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....the Directors of the company when the accused is the company. It is further observed and held that the vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. It is further observed that the statute indisputably must contain provision fixing such vicarious liabilities. It is further observed that even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability. In the present case, there are no such specific allegations against the appellants being Managing Director or the Director of the company respectively. Under the circumstances also, the impugned criminal proceedings are required to be quashed and set aside." 18. The learned advocate for the petitioners also drew the attention of this Court to the Merchant Shipping (Maritime Labour) Rules, 2016. Attention of the Court was drawn to Rule 3(1)(i) which defines "ship owner", rule 7 relating to "recruitment and placement" and rule 14(1) which refer to "manning levels". It was emphasized before this Court that the petitioners strictly adhered to the....
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.....09.2021 to 05.11.2021. Much stress has been made by the state on the issue that by illegally withholding the vessel in fact the petitioners have paralyzed the essential services which the port authorities are bound to deliver by taking aid of the said vessel. Documents have been produced before this Court which were collected during the investigation which relates to number of times attempt being made for handing over the vessel which was on 20.09.2021 through the engineer(s) attached to the port, the same team of engineers on 23.09.2021 again went for handing over the vessel but was refused on issue of settlement of payments. Documents collected by the Investigation Agency also reflects that even the CISF was deputed for the vessel to be handed over but the same was berthed at Haddo, Knuckle Jetty on and from 14.09.2022 in a manner and with resistance from the crew of the said vessel the Port administration was both handicapped and paralyzed. It has also been contended that the investigation of the case is in progress, materials are being collected and the petitioners who had taken the law in their own hands by illegally withholding the vessel are subsequently trying to give the ....
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....s and the report under Section 173 of the Code of Criminal Procedure is yet to be filed by the Investigating Officer, adjudicating such issue would be a premature act on the part of this Court. 24. So far as the issue of registration of FIR under Section 409 of the Indian Penal Code and Sections 420 of the Indian Penal Code is concerned which has been very strenuously argued by the learned Advocate for the petitioners by relying upon the number of authorities, it would be worthwhile to state that in column No. 12 wherein the contents of the FIR refers to Indian Penal Code sections, the same are restricted to Section 409 and Section 120B. Again in the tabular form at column No. 2, Section 420 of the Indian Penal Code has been referred along with Section 409 and 120B of the Indian Penal Code. It would be apposite to state that at the stage of the investigation mere mentioning and non mentioning of the sections are irrelevant, what is important is the nature of the allegations and as to whether any cognizable offence has been made out. It is a fact that there is a difference between column No. 12 and the column No. 2 of the formal FIR, at the same time the facts of the case do disc....
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....ported in (2022) 2 SCC 129, the Hon'ble Supreme Court in paragraph No. 16 reminded the powers of High Court under Section 482 of the Code of Criminal Procedure which is as follows :- "On reading the judgment of the Single Judge, it would appear that the Single Judge has failed to notice the distinction between a petition for quashing under Section 482 (which was being considered) and a criminal trial or an appeal against a conviction on a charge under Section 306. The Single Judge has transgressed the limits of the jurisdiction under Section 482 of the CrPC. The judgment is replete with hypothesis and surmises on the basis of which the Single Judge has reached an inference on facts. The Single Judge has tested the veracity of the allegations in the criminal complaint and in the suicide note left behind by the deceased without having the benefit of an evidentiary record which would be collected during the trial. At the stage when the High Court considers a petition for quashing under Section 482 of the CrPC, the test to be applied is whether the allegations in the complaint as they stand, without adding or detracting from the complaint, prima facie establish the ingredi....
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....sed with great care and circumspection before embarking to scrutinise the complaint/FIR/charge-sheet in deciding whether the case is the rarest of rare case, to scuttle the prosecution at its inception. ... 31. Be it noted that in the matter of exercise of inherent power by the High Court, the only requirement is to see whether continuance of the proceedings would be a total abuse of the process of the Court. The Criminal Procedure Code contains a detailed procedure for investigation, framing of charge and trial, and in the event when the High Court is desirous of putting a halt to the known procedure of law, it must use proper circumspection with great care and caution to interfere in the complaint/FIR/charge-sheet in exercise of its inherent jurisdiction. ... 34. So far as initiation of arbitral proceedings is concerned, there is no correlation with the criminal proceedings. That apart, the High Court has not even looked into the charge- sheet filed against 2nd respondent which was on record to reach at the conclusion that any criminal offence as stated is prima facie being made out and veracity of it indeed be examined in the course of crimina....