Writ Petn. No. 498 of 1985

19th November, 1986.

Petitioner Counsel: N. R. Kothare, i/b M/s. Nanu Hormusjee and Co., for
Respondent Counsel: K. M. Desai i/b M/s. Bachubhai Munim and Co. (for No. 1) and R. Y. Mirza, Public Prosecutor (for No. 2), .

Cases Cited:
AIR 1985 SC 1668,1985 Cri LJ 1858 [Para 4]
AIR 1968 SC 117,1968 Cri LJ 97 (Referred to) [Para 6]
AIR 1954 SC 397,1954 SCJ 458,1954 Cri LJ 1019 (Referred to) [Para 4]
M/s. National Traders v. Atlas Assurance Co. Ltd., (1954) Appeal No. 3 of 1954,Suit No. 747 of 1952 (Bom) [Para 5]
AIR 1945 PC 18,46 Cri LJ 413 [Para 6]

JUDGMENT

ORDER :-One Aldo Vogel, and Mr. Chandru Makhijani, carry on business of importers under the name and style of Aldo Vogel AG, ("Vogel") having its office at Rutistresse 28, 8032, Zurich, Switzerland. Miltons Private Limited, Bombay ("Miltons") are in the business of manufacture and export of readymade garments. Chandru Makhijani, on behalf of Vogel used to purchase goods of substantial value from Miltons, and on one such occasion, according to Miltons, Aldo Vogel and Chandru Makhijani came to India in May 1983 and carried on negotiations for purchase of readymade garments of US $ 65,900/- against opening of an irrevocable Letter of Credit ('L/C'). The L/C was opened on 19th Dec., 1983 and Miltons despatched the first consignment worth US $ 7, 099.50 for which they received payment. As there was delay in effecting shipments, the L/C was amended by extending the shipment date to 15th April 1984 and increasing the value thereof by US $ 43,944.25 plus freight and insurance and Miltons continued to effect shipment of goods and receive payments. At the end of the series of transanctions, Miltons claimed a debit balance of US $ 39,496.68 against the Swiss importers for which Miltons on 2-8-1984 filed Summary Suit No. 1989 of 1984 under O.37, R.132 of the Civil P.C. 1908 on the Original Side of this Court. In the suit Miltons have claimed US $ 39,496/- and interest as the balance of the price of the goods supplied to the Swiss Company. Leave has been granted to Vogel to defend the suit unconditionally.

2. On 28th Sept. 1984 one Jimmy D. Nanavutty, Company Secretary of Miltons, Bombay, filed a complaint in the Court of the Chief Metropolitan Magistrate, 9th Court, containing more or less the same allegations which are found in the plaint in Summary Suit No.1989 of 1984. Nanavutty, had, in addition, submitted that the accused entered into a criminal conspiracy to cheat his company (Miltons) and had cheated the company and induced the company to part with the goods. The learned Magistrate has ordered the police to investigate into the matter.

3. Mr. Kothare, learned Counsel appearing for the petitioner, urges that the relations between the parties were cordial when the Indian exporter was conforming to the delivery schedule and supplying goods as per the contracts. It was only when the importer - purchaser found that the goods do not conform to the specifications that they informed Miltons about it by their letter dt. 13th Mar, 1984. Vogel pointed out that 30% of the items have been stone-washed when the instructions were that they should be washed with water only; that the garments have oil marks, the buttons have been badly stitched, the quantity was correct but not size-wise and warned Miltons that in case their Europen clients do not accept the goods, they would prefer claim on Miltons. This was followed by another letter dt. 14th Mar. 1984 complaining short delivery as well as non-conformity with the specifications. It appears that Aldo Vogel came over to India with a view to iron out the matters but as it could not be done, Miltons filed Civil Suit as adumberated above.

4. Mr. Desai, learned counsel appearing for the 1st Respondent-Miltons, places reliance on Lord Porter's observations in Emperor v. Nazir Ahmad, AIR 1945 PC 18, quoted with approval by the Supreme Court

in Abhinandan Jha v. Dinesh Mishra, AIR 1968 SC 117 :-

"In India as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the Court."

Abhinandan Jha's case was considered in a series of later judgments by the Supreme Court and the latest being E.S. Mills Shri Virendra Kumar v. Rajiv Poddar, AIR 1985 SC 1668, which succinctly summarises the law by stating that :

"..... in exceptional case where non-interference would result in miscarriage of justice, the High Court and the judicial process should not interfere at the stage of investigation of offences."

5. Chief Justice Chagla, in an unreported Judgment (Appeal No. 3 of 1954; Suit No. 747 of 1952 - Messrs. National Traders v. Atlas Assurance Co. Ltd.) on the Original Side, had occasion to consider a situation where there is a suit between the parties and a criminal prosecution where same issues arise and similar questions have to be determined, Chief Justice Chagla was referred to the decision of the Supreme Court in M.S. Sheriff v. State of Madras, 1954 SCJ 458 : (AIR 1954 SC 397), according to which, in such a case the Court should stay the suit and not the criminal proceedings. The learned Chief Justice observed :

"If, with great respect, the Supreme Court has laid down any such proposition then it would seem to us that it would be contrary to the ordinary practice which has been followed by this Court for several years. Now, the ordinary practice of this Court is that, when there is a criminal proceeding and a suit and the issues are common, it is much more satisfactory to get the decision of the Civil Court on the issues rather than to get the decision of the Criminal Court on the very issues."

6. As Sheriff's case dealt with the provisions under S.491 of the Cr.P.C. a detailed discussion about the principles need not detain us here. To my mind, the reading of the complaint in juxtaposition with the Plaint brings out a similarity of allegations of series of transanctions entered into between the parties and an alleged breach of contract committed by the importer in not paying for certain goods. The counter-claims made by the importer imputes the exporter with supply of sub-standard goods entitling the importer to claim damages as he could not perform his obligations under the contracts to supply goods to his clients as well as the expenses incurred by him in paying extra customs charges. These are complicated questions of facts as well as mixed questions of fact and law, for the determination of which the proper forum will be the Civil Court. Except a blank statement that the company has been cheated by the Swiss National Aldo Vogel, the ingredients of offence of cheating do not appear from the complaint. Under these circumstances, I feel that the present case is one of the exceptional ones falling within the ratio of Rajiv Poddar's case (AIR 1985 SC 1668) in which the discretion should be exercised in quashing the proceedings in the Criminal Court, because, if continued, it would result in miscarriage of justice.

7. In the result, the Petition succeeds. Rule is made absolute. The Criminal proceedings in Case No. 144/Misc./84 of 1984 pending in the Court of the Additional Chief Metropolitan Magistrate's 19th Court, Esplanade, Bombay, are quashed.

Petition Allowed