Cri.P. No.2702 of 2002

8th October, 2002

Petitioner Counsel: Mr. V. PATTABHI
Respondent Counsel: Mr. C. V. MOHAN REDDY

Cases Cited:
State of Kerala Vs. A.P. Pillai, 1972 Cri.LJ 1243 [Para 6]
Trisuns Chemical Industry Vs. Rajesh Agarwal, AIR 1999 SC 3499 [Para 9]
State of Karnataka Vs. M. Devendrappa, (2002) 3 SCC 89 [Para 9]
M/s. Medchl Chemicals and Pharma Private Limited Vs. M/s. Biological E. Limited, 2000 ALL MR (Cri) 999 (S.C.)=AIR 2000 SC 1869 [Para 9]
Nagpur Steel and Alloys Private Limited Vs. P. Radhakrishna, 1997 SCC (Cri.) 1073 [Para 9]

JUDGMENT

-This is an application to quash the FIR in Crime No.50 of 2002 of Vellur P.S. of Cuddapah District.

2. Representation dated 12-6-2002 given to the Superintendent of Police, Cuddapah, by the 1st respondent was forwarded to the Deputy Superintendent of Police, Cuddapah with an endorsement to get a case registered and investigated after perusing the relevant records, which in turn was sent to the Sub-Inspector of Police, Vellur P.S. with a direction to register a case under the relevant section of law and to take up investigation. Consequently the Sub-Inspector of Police, Vellur P.S. registered the said complaint as Crime No.50 of 2002 under Section 420 IPC read with Section 138 of Negotiable Instruments Act.

3. The case, in brief, of the 1st respondent is that he and his brother V. Subba Rayudu are carrying on business in Dupion Silk under the name and style of Krishna Silk Fabrics and have business transactions with the petitioner, who is the proprietor of M/s. Super Exports, from five years and that they, basing on the orders placed by the petitioner, used to prepare cotton material and send the same to Bangalore through Raghavendra Transport and that the petitioner used to pay cash or send post-dated cheques towards the value of the material supplied to him by them, and on some occasions the petitioner used to request them not to present the cheques and used to pay the amounts, covered by the cheques, in cash and take return of those post-dated cheques. As per the order placed by the petitioner, material worth Rs.12,74,032/- was supplied to him, towards the value of which petitioner gave eleven cheques for Rs.1,06,000/- each, six cheques with date 1-9-2001, two cheques with date 20-10-2001, one cheque with date 17-11-2001 and two cheques with date 18-12-2001. Three cheques i.e., dated 17-11-2001 and 18-12-2001 were dishonoured on their presentation to Bank. Besides the amount covered by those cheques an amount of Rs.4,26,032/- towards principal and Rs.2,84,503/- towards interest is still due from the petitioner. Petitioner failed to pay the said amount when demanded by them asserting that he does not owe any amount to them. Thus the petitioner, who wields considerable influence at Bangalore, cheated him (1st respondent) and other businessmen at Duggayapally by issuing false cheques.

4. The point for consideration is whether the complaint of the 1st respondent is liable to be quashed.

5. The main contention of Sri Pattabhi, learned Counsel for the petitioner is that the averments in the FIR only show that petitioner failed to make payment for the goods supplied to him by the 1st respondent and his brother, which does not create any criminal liability on the part of the petitioner and since there is not even a whisper in the complaint that petitioner even harboured an intention to cheat the 1st respondent when he placed an order for supply of the material with the 1st respondent and since admittedly some of the cheques issued by the petitioner were honoured, dishonour of some of the cheques issued by the petitioner, if at all, would be an offence under Section 138 of Negotiable Instruments Act, (the Act) but not an offence under Section 420 IPC. It is his contention that an accidental mistake relating to cheque numbers crept into the affidavit of the petitioner filed along with the petition, and after noticing the said mistake, petitioner with the leave of the Court, filed a fresh affidavit giving correct number of the cheques and contended that since the bounced cheques were in fact issued in the name of Subba Rayudu, but not in the name of the 1st respondent, finding that there was no scope for the 1st respondent initiating proceedings under Section 138 of the Act, he not being the payee or holder in due course of the bounced cheques and since the time for initiation of proceedings under Section 138 of the Act also lapsed, 1st respondent with a view to take a short cut route for recovery of the amount allegedly due to him, by using arm twisting methods, sought police help instead of filing a civil suit for recovery of the amount allegedly due to him and got registered the FIR against the petitioner. It is also his contention that the material supplied by the 1st respondent is of inferior variety and so the dispute between the parties can be decided only by a civil Court, and since the complaint is filed only with a view to harass the petitioner and does not spell out an offence under Section 420 IPC, the FIR is liable to be quashed. The contention of Sri Mohan Reddy, learned Counsel for 1st respondent is that since the petitioner admitted that there are business dealings between him and 1st respondent and that he issued cheques in favour of the 1st respondent, petitioner cannot now be heard to say that there are no business transactions between him and the 1st respondent, and that the petitioner, after obtaining an interim direction from the Court on the basis of false averments in the affidavit, came up with a version that the averments in the affidavit filed in support of the petition were made by mistake, and the averment in the affidavit of the petitioner that cheques dated 14-9-2001, 15-10-2001, 17-11-2001, 1-9-2001 and 20-10-2001, became stale cannot be true because they would be valid till February and March, 2002, and since the complaint clearly shows that 1st respondent and his brother were cheated by issuing false cheques, it cannot be said the averments in the FIR do not disclose the commission of offence under Section 420 IPC and in any event since the 1st respondent is a small businessman from a remote village, he cannot be expected to know the finer aspects of law and so his not mentioning the minute details in the complaint is not and cannot be a ground for quashing the complaint.

6. In the additional affidavit of the petitioner it is stated that in lieu of the five cheques bearing Nos.978754 to 978756 dated 1-9-2001, two cheques bearing Nos.978766 and 978767 dated 20-10-2001, five cheques bearing Nos.052790 dated 14-9-2001, cheque bearing No.058805 dated 15-10-2001, cheque bearing No.058806 dated 15-10-2001, cheque bearing No.058851 dated 17-11-2001 and cheque bearing No.058852 dated 17-11-2001 were issued in the name of V. Subba Rayudu. A copy of the statement of UCO Bank, Bangalore, produced by the petitioner shows that cheques bearing Nos.052790, 058805, 058806, 058851 and 058852, each cheque drawn for Rs.1,06,000/- in favour of V. Subba Rayudu, were encashed. So prima facie it is clear that the first five cheques referred to in the complaint were not in fact issued in the name of 1st respondent, but were issued in the name of V. Subba Rayudu and were encashed. Therefore there is force in the contention of the learned Counsel for the petitioner that the question of the petitioner having an intention to cheat the 1st respondent either at the time of placing the order, or at the time of issuing of those cheques in the name of V. Subba Rayudu, would not arise because if the transaction was between the petitioner and 1st respondent, the cheques should have been issued in the name of 1st respondent, but not in the name of V. Subba Rayudu. In any event the averments in the complaint do not show that the petitioner, with an intention to cheat the 1st respondent, issued those cheques. No doubt the last sentence in the in complaint reads:

Telugu matter omitted (Action may be taken against Priyatam Sen (petitioner) who without giving the amount due to us gave fraudulent cheques with a view to cheat us). The said averment does not show that the petitioner had a dishonest intention at the time of placing the order. It is well known that mere breach of contract cannot give rise to criminal prosecution under Section 420 IPC unless fraudulent or dishonest intention is shown right at the beginning of the transaction. In fact Supreme Court in State of Kerala v. A.P. Pillai, 1972 Cri.LJ 1243, held that mere failing to keep up the promise subsequently does not warrant a presumption that the accused had a culpable intention right from the beginning being raised.

7. Non-payment of some amount due for one transaction out of various transactions in business dealings per se does not amount to cheating. The averments in the complaint show that from five years there were transactions between the petitioner and 1st respondent and that the petitioner used to give post-dated cheques, and some times he used to make payment for the goods supplied and take back the post-dated cheques, and on some occasions the cheques were being presented in Bank and the amounts covered by those cheques were withdrawn. If really there was an intention on the part of the petitioner to cheat 1st respondent, he would not have paid any amount to the 1st respondent. In respect of the bounced cheques, if the 1st respondent felt that there was an element of cheating on the part of the petitioner, he should have stated in the complaint that petitioner, at the time of placing the order for goods, harboured an intention to cheat him. The contention of the petitioner is that since the goods supplied were of inferior quality, he did not make the fall payment. It is thus clear that the dispute between the petitioner and 1st respondent is purely civil in nature and the averments in the complaint do not disclose any criminal liability on the part of the petitioner, because mere failure to honour a promise by itself does not constitute the offence of cheating.

8. The contention of the learned Counsel for 1st respondent that 1st respondent being businessman from a rural area, his not disclosing all the ingredients for the offence of cheating in the complaint, when there is no necessity to reproduce all the ingredients in the section in the complaint, is not a ground for quashing the complaint prima facie appears to be appealing, but on deeper examination, I am not able to accept the said contention, 1st respondent who has dealings running into several lakhs cannot be said to be an innocent man from a rural area. The complaint was typewritten in Telugu and was in fact given to the Superintendent of Police, but not to the Station House Officer of the Police Station. It prima facie shows that petitioner had guidance and advice and that he did not act spontaneously or on impulse, for him to omit mentioning important ingredients in his complaint. So non-mention of the relevant ingredients for the offence of cheating in the complaint does have significance.

9. The following decisions relied on by the learned Counsel for 1st respondent have no application to the facts of this case. Trisuns Chemical Industry v. Rajesh Agarwal, AIR 1999 SC 3499, is a case where the accused, by quoting a rate higher than the market rate, promised to supply 5450 metric tonnes of Toasted Soyabeen Extractions and received the entire amount of nearly Rs.4,50,00,000/- as advance, and supplied commodity which was most inferior and of sub-standard quality, and so the purchaser lodged a complaint for an offence under Section 420 IPC. In State of Karnataka v. M. Devendrappa, (2002) 3 SCC 89, extension of an excise contract was obtained on fake bank guarantee, by impersonation. The Supreme Court clearly held therein that power under Section 482 Cr.PC to quash a complaint has to be exercised ex debito justicia to do real and substantial justice, and if the Court feels that it would be abuse of process of Court to allow any action which would result in injustice, it would be justified in quashing the proceedings. In M/s. Medchl Chemicals and Pharma Private Limited v. M/s. Biological E. Limited, AIR 2000 SC 1869 : [2000 ALL MR (Cri) 999 (S.C.)], the Supreme Court held that a criminal proceeding cannot be quashed merely because civil remedy is available and that civil and criminal remedies are not mutually exclusive, but are co-existive and that the object of criminal proceedings is to punish the offender. In Nagpur Steel and Alloys Private Limited v. P. Radhakrishna, 1997 SCC (Cri.) 1073, the Supreme Court held that merely because an offence was committed during the course of a commercial transaction. High Court would not be justified in quashing the complaint, and the question as to whether the allegations in the complaint are true or not are decided during the course of trial.

10. As stated earlier, in this case the bounced cheques were not drawn in the name of 1st respondent and were drawn in the name of V. Subba Rayudu. The payee Subba Rayudu is not the complainant. Section 142 of the Act in no uncertain words says that no Court shall take cognizance of an offence under Section 138 of the Act except on a complaint made by the payee or the holder in due course of the cheque. So in view of the embargo placed by Section 142 of the Act, police registering a case under Section 138 of the Act and investigating it and filing a charge-sheet does not arise. A plain reading of the complaint given by 1st respondent only shows a breach of contract by the petitioner. Since dishonest intention on the part of the petitioner when he placed an order with the petitioner is not spelt out in the complaint, it is clear that the 1st respondent is trying to put criminal law into motion for recovery of the amount due to him, without seeking the remedy open to him under civil law, which is but an abuse of the process of Court. Therefore the complaint against 1st respondent is liable to be quashed. The point is answered accordingly.

11. In view of my finding on the point for consideration, the petition is allowed and the FIR in Crime No.50 of 2002 of Vellur P.S., Cuddapah District is quashed.

Petition allowed.