(By Sri.D.N.Nanjunda Reddy, Senior Advocate for Sri.M.Vinaya Keerthy, Advocate)

Transcription

1 1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 21 ST DAY OF FEBRUARY 2013 BEFORE THE HON BLE MR JUSTICE K. N. KESHAVANARAYANA CRIMINAL PETITION No. 3944/2012 C/W CRIMINAL PETITION No. 4009/2012 BETWEEN: In Crl.P.No.3944/2012 Vinod Goel, Aged about 51 years, S/o. Madanlal Goel, # 408, 12 th Main, RMV Extension, Sadashivanagar, Bengalooru Petitioner (By Sri.D.N.Nanjunda Reddy, Senior Advocate for Sri.M.Vinaya Keerthy, Advocate) In Crl.P.No.4009/2012 Sameer Goel, Aged about 36 years, S/o. Suresh Kumar Goel, Behind Ujwal Bar & Restaurant, C-15, VIII Cross, Sanjay Nagar, Bengalooru Petitioner (By Sri.G.S.Prasanna Kumar, Advocate)

2 2 AND: 1. State of Karnataka, By City Crime Branch Police, Nagarthpet, Bengalooru Alsaa Petroleum & Shipping FZC Having its Registered office at P.O. Box 10335, RAS AL Khaimah, UAE And correspondence office at Suite # 9C, Dubai Creek Tower, P.O. Box , Dubai, UAE And through its constituted Attorney Dinesh Menon, Aged about 52 years, S/o. Chakungal Padmakara Menon, # 001, A-14, Aradhana Garden, Goregaon (East), Mumbai Respondents (Common in both Petitions) (By Sri.P.Karunakar, HCGP for R-1) Sri.K.Suman Advocate for R-2 These Criminal Petitions are filed under Section 482 of the Cr.P.C., praying to quash the proceedings in C.C.No.23679/2011 on the file of the VII Additional Chief Metropolitan Magistrate, Bangalore. Reserved on : Pronounced on : These Criminal Petitions having been heard and reserved for order, coming on for pronouncement of order this day, the Court made the following:

3 3 O R D E R These two petitions are filed under Section 482 of Cr.P.C. seeking to quash the prosecution launched in C.C. No.23679/2011 on the file of the VII Additional C.M.M., Bangalore. 2) Vinod Goel- the petitioner in Criminal Petition No.3944/2012 is arraigned as Accused No.1, while Sameer Goel, petitioner in Criminal Petition No.4009/2012 is arraigned as Accused No.2 in the charge sheet filed by the Assistant Commissioner of Police, CCB, Special Enquiries, N.T. Pet, Bangalore City, for the offences punishable under Sections 465, 467, 468, 471, 420 r/w. 120(B) of IPC. 3) The facts leading to the presentation of these two petitions are as under:- The 2 nd respondent in these two petitions by name Alsaa Petroleum and Shipping FZC having its registered office at RAS AL KHAIMAH, UAE, represented through its constituted attorney Sri. Dinesh Menon, filed a private

4 4 complaint under Section 200 of Cr.P.C. alleging the offences punishable under Sections 420, 406, 465, 467, 468, 471 r/w. 120(B) of IPC against the following four named accused,- (1) M/s. Twenty First Century Wire Rods Limited, Sadashiv Nagar; (2) Vinod Goel, the Chairman and Managing Director of M/s. Twenty First Century Wire Rods Limited; (3) Janthakal Enterprises, and (4) Hanuman Mines. 4) In the complaint, it was inter alia alleged that Accused No.1 is the registered company of which Accused No.2 is the Chairman and Managing Director and he primarily dealt with the complainant s representatives in respect of entire transaction, which is the subject matter of the complaint; that during September 2009, the complainant was desirous of purchasing iron ore lump with FE 62% and Iron Ore (Fine) with FE 61.5% and for that purpose, the complainant authorized its representatives for search in the Indian Market to find-

5 5 out as to who are the right suppliers/sellers to procure large quantities of goods of required specification, as the complainant was required to be traded in the International Market. The representatives of the complainant-company met Accused No.2 (Vinod Goel) and several other persons including Sameer Goel (Accused No.2 in the charge sheet); that Accused No.2 represented that he is the Proprietor of Accused Nos. 3 & 4, which owned mines in the State of Karnataka and Accused No.3 has a mining lease, whereas Accused No.4 also owned mines and therefore, they would be in a position to supply the required quantity of Iron Ore in both qualities and as per specifications; that after several meetings, the offer by Accused No.2 on behalf of Accused Nos.1, 3 & 4 was accepted by the complainant- Company and in that regard two formal written contracts were entered into between the complainant-company and Accused No.1-Company on bearing Reference Nos. IOL/62/09 and IOF/63/090, whereunder, the accused agreed to supply Hematite Iron Ore (Lump) of 3 x 40,000 M.T. (+/- 10% at the complainant s option) and

6 6 Hematite Iron Ore (Fine) of 3 x 40,000 M.T. (+/- 10% at the complainant s option); that even prior to entering into such two contracts on , the complainantcompany was already in serious negotiations with M/s. Pakistan Steel Mill, Karachi, Pakistan, for sale of the said goods to be purchased from Accused Nos.1 to 4 and the said fact was also disclosed by the complainant-company to Accused Nos.1 to 4 through various correspondences between them; that in that regard, the complainant also entered into two separate contracts with Pakistan Steel Mill on ; that the fact of goods agreed to be purchased from the accused were intended to be supplied to M/s.Pakistan Steel Mill were also incorporated in both the contracts entered into between the complainantcompany and Accused Nos. 1 to 4; that the contract between the complainant-company and the accused contained the specifications as to the quality of the goods to be supplied and also clauses regarding the payment to be made; that the entire cargo falling under both the contracts were to be shipped in five shipments totally as

7 7 per clause (2) of the respective contracts consisting of MTs ( +/- 10% ); that the contracts also contained the dates of the shipments; that however, the accused did not adhere to the dates of shipments, instead, went on demanding the payments contrary to the terms of the payment under the agreements; that nevertheless, the complainant paid the amounts as demanded by the accused since the complainant was under an obligation to supply Iron Ore to M/s. Pakistan Steel Mill; that as per the terms of the agreement, at the time of shipment, the accused were required to provide all the necessary documents including the quality certificate in respect of the goods so shipped; that there was inordinate delay in shipment of the cargo, however, the accused delayed in sending the necessary documents including the quality certificate regarding the chemical composition; that on , the accused sent a copy of the quality analysis certificate by dated issued by M/s.SGS India Private Limited and in the said certificate, the date of commencement of loading operation was stated

8 8 to be and the date of completion was said to be , and the percentage of Fe had been shown as 58.51% and Si02 as 5.14%; that thereafter, the accused-company sent a commercial invoice for making higher claim which was objected to by the complainant and thereafter, revised invoice was sent; that the vessel carrying cargo arrived at the destination of M/s.Pakistan Steel Mill on and the sample of cargo was taken by the representative of M/s.Pakistan Steel Mill in order to identify the cargo specifications; that on examination of samples, to the shock of the officers of M/s.Pakistan Steel Mill revealed that the specification of the cargo provided was totally different from the contractual specifications and M/s. SGS India Pvt. Ltd. s certificate produced by the accused at the loading port was beyond the rejecting limit for each and every chemical; that on , the complainant-company received a set of original documents from the accused, which contained the certificate of quality dated signed by M/s.SGS India Pvt. Ltd; that

9 9 however, this quality certificate was totally different from the one received by the complainant-company through e- mail from the accused on and thus, the quality certificates sent by the accused when compared with each other apparently found to be bogus; that once again, on , the complainant received another set of quality reports issued by M/s. SGS India Pvt. Ltd. showing total discrepancy between the quality certificates received earlier; that in the light of the contradictory quality report sent by the accused, the complainant decided to verify the authenticity of the certificates and therefore, carried on correspondences with the M/s.SGS India Pvt Ltd., to verify the same; that even in respect of subsequent shipments also, the quality certificates sent by the accused and the quality test carried out by M/s.SGS India Pvt. Ltd. and Pakistan Steel Mill revealed that the goods so sent were not upto the quality specifications; that as a result of this, M/s. Pakistan Steel Mill rejected the cargo and asked the complainant to lift back the rejected materials from their yard; that the correspondence with

10 10 M/s. SGS India Pvt. Ltd. revealed that none of the quality certificates received by the complainant company from accused are not issued by them and they are all forged and fabricated certificates. Thus, the accused by fabricating and forging the quality certificates have cheated the complainant by sending the goods which did not conform to the quality specifications; that since M/s.Pakistan Steel Mill rejected the goods, it resulted in great loss to the complainant-company. Therefore, the complainant contended that the accused named in the complaint have committed the offences punishable under Sections 420, 465, 476, 468, 471 r/w 120(B) of IPC. 5) In the complaint, the complainant prayed for directing an investigation under Section 156(3) of Cr.P.C. by Senior Inspector of Police, Economic offences or in the alternative, the Court to take cognizance of the said offences and issue process to the accused. On presentation of the complaint, the learned Magistrate before whom the complaint was presented, on perusal of

11 11 the complaint and the documents produced, referred the complaint under Section 156(3) of Cr.P.C. to the SHO of the Sadashivanagar Police Station for investigation and report. Based on such reference, Sadashivanagar Police registered the case in Crime No.45/2010 for the aforesaid offences and took-up investigation. Subsequently, as per the orders of the Commissioner of Police, Bangalore, the investigation was transferred to the Assistant Commissioner of Police, CCB, Special Enquiries, Bangalore. 6) After investigation, the Investigating Officer filed the charge sheet for the offences punishable under Sections 465, 467, 468, 471 & 420 r/w. 120(B) of IPC against the petitioners herein. The learned Magistrate on perusal of the allegations made in the charge sheet as well as the documents, took cognizance of the offences alleged and ordered issue of summons to the accused. 7) On coming to know of the same, the petitioners have presented these petitions, seeking to quash the

12 12 prosecution launched against them for the aforesaid offences. 8) The grounds urged by the petitioner in Criminal Petition No.3944/2012 in support of the prayer for quashing the prosecution are, - The entire averments made in the private complaint clearly discloses that the matter is totally civil in nature and the complainant has already initiated Arbitration Proceedings before the Arbitral Tribunal as well as before the Civil Court, which are pending consideration. From this it is clear that the sole intention of presenting the complaint is to pressurize the petitioner-accused by invoking the provisions of Cr.P.C., which is not permissible under law; that the 1 st respondent-police instead of holding that the matter is civil in nature, have filed the charge sheet; that the Deputy Director of Prosecution in his report submitted to the 1 st respondent has clearly opined that the dispute pertains to contracts which are civil in nature, therefore, no criminal offences is

13 13 attracted; that by giving a complete go-by to the said opinion, the 1 st respondent-police have filed the charge sheet; that the dispute arose only on account of breach of contract and since the complainant has already invoked the civil remedy, the criminal complaint alleging the aforesaid offences was not maintainable; that at no point of time, the petitioner has committed breach of contract as alleged in the complaint, but, on the contrary, it was the complainant who though required to make 100% payment against the materials shipped, made payment of upto 85% in contravention of the terms of the agreement and failed to pay the balance amount in spite of the petitioner s repeated requests and thereafter, the complainant with an intention to escape from the legal liability has filed a frivolous complaint and the 1 st respondent-police without giving credence to these factors, have arbitrarily filed the charge sheet; that the representatives of the complainant were very much present during the shipment of materials on both the occasions and M/s. SGS India Pvt. Ltd. who was

14 14 nominated by both the complainant and the petitioner herein, have checked the quality of the materials and at the time of shipment of the goods, the representatives of the complainant did not raise any objection against the quality report received; that after receiving the materials and disbursement of the consignment, the consigneecomplainant has knitted the story to their convenience with an intention to escape from the legal liability, as such, the entire matter is civil in nature and since the entire matter is sub judice before the Arbitral Tribunal at London, the initiation of the criminal prosecution is actuated with mala fides, as such, it is liable to be quashed. 9) The petitioner in Criminal Petition No.4009/2012 has urged the following grounds in support of his prayer; That he is in no way connected with the transaction entered into between the complainant on the one hand and accused-vinod Goel and his company on the other

15 15 hand; that as could be seen from the averments made in the complaint, the entire allegations made therein are against Accused No.1-Vinod Goel; that he is neither a party to the financial transaction between Accused No.1- Vinod Goel and his company on the one hand and the complainant on the other hand, nor he was in any way connected with the shipping of the materials by Accused No.1 to the complainant; that the only averment against him is that he made certain correspondence on behalf of Accused No.1-Vinod Goel, therefore, no case is made-out against him for any of the offences and in spite of the same, the Magistrate has erroneously taken cognizance; that the averments made in the complaint clearly discloses that the matter is totally civil in nature and since the complainant has already initiated Arbitration Proceedings before the Arbitration Tribunal in London as well as before the Civil Court, which are pending consideration, the criminal prosecution launched is not maintainable.

16 16 10) On service of notice of these petitions, the 2 nd respondent has appeared through his counsel, while the learned Government Pleader has appeared on behalf of the 1 st respondent-police. 11) I have heard Sri. D.N. Nanjunda Reddy, learned Senior Counsel appearing for the counsel for the petitioner in Criminal Petition No.3944/2012, Sri. G.S. Prasanna Kumar, learned counsel appearing for the petitioner in Criminal Petition No.4009/2012, Sri. P. Karunakar, Learned Government Pleader appearing for Respondent No.1 and Sri. K. Suman, learned counsel appearing for the respondent complainant. 12) Sri. D.N. Nanjunda Reddy, learned Senior Counsel, reiterating the grounds urged in the petition contended that, reading of the complaint averments makes it clear that the entire dispute is civil in nature and the alleged civil wrong is sought to be converted into a criminal wrong, therefore, the prosecution launched is liable to be quashed. He further contended that in the

17 17 light of the fact that the complainant has already initiated civil proceedings by invoking the arbitration clause and the proceedings are pending before the Arbitral Tribunal at London as also before the Civil Court at Bangalore, the criminal prosecution launched is intended to coerce the accused to come to their terms; that the materials placed before the Court along with the charge sheet does not make-out any prima facie case for any of the offences alleged; that the learned Magistrate without applying his judicious mind to the facts as well as the materials placed before him has taken cognizance of the offences, therefore, the order taking cognizance of the offences alleged and directing issue of summons is erroneous and illegal, as such, it is liable to be set aside and the prosecution launched is liable to be quashed. 13) Sri.G.S. Prasanna Kumar, learned counsel appearing for the petitioner in Criminal Petition No.4009/2012, contended that Accused No.2 was not arraigned as accused in the private complaint nor any

18 18 allegation was made against him and even in the charge sheet filed, the only allegation against him is that he made certain correspondence on behalf of Accused No.1 and that circumstance itself cannot be a ground to hold that the petitioner is guilty of any offences alleged and without applying the judicious mind to this aspect of the matter, the Magistrate proceeded has to take cognizance against Accused No.2 and has directed issue of summons, as such, the prosecution launched against Accused No.2 is liable to be set aside. 14) On the other hand, Sri. K. Suman, learned counsel appearing for the complainant contended that though the dispute arises out of the contract between the complainant-company and the company of which Accused No.1 is the Chairman and Managing Director, the allegations made in the complaint clearly indicates that Accused No.1 along with Accused No.2 with an intention to cheat the complainant-company, produced forged and concocted quality certificates purported to have been issue

19 19 by M/s.SGS India Pvt. Ltd. as to the quality of goods shipped representing that the goods shipped are in conformity with the quality specified in the contract, but later, it was found that the quality of the goods did not conform to the quality specified in the contract and further enquiries made by the complainant revealed that the certificates purported to have been issued by M/s. SGS India Pvt. Ltd. and made available by Accused No.1 are all fabricated and forged and thereby the accused have cheated the complainant. He further contended that the averments made in the complaint prima facie make-out the offences alleged in the complaint and the 1 st respondent after elaborate investigation and collecting voluminous evidence has indicated in the charge sheet as to how the accused have committed the offences alleged and the evidence produced along with the charge sheet prima facie makes-out the offences alleged against both the accused and the learned Magistrate after applying his judicious mind to the materials placed before him, has rightly taken cognizance of the offences alleged and

20 20 ordered issue of summons to the accused. Therefore, there is no illegality or irregularity in the said order calling for interference by this Court. He further contended that merely because the dispute arise out of the contract between the parties, it cannot be said that there is no element of criminal wrong. He further contended that the materials produced along with the charge sheet would prima facie establish the criminal acts committed by the accused, therefore, there are no grounds for quashing the prosecution. He contended that pendency of the civil proceedings before the Arbitral Tribunal at London and the Civil Court in Bangalore is not a bar for initiation of the criminal prosecution. In support of his contentions, he placed reliance on the following decisions:- i) AIR 1999 SC 3499 [Trisuns Chemical Industry Vs. Rajesh Agarwal and others. ii) (2006) 6 SCC 736 [Indian Oil Corporation Vs. NEPC India and others] iii) (2009) 8 SCC 787 [State of Maharashtra Vs. Sayed Mohammed Masood and Another]

21 21 iv) (2009) 8 SCC 751 [Mohammed Ibrahim and others Vs. State of Bihar and another v) ( SCC 460 [Amit Kapoor Vs. Ramesh Chander and another] vi) (2012) 10 SCC 155 [State of Madhya Pradesh Vs. Surendra Kori] 15) In the light of the submissions made on both sides, the point that arises for consideration is, whether the criminal prosecution launched against the petitioners is liable to be quashed. 16) I have bestowed my anxious consideration to the submissions made by the learned counsel appearing on both sides. 17) Before considering the various contentions urged, let me refer to the principles laid-down in various decisions as to the power of this Court to quash the FIR or the Criminal prosecution in exercise of the inherent powers saved under Section 482 of Cr.P.C.

22 22 18) In Trisuns Chemical Industry Vs. Rajesh Agarwal and others AIR 1999 SC 3499 after referring to several earlier decisions of the Supreme Court, it has been held that the quashment of the FIR or a complaint by the High Court in exercise of inherent powers should be limited to very extreme exceptions. The relevant observations are found in Paragraph-6, which reads as under:- 6. Time and again this Court has been pointing out that quashment of FIR or a complaint in exercise of inherent powers of the High Court should be limited to very extreme exceptions (vide State of Haryana-Vs- Bhajan Lal (1992 suppl.(1) SCC 335): (1992 AIR SCW 237: AIR 1992 SC 604: 1992 Cri LJ 527) and Rajesh Bajaj-Vs-State NCT of Delhi (1999) 3 SCC 259: (1999 AIR SCW 881: AIR 1999 sc 1216: 1999 Cri LJ 1833)) In the last referred case this court also pointed out that merely because an act has a civil profile is not sufficient to denude it of its

23 23 criminal outfit. We quote the following observations (para 10 of AIR, Cri LJ): It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions. Further, in the said decision, rejecting the contention that since the agreement between the parties provided for referring the disputes to Arbitration, it is an effective substitute for the criminal prosecution, Their Lordships have observed thus in Paragraph-7:- 7. We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording

24 24 reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases as indicated in State of Haryana Vs- Bhajaj Lal (1992 AIR SCW 237: AIR 1992 SC 604: 1992 Cri LJ 527 (Supra). 19) In Indian Oil Corporation Vs. NEPC India Limited [(2006) 6 SCC 736] the Apex Court has considered the question as to whether the existence or availment of civil remedy in respect of disputes arising from breach of contract, bars the remedy under criminal law. After referring to several earlier decisions, Their Lordships have set-out the principles, which are relevant for consideration of the said point as under:-

25 25 (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 of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint. (ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with malafides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable. (iii) The power to quash shall not, however, be used to stifle or scuttle a

26 26 legitimate prosecution. The power should be used sparingly and with abundant caution. (iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. (v) A given set of facts may make out : (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is

27 27 not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not. In this decision, Their Lordships noticing the growing tendency in the business circles to convert purely civil disputes into criminal cases, have observed thus in Paragraphs- 13 & 14, which read as under:- 13. While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal

28 28 offence, by applying pressure though criminal prosecution should be deprecated and discouraged. In G. Sagar Suri Vs-. State of Uttar Pradesh this court observed: SCC p.643, para 8) "It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice." 14. While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a

29 29 prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may." 20) In State of Maharashtra Vs. Sayed Mohammed Masood [(2009) 8 SCC 787]. Their Lordships have stated thus in Paragraph-10, as to the legal position in regard to the exercise of the jurisdiction by the High Court for quashing of an FIR, the relevant observations are as under:- 10. The legal position in regard to exercise of jurisdiction by the High court for quashing of an FIR is now well settled. It is not necessary for us to delve deep thereinto as the propositions of law have recently been stated by this Court in R.

30 30 Kalyani Vs- Janak C. Mehta [1 (2009) 1 SCC 516: (2009) 1 SCC (Cri) 567] in the following terms: [SCC p.523, para 15] "15. Propositions of law which emerge from the said decisions are: (1) The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizable offence. (2) For the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence. (3) Such a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the Court shall not go beyond the same and

31 31 pass an order in favour of the accused to hold absence of any mens rea or actus reus. (4) If the allegation discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue." 21) In Mohammed Ibrahim and Others Vs. State of Bihar [(2009) 8 SCC 751], Their Lordships have once again noticing the growing tendency of the complainants attempting to covert a civil wrong into a criminal wrong, have observed thus in Paragraph-8:- 8. This Court has time and again drawn attention to the growing tendency of complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling

32 32 scores or to pressurize parties to settle civil disputes. But at the same, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes. (See G.Sagar Suri Vs- State of Uttar Pradesh and Indian Oil Corporation Vs- NEPC India Ltd) Let us examine the matter keeping the said principles in mind. 22) In Amit Kapoor Vs. Ramesh Chander and Another [(2012) 9 SCC 460] Their Lordships while dealing with the power of the High Court to quash criminal prosecution, have observed thus in Paragraph- 26: 26. This further raises a question as to the wrongs which become actionable in accordance with law. It may be purely a civil wrong or purely a criminal offence or a civil wrong as also a criminal offence constituting both on the same set of facts. But if the records disclose commission of a criminal offence and the ingredients of the offence are satisfied, then such criminal proceedings cannot be quashed

33 33 merely because a civil wrong has also been committed. The power cannot be invoked to stifle or scuttle a legitimate prosecution. The factual foundation and ingredients of an offence being satisfied, the Court will not either dismiss a complaint or quash such proceedings in exercise of its inherent or original jurisdiction. In Indian Oil Corporation Vs-. NEPC India Ltd. this Court took the similar view and upheld the order of the High Court declining to quash the criminal proceedings because a civil contract between the parties was pending. 23) In the light of the various earlier decisions of the Supreme Court, Their Lordships have culled-out principles to be considered for proper exercise of the jurisdiction with regard to quashing of the criminal prosecution by observing thus in Paragraph-27: Though there are no limits of the powers of the Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in

34 34 terms of Section 228 of the Code should be exercised very sparingly and with circumspection and that too in the rarest of rare cases The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion and where the basic ingredients of a criminal offence are not satisfied then the Court may interfere The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge Where the exercise of such power is absolutely essential to prevent patent miscarriage of justice and for correcting some grave error that might be committed by the subordinate courts even in such cases, the High

35 35 Court should be loath to interfere, at the threshold, to throttle the prosecution in exercise of its inherent powers Where there is an express legal bar enacted in any of the provisions of the Code or any specific law in force to the very initiation or institution and continuance of such criminal proceedings, such a bar is intended to provide specific protection to an accused The Court has a duty to balance the freedom of a person and the right of the complainant or prosecution to investigate and prosecute the offender The process of the Court cannot be permitted to be used for an oblique or ultimate/ulterior purpose Where the allegations made and as they appeared from the record and documents annexed therewith to predominantly give rise and constitute a civil wrong with no element of criminality and does not satisfy the basic ingredients of a criminal offence, the Court may be justified in quashing the charge. Even in

36 36 such cases, the Court would not embark upon the critical analysis of the evidence Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the Court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice It is neither necessary nor is the court called upon to hold a full- fledged enquiry or to appreciate evidence collected by the investigating agencies to find out whether it is a case of acquittal or conviction Where allegations give rise to a civil claim and also amount to an offence, merely because a civil claim is maintainable, does not mean that a criminal complaint cannot be maintained In exercise of its jurisdiction under Section 228 and/or under Section 482, the

37 37 Court cannot take into consideration external materials given by an accused for reaching the conclusion that no offence was disclosed or that there was possibility of his acquittal. The Court has to consider the record and documents annexed therewith by the prosecution Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records but is an opinion formed prima facie Where the charge-sheet, report under Section 173(2) of the Code, suffers from fundamental legal defects, the Court may be well within its jurisdiction to frame a charge Coupled with any or all of the above, where the Court finds that it would amount to abuse of process of the Court or that interest of justice favours, otherwise it may

38 38 quash the charge.the power is to be exercised ex debito justitiae, i.e. to do real and substantial justice for administration of which alone, the courts exist. [Ref. State of West Bengal Vs- Swapan Kumar Guha; Madhavrao Jiwajirao Scindia Vs- Sambhajirao Chandrojirao Angre; Janata Dal Vs- H.S.Chowdhary; Rupan Deol Bajaj-Vs- Kanwar Pal Singh Gill; G.Sagar Suri-Vs-State of Uttar Pradesh; Ajay Mitra-Vs- State of Madhya Pradesh; Pepsi Foods Ltd-Vs-Special Judicial Magistrate; State of Uttar Pradesh-Vs- O.P.Sharma; Ganesh Narayan Hegde-Vs- S.Bangarappa; Zandu Pharmaceutical Works Ltd-Vs- Mohd.Sharaful Haque; Medchl Chemicals & Pharma (P) Ltd-Vs-Biological E.Ltd; Shakson Belthissor Vs-State of Kerala; V.V.S.Rama Sharma-Vs-State of Uttar Pradesh; Chunduru Siva Ram Krishna-Vs-Peddi Ravindra Babu; Sheonandan Paswan-Vs- State of Bihar; State of Bihar-Vs-P.P. Sharma; Lalmuni Devi-Vs-State of Bihar; M. Krishnan-Vs-Vijay Singh; Savita-Vs- State of Rajasthan and S.M. Datta-Vs-State of Gujarat.] These are the principles which individually and preferably cumulatively (one or more) be taken into consideration as precepts to exercise of extraordinary and wide plenitude and jurisdiction under Section 482 of the Code by the High Court. Where the factual foundation for an offence has been laid down, the courts should be reluctant and should not

39 39 hasten to quash the proceedings even on the premise that one or two ingredients have not been stated or do not appear to be satisfied if there is substantial compliance with the requirements of the offence. 24) Keeping in mind the above principles laid-down in various decisions, let me proceed to consider the case on hand. 25) Reading of the private complaint filed by the complainant as also the allegations made in the charge sheet filed by the Investigating Officer no doubt indicates that the criminal offences alleged stem-out of the commercial transactions between the company of which Accused No.1 is the Chairman and Managing Director and the complainant-company. The contract between the parties was for supply of Iron Ore both in lump and fine quality with definite specifications. No doubt, in the complaint, the major portion of the averment relate to the breach said to have been committed by Accused No.1 in not adhering to the time schedule regarding shipment of

40 40 the goods and also in demanding payments contrary to the terms of the contract. However, in the complaint, specific allegations have been made as to how the accused have committed the criminal wrongs. The criminal wrongs alleged relate to production of fabricated and forged quality certificates and supply of goods, which did not conform to the specifications agreed under the contract. The specific averments had been made in the complaint that when the goods shipped into the cargo reached the destination at Karachi in Pakistan, samples were taken in respect of both the shipments and when it was tested, it found to be not in conformity with the specifications contained in the agreement. Specific averments have also been made with regard to the correspondences between the complainant-company and M/s. SGS India Pvt. Ltd., who said to have issued the quality certificates regarding both the shipments and sent to the complainant-company through the accused, were fabricated and forged. In support of such specific averments, copies of the documents had been produced before the Court. In the

41 41 charge sheet, the Investigating Officer has clearly set-out as to how the offences alleged have been committed. The evidence collected by the Investigating Officer during investigation would prima facie indicate that the quality certificate purported to have been issued by M/s. SGS India Pvt. Ltd. and sent to the complainant by the accused were subjected to examination by the experts and the purported signature of the person found on such quality certificates were compared by the experts and the report revealed that those certificates are fabricated and forged. It is also stated in the charge sheet that there were contradictions between the quality certificates submitted by the accused to the complainant. As noticed supra, the Apex Court has clearly held that, while exercising the power under Section 482 of Cr.P.C. to quash the criminal prosecution, it is not open to the High Court to examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in conviction. But the Court concerned primarily with the allegations taken as a whole

42 42 whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice. It has also been held by the Apex Court that, 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 of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint. 26) In my considered opinion, the reading of the complaint as a whole and the allegations now made in the charge sheet filed by the Investigating Officer supported by the evidence collected by the Investigating Officer during investigation and produced along with the charge sheet read as a whole, make-out prima facie case for the offences alleged against the petitioners. The allegations prima facie indicate that the goods supplied were not in conformity with the specification and the accused by falsely representing that goods supplied are in conformity

43 43 with the specification agreed, made available forged and fabricated quality certificates purported to have been issued by M/s. SGS India Pvt. Ltd.. Thus, though the dispute between the parties relate to the commercial transaction, the acts alleged to have been committed by the accused would constitute both civil wrong and criminal offences. No doubt the contract between the parties contains an Arbitration Clause and the complainant has already invoked the said remedy and the matter appears to be pending before the Arbitral Tribunal in London in respect of the civil wrong alleged to have been committed by the accused. As noticed supra, the Apex Court has clearly held that, the fact that contract between the parties contains arbitration clause and one of the parties has invoked the said remedy, is no bar for initiation of the criminal prosecution, if the acts complained of constitute a criminal offence. Therefore, there is no substance in the contention of the learned Senior Counsel that the pendency of the proceedings

44 44 before the Arbitral Tribunal at London is a bar for the complainant to initiate criminal prosecution. 27) From the discussion made above, it is clear that the allegations made in the complaint as also in the charge sheet and the materials produced along with the charge sheet would prima facie make-out a case for the aforesaid offences. Having regard to the materials on record, it cannot be said that, no case is made-out for any of the offences alleged. Admittedly, Accused No.1, is the Chairman and Managing Director of M/s. Twenty First Century Wire Rods Limited and there is no serious dispute that he acting as Chairman and Managing Director of the said Company, signed the contracts. No doubt, Accused No.2 was not arraigned as an accused in the private complaint. However, during investigation of the case, it is specifically alleged that Accused No.2 colluding with Accused No.1 has sent several s to the complainantcompany and also has sent several shipping documents to the complainant-company duly signed by him and thereby

45 45 Accused No.2 is a party to the fabrication and forging of the quality certificates sent to the complainant-company, and thus he assisted Accused No.1 in deceiving the complainant-company. 28) The opinion furnished by the Deputy Director of prosecution is not binding on the Investigating Officer. Not withstanding such opinion, the Investigating Officer is of the opinion that there are sufficient evidence to send-up the accused for trial, he is empowered under law to file the chargesheet. Therefore, the contention raised in this regard has no force of law. 29) In the light of the specific allegations in the charge sheet, in my considered opinion, there are reasonable grounds to proceed against both the accused for the offences alleged in the charge sheet. In this view of the matter, no ground is made out to quash the prosecution launched against the petitioner in exercise of inherent power saved under Section 482 Cr.P.C.

46 46 30) In this view of the matter, I find no merit in these petitions and therefore, they are liable to be dismissed. Accordingly, the petitions are dismissed. Sd/- JUDGE KGR*