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2022 (3) TMI 1527 - SC - Companies LawContinuance of criminal proceedings against the present appellant/accused - Section 482 Cr.P.C - whether continuance of the criminal proceedings would be a total abuse of the process of the court and the continuance of the criminal proceedings against the appellants is in no way an abuse of the process of the court? HELD THAT - This Court in the widely celebrated judgment of State of Haryana Ors. Vs. Bhajan Lal Ors. 1990 (11) TMI 386 - SUPREME COURT considered in detail the scope of the High Court powers under Section 482 Cr.P.C. and/or Article 226 of the Constitution of India to quash the FIR and referred to several judicial precedents and held that the High Court should not embark upon an inquiry into the merits and demerits of the allegations and quash the proceedings without allowing the investigating agency to complete its task. This Court in G. Sagar Suri Anr. Vs. State of UP Ors. 2000 (1) TMI 934 - SUPREME COURT observed that it is the duty and obligation of the criminal court to exercise a great deal of caution in issuing the process, particularly when matters are essentially of civil nature. At the outset, Respondent No. 2/Complainant alleged that the Appellants were responsible for the offence punishable under Section 420, 405, 406, 120B IPC. Therefore, it is also imperative to examine the ingredients of the said offences and whether the allegations made in the complaint, read on their face, attract those offences under the Penal Code. Having gone through the complaint/FIR and even the chargesheet, it cannot be said that the averments in the FIR and the allegations in the complaint against the appellant constitute an offence under Section 405 420 IPC, 1860. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making promise being absent, no offence under Section 420 IPC can be said to have been made out. In the instant case, there is no material to indicate that Appellants had any malafide intention against the Respondent which is clearly deductible from the MOU dated 20.08.2009 arrived between the parties - The entire origin of the dispute emanates from an investment made by Respondent No. 2, amounting to Rs. 2.5 crores in lieu of which 2,50,000/- equity shares were issued in the year 25.03.2008, finally culminating into the MOU dated 20.08.2009. That based on this MOU respondent No. 2 filed three complaints, two at Delhi and one at Kolkata. Thus, two simultaneous proceedings, arising from the same cause of action i.e. MOU dated 20.08.2009 were initiated by Respondent No. 2 amounting to an abuse of the process of the law which is barred. The order of the High Court is seriously flawed due to the fact that in its interim order dated 24.03.2017, it was observed that the contentions put forth by the Appellant vis- -vis two complaints being filed on the same cause of action at different places but the impugned order overlooks the said aspect and there was no finding on that issue. At the same time, in order to attract the ingredients of Section of 406 and 420 IPC it is imperative on the part of the complainant to prima facie establish that there was an intention on part of the petitioner and/or others to cheat and/or to defraud the complainant right from the inception. Furthermore it has to be prima facie established that due to such alleged act of cheating the complainant (Respondent No. 2 herein) had suffered a wrongful loss and the same had resulted in wrongful gain for the accused(appellant herein). In absence of these elements, no proceeding is permissible in the eyes of law with regard to the commission of the offence punishable u/s 420 IPC. It is apparent that the complaint was lodged at a very belated stage (as the entire transaction took place from January 2008 to August 2009, yet the complaint has been filed in March 2013 i.e., after a delay of almost 4 years) with the objective of causing harassment to the petitioner and is bereft of any truth whatsoever. Appeal allowed.
Issues Involved:
1. Forum Shopping 2. Quashing of FIR and Criminal Proceedings 3. Allegations of Cheating and Criminal Breach of Trust 4. Jurisdictional Issues Issue-wise Detailed Analysis: 1. Forum Shopping: The concept of forum shopping was central to the case. The court defined forum shopping as the practice of choosing a court likely to provide the most favorable outcome. The court condemned forum shopping as an abuse of law, citing various precedents where litigants approached multiple courts for relief on the same cause of action, which was viewed as creating a jurisdictional advantage. The court noted that Respondent No. 2 filed complaints in both Delhi and Kolkata based on the same cause of action, thus engaging in forum shopping. 2. Quashing of FIR and Criminal Proceedings: The court examined the principles under which FIRs and criminal proceedings can be quashed, referencing the landmark judgment in State of Haryana & Ors. Vs. Bhajan Lal & Ors. It highlighted that the High Court should not quash proceedings without allowing the investigating agency to complete its task unless the allegations do not constitute an offense or are inherently improbable. The court found that the FIR and subsequent criminal proceedings in Kolkata were based on the same facts as the complaint in Delhi, which had already been dismissed, thus constituting an abuse of the process of law. 3. Allegations of Cheating and Criminal Breach of Trust: The court analyzed the ingredients of the offenses of cheating under Section 420 IPC and criminal breach of trust under Section 406 IPC. It emphasized that fraudulent or dishonest intention at the time of making a promise is essential for these offenses. The court found that the allegations in the complaint did not disclose any such intention on the part of the appellants. The court referred to several precedents, including Hridaya Ranjan Prasad Verma & Ors. Vs. State of Bihar & Anr., to distinguish between mere breach of contract and cheating. It concluded that the complaint was purely a civil dispute without any element of criminality. 4. Jurisdictional Issues: The court scrutinized the jurisdictional basis of the complaints filed by Respondent No. 2. It noted that the initial complaint in Delhi mentioned that all transactions took place in Delhi, thereby establishing jurisdiction there. However, the subsequent complaint in Kolkata mentioned the regional office to create jurisdiction in Kolkata. The court found this to be a deliberate attempt to harass the appellants by filing complaints in different jurisdictions based on the same cause of action. Conclusion: The Supreme Court set aside the High Court's order and quashed the FIR No. 168 dated 28.03.2013 and the subsequent criminal proceedings in Kolkata. The court held that the complaints were an abuse of the process of law, aimed at harassing the appellants, and did not disclose any criminal offense. The appeal was allowed, and the proceedings were quashed.
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