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2022 (3) TMI 1578 - HC - Indian LawsRecovery of dues - civil dispute - Cheating - Non-payment of amount borrowed from the defacto complainant to settle the financial discrepancies with sub-contractors at Kuwait - the defacto complainant has approached the concerned civil court and filed a suit for recovery of the amount and the said suit is pending for consideration - HELD THAT - In an identical matter fell for consideration before the Apex Court reported in between Prof. R.K. Vijayasarathy and another vs. Sudha Seetharam and another 2019 (2) TMI 2064 - SUPREME COURT where in also the defacto complainant has also instituted a civil suit for recovery of amounts. Thereafter they have filed complaint against the accused under section 405, 415 and 420 IPC alleging that the accused colluded to siphon away said money from the defacto complainant and the complaint was filed after long lapse of time. In the said matter, the court has observed An attempt has been made by the first respondent to cloak a civil dispute with a criminal nature despite the absence of the ingredients necessary to constitute a criminal offence. Thecomplaint filed by the first respondent against the appellants constitutes an abuse of process of court and is liable to be quashed. A perusal of the record and on hearing the parties, no doubt the petitioners have filed a suit and complaint made by the defacto complainant no specific averments with regard to cheating. There are no specific proof to support the said allegations made in the complaint. The respondents in its complaint itself clearly states that basing onsome information, the petitioners have not paid the amounts to the sub-contractors and utilized for the benefit of the business. That itself shows that the allegations are made bold and baseless. As per the ratio decided by the Hon'ble Apex Court reported in Sharad Kumar Sanghi vs. Sangita Rane 2015 (2) TMI 1117 - SUPREME COURT it is clear that once a transaction is made with the company, the company being a legal entity, unless and until the company is made as co-accused, the complaint is not maintainable. On this ground alone, the complaint required to be quashed. On perusal of the record and considering the facts of the case, it is purely a civil dispute and there are no allegations or supporting material to substantiate that the petitioners have cheated the defacto complainant. The criminal petition is allowed.
Issues Involved:
1. Whether the F.I.R. No. 374/2020 should be quashed under Section 482 Cr.P.C. 2. Whether the complaint filed under Section 420 IPC is maintainable without making the company a party. 3. Whether the complaint constitutes an abuse of the process of law given the pending civil suit. 4. Whether the allegations in the complaint substantiate the ingredients of cheating under Section 415 IPC. Detailed Analysis: Issue 1: Quashing of F.I.R. No. 374/2020 under Section 482 Cr.P.C. The petitioners sought to quash F.I.R. No. 374/2020 registered under Section 420 IPC. They argued that the amounts were transferred to the company's account, but the company was not made a party in the complaint, which contradicts the ratio decided by the Hon'ble Apex Court. Additionally, the defacto complainant had already filed a civil suit for recovery of the amounts, making the present complaint an abuse of the process of law. Issue 2: Maintainability of Complaint Without Making the Company a Party The petitioners contended that the complaint was filed against them as individuals without including the company, Newton Engineering & Chemicals Ltd., as a party. The court referred to the Supreme Court judgment in Sharad Kumar Sanghi vs. Sangita Rane, which held that allegations against a company must include the company as a party for the complaint to be maintainable. The court found that the allegations were primarily against the company, and without the company being a party, the complaint was not maintainable. Issue 3: Abuse of Process of Law Given the Pending Civil Suit The court noted that the defacto complainant had already filed a civil suit for the recovery of the amounts, which was pending. The court cited the Supreme Court judgment in Prof. R.K. Vijayasarathy vs. Sudha Seetharam, which emphasized that the continuation of criminal proceedings in a matter essentially of a civil nature constitutes an abuse of the process of court. The court found that the complaint was filed three years after the civil suit, indicating an attempt to cloak a civil dispute with a criminal nature. Issue 4: Allegations Substantiating Cheating Under Section 415 IPC The court examined the allegations in the F.I.R., which stated that the petitioners borrowed money to settle financial discrepancies with sub-contractors in Kuwait but did not repay the amounts as promised. The court found that the complaint lacked specific averments and proof of cheating. The allegations were based on information that the petitioners did not pay the sub-contractors but used the money for their business, which was deemed bold and baseless. The court concluded that the allegations did not substantiate the ingredients of cheating under Section 415 IPC. Conclusion: The court allowed the criminal petition and quashed F.I.R. No. 374/2020 dated 12.8.2020 registered under Section 420 IPC. The court held that the complaint was not maintainable without making the company a party and constituted an abuse of the process of law given the pending civil suit. The court also found that the allegations did not substantiate the ingredients of cheating under Section 415 IPC. Pending miscellaneous petitions, if any, were also closed.
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