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2018 (4) TMI 485 - HC - Indian LawsValidity of FIR - main contention of the Petitioners is that, this being a transaction which is purely civil in nature, the Respondent No.2 could not have lodged the FIR. In the FIR, there is no mention of any of the pending proceedings. Held that - the present FIR does not pertain to a purely civil transaction. The false representation and inducement is very clear from the email sent to the Respondent No.2 for placing the purchase order for trial. Though it was clearly mentioned in the email that the Petitioner No.1 was the Managing Director of M/s. Sharp Industries Ltd., the Petitioner No.1 had already resigned from the Directorship of the said company. Placing the first purchase order on the trial basis was clearly a ploy to induce the Respondent No.2 s firm to enter into bigger transaction. The subsequent conduct of the Petitioners shows that they had no intention of making the full payment. Thus, the inducement is apparent right from the inception of the business relationship between the parties. The email contained false information and therefore, the offence of forgery with cheating is also made out. The subsequent conduct of surreptitiously changing the office and avoiding to meet the Respondent No.2, shows the dishonest intention on the part of the Petitioners. In any case, it cannot be said that no cognizable offence is made out from the allegations in the FIR. Right from the inception, the Petitioners had induced the Respondent No.2 in parting with huge quantity of Chromo Paper. The Petitioners conduct right from the beginning till their default in the payment and till executing the Consent Terms shows that they never intended to make the full payment. Looking at the allegations in the FIR, we are unable to hold that no cognizable offence is made out against the Petitioners. Petition dismissed.
Issues Involved:
1. Quashing of FIR under various sections of IPC. 2. Nature of the transaction – civil vs. criminal. 3. Allegations of misrepresentation and inducement. 4. Pending litigation under Section 138 of the NI Act. 5. Consent Terms and the conduct of the Petitioners. 6. Jurisdiction and powers of the court under Section 482 of Cr.P.C. and Article 226 of the Constitution of India. Issue-wise Detailed Analysis: 1. Quashing of FIR under various sections of IPC: The petitioners sought to quash the FIR registered under Sections 406, 409, 418, 420, 465, 467, 468, 471, and 474 read with Section 120B of the IPC. The FIR was initially registered with Marine Drive Police Station and later transferred to the Economic Offences Wing (EOW). The court examined whether the allegations in the FIR disclosed cognizable offenses and concluded that they did, thus denying the petition to quash the FIR. 2. Nature of the transaction – civil vs. criminal: The petitioners argued that the transaction was purely civil in nature, involving a sale of Chromo Paper worth ?17,01,73,377, with an outstanding amount of ?5,54,69,069. They contended that the FIR was filed as a pressure tactic for recovery. The court, however, held that the false representation and inducement by the petitioners indicated a criminal intention from the inception of the business relationship, making it a criminal matter. 3. Allegations of misrepresentation and inducement: The FIR alleged that the petitioners misrepresented their positions and induced the respondent to supply Chromo Paper by issuing cheques that were subsequently dishonored. The court noted that the petitioners had falsely represented the directorship status of Petitioner No.1 and placed orders with no intention of making full payment, thus constituting cheating and forgery. 4. Pending litigation under Section 138 of the NI Act: The petitioners argued that the pending complaints under Section 138 of the NI Act for dishonored cheques should preclude the filing of the FIR under IPC sections. The court clarified that the existence of proceedings under the NI Act does not bar the filing of an FIR for cognizable offenses under the IPC. The court cited precedents to support the view that both remedies could be pursued concurrently. 5. Consent Terms and the conduct of the Petitioners: The court considered the Consent Terms dated 07/03/2017, where the petitioners had agreed to settle the outstanding disputes. The petitioners' failure to honor the Consent Terms and their subsequent conduct, including obtaining bail based on these terms, demonstrated their dishonest intentions. The court found that this conduct further substantiated the allegations of cheating and forgery. 6. Jurisdiction and powers of the court under Section 482 of Cr.P.C. and Article 226 of the Constitution of India: The court emphasized that its powers under Section 482 of Cr.P.C. and Article 226 of the Constitution should be exercised sparingly and only in cases where no cognizable offense is made out. Given the facts and allegations in the FIR, the court held that it was not a fit case to quash the FIR, as the petitioners' actions indicated a clear intention to deceive and cheat the respondent. Conclusion: The court dismissed the petition to quash the FIR, finding that the allegations in the FIR disclosed cognizable offenses and that the petitioners' conduct indicated a dishonest intention from the beginning of the transaction. The court extended the ad-interim relief for four weeks to allow the petitioners to seek further remedies.
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