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2022 (9) TMI 1663 - HC - Indian LawsSeeking to invoke inherent power of this Court under Section 482 of the Code of Criminal Procedure 1973 (Cr.P.C.) for quashing FIR - whether the material available on record demonstrates at least prima facie that the criminal proceedings initiated against the applicant in the form of registration of FIR for offence under Section 420 of the IPC deserve to be continued or that such proceedings deserve to be terminated at this stage itself? - HELD THAT - The parameters for exercise of inherent power of this Court under Section 482 of the Cr.P.C. are by now well settled and elaborated upon in a series of judgments of the Hon ble Supreme Court starting from State of Haryana vs. Bhajanlal 1990 (11) TMI 386 - SUPREME COURT . The Hon ble Supreme Court has also deliberated upon the tendency of giving colour of criminality to purely commercial and civil disputes for the reason that invoking civil remedies leads to a long wait for the aggrieved person to get appropriate relief. In the case of M/s.Indian Oil Corporation vs. NEPC India Ltd. and others 2006 (7) TMI 575 - SUPREME COURT in this context the Hon ble Supreme Court held 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 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. As per the allegations made by the non-applicant No. 2 not only did the applicant induce him into entering into a contract for sale of coal but when huge outstanding amount became due he further induced the non- applicant No. 2 to enter into the aforesaid agreement to discharge the liability specifying the dates when amounts would be repaid in installments. The non-applicant No. 2 has alleged that only Rs. 5, 00, 000/- were paid and the entire balance of Rs. 75, 00, 000/- which was to be paid in 05 equal installments of Rs. 15, 00, 000/- was not paid by the applicant. Merely because the same set of facts alleged by the non-applicant No. 2 could also give rise to civil proceedings against the applicant ought not to be a factor held against the non-applicant No. 2 or in favour of the applicant while considering the present application. It is in this context that the Supreme Court in the case of Pratibha Rani vs. Suraj Kumar 1985 (3) TMI 60 - SUPREME COURT has observed that it is anathema to suppose that when a civil remedy is available criminal prosecution is completely barred. Conclusion - In the facts of the present case it could not be said that the non-applicant No. 2 caused the FIR to be registered only with a view to bring about pressure on the applicant as an arm twisting tactic for recovery of the amounts due from the applicant. It is found that prima facie the ingredients of the offence defined under Section 415 of the IPC and punishable under Section 420 thereof can be said to be made out and the criminal proceedings do not deserve to be nipped in the bud. No case is made out by the applicant to invoke our inherent jurisdiction under Section 482 of the Cr.P.C. in order to allow the present application. The application is dismissed.
ISSUES PRESENTED and CONSIDERED
The primary issue considered in this judgment is whether the material on record demonstrates a prima facie case for the continuation of criminal proceedings against the applicant under Section 420 of the Indian Penal Code (IPC) for cheating, or if such proceedings should be quashed under the inherent powers of the Court as per Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.). ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The legal framework involves Section 420 of the IPC, which pertains to the offense of cheating, and Section 482 of the Cr.P.C., which provides the High Court with inherent powers to prevent abuse of process or to secure the ends of justice. The Court refers to precedents including State of Haryana vs. Bhajanlal, Mitesh Kumar J. Shah vs. State of Karnataka, and others, which discuss the misuse of criminal proceedings in civil disputes. Court's Interpretation and Reasoning The Court examines whether the allegations made by the non-applicant No. 2, if taken at face value, fulfill the ingredients of the offense of cheating as defined under Section 415 of the IPC. The Court considers the tendency to convert civil disputes into criminal cases, noting that criminal proceedings should not be used as a shortcut for civil remedies. Key Evidence and Findings The evidence includes the agreement between the parties, the initial payments made by the applicant, and the subsequent failure to pay the remaining amount. The non-applicant No. 2's complaint and the subsequent agreement to discharge the liability are crucial in demonstrating the alleged dishonest inducement by the applicant. Application of Law to Facts The Court applies the legal principles to the facts by assessing whether the applicant's actions, as alleged, demonstrate fraudulent or dishonest inducement. The Court finds that the material on record, including the agreement and the applicant's financial conduct, prima facie indicates the ingredients of cheating. Treatment of Competing Arguments The applicant argues that the dispute is purely civil and that the FIR is an arm-twisting tactic. The non-applicant No. 2 contends that the circumstances justify both civil and criminal proceedings. The Court acknowledges the possibility of concurrent civil and criminal proceedings and emphasizes that the existence of a civil remedy does not bar criminal prosecution. Conclusions The Court concludes that the allegations, if accepted, prima facie make out the offense of cheating, and thus the criminal proceedings should not be quashed at this stage. The application of the applicant to invoke the inherent jurisdiction of the Court under Section 482 of the Cr.P.C. is dismissed. SIGNIFICANT HOLDINGS The Court holds that criminal proceedings cannot be used as a shortcut for civil remedies. It emphasizes the need for caution in exercising jurisdiction under Section 482 of the Cr.P.C. The Court states: "If the essential ingredients of the offense of cheating are not even prima facie made out, on the basis of the facts as claimed by the aggrieved party, criminal proceedings cannot be continued." The Court establishes the principle that the existence of a civil remedy does not preclude criminal prosecution, as noted in Pratibha Rani vs. Suraj Kumar. It reiterates that the allegations, as presented, prima facie demonstrate the offense of cheating, warranting the continuation of criminal proceedings. The final determination is that the application to quash the FIR is dismissed, allowing the criminal proceedings to continue.
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