WPCR Nos. 1181, 1360, 2916 of 2011 and Cri MP No. 764 of 2010. Case: Venkata Sarveasam Sastry Tejomurty Vs State of Chhattisgarh. Chhattisgarh High Court
| Case Number | WPCR Nos. 1181, 1360, 2916 of 2011 and Cri MP No. 764 of 2010 |
| Counsel | For Petitioner: V. G. Tamaskar, Simran Mehta, Rohit Ranjan, Prateek Sharma, Vinay Mohan Gupta, Advs. and For Respondents: Adhiraj Surana, Dy. Govt. Advocate, Anil Khare, Sr. Advocate, Rakesh Makhija, Satish Agrawal, Ankit Singhal, Advs. |
| Judges | Prashant Kumar Mishra, J. |
| Issue | Indian Penal Code (45 of 1860) - Sections 406, 420; Criminal Procedure Code (2 of 1974) - Section 482 |
| Citation | 2015 CriLJ 4564 |
| Judgement Date | May 01, 2015 |
| Court | Chhattisgarh High Court |
Judgment:
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All these petitions have been heard analogously, as they arise out of First Information Report (FIR)/crime No. 254/2010 for offences under Sections 406 and 420 read with Section 34 of the Indian Penal Code (for short 'the IPC') at Police Station Chakradhar Nagar, District Raigarh. During pendency of these petitions, the Police has filed the charge-cheet on 15-12-2014 for offence under Sections 406, 420, 467, 468, 471 and 120-B of the IPC.
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In WP (Cri.) Nos. 1360 and 1181 of 2011, the accused/petitioners have prayed for quashment of the said FIR and all the proceedings emanating therefrom including the investigation and warrants; whereas in W.P. (Cri.) No. 2916/2011 the accused/petitioner has sought for quashment of the entire proceedings drawn by the respondent in its file in the said crime number and in Cri.M.P. No. 764/2010 the accused/petitioners have prayed for quashment of the FIR. Since all the petitioners are accused in the said common crime number/FIR, the petitions are being disposed of by this common order.
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The subject FIR was registered on 28-7-2010 for offences under Sections 406 and 420 read with Section 34 of the IPC naming the following six accused persons:-
* Sureshchandra Goyal, B-45, Maharani Bagh, New Delhi (Petitioner No. 1 in Cri. M.P. No. 764/2010).
* R. C. Venkata Sarvesam Sastry Tejomurty, 2-23122119, Durgabai Deshmukh Colony. Bagh Amarpot, Hyderabad (Petitioner in W.P. (Cri) No. 1181/2011).
* Gulshan Kumar Balaya, 960 Sector-4, Arban Estate, Gurgaon (Haryana) (Petitioner No. 2 in Cri. M.P. No. 764/2010).
* Prakash Agarwal, 5, Raja Santosh Road, Alipore, Kolkata (Petitioner in Cri. W.P. (Cri) No. 1360/2011).
* M. J. Pandya, 702, 7th Floor, Little Star, Ramkrishna Santkunj, West Mumbai.
* Ved Prakash Gupta, 43, Gopal Ram Nagar Extension Delhi (Petitioner No. 3 in Cri. M.P. No. 764/2010, but later on deleted from the array of cause title on 26-11-2010).
S. No. i is the Chairman and S. Nos. ii to vi are the Directors of Goyal MG Gases Pvt. Lte. (for short 'MG Gases').
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In the FIR, the Law Officer of the complainant Ind Synergy Limited (for short 'Ind Synergy'), has alleged that the Chairman and Directors of MG Cases entered into a written agreement with the complainant company for installation of Air Separation Unit (for short 'ASU') for supply of oxygen and nitrogen gases and against the terms of the contract fraudulently obtained payment of Rs. 78.00 lacs and committed breach of trust. Under the terms of agreement, MG Gases was to erect the ASU plant by making available the drawing and design to Ind Synergy. The accused persons were provided 6400 square meter of land and also made available all other facilities. As per clause 9 of the agreement, the accused persons were liable to commence supply of gases within six months from the completion of civil work whereas under clause 10, time was the essence of the contract. The accused persons mala fidely and to avoid the liability of supply of gases raised the plea that civil work is not completed, and as such, they failed to supply gases. One of the necessary machinery of the ASU plant, the cold box was brought by the accused persons in the month of December, 2009; and was parked in a trailer at village Loing, District Raigarh; and was brought to the plant premises in April, 2010. The delay was deliberate on the part of the accused persons on the pretext that civil work is not complete. On inspection of the machinery, the cold box was found to be 60 years old and the complainant company got opinion that the cold box has been rejected by some industrial unit in the Burnpur district of West Bengal. The accused persons, thus, committed fraud with an intention to cheat the complainant knowing fully well that the cold box was not capable of producing gas.
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According to the FIR, the accused persons falsely and with bad intention assured the complainant company that they are capable of erecting ASU to produce gases; made the complainant company to believe them and execute an agreement. On 30-5-2008 itself, the agreement was executed by making false promise and cheating. The agreement was for 15 years, wherein the complainant company was required to furnish interest free, returnable security deposit of Rs. 78,00 lacs to MG Gases. The complainant was to furnish the security deposit in two installments, 10% at the time of agreement and the remaining 90% within 30 days of agreement. Accordingly, Ind Synergy paid Rs. 7,80,000/- on 3-6-2008 and the remaining amount of Rs. 70,20,000/- on 17-7-2008.
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The FIR further states that the contract specifically mentions the duties and obligations of the accused persons, however, they failed to supply gases in terms of agreement and at the same time started presenting the cheques for encashment handed over by the complainant company to the accused persons. According to the complainant, the accused persons have committed cheating and fraud and tried to recover the amount under the cheques without supplying gases, therefore, the complainant company had to instruct 'stop payment' to its banker. The accused persons are sending notice for dishonour of cheque, which is illegal because, they themselves are responsible for not supplying the gases and the complainant company was justified in stopping the payment of the amount under the cheques. Thus, the accused persons received payment of Rs. 78.00 lacs; did not complete the work of erection of ASU Plant and sent junk cold box unit, which was about 50 years old, which shows the fraudulent intention to cheat the complainant causing them loss. The accused persons entered into the agreement knowing well that it does not have the capacity and expertise of erecting ASU unit.
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These petitions were submitted after registration of the FIR and the investigation continued for about 4 years, as the charge-sheet could be filed only on 15-12-2014/31-1-2015.
Rival contentions:
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Learned counsel appearing for the respective petitioners would submit that:-
* Even if the FIR and the material available in the charge-sheet is taken as it is, no offence is made out against the accused persons;
* The dispute between the parties is of civil nature and there is no element of any culpable criminal act;
* The agreement dated 30-5-2008 executed between Ind Synergy and MG Gases was for supply of oxygen and nitrogen gases to Ind Synergy by setting up of a 70 Tonnes Per Day (TPA) ASU on Build Own and Operate Basis (BOO Basis) and as per Clause 25 of the contract, the production facility shall at all times remains the property of the seller, removable by the seller within 12 months after expiry of the contract period, as provided in Clause 4 of the contract. Thus, the contract was not for supply of ASU but it was for supply of gases;
* Delay in installation and erection of ASU was on account of non-completion of civil work by Ind Synergy and providing the clear land because, a high power transmission line was going just above the area earmarked for location of the plant;
* Ind Synergy was to give interest free, returnable security deposit of Rs. 78.00 lacs to MG Gases against the bank guarantee of the same amount by MG Gases. Bank guarantee was furnished by MG Gases to Ind Synergy on 26-6-2008, issued by the State Bank of India, New Delhi, and, thereafter, Ind Synergy furnished the balance amount of Rs. 70,20,000/- on 17-7-2008; both the parties mutually accepted the schedule for completion of civil works in their meeting dated 8-8-2008, wherein Ind Synergy agree to get the High Tension (HT) line shifted. Ind Synergy made first application for shifting of HT line to the Chhattisgarh State Power Distribution Company Limited (for short 'the CSPDCL') on 10-5-2010 i.e. after the delay of almost 2 years and the documents sought for by the SCPDCL vide its communication dated 17-5-2010 and 25-10-2010 was also not complied with by Ind Synergy;
* The contract provided for and permitted supply of gases through an used ASU, therefore, MG Gases dismantled and shifted its existing ASU, which was operational at SAIL's (Steel Authority of India Limited) Burnpur Plant (West Bengal). The fact that the unit was operational is provided by the daily production report of SAIL Burnpur with gate pass of cold box dated 17-7-2009; the production facility could not be commenced on account of failure of Ind Synergy to fulfill its obligation under the contract and the FIR has been filed to avoid payment of fixed facility charges in terms of clause 12.4 of the contract and also to avoid criminal action on account of dishonour of cheques handed over by Ind Synergy is MG Gases;
* Allegations in the FIR are contrary to the terms of the contract inasmuch as the interest free, returnable security deposit has been referred in the FIR as advance and further it mentions that the bank guarantee was not furnished by MG Gases, which is untrue. The FIR also alleges breach of contract and the charge-sheet relies on report about the cold box obtained on 5-3-2014, whereas the cold box is lying in the premises of Ind Synergy since December, 2009;
* The FIR and the charge-sheet uses the expression like cheating, breach of trust, dishonest intention, etc. merely to convert the civil dispute into a criminal case;
* The cold box for which an adverse report has been submitted in the charge-sheet was in workable condition till July, 2009 when it was taken out in an operational condition from SAIL. Burpur (West Bengal) and the stage of erection and deciding the efficiency of the ASU at the site of Ind Synergy never occasioned, therefore, the test report conducted after 5 years of the same lying open in the premises of Ind Synergy would not by any stretch of imagination constitute dishonest intention from the beginning. In any case, ASU is the property of MG Gases and not that of Ind Synergy;
* In absence of the company MG Gases being arrayed or charge-sheeted as accused, there is no vicarious liability of the...
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