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Ramesh Kumar Verma Vs. State of Bihar and ors. - Court Judgment

LegalCrystal Citation
Subject;Criminal
CourtPatna High Court
Decided On
Case NumberCriminal Misc. Case No. 6424 of 1993 and Cri. Misc. No. 1031 of 1994
Judge
ActsIndian Penal Code (IPC), 1860 - Sections 120B, 406, 407, 409, 420, 424, 467 and 468; Code of Criminal Procedure (CrPC) , 1974 - Sections 192 and 482; Constitution of India - Article 226
AppellantRamesh Kumar Verma
RespondentState of Bihar and ors.
Appellant AdvocateNavin Sinha, Chandra Bhushan Verma and Anil Kumar Sinha, Advs.
Respondent AdvocateR.K. Agrawal and Bindhyachal Singh, Advs.
DispositionPetition allowed
Prior history
Ravi Nandan Sahay, J.
1. These two quashing applications arise from two complaint cases, which have more or less common features and are, therefore, being disposed by this common order.
2. Criminal Misc. No. 6424 of 1993 relates to complaint Case No. 73 of 1993. This complaint petition was filed by Opposite Party No. 2 Bal Manohar Jalan, a resident of Patna City having his office at Hira Place, Dak Bungalow Road, Patna. Accused No. 1 in this complaint case is M/s. Verma and Co. having its offi
Excerpt:
.....was made during inquiry, petition for quashing complaint--opposite party delivered some share scripts in friendly accommodation to accused no. 1 duly signed on transfer papers without attestation and unstamped also--petitioner as agent of the firm--opposite party was issued notice to pay margin money--allegation in complaint was about wrongful gain and misappropriation of money by transferring the share--no specific allegation against petitioner--held, the case as a civil dispute--criminal proceedings on complaint quashed under section 482, cr.p.c. - - bihar abhikaran is a partnership firm having office at hira place, patna, with which the complainant has good business relationship. the complainant finally wrote on 31-12-1992 calling upon the petitioner to send the accounts..........mukul verma is accused no. 2. the complainant bal manohar jalan is a businessman. he possessed 500 share scripts carrying face value of rs. 10/- each of m/s. himatsingka seide ltd., bangalore. m/s. bihar abhikaran is a partnership firm having office at hira place, patna, with which the complainant has good business relationship. m/s. verma and co. carry on business of sales and purchase of share scripts in kanpur for and on behalf of such person or persons who engage him for dealing at rates prevailing at the time of purchase during which he makes prompt payment simultaneous with purchase and likewise receives prompt payment for the sale of the share scripts and maintains account for each such person, for whom he makes purchase or sale and subsequently settle account with the person or.....
Judgment:

Ravi Nandan Sahay, J.

1. These two quashing applications arise from two complaint cases, which have more or less common features and are, therefore, being disposed by this common order.

2. Criminal Misc. No. 6424 of 1993 relates to complaint Case No. 73 of 1993. This complaint petition was filed by Opposite Party No. 2 Bal Manohar Jalan, a resident of Patna City having his office at Hira Place, Dak Bungalow Road, Patna. Accused No. 1 in this complaint case is M/s. Verma and Co. having its office at 682, Padam Tower, 14/113, Civil Lines, Kanpur and also an office at 1, S. Verma Road, Patna. This firm is a registered broker of Uttar Pradesh Stock Exchange Association Ltd., Kanpur who has also been made an accused along with others. Petitioner Ramesh Kumar Verma is one of the partners of M/s. Verma & Co. The petitioner has not been made an accused by name, but his son Mukul Verma is accused No. 2. The complainant Bal Manohar Jalan is a businessman. He possessed 500 share scripts carrying face value of Rs. 10/- each of M/s. Himatsingka Seide Ltd., Bangalore. M/s. Bihar Abhikaran is a partnership firm having office at Hira Place, Patna, with which the complainant has good business relationship. M/s. Verma and Co. carry on business of sales and purchase of share scripts in Kanpur for and on behalf of such person or persons who engage him for dealing at rates prevailing at the time of purchase during which he makes prompt payment simultaneous with purchase and likewise receives prompt payment for the sale of the share scripts and maintains account for each such person, for whom he makes purchase or sale and subsequently settle account with the person or persons for whom he makes sales and purchase and for the period till before settlement of account he obtains security to cover cases of shortfalls recoverable from the person or persons, for whom he acts in the deal of purchase or sale of share scripts at the exchange.

3. The case of the complainant is that the accused as stock broker as agent of Bihar Abhikaran had obtained from the complainant certain share scripts by way of friendly accommodation without payment, title in the same remaining with the complainant, made over the same to the agent (accused No. 1) who acted as representative, accused No. 2 in presence of the complainant with his consent on the condition that the share scripts made over to the agent would not be sold till after accounting of M/s. Bihar Abhikaran and accused No. 1.

4. In view of the above agreements the complainant made over the share scripts accompanied by unstamped transfer deeds in bank, without getting attested by any witness, as it was understood that necessary endorsement to sell in favour of accused No. 1 would be made by the complainant after liability of principal, if any found, was not discharged by him.

5. The complainant received a letter dated 1-1-1993 from M/s. Himatsingka, C.Y, C.I. Ltd. intimating receipt of the said share scripts for registration in favour of new purchaser. The complainant addressed a letter to M/s. Himatsingka Seide Ltd. for particulars of the new purchaser and in compliance thereof photostat copies of the share transfer deed was received by the complainant.

6. The complainant alleges that accused No. 1 M/s. Verma & Co. committed breach of trust by passing on the share scripts to Uttar Pradesh Stock Exchange (accused No. 3) after falsifying the document of transfer deed by supplying stamp of Rs. 1100/- and by providing imaginary date namely 16-12-92 purporting to have been made at Kanpur in collusion and conspiracy with accused Nos. 2 to 5 for wrongful gains and the purported transfer in favour of Uttar Pradesh Stock Exchange Association was entirely fraudulent and without title. The title always remained with the complainant to the full knowledge of the accused.

7. On these allegations the complainant filed the complaint before the Chief Judicial Magistrate, Patna for prosecuting the accused persons named in the complaint petition for offences punishable under Sections 409, 420, 467, 468 read with Section 120B of the Indian Penal Code. The Chief Judicial Magistrate transferred the complaint case for enquiry under Section 192, Cr.P.C. to the file of Shri S.K. Shrivastava, Judicial Magistrate. The complainant was examined on solemn affirmation, in reference to which the learned Magistrate directed the complainant to produce his witnesses. In the meantime the petitioner moved this Court for quashing the complaint on the ground that the petition was false and fabricated.

8. According to the petitioner, M/s. Bihar Abhikaran is a partnership firm consisting of family members and the wife of the complainant, Smt. Manju Jalan. The petitioner challenges the jurisdiction of Patna Court to entertain the complaint since no transaction had taken place at Patna. On the contrary all the transactions have taken place at Kanpur, where all the necessary parties reside. The complainant on 28-5-1992 forwarded certain share certificates along with transfer deeds to the petitioner through Opposite Party No. 5, who is also an accused, at Kanpur, to be kept as margin for the transactions being done by the petitioner on behalf of the complainant. The complainant authorised the petitioner to dispose of the same in case of default in payment by the complainant. The complainant handed over the share transfer form duly signed by him as transferor to opposite Party No. 4 who witnessed the same and initialled the address of the petitioner's brother at Patna. It is alleged that the complainant had suffered certain losses for which reason the petitioner prudently wrote to M/s. Bihar Adhikaran on 25-9-92 that the complainant owed a sum of Rs. 1,25,155/- to the petitioner and which may be forwarded at the earliest. The complainant did not respond to the same. Consequently when the complainant did not pay up the petitioner on 15-10-92 he wrote to the complainant to pay up a sum of Rs. 1,13,730/-at the earliest on the closing and settlement of accounts. In terms of the agreement between the parties as contained in complainant's letter dated 28-5-1992 the petitioner was at liberty to dispose of the shares of the complainant so held by the petitioner in margin, accompanied by duly signed transfer deed.

9. It is submitted on behalf of the petitioner that no offence has been committed as the shares have not been transferred and registered in the name of Opposite Party No. 2 and still continued to be the property of the complainant. On the contrary, it is the complainant who has committed the offence of breach of trust and cheating.

10. Facts of complaint case No. 509(C) of 1993, which has given rise to Criminal Misc. 1031 of 1994, was filed by Mahabir Kumar Modi, partner of M/s. Bihar Abhikaran, against the same set of accused. The case in the complaint petition is that the complainant is one of the partners of M/s. Bihar Abhikaran. The petitioner was acting as an agent or broker of the complainant for purchase and sale of shares of different companies. The petitioner was receiving payment from the complainant from time to time and as per promise was rendering accounts of deals, earnings and profit and loss. The petitioner is alleged to have become dishonest since 5-9-1992 and planned to cheat the complainant and misappropriated the complainant's money, committing breach of trust. The accused stopped sending periodical statement of account. The complainant finally wrote on 31-12-1992 calling upon the petitioner to send the accounts as well as the amount outstanding to the credit of the complainant and to return 500 shares of Himatsinghka Seids Ltd. which were lying with the petitioner as margin. The petitioner failed to do so and it is alleged that acting as the broker of the complainant, he misappropriated a sum of Rs. 8,35,000/- between 5-9-92 and 15-3-1993. Thus, the petitioner caused wrongful loss to the complainant by misappropriating his money and caused wrongful gain to himself. The Magistrate found prima facie case, took cognizance against the accused persons and summoned them for trial.

11. The moot question for consideration is whether allegation in the complaint petition discloses purely a Civil disputes or disclosed a valid ground for prosecution of the petitioner. In Superintendent and Remembrancer of Legal Affairs v. Birendra Chandra Chakravarty reported in AIR 1974 SC 290 : 1974 Cri LJ 341 the Supreme Court held that having regard to all the facts and circumstances of the case a dispute of an essentially civil nature had to be decided between the complainant and accused before any question of criminal liability could be satisfactorily adjudicated upon. The facts of that case was that the accused in violation of the understanding set up his own title on one of the several properties, which should have been relinquished or transferred to the complainant.

12. In Trilok Singh v. Satya Deo Tripathi reported in AIR 1979 SC 850: 1980 Cri LJ 822 the financier of a truck seized the truck in the carrier of the hire purchase to pay an instalment. Hon'ble Supreme Court held the dispute raised was purely of civil nature and any criminal proceeding was an abuse of the process of the Court and deserved to be quashed.

13. Shri Vindhyachal Singh, learned counsel for the complainant in his forceful argument has placed strong reliance on State of Haryana v. Bhajanlal in 1992 Supp (1) SCC 335 : 1992 Cri LJ 527. In this case, the Supreme Court held that the High Court was not justified in quashing of the FIR under Article 226 of the Constitution. Power of quashing criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. In my opinion, the facts of Bhajanlal's case was quite different from the facts of the present case.

14. In a recent decision of the Supreme Court in Ashok Chaturvedi v. Shitul H. Chanchani reported in AIR 1998 SC 2796 : 1998 Cri LJ 4091 facts were somewhat akin to the facts of the present case. Case was under Sections 406, 424, 407 and 120B of the I.P.C. in respect of transfer of shares effected by a Public Limited Company. The submission of the learned counsel for the accused was noticed in para 3 of the case, extracted below which will shows the similarity of facts and arguments in support of quashing of the case:-

3. Mr. Ashok Desai the learned Senior Counsel appearing for the appellants submitted that accused Nos. 1 to 9 are Chairman, Directors and Secretary of the Company and no allegation whatsoever having been made against them either in the petition of complaint or in the evidence adduced before the Magistrate, the High Court committed serious error in not quashing the cognizance merely because there is an allegation of forgery and being of the opinion that the same could be substantiated only during trial. Mr. Desai also contended that in a company having share capital of 5 crores of 50 lakh shares of Rs. 10/-each at the point when the alleged transfer of share of the complainant took place, it is unimaginable that the 100 equity shares of the complainant could be transferred against the wishes of the complainant at the connivance of the Director to the company. Mr. Desai also contended that the dispute, if at all any, is a dispute of civil nature and the complainant himself has already filed a claim petition before the Consumer Forum and the criminal proceedings, therefore, cannot be permitted to be continued as that would amount to an abuse of the process of Court. The learned Counsel appearing for the complainant-respondent on the other hand contended that on the materials on record, the High Court was fully justified in coming to the conclusion that a prima facie case has been made out and therefore, it is not a fit case for quashing the order of cognizance in exercise of the inherent jurisdiction of the Court under Section 482 of the Code which has to be exercised sparingly and only when a conclusion is arrived at that non-exercise of the power would ultimately lead to abuse of the process of Court.

15. The Supreme Court quashed the proceeding. Hon'ble Pattanaik, J. speaking for the Court observed:-.We are clearly of the opinion that the necessary ingredients of any of the offence have not been made out so far as the appellants are concerned. The petition of complaint is a vague one and excepting the bald allegation that the shares of the complainant have been transferred on the forged signatures, nothing further has been stated and there is not an iota of material to indicate how all or any of those appellants are involved in the so-called allegation of forgery. The statement of the complainant on oath as well as his witnesses do not improve the position in any manner and therefore, in our considered opinion even if the allegations made in the complaint petition and the statement of complainant and his witnesses are taken on their face value, the offence under Sections 406, 420, 467, 468 and 120B of the Indian Penal Code cannot be said to have been made out. This being the position the impugned order of the Magistrate taking cognizance of the offence dated 5-2-1996 so far as it relates the appellants are concerned cannot be sustained and the High Court also committed error in not invoking its power under Section 482 of the Code. In the aforesaid premises, the impugned order of the High Court as well as the order of the Magistrate dated 5-2-1996 taking cognizance of the offence as against the appellants stand quashed.

16. In the instant case also there is no allegation against petitioner Ramesh Kumar Verma and the case if at all is a civil dispute. I have come to the conclusion that it is a fit case, where the criminal proceeding be quashed in exercise of powers conferred under Section 482 of the Code of Cr.P.C. There being no specific allegation against the petitioner who is not named. The proceeding is quashed. The application is accordingly allowed.


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