B.N. Singh ""Neelam"", J.@mdashThis application u/s 482 of the Code of Criminal Procedure (for short the Code) is so filed by the petitioners
challenging the order dated 6.1.98 so passed in Complaint Case No. 1388/97 preferred by one Raghunath Prasad, figuring here as Opp. Party
No. 2, in which the learned Court below, as detailed in the impugned order, a copy of which is filed, finding prime facie material has taken
cognizance of the offence against the accused-petitioners under Sections 406 and 420/120B of the Indian Penal Code issuing summons against the
petitioners under the provisions of Section 204 of the Code.
2. By going through the complaint, petition, a copy of which is filed marked as Annexure-1, in a nut shell the allegations so put against the present
petitioners are that the accused-persons are concerned with M/s. Gujarat Fertilizers and Chemicals Ltd., in short hereinafter to be referred as
GSFC and Opp. Party No. 2 was so appointed as C & S (consignment Stockiest) as to get supply of their products i.e. urea in brand name
Sardar"" and to that effect an agreement was also so entered into between the parties on 21.2.95, a copy of which is also available for perusal but
the accused-persons could not supply the target of the consignment which would have been the source of income for the complainant to gain
commission out of the said allotment and supply of the product agreed upon to be despatched to the appointed C & F. i.e., the complainant. It
was at one occasion some supply is said to have been made but after long persuasion when attempt was so made by the complainant failed to have
another consignment and in that course, as per the complainant even the establishment of C&F was so utilized by way of approaching the office of
the complainant by the GSFC as a result of which the complainant claimed to have been cheated and there was criminal breach of trust even on the
part of the concern GSFC and it was so done because of the accused-persons entering into criminal conspiracy, the conduct of the accused-
persons thus as claimed led the complainant as to incur monetary loss to a great extent as detailed in the complaint-petition and hence, the prayer
was as to take legal action against them, i.e., the accused-persons so detailed in the complaint-petition for their cheating the complainant.
3. Learned Counsel for the petitioners/accused has submitted that before the learned Court below there was no prime facie material as to take
cognizance of the offence since by the plain reading of the complaint-petition, it will transpire that no offence was so matte out with regard to the
present petitioners-accused m any way cheating the complainant or entering into any criminal conspiracy and there was also nothing as to
misappropriate the property so entrusted. Since no offence was so made out whatsoever it is pointed out that the learned Court below has thus
erred in issuing summons under the provisions Section 204 of the Code. The second limb of argument of learned Counsel for the
petitioners/accused is that while passing the order under challenge, even the learned Court below had not applied its judicious mind, furthermore
any breach of contract can on no account be said to be a breach of trust and it is also pointed out that the learned Court below had no jurisdiction
as. to take cognizance of the offence in the background of the Clause 30 of the agreement so entered into between the parties. Reference is also
made to Clause (sic) 10, 17 and 19 of the said agreement and in that background it is submitted that for any breach of contract which was so
entered into in the shape of deed of agreement so prepared, filing of the criminal proceedings was not justified and that too in the background of
the specification for the agreement so indicated that the matter, would go to arbitrator in case of any dispute arising and finally to be adjudicated
upon by the competent Court in the city of Baroda and by no other Courts.
4. By taking all other grounds as good grounds for interference with the order under challenge, learned Counsel for the petitioners has also banked
upon some of the reported cases. Firstly by referring to a reported case R.S. Raghunath Vs. State of Karnataka and another, it is submitted that
principles are laid down relating to the circumstances under with this Court while exercising its inherent powers so contained u/s 482 of the Code
can interfere with and u/s 204 of the Code, summonses are being issued arbitrarily and in the present case no offence was so made out against the
petitioners, the order under challenge is fit to be set aside. By referring to another reported case Smt. Nagawwa Vs. Veeranna Shivalingappa
Konjalgi and Others, . it is submitted that the apex Court has held that if the order under challenge is capricious, arbitrary, suffering from legal
defects and patently absurd that is liable to be set aside by exercising the powers so contained u/s 482 of the Code as not to allow the abuse of the
process of the Court and as to avoid injustice. By referring to another reported case 1972 BUR 40 Hah Narain Sah v. Tirbeni Lal it is further
pointed out that there is distinction between the breach of contract and cheating and in the instant case if the goods, taking the worst view, are not
supplied in time and to the extent of quantity as expected or agreed upon, the act on the part of one of the partners does not constitute an offence
of cheating because of the concept of deception is wanting and the learned Court below in such circumstance was excepted as to take legal notice
of these situations instead arbitrarily passing erroneous order u/s 204 of the Code.
5. Learned Counsel representing the opposite party No. 2, the complainant, has also made a lengthy argument supporting the order under
challenge claimed to have been passed in accordance with law in the background of the facts and circumstance of the present case. On the same
line, the argument is advanced on behalf of the State being represented by learned Addl. P.P. impleaded as Opp. Party No. 1 in the present
application. It has been submitted on behalf of other side that before the learned Court below, there was prime facie material as to proceed with
and in that light after taking cognizance of the offence, summonses have been issued to M/s GSFC and its officers responsible and since there is no
merit in this application so filed, the prayer for exercising the inherent powers so contained u/s 482 of the Code by the this Court thus cannot be
invoked. It is also pointed out that a complaint cannot be quashed merely on the ground that Civil remedy is available and in the matter of exercise
of High Court''s inherent powers u/s 482 of the Code, the only requirement is to see whether the continuance of the proceedings would be a total
abuse of the process of the Court. whether or not the allegations in the complaint are otherwise correct has to be decided on the basis of the
evidence to be led at the trial in the complaint case and simply because there is remedy provided for breach of contract in the Civil Courts that
does not in itself clothe the Court to come to a conclusion that Civil remedy is the only remedy available. By referring to Clause 30 of the
agreement in question relating to the matter to referred to the arbitrator, it is pointed out on behalf of the complainant-opposite party No. 2 that the
arbitrator, on no account can take notice of the offender and cannot punish the offender for. which the proper Court is the criminal Court and a
criminal prosecution in such circumstance cannot be said to be a bar when one of the parties though entering into the written agreement had the
intention from the very beginning as to cheat his partner causing wrongful loss to the said partner. In support of his this contention on behalf of
Opp. Party No. 2 reported case so cited is AIR 2000 SC 1869, 1st suppl. Medchi Chemicals and Pharma Pvt. Ltd. v. Biological E. Ltd. and
particularly its paragraph 5 is so referred which is so quoted below for ready reference:
It is on the basis of the agreement as noticed above and failure to comply therewith, it is stated that the petitioner herein has lost a substantial
amount of money and to the extent of about one crore and the sufferance of loss has been by reason of specific assurance and representation
which obviously turned out to be false. Misrepresentation on the part of the respondent-accused persons to the complainant, has been the major
grievance and a definite and specific case has been made out that such a misrepresentation was intentionally effected since the accused-persons
were in the know of things that in the event the supplies are not effected, as per the agreement, the complainant is likely to suffer a wrongful loss
which as the complainant proceeds, in the interest of the transaction between the parties, the accused-persons were bound to protect. It is on this
score that relevant extracts of the complaint ought to be noticed at this juncture.
On the same point, it is further pointed out that once cheating is alleged, criminal prosecution cannot be thwarted merely because Civil proceedings
are also maintainable. Existence of an arbitration Clause in the contract is not a sufficient ground for quashing the complaint against the supply
company alleging cheating if prima facie material is so found particularly in the light that the arbitrator cannot be said to be competent to adjudge
the criminal offence so alleged. In support of this contention, learned Counsel for Opp. Party No. 2 also claimed himself to be fortified by another
reported case Trisuns Chemical Industry Vs. Rajesh Agarwal and others, . On behalf of Opp. Party No. 2 some of the other reported cased are
also so cited showing as to under what circumstance the order so passed in a complaint case can be quashed. Distinguishing in the background of
the facts and circumstance that in the instant case, the order under challenge on no account can be said to be arbitrary and it is also cannot be
claimed that the continuance of such proceedings in any way would be nothing but the abuse of the process of the Court causing any injustice, in
this connection reported cases so cited are R.P. Kapur Vs. The State of Punjab, U.P. Pollution Control Board v. Mohan Meakin Ltd. and Rajesh
Bajaj Vs. State NCT of Delhi and Others, Lastly, it is submitted by the learned Counsel appearing for Opp. Party No. 2 that since this application
so filed has no leg to stand, the same rather be dismissed.
6. After hearing learned Counsel for the petitioners, learned Counsel for Opp. Party No. 2 with that of learned Addl. P.P. representing the State, I
have carefully gone through the contents of the complaint-petition with that of the contents of the agreement so entered into between the parties,
keeping in mind carefully the facts and circumstances of this case particularly two of the reported cases so cited and findings so arrived at by the
apex Court in Trisuns Chemical Industry Vs. Rajesh Agarwal and others, with that of AIR 2000 SC 869 (supra) are carefully looked into. In
almost the similar situation, the apex Court rather has held that in such circumstance, the jurisdiction of arbitrator, if so indicated in one of the
Clauses of the agreement so entered into cannot be the basis for the criminal Court as not to interfere if the allegation of cheating or criminal breach
of trust by entering into criminal conspiracy causing monetary loss to the complainant and wrongful gain to the other side and in such circumstance
when a complaint is filled by the person aggrieved and before the Court concerned there is prima facie material as to proceed with and issue
summons under the provision of Section 204 of the Code and that rather be not interfered by quashing the whole proceedings when summons u/s
204 of the Code got issued. Needless to say that a caution is so put on the Court concerned while exercising inherent powers u/s 482 of the Code
as to quash any criminal proceeding after due care and caution and sparingly and in the instant case keeping in mind the facts and circumstances
under which the complaint case was so filed in my considered opinion, agreeing with the argument so advanced by the learned Counsel for Opp.
Party No. 2 finding strength in such argument so advanced being supported by reported cases so cited, it does not at all seem to be a fit case in
which order under challenge required interference.
7. Consequently, finding thus no merit in this application so filed, the same stands dismissed. During the pendency of hearing of this matter, the
order so , passed by this Court staying further proceedings also stands vacated.