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PEC LIMITED v. The State of Tamil Nadu - Crl.O.P.(MD).No.6556 of 2006 [2007] RD-TN 1184 (29 March 2007)


DATED : 29/03/2007



Crl.O.P.(MD).No.6556 of 2006


A Government of India Enterprise,


15, Barakhamba Road,

New Delhi - 110 001,

represented by its

Deputy Marketing Manager,

V.Saravana Bavan. ... Petitioner


1.The State of Tamil Nadu,

represented by

The Inspector of Police,

Marthandam Police Station,

Kanyakumari District.

2.The Inspector of Police,

District Crime Branch,


Kanyakumari District.

3.The Superintendent of Police,


Kanyakumari District.

4.K.Neelakanthan Nair

5.K.Ramachandran Pillai


7.Quality Management System,


Alummoodu Post,

Kollam-691 577. ... Respondents (R4 to R7 were impleaded as per the order of this Court in M.P.MD.No.1 of 2007 dated 29.09.2006.)


Petition filed under Section 482 of the Code of Criminal Procedure, to direct the second respondent to register the F.I.R on the basis of the complaint dated 04.05.2006 lodged by the petitioner Company and to take action as against the accused persons as per law.

For Petitioner : Mr.T.R.Jeyapalam

For Respondents: Mr.L.Murugan

Government Advocate (Crl. Side) for R1 to R3.

Mr.V.Janakiramulu for R4.

Mr.C.Robert Bruce for R5 and R6.


This petition has been filed to direct the second respondent to register the F.I.R on the basis of the complaint dated 04.05.2006 lodged by the petitioner Company and to take action as against the accused persons as per law.

2. The facts giving rise to the filing of this petition would run thus: The petitioner, PEC Limited, (A Government of India Enterprise), lodged a complaint with the first respondent police on 04.05.2006. But, based on that complaint, no F.I.R was registered by the police. Hence, this petition for obtaining a direction to get the F.I.R registered and investigate into the matter.

3. The fourth and fifth respondents are partners of M/s.Universal Foods. The sixth respondent is the owner of the godown at Pazhayakada, Kalkulam Taluk, Kanyakumari District and the seventh respondent is the Stock Surveyor appointed by the petitioner.

4. The nitty-gritty of the complaint of the petitioner dated 04.05.2006 is that the petitioner being the Government of India Enterprise, is doing business in Importing and Exporting various items extending credit facilities to business people for importing and exporting various items; and also helping such business people in complying with all formalities.. The petitioner and the Universal Foods represented by its partners namely R.4 and R.5, entered into an agreement with the petitioner relating to importing of raw cashew nuts from various foreign firms/companies. The petitioner financed R.4 for importing such raw cashew nuts. The agreements were to the effect that such imported goods with the help of the petitioner, should be kept in the aforesaid godown and only after 100 payment relatable to the goods the petitioner/complainant, take the goods from the godown. The lease agreement was entered into between the petitioner and R.6 and also the arrangement is that he should not release the goods without the authorisation of the petitioner. However, it so happened that R.4 and R.5 in collusion with R.6 and R.7 managed to take away the goods from the godown without making any payment. On 04.05.2006, when Survey was conducted, it was found that 1,500 Metric Tones of raw cashew nuts were found missing and the petitioner got reliable information that it was those four persons namely, R.4, R.5, R.6 and R.7, took away the goods from the godown in pursuance of the conspiracy/cahoot hatched among them and thereby, caused loss to the petitioner.

5. However, R.4, R.5 and R.6 in unison would submit that this is out and out a matter having civil profile, for which the learned Counsel for the petitioner wants to give criminal colour in order to harass and recover the amounts from these respondents.

6. Gainsaying and denying, challenging and impugning the allegations of the petitioner, the fourth respondent filed a counter with the averments which could be portrayed thus:

The fourth and the fifth respondents are partners of Universal Foods and they obtained three consignments of raw cashew nut kernels and relating to which three associate agreements were entered into with the petitioner's company. There is an arbitration clause also in those agreements. The petitioner used to open the letter of credit often belatedly. Hence, R.4 and R.5 were able to avail only second quality raw cashew kernels and thereby, such delay caused loss to R.4 and R.5. Out of those three consignments, the first consignment was lifted after necessary payment by R.4 and R.5. Thereafter, there was fluctuation in the market and hence, they cannot sell the cargo for the expected price. Hence, there was reasonable delay in making payments. Since, R.4 and R.5 incurred loss, they made a proposal on 01.07.2005 to furnish security in order to open new letter of credit and they assured that they would sell 30 of the cargo once the cargo is boarded and 60 of the cargo would be sold on destination. The petitioner agreed for such an arrangement. R.4 and R.5 also mortgaged their properties in favour of the petitioner by their letter dated 15.07.2005. There was deposit of title deeds of immovable properties for the purpose of opening new letter of credit for importing the said cargo. R.4 and R.5 furnished securities worth about Rs.5.85 Crores in favour of the petitioner, R.4 and R.5 made repeated requests, nevertheless the petitioner delayed in opening the new letter of credit, even after many request made by R.4 and R.5. There is an arbitration clause also for settling such disputes by arbitration. Absolutely, there is no reason for lodging a criminal complaint as against the respondents. Even assuming that the cargo had been removed by the respondents 4 and 5, the petitioner holds security to a value much more than what is due from the respondents. Accordingly, the respondents prayed for the dismissal of this petition.

7. The learned Government Advocate (Criminal Side) would submit that the first respondent got the legal opinion from the Government Pleader, dated 18.07.2006 and as per which, the first respondent treated the case not as a criminal case and accordingly, did not register the F.I.R The learned Government Advocate (Criminal Side) also furnished the copy of the legal opinion of the Government Pleader and it is extracted hereunder for ready reference: "Document Produced:

1.Agreement dated 12.12.2003 between PEC and M/s.Universal Foods.

2.Agreement dated 23.12.2003 between PEC and M/s.Universal Foods.

3.Order of authorization of Warehouse Owner.

4.Letter dated 12.01.2004 from warehouse owner.

5.Lease Agreement dated 12.01.2004 entered between Mr.M.Ganesan and PEC.

6.Documents proving storage of cargo in warehouse.

7.Accounts relating to M/s.Universal Foods. On perusing the documents produced, it is clear that the petitioner herein the Marketing Manager of PEC Ltd., New Delhi and the M/s.Universal Foods had entered into an agreement for imported cashew nuts from the former to the later.

It is clear that all the transactions including money transactions every thing had taken place only based on the agreements. It is clear that M/s.Universal Foods company had defaulted in paying the amounts. But, it is seen that there is contradiction between the amount stated by both the PEC and the M/s.Universal Foods. It is seen that as per PEC Company, the Universal Foods has to pay Rs.1,71,20,301/- and Rs.1,81,52,770/-. But, the Universal Foods Company has stated that the company has to pay only Rs.2,79,06,411/-.

It is clearly seen that M/s.Universal Foods had given Collateral Security to PEC Enterprises and the same is in the hands of PEC Enterprises. Further, it is seen that post dated cheque for 90 value of goods were obtained by PEC Enterprises as per agreements besides initial deposit money at the time of opening L/C.

Hence, it is very clear that both the companies are in contractual obligation and the matter in dispute between both the parties is full of civil nature.

So, I am of the opinion that no criminal proceeding will lie against the M/s.Universal Foods Company. The documents cited here itself clearly proves that no criminal proceedings can be initiated against the M/s.Universal Foods Company.

8. The mere perusal of the legal opinion would show that all the intricacies involved in these allegations and counter allegations have not been gone into and without delving deep into the relevant implications, the matter was dealt with.

9. It is the specific allegation of the petitioner that the goods in the godown were unauthorisedly in collusion with R.6 and R.7, R.4 and R.5 taken away and that aspect of the case has not been dealt with while analysing the case by the police. While highlighting the above, I do not come to any conclusion in favour of either sides.

10. I am of the considered opinion that the Deputy Superintendent of Police, (E.O.W), Kanyakumari District, will be able to deal with this matter in a proper manner and hence, I would incline to transfer that complaint to the Deputy Superintendent of Police, (E.O.W), Kanyakumari District, to go into all the details relating to the matter. The Deputy Superintendent of Police, (E.O.W.), Kanyakumari District, after hearing both sides and scrutinising the relevant documents, keeping in mind Section 154 Cr.P.C and the dictum of the Honourable Apex Court in in Prakash Singh Badal v. State of Punjab reported in (2007) 1 Supreme Court Cases 1 shall do the needful as expeditiously as possible.

11. With the above direction, this petition is closed. rsb


1.The Inspector of Police,

Marthandam Police Station,

Kanyakumari District.

2.The Inspector of Police,

District Crime Branch,


Kanyakumari District.

3.The Superintendent of Police,


Kanyakumari District.

4.The Public Prosecutor,

Madurai Bench of Madras High Court,



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