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T.P. Singh G.M. Sales M/S Orion International Ltd. & Ors. v. State Of U.P. & Another - APPLICATION U/s 482 No. 7911 of 2006  RD-AH 13701 (18 August 2006)
Criminal Misc. Application No. 7911 of 2006
T.P. Singh , General Manager, Sales,
M/s Orion International Ltd.
and two others. .......................... Applicants.
1. State of U.P.
2. Smt. Alka Saxena, ......... Opp.parties/ Complainant.
Hon'ble Barkat Ali Zaidi, J
1. Heard Sri Viresh Mishra, Senior Advocate, Assisted by Sri Amit Mishra, Advocate for the accused-applicants, Sri Manish Tiwary and Ashvini Kumar Awasthi, for the complaint and the learned A.G.A. for the State.
2. This is an application for relief under Section 482 Cr.P.C.. The applicants accused are here against the order of summoning passed against them in complaint Case No. 4837 of 2003 ( Smt. Alka Saxena Vs. M/s Orion International Ltd. and others) under Section 420 I.P.C. In her complaint filed by the Opp.Party No.2 in the Court of Chief Judicial Magistrate, Bareilly against the 11 persons including the present applicant, the allegation was that accused Rajesh Yadav and Amit Bhatia came to her firm M/s A.B.L. Enterprises, Bareilly in the beginning of the year 2001 and said that they belonged to the firm M/s Orion International Ltd., Delhi which imports in India batteries of Watta Premium (Malaysia) and Delkor (Korea) and offered the complainant the distributorship of those batteries for 8 districts. The complainant alongwith her husband went to M/s Orion International Ltd., Delhi for a discussion with the higher authorities, where she met all accused persons and accepted the offer of the distributorship which was given to her w.e.f. 1.4.2001 for one year. Thereafter it was renewed for one year more, ending February,2002. The complainant's further allegation is that upto the February, 2002, the accused company supplied the batteries and settled the replacement claims but thereafter neither supplied the batteries nor settled the claim of batteries under warranty period despite the demands and also returned the demand draft, expressing non-availability of batteries with further assurance that the consignment from Malaysia was likely to come soon for the supply. It was further alleged that, the accused supplied 50 pieces of batteries in replacement, which were not manufactured in Malaysia by M/s Orion International Ltd. and were not original and when attention of the accused was drawn that these 50 batteries were not upto the mark, accused Rajesh Yadav informed the complainant that the Principal company had forgotten to mention the company's name and product A.H. capacity, for the reason that the batteries were mend for sale in some other countries. In all, 132 batteries were sent for replacement by the complainant to the accused but not a single battery was replaced, in consequence whereof, she suffered financial loss of Rs. 4 lacs, damage of credibility and reputation amounting to Rs. 5 lacs. The complainant also contacted Ms/ Watta Battery Industries in Malaysia about 50 batteries supplied to her by accused in the name of ''Watta Premium Gold' and the firm of Malaysia replied that they were neither manufactured by them nor they had exported those batteries to M/s Orion International Ltd. India. It was , therefore, said that these accused persons have intentionally cheated the complainant by supplying fake batteries numbering 50 as original batteries and also by refusing replacement of 132 sub standard batteries supplied to her. A notice in this regard raising a demand of Rs. 9 lacs to be paid as damages to her by accused persons was also sent by her through her advocate on 28.4.2003, for which no not satisfactory reply was given.
3. The Magistrate after examining the complainant and her witnesses ordered issue of process against the accused under Section 420 I.P.C.. That is why , the applicants have come to this Court seeking quashing of proceedings against them.
4. It will appear from the above narrative that the transactions between the parties in question were purely of a commercial nature. In cases of this nature, prima-facie, civil in character, we have got to search for the ingredients of Section 415 I.P.C. in order to ascertain whether an offence of criminal cheating is made out ? Section 415 I.P.C. is as follows:
" 415. cheating:- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to ''cheat"."
5. The Supreme Court as in the case of M/s Indian Oil Corporation Vs. M/s NEPC India Ltd. and others, J.T. 2006 (6) sc 474, outlined the ingredients of Section 415 I.P. C. as follows; (i) deception of a person either by making a false or misleading representation or by other action or omission (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person to do or omit to do anything which he would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.
6. It is these ingredients which we have got to search. If any of the ingredients are missing, no case under Section 420 I.P.C. will be found to be made out. It would suffice to take up one of the ingredients of a significant nature. One of the ingredients is that there must be an intention to cheat from the very out set. The first document which came into existence from the side of the respondent-complainant is the notice which the respondent no.2 gave to the applicant-accused. The notice is important because it is the first communication by the respondent no. 2 in making the requisite allegations and revealing the defects and circumstances, because by then, they are un-likely to have modulated their version to suit the requirement of criminal cheating. The notice was sent through her counsel Sri Anand Kumar Mathur on 28..4.2003, which is available on the file of criminal Misc. Application No. 2870 of 2004. It would be appropriate to reproduce the notice here:-
"1. that my client Smt. Alka Saxena hereinafter referred to as notice giver is the proprietor of M/s ABL enterprises and her firm is dealing in batteries, inverters, stabilizers and other consumer items etc. having its office at 1st Floor K.B. cloth Market, 134 Katra Manari, Bareilly since 1997.
2. That in the beginning of year 2001, you notices no. 5 & 6 Mr. Rajesh Yadav and Amt. Amit Bhatia visited the firm of notice giver and introduced themselves as Manager Sales and Assistant Manager Sales respectively of notice No.1 M/s Orion International Ltd. 37 Rani Jhansi Marg, New Delhi 110055 and informed that their firms M/s Orion International Ltd. are the importers in India of Watta Premium ( Malaysia) brand battery and Delkor brand battery ( Korea) being manufactured by M/s Watta Battery Industries SDN BHD Malaysia and M/s Delkor Corporation Korea, respectively. You both also showed the literature regarding Watta/ Delkor batteries and convinced that those batteries are one of the best imported batteries in India and being used in more than 30 countries after describing the qualities, both of you offered the proposal of distributorship on behalf of notice no.1 for eath districts namely Bareilly,Pilibhit, Rampur, Moradabad, Gujraula, Sahjahanpur, Sitapur and Badaun.
3. That it was also told by you noticee no. 5 & 6 that the performance of Watta/ Delkor battery is guaranteed and incase of any defect the batteries shall be replaced at the cost of noticee No.1. You noticee Nos.5 & 6 also assured the notice giver that our company notice no.1 gives 1 year warranty and during this warranty period the replacement of defected batteries will be done promptly and without any charge.
4. That at the time above conversation it was disclosed that Mr. Ashok Chadda and Mr. Gulshan Chadda, noticee nos. 2 & 3 are real brothers and hold the positon as Managing Director and Mr. Amit Bhatia are Manager Sales and Assistant Manager Sales.
5. That the notice giver also told noticee no. 5 & 6 that she will consider the above proposal after about a week you noticee no. 5 & 6 again visited office of notice giver and again insisted on the distributorship proposal of their product on which the notice given desired to meet to the M.D. and senior officer of M/sOrion International Ltd and the said meeting was arranged at New Delhi some time in the 2nd week of March, 2001 and the same was attended by notice given and her husband Mr. Pramod Behati Lal, where in beside the noticee No. 2 & 3 and noticee No. 5,6 & 8 were also present.
6. That during the process of meeting you notice no.2 & 3 confirmed the proposal of distributorship through General Manager, Sales ( notice No. 4) and also confirmed the assurances given by noticee no. 5 & 6 . On believing such assurances to be true, the notice giver accepted the officer of distributorship to Bareilly and seven other districts, thereafter a certificate was issued in favour of notice giver stating that M/s ABL Enterprises is our authorized distributor or Delkor Daewoo and Watta range of automotive batteries w.e.f. 1.4.2001, after the said authorization the notice giver received consignment of mostly Watta Batteries and some Delkor branch batteries and the payment of 3 lacs were made through D/D.
7. That as the above distributorship was given for one year and same was further renewed for yet another year.
8. That the notice no.4 has undertaken and ga ve inwriting that all warranty claims related to Delkor, Daewoo and Watta batteries purchased by M/s ABL, Enterprises Bareilly shall be handled by M/s Orion International Ltd.
9. That up to February,2002 notice no. 1 supplied the batteries and settled the claim of replacement of notice giver but after that the notice no.1 neither supplied the batteries nor settled the claim of batteries under warranty period and that notice giver repeated demand for billing of batteries to notice no.1 and also send the demand draft so many times but due to non-availability of batteries, the notice no.1 returned the above D/D to notice giver and notice no.4 always assured to notice giver that our consignment from M/s Watta Battery industries SDN BHD Malaysia Ltd. will arrive soon through shipment. But during the five months period in 2002, the consignment never arrived. The noticee No.4 willfully misguided the notice giver.
10. That inferior quality of imported Watta premium range of batteries ( made in Malaysia) resulted in a huge amount of replacement. Distributor network in India was affected by and large due to poor quality of batteries.
11. That due to this conduct of notice no. 1 the notice giver suffered a great irreparable financial loss and mental harassment and entire dealer network as disturbed due non-replacement of defective batteries.
12. That in May, 2002 vide invoice No. OR-wt-11 dated 31.5.2002, the notice no. 1 supplied 50 pieces of batteries with brand name " Watta Premium Gold" bearing 21 plats and 150 AH capacity to notice giver at Bareilly through transport. On inspection it was revealed that the above batteries were neither manufactured in Malaysia nor imported from Malaysia but manufactured by M/s Orion International Ltd( notice no.1) THEMSELVES. These batteries were supplied as original although they were not original.
13. That these fake 50 batteries contained only 21 plates in one cell instead of 25 plats '' Watta Premium ( original brand) and the quality, performance of these fake batteries were not up to the mark and large numbers of complaints were received by the notice giver from her consumer. In these batteries there was no mention of name of country manufacturing of the batteries.
14. That when the above facts was brought to the notice of noticee no. 2 & 3 through noticee No. 4 & 5 the notice giver received a clarification letter regarding genuineness of '' Watta Premium Gold" fake inverter batteries, dated 5.6.2002 send by Mr. Rajesh Yadav noticee no. 5 informing the notice giver that , " our principal has forgot to mention country name and product AH capacity because these batteries were manufactured for some other country" and these Watta No- 150 batteries are basically inverter battery and in future only this special battery for inverter will be supplied to notice giver instead of previous brand Watta Premium.
15. That by the supply of locally manufactured, sub-standard batteries, sale of notice giver was badly affected and credibility of notice giver was adversely affected.
16. That as per terms and conditions of distributorship defective batteries was to be replaced by notice no.1. In the beginning the battery were replaced accordingly but subsequently the intention of you all notices became dishonest and subsequently the replacement was denied on one pretext or the other. Totoal number of 132 Watta batteries were sent to replacement notcee no.1 through you all out of these not a single battery was replaced causing a financial loss of rupees 4 lacs and additional of credibility and reputation of the firm amounting rupees 5 lacs.
17. That the notice giver enquired from M/s Watta Battery Industries SDN BHD Malaysia about '' Watta Premium Gold' batteries who in turn replied hat these batteries were neither manufactured by them nor they exported the above mentioned batteries to M/s Orion International Ltd. India and M/s Watta Battery Industries SDN BHD Malaysia also denied the fact regarding authorization of manufacturing in India by M/s Orion International Ltd.
18. They further informed to notice giver that no consignment was exported to M/s Orion International Ltd., India since September, 2001.
19. That despite repeated request and demand the claim of defective batteries were not settled and at the end the notice giver to received a letter dated 12.3.2003 signed by Mr. Amol Suneja (Assistant Manager-Service) notice no.7 completely rejecting replacement of the batteries sent by notice giver.
20. That by your acts and deeds you all notices have cheated the notice giver and dishonestly caused financial loss to notice giver to the tune of Rs. 9 lacs.
21. That after receiving such complaint from notice giver and other distributor network all over India, so under the pressure of distributor network the noticee no. 1 have further started importing batteries through new import license M/s Prima Export 37 Rani Jhansi Marg, New Delhi 110055 instead of previous import license in the name of M/s Orion International Ltd. 37 Rani Jhansi Marg, New Delhi 110055 under same management and staff.
22. That you all notices have intentionally cheated the notice giver by manufacturing and supplying the batteries under fake name of '' Watta Premium Gold" and also by supplying the above fake batteries as original batteries to notice giver and also by refusing replacement of 132 sub standard batteries mostly " Watta Premium brand and some Delkor brand". You all notices have committed offenses with the intention of cheating and mischief by doing forgery under the previsions Trademarks Act,199 and Indian Copyright Act, in addition to it you have also committed offenses under various provisions of Indian Penal Code, 1860.
Through this notice, you are required to replace 132 batteries ( Watta Premium and Delkor brand) within 15 days of the receipt of this notice you are also required to pay my client a sum of Rs. 9 lacs as damages and towards loss of business within the same period and incase of your failure my client shall be compelled to file case against you under the provisions of appropriate law in the court of competent jurisdiction at Bareilly and in that case you shall also be liable to pay all the costs and damages incurred by my client in prosecuting the said remedies.
Notice given today on 18 April, 2003 under my signature."
7. It will be seen from the contents of the above notice that there is no mention in the notice that there was any intention on the part of the applicant-accused to cause deliberate damage by cheating and that they had no intention to fulfill their part of the contract . Since this vital ingredient is missing , the case of the applicant and the respondent no. 2 cannot be said to fall within the ambit of Section 415 I.P.C.
8. In view of the growing tendency to bring civil matters into the criminal arena for quick redressal, the Supreme Court has in a very recent case of M/s Indian Oil Corporation Vs. M/s NEPC India Ltd. and others ( not cited at the bar) has sounded a note of caution for the courts below, not to allow this to happen because it is tantamount to an abuse of the process of court. This is what the Supreme Court has said, "while on this issue, it is necessary to take notice of a growing tendency in business circles to cover purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that Civil law remedies are time consuming and do not adequately protect the interests of lenders/ creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/ families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure though criminal prosecution should be deprecated and discouraged". "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 need 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 of ulterior motives on the part of the complainant".
9. The consequence is that the case of the applicants does not fall within the purview of Criminal Cheating and does not come within the ambit of Section 415 I.P.C.
10. There were 11acused in this case, which were summoned, out of whom 8 had filed a petition bearing number Criminal Misc. Application No. 2870 of 2004, under Section 482 Cr.P.C., which was decided by the learned Single Judge Hon'ble Mr. Justice C.P. Mishra on 13.2.2006, who has now retired. The petition was dismissed. This petition by the remaining three accused has been allowed. There is as such a variation between the two orders and the matter, therefore, needs to be referred to a third judge for consideration.
11. The file may, therefore, be placed before the Hon'ble the Chief Justice for orders.
Dt: 18th August, 2006
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