Aldo Vogel vs Jimmy d. Nanavutty

One Vogel , and Mr. Chandru Makhijani carry on business of importers under the name and style of Aldo Vogal AG. ("V"gal")"having its office at Rutistresse 28, 8032, Zurich , Switzerland. Niltons Private Limited Bombay )"Miltons") are in the business of manufactures and export of readymade garments . Chandra Makhijani , on behalf of Vogal used to purchose good of substantial value from Miltons , and in noe such occasion , according to Miltons , Aldo Vogal and Chandru Makhijani came to India in May 1983 and carried on negotiations for purchase of readymade garments of US 5,65,000/- against opening of an irrevocable Letter of Credit (" "/C")". the L/C was opened on 19th Dec. 1983 and Miltons dispatched the first consignment worth US $ 7,099,50 for which they received payment, As there was delay in effecting shipments, the L/C was amended by extending the shipment date to 15th April 1984 and increasing the value thereof by US $ 43,944,25 plus freight and insurance and Miltons continued to effect shipment of goods and receive payments. Miltons claimed a debit balance of US$ 39,296.68 against the Swiss importers for which Miltons on 2-8-1984 Summary Suit no. 1989 of 1984 under O, 37 R. 132 of the Civil P.C. 1908 on the Original Side of the Court . In the suit Miltons have claimed US $ 39,496/- and interest as the balance of the price of the goods supplied to the Swiss Company . Leave has been granted to Vogal to defend the suit unconditionally.

On 28th Sept, 1984 one Jimmy D. Nanavutty , Company Secretary of Miltons , Bombay , filed a complaint in the Court of the Chief Metropolitan Magistrate, 9th Court containing more or less the same allegations which are found in the plaint in Summary Suit No. 1989. Of 1984 Naanvutty , had in addition , submitted that accused entered into a criminal conspiracy to cheat his company (Miltons ) and had cheated the company and induced the company to part with the goods. The learned Magistrate has ordered the police investigate into the matter.

Mr. Kothare, learned Counsel appearing for the petitioner, urges that the relations between the parties were cordial when the Indian exporter was conforming to the delivery schedule and supplying goods as per the contracts, It was only when the importer - purchaser found that the goods do not conform to the specification that they Informed Miltion about it by their letter dt. 13th Mar. 1984. Vogel pointed out that 30% of the items have been stone washed when the instructions were that they should be washed with water only: that the garments have oil marks , the buttons have been badly stitched, the quaintly was correct but not size-wise and warned Miltons that in to case their European clients on not accept the goods, they would prefer claim on Miltons . This was followed by another letter dt.14th Mar 1984 complaining short delivery as well as non-conformity with the specifications . It appears that Aldo Vogel came over to India with a view to iron out the matters but as it could not be done, Miltons filed Civil Suit as adumbrated above.

Mr. Desai, learned counsel appearing for the 1st Respondent-Miltonss. Places reliance on Lord Poter''s observations in AIR 1945 18 (Privy Council) Quoted with approved by the Supreme Court in Abhinandan Jha and Others Vs. Dinesh Mishra,

" In India as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities and it would, as their Lordship think, be an unfortunate result it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the Court."

Abhinandan Jha''s case was considered in a series of later judgment by the Supreme Court and the latest being Eastern Spinning Mills and Virendra Kumar Sharda and Another Vs. Rajiv Poddar and Others, which succinctly summaries the law by stating that:

".... In exceptional case where non-interference would result in miscarriage of justice , the High court and the judicial process should not interfere at the stage of investigation of offences."

Chief Justice Chagla in an unreported judgment (Appeal No.3 of 1954: Suit No.747 of 1952 - Messrs. National Traders v. Atlas Assurance Co.Ltd.) on the Original Side, had occasion to consider a situation where there is a suit between the parties and a criminal prosecution where same issues arise and similar questions have to be determined. Chief Justice Chagla was referred to the secession of the Supreme Court in M.S. Sheriff Vs. The State of Madras and Others, according to which ,in such a case the Court should stay the suit and not the criminal proceedings .The learned Chief Justice observed:

" If , with great respect, the Supreme Court has laid down any such proposition then it would seem to us that it would be contray to the ordinary practice which has been followed by this Court for several years. Now , the ordinary practice of this Court is that , when there is a criminal proceeding and a suit and the issues are common, it is much more satisfactory to get the decision of the Civil Court on the issues rather then to get the decision of the Criminal on the very issues",

As Sheriff''s case dealt with the provisions under S. 491 of the Cr.P.C. a detailed discussion about the principles need not deta in us here. To my mind, the reading of the complaint in juxtaposition with the Plaint of transactions rntered into between the parties and an alleged breach of contract committed by the importer in not paying for certain goods. The counter-claims made by the importer imputes the exporter with supply of sub-standard goods entitling the importer to claim damages as he could not perform his obligations under the contracts to supply goods to his clients as well as th expenses uncured by him paying extra customs charges. These are complicated questions of facts as well as mixed questions of fact and law, for the determination of which the properforum will be the Civil Court, Except a blank statement that the company has been cheated by the Swis s National Aldo Vlgel, the ingredients of offences of cheating do not appear from the complaint. Under these circumstances, I feel that the present case is one fo the exceptional ones falling within the ratio of Eastern Spinning Mills and Virendra Kumar Sharda and Another Vs. Rajiv Poddar and Others, in which the discretion should be exercised in quashing the proceeding in the Criminal court , because if continued , it would result in miscarriage of justice.

In the result, the Petition succeeds, Rule is made absolute, the Criminal proceeding in Case No. 144/Mix/ 84 of 1984 pending in the court of the Additional Chief Metropolitan Magistrate''s 19th Court Esplanade. Bombay, are quashed.

Petitioner allowed.