Kamal Bhatia vs State of Punjab

V.S. Aggarwal, J.

The facts alleged in the petition were long but the learned counsel for the petitioner at the time of arguments only pressed for one plea namely that because the amount has since been paid, therefore, the first information report against the petitioner should be quashed. In any case he urged that the respondent had been making statement in different courts to the effect that he would withdraw the criminal complaint pending against the petitioner.

Keeping in view the said submission, it is unnecessary to refer to all the detailed assertions of the petitioner. Petitioner seeks quashing of FIR No. 89 dated 7.12.1994 with respect to offence punishable under Section 420 IPC along with all subsequent proceedings including filing of the challan in the court of Sub Divisional Judicial Magistrate, Phagwara.

The first information report has been registered on the complaint of Chief Security Officer, JCT Mills, Phagwara. It is recited that the petitioner and Anant Dhir purchased 1,400 shares of JCT (E) from him at the rate of Rs. 83/ per share. It was disclosed that they were registered share brokers of Ludhiana Stock Exchange. Anant Dhir was known to the complainant. Therefore, the complainant handed over the said shares to Anant Dhir and the petitioner along with the transfer deed duly signed. It happened on 1.3.1994. A receipt was issued by the petitioner and Anant Dhir. Assurance was given that payment would be made on 15.3.1994. Accordingly, a cheque dated 24.2.1994 was issued. The said cheque could not be encashed due to insufficiency of funds in the account. The complainant came to know that petitioner is not a member of the Stock Exchange and that the complainant had been cheated. They gave their wrong identity and received shares of Rs. 1,16,200/.

The petition has been contested and in the reply filed on behalf of the State of Punjab, it has been alleged that challan has since been presented in the trial court. The law must take its own course. It was further asserted that on 24.2.1994 the coaccused of the petitioner issued a cheque to respondent No. 2 for purchase of 1,200 shares. The petitioner did not make the payment. On 1.3.1994 in addition to 1,200 shares, 200 more shares were purchased. They had cheated respondent No. 2 because the petitioner was not even a member of the Stock Exchange.

In separate reply filed by respondent No. 2, he insisted that the petitioner and the coaccused had cheated them. It is not being disputed that the amount in question has since been paid. Respondent No. 2 has received the same price of the shares but it is denied that the first information report and the proceedings are liable to be quashed.

During the course of arguments learned counsel for the petitioner strongly relied upon the decision of the Supreme Court in the case C.B.I., New Delhi v. Duncans Agro Industries Ltd., Calcutta, 1996(3) RCR 60. On the strength of this decision it was urged that since the payment had been made the criminal proceedings deserves to be quashed. In the present case admittedly the payment has since been made. But to appreciate the said argument reference must be made to paragraph 29 of the cited judgment. It reads :

"In the facts of the case, it appears to us that there is enough justification for the High Court to hold that the case was basically a matter of civil dispute. The Banks had already filed suits for recovery of the dues of the Banks on account of credit facility and the said suits have been compromised on receiving the payments from the concerned Companies. Even if an offence of cheating is prima facie constituted, such offence is a compoundable offence and compromise decrees passed in the suits instituted by the Banks, for all intents and purposes, amount to compounding of the offence of cheating. It is also to be noted that long time has elapsed since the complaint was filed in 1987. It may also be indicated that although such FIRs were filled in 1987 and 1989, the Banks have not chosen to institute any case against the alleged erring officials despite allegations made against them in the FIRs. Considering that the investigations had not been completed till 1991 even though there was no impediment to complete the investigations and further investigations are still pending and also considering the fact that the claims of the Banks have been satisfied and the suits instituted by the Banks have been compromised on receiving payments, we do not think the said complaints should be pursued any further. In our view, proceeding further with the complaints will not be expedient. In the special facts of the case, it appears to us that the decision of the High Court in quashing the complaints does not warrant any interference under Article 136 of the Constitution. We, therefore, dismiss these appeals."

Perusal of what has been recorded by the Apex Court it is clear that merely making the payment will not absolve a person from the criminal liability. In the cited case the Supreme Court had taken note of totality of facts. The investigation had not been completed for years. The civil suits had been filed and the payment had been made. It was further held that it was a compoundable offence. Keeping in view the delay in investigation and the abovesaid facts, the Supreme Court did not interfere in the order of the Calcutta High Court. The position in the present case is different. Herein the challan has since been presented. It is pending before the trial court. Merely because the payment has been made will not permit the petitioner to rake the contention that the first information report and the subsequent proceedings should be quashed. The criminal court will take into consideration all the facts. But it will not permit this Court to quash the proceedings.

In that event the attention of the Court was drawn to the statement made during the course of the civil proceedings and the other writings that were given. Reference to some of them would be advantageous. Annexure P17 is a certificate issued by the Chief Security Officer of JCT Mills, Phagwara. It reads :

"Shri Kamal Bhatia, ExMember, Ludhiana Stock Exchange, has given me the full amount of Rs. 1,16,000.00 for 1,400 JCT(E) shares. In view of payment of the above amount, I undertake to withdraw/compromise the case filed by me in order to keep good relations with Mr. Bhatia and to avoid any kind of tension to him. From our side, we assure Mr. Kamal Bhatia of full cooperation. The complaint filed by me in Ludhiana Stock Exchange may also be treated as withdrawn. The above complaint was filed by me on wrong assurance of the Secretary of the Ludhiana Stock Exchange."

Subsequently, even the statements were made in the civil court that matter has been compromised and they do not want to proceed with the suit. Such a statement was made on 2.6.1995 by the counsel for JCT Mills. It reads :

"The matter has been compromised with the defendant. As such, I do not want to proceed with this case. It be dismissed as fully satisfied."

Keeping in view the aforesaid it has been urged that assurance had been given that criminal proceedings shall be withdrawn. The question that arises for consideration is as to whether this would permit this Court to quash the first information report and the subsequent proceedings. The answer patently is in the negative. Though in the first blush one is swayed by such an argument but on close scrutiny the argument cannot be allowed to succeed. Withdrawal of the civil proceedings does not put an end to any offence that may have been committed. Even if the Chief Security Officer respondent No. 2 had given in writing that complaint filed may be treated as withdrawn, still on basis of it the criminal proceedings will not come to an end. The offence has to be compounded. The same must be done in terms of Section 320 Cr.P.C. otherwise it is not one of those cases where it can be recorded at this stage that chances of success are remote. When the challan had been presented in court, then all the pleas now available can be raised before the learned Judicial Magistrate. He would be competent to consider the same. We know from the decision in the case of State of Bihar v. P.P. Sharma, AIR 1991 SC 1260 that when the challan is presented, the pleas available can be taken before the trial Court. Consequently, this court would restrict itself from going further into these arguments.

As a sequel to the reasons given above, the present petition fails and is dismissed.