Ravindra Mundhada vs The State of Maharashtra

V.R. Kingaonkar, J.—By this common judgement, a group of four (4) similar applications and one (1) another application are being disposed of together so as to avoid overlapping consideration of identical questions involved therein.

All these applications are filed u/s 482 of the Criminal Procedure Code. Applicant is a Transport Contractor. He runs a proprietary concern styled as "M/s Ravindra Suppliers", Ambajogai. He seeks quashing of First Information Reports (FIRs) registered at Kaij, Ambajogai and Beed Police Stations in respect of Crime No. 180/1998, Crime No. 172/1998 and Crime Nos. 284/1998, 282/1998 and 123/1998, respectively. Out of these five (5) FIRs, First Information Report pertaining to Crime No. 284/1998, registered at Beed Police Station is for offences punishable u/s 420, 465, 468, 471 and 472 of the I.P. Code. The rest of the four (4) FIRs pertain to offences punishable u/s 405, 406 and 420 of the I.P. Code.

Indisputably, tenders of the applicant were accepted by the Collector, Beed for contractual work of transportation and repacking of rice. The rice was to be lifted from godowns of Food Corporation of India (F.C.I.), situated at Railway Stations at Parali, Ahmednagar, Shrirampur, Solapur, Pune and Manmad, as per requisition. The applicant agreed to transport the rice from the places of said godowns to places in Beed District. The applicant was agreed to repack the rice in polythene bags of three (3) kilograms (Kgs.) weight each. Those bags of rice were to be delivered at various schools in several places within Beed district as per the terms of the agreements. The execution of Transport and Repacking Agreements between the applicant and the District Collector, Beed, on 3rd January, 1998, is an undisputed fact. There is also no dispute about the fact that the Collectorate issued notices to the applicant in the first week of March, 1998 and called upon him to explain certain lapses which were reportedly found during course of execution of the transportation agreements. By order dated 03-04-1998, the Collector terminated the contract. The Collector also directed the concerned officers to take possession of the remaining rice, which was undisbursed, into custody from the godowns of M/s Ravindra Suppliers. The Collector further directed that crimes be registered against the applicant for offences punishable u/s 405, 406 and 420 of the I.P. Code. In pursuance of such directions, the five (5) FIRs were filed by the District Supply Officer.

Out of the said five (5) First Information Reports, First Information Report in Crime No. 180/1998, was registered at Kaij Police Station, in Crime No. 172/1998 was registered at Ambajogai Police Station, in Crime No. 282/1998 and Crime No. 123/1998 were registered at Beed Police Station, for offences u/s 405, 406 and 420 of the I.P. Code whereas a separate First Information Report (Crime No. 284/1998) was filed at Beed Police Station pertaining to offences punishable u/s 420, 465, 468, 471 and 472 of the I.P. Code.

Common averments in the four (4) similar First Information Reports, indicated above, are that the applicant did not properly disburse the rice bags. He did not deposit the rice in the Government godowns but stored the same in his private godowns. He delivered the rice bags irregularly and not as per the schedule and in accordance with the terms of the agreement. The District Supply Officer carried out random inspection at a primary school situated at Dharur on 2nd March, 1998. He weighed 10 such rice bags which were found to be less in weight upto 70 grams. The applicant did not promptly distribute the rice bags and his work was very slow. He did not reply the notices issued by the Collectorate. He committed breach of the terms of the agreements. He committed criminal breach of trust and misappropriation in respect of the rice which was lifted from the F.C.I. godowns.

The averments in the F.I.R. (Crime No. 284/1998) filed at Beed Police Station are to the effect that the applicant furnished forged and fabricated documents of Bank Guarantees No. 24/97 to 30/97 which were submitted to the State Bank of Hyderabad, Branch at Ambajogai but could not be encashed since they were not genuine documents. The encashment was sought when the contract was terminated. The applicant, therefore, allegedly committed offence of forgery, cheating and use of fabricated documents in order to commit fraud on the Government, by furnishing such bogus and forged documents of seven Bank Guarantees while obtaining the contractual work.

The applicant seeks quashing of all the five (5) First Information Reports mainly on ground that due to political rivalry between his aunt Dr. (Smt.) Vimal Mundada and the then Deputy Chief Minister, Mr. Gopinath Mundhe, he has been falsely implicated in the criminal cases. He asserts that the Collector was influenced by the then Deputy Chief Minister while issuing notices to him notwithstanding any default committed by him in respect of terms of the agreements. He asserts that the Collector terminated his contracts without there being substantial reason and hastily, at the behest of the then Deputy Chief Minister. He asserts that the Collector imposed fine of Rs. five (5) lacs for the alleged violation of the terms of the contracts and, therefore, there was no reason to prosecute him only on account of his failure to abide by certain terms of the contracts. He asserts that as per terms of the contracts, the dispute was required to be referred to Arbitrator under Clause 27. He further would submit that when the private godowns owned by him were sealed and the remaining undisbursed quantity of the rice was taken in possession, there could not be any substratum to proceed against him for offence of alleged criminal breach of trust. He would further submit that the dispute about violation of the terms of the agreements is only of civil nature and could not be, therefore, given colour of criminal acts. He asserts that the Government Circular condones shortage upto 5 per cent which is incidental in handling of grains and, therefore, the shortage only to the extent of marginal quantity of 70 grams out of 30 kgs. could not be made subject of criminal prosecution. He asserts that erroneously, the civil dispute is converted into criminal actions only at the behest of the then Deputy Chief Minister (Mr. Gopinath Mundhe). Consequently, he urged for quashing of the First Information Reports.

No reply affidavit is filed by the respondent/State.

Mr. Talekar, would submit that the timings of filing the First Information Reports would show as to how they were hastily registered and are perse false. He submits that there is no prima facie material to infer that the applicant committed misappropriation of the rice bags. He would submit that within about three (3) months, the contracts were terminated as a result of political vendetta. He would submit that when the dispute was referred to Arbitrator, namely, the Additional Divisional Commissioner, Aurangabad, there could be no reason to seek prosecution of the applicant. He would further submit that the termination order dated 03-04-1998 vaguely shows that the applicant was to be prosecuted for the offences of misappropriation and cheating, but there is no material in support of such criminal action. Mr. Talekar referred to several authorities in support of his contentions. Per contra, learned A.P.P. Mr. Sonawane would submit that the First Information Reports should not be quashed peremptory. He would point out that there were complaints about sloth in distribution of the rice bags, less quantity was being supplied and there was dereliction committed by the applicant which showed his criminal intention to commit the criminal breach of trust. Hence, he urged to dismiss the applications.

The applicant has produced copies of the bilateral agreements on record which would show that he was under obligation to indemnify the Government against any loss caused owing to his defaults. It was agreed that he shall be responsible for damage caused during course of the carriage of food grains (rice). He also agreed to furnish cash deposit of Rs. 10,000/- or in the form of Government Promissory Notes or Demand Draft or Fixed Deposit Receipts endorsed in favour of the Collector which could be forfeited in case of termination of the contracts. There is no dispute about the fact that he furnished the seven Bank Guarantees about which the F.I.R. is lodged when the Bank declined to honour the same for the reason that they were not the genuine documents.

The termination order dated 03-04-1998 may be considered at this juncture. For, by such order, the contracts were called off and the prosecutions were directed to be initiated. The termination order reveals that the applicant did not promptly collect and lift the stock of rice from the godowns of F.C.I. He did not disburse the rice bags as per the scheduled programme. He was under contractual obligation to lift stock of 9038.58 quintals per month, but did not lift such stock in the month of January, 1998 and February, 1998. It is stated in the termination order itself that during January, 1998 and February, 1998, 381.02 quintals rice was not lifted by the applicant and, therefore, same was lapsed. Thus, it is apparent that the applicant did not commit misappropriation of the quantity of rice which had lapsed for the use of the Collectorate in the course of implementation of the Scheme, to provide meals to the students in the schools, during the relevant period. The termination order shows that the random inspection carried out on 02-04-1998 indicated that the weight of 10 rice bags, weighing 3 kgs. each, showed that 70 grams rice was less in them. So, out of 30 kgs. of the rice, the bags were found to contain only 70 grams less. It is manifest that the quantity was found to be less below 5 per cent. There is no denial to the averment that as per the Government Circular, 5 per cent is a marginal quantity which could be less due to several reasons like, handling, transportation, variations in the weights and due to negligence in maintaining the bags by the concerned school. The other reasons shown in the termination order would make it manifest that the applicant allegedly did not maintain proper record and did not supply the rice bags within the scheduled period. It is also stated in the termination order that he distributed the rice bags with slow speed.

For the purpose of any criminal action, presence of mensrea ought to exist unless it is a case of accidental or negligent act which is made punishable under the law. The termination order does not furnish substratum to infer existence of mensrea with the applicant. What emerges from the termination order is that he committed violation of the terms of the contracts. The reasons recorded in the termination order would show that the applicant did not lift the full quantity of the rice from the godowns of F.C.I. A person who acts with criminal intention to commit misappropriation is unlikely to commit such act of omission.

As stated earlier, there is no reply affidavit filed by the respondent. The statement made in the applications that there was political rivalry between aunt of the applicant and the then Deputy Chief Minister (Mr. Gopinath Mundhe) is uncontroverted. The mutual agreements were brought into existence on 3rd January, 1998. The termination of the contracts was as per the order dated 03-04-1998. The contracts were short-lived. There is some grain of substance in the applicants contentions that such speedy action was taken against him out of political rivalry between his aunt, namely, Dr. (Smt.) Vimal Mundada and the then Deputy Chief Minister (Mr. Gopinath Mundhe).

The recitals of the First Information Reports in the context of the four applications mentioned above, make it manifest that they were submitted at different places almost simultaneously. For example, F.I.R. - Crime No. 180/1998 - was registered at Kaij Police Station on 12-08-1998 at 17.00 hours. F.I.R. in Crime No. 172/1998 is registered on the same day at 18.10 hours and F.I.R. in Crime No. 284/1998 was registered on the same day at 18.20 hours at Beed. The first two (2) First Information Reports are registered at Kaij and Ambajogai which are at distance of approximately 55 and 90 kilometres from Beed. The complainant -District Supply Officer is the same person. It is difficult to believe that he travelled distance between Beed and Ambajogai with such great speed. The contracts were terminated on 03-04-1998. The above First Information Reports were lodged on 12-08-1998. There is no substantial reason given in the F.I.Rs. for causing such delay.

A close scrutiny of the terms of the agreements would show that care was taken to ensure recovery of damages for loss caused due to failure of the applicant (Contractor) to execute the contractual work. As stated before, the termination order does not show any material to infer that he committed misappropriation of the rice bags. It is nobody''s case that the rice bags were not supplied at all to the concerned schools. The tenor of the allegations is that there was sloth in the execution of the contractual work and that the applicant did not properly maintain the record about distribution of the rice bags. The stock of the rice was lifted by him from various godowns of the F.C.I., during the relevant period as per the terms of the contracts. He acted as an agency for implementation of the Scheme for distribution of the rice to supply one time meals to students in various schools in Beed district. It is not a case of entrustment of the rice to him and his converting of the said property for personal use. Whatever was alleged at the time of termination of the contracts was in respect of his violation of the terms, short lifting of the rice and slow delivery of the re-packed polythene bags at the schools.

The Apex Court in K. Murugan Vs. Fencing Association of India, Jabalpur and Others, , considered somewhat identical case. The case against the petitioner therein was that there was shortage of paddy and rice procured by him from the F.C.I. The Arbitration agreement between the parties permitted shortage upto certain limit and payment of penalty beyond that limit at the rates prescribed in the agreement. The dispute was referred to and pending before the Arbitrator. The Apex Court held that it was a dispute purely of civil nature and, therefore, the F.I.R. was liable to be quashed.

The learned advocate for the applicant, seeks to rely on Alpic Finance Ltd. Vs. P. Sadasivan and Another, , wherein the Apex Court observed that merely because remedy by way of civil suit is available, would not be an impediment in maintaining criminal complaint, yet, such remedy would be available provided the complaint discloses the ingredients of the offences alleged. It was held that the facts in the given case did not show element of deception or fraud or dishonest inducement. Hence, the complaint was held liable to be quashed.

In B.S. Joshi and Others Vs. State of Haryana and Another, , the Apex Court considered the scope of Section 482 of the Criminal Procedure Code. It has been held that the categories of cases in which such power can be exercised are not restricted to those referred to in R.S. Raghunath Vs. State of Karnataka and another, . In Zandu Pharmaceutical Works Ltd. and Others Vs. Md. Sharaful Haque and Others, , the Apex Court held that no hard and fast rule can be laid down for exercise of the extraordinary jurisdiction enumerated in Section 482 of the Criminal Procedure Code. In Ramesh and Others Vs. State of Tamil Nadu, , the Apex Court considered the scope of Section 482 of the Criminal Procedure Code in the context of the facts of the said case.

In Vir Prakash Sharma v. Anil Kumar Agarwal and Anr. (2007) 7 SCC 373, the Apex Court held that where allegations contained in the complaint, even if given face value and taken to be correct in its entirety, do not disclose an offence, the complaint can be quashed. In K.L.E. Society and Others Vs. Siddalingesh, , the Apex Court reiterated the same view. So also, in Indian Oil Corporation Vs. NEPC India Ltd. and Others, , the Apex Court deprecated tendency to convert purely civil disputes into criminal cases. It is observed:

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 end 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 u/s 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant.

Learned A.P.P. invited my attention to certain observations in State of Karnataka and Another Vs. Pastor P. Raju, . The Apex Court observed:

There is another aspect of the matter which deserves notice. The FIR in the case was lodged on 15.1.2005 and the petition u/s 482 Cr.P.C. was filed within 12 days on 27.1.2005 when the investigation had just commenced. The petition was allowed by the High Court on 23.2.2005 when the investigation as still under progress. No report as contemplated by Section 173 Cr.P.C. had been submitted by the incharge of the police station concerned to the Magistrate empowered to take cognizance of the offence. Section 482 Cr.P.C. saves inherent powers of the High Court and such a power can be exercised to prevent abuse of the process of any Court or otherwise to secure the ends of justice. This power can be exercised to quash the criminal proceedings pending in any Court but the power cannot be exercised to interfere with the statutory power of the police to conduct investigation in a cognizable offence.

There cannot be duality of opinion that interference in the statutory powers of the police to conduct inquiry in cognizable offence may not be proper in the exercise of the inherent powers u/s 482 of the Criminal Procedure Code. At the same time, it is to be noted that in the fact situation of the case in State of Karnataka v. Pastor P. Raju (supra), the Karnataka High Court had quashed the proceedings initiated against the respondent mainly on ground that there was no prior sanction to prosecute him. The Apex Court held that bar of sanction will not apply against the registration of the criminal case or investigation by the police agency. The fact situation in the given case was altogether different. The investigation cannot be normally scuttled at the pre-emptory stage. This cannot be a disputed proposition. Still, however, the exercise of powers u/s 482 of the Criminal Procedure Code can be made in an appropriate case where ingredients of the offence are not brought on surface on the face value of the complaint itself, as has been laid down in Vir Prakash Sharma v. Anil Kumar Agarwal (supra) and in K.L.E. Society and Ors. v. Siddalingesh (supra).

It appears from the record that the applicant lifted 26,733.80 quintals of rice during the relevant period of three (3) months in pursuance to the terms of the contracts. He distributed 13,288.26 quintals of rice as per the contention and the accounts submitted by him. The remaining quantity of 12,965.17 quintals of rice was seized from his godowns after termination of the contracts. Thus, there is shortage of 481.37 quintals of rice, as per his submission. The Collector has imposed penalty of rupees five (5) lacs which appears to be subject matter of challenge in Writ Petition No. 3903/1998 preferred by the applicant. The recovery proceedings are stayed by this Court in exercise of writ jurisdiction. There is also no dispute about the fact that the arbitration award is rendered by the sole Arbitrator, namely, the Additional Divisional Commissioner, Aurangabad. Cumulatively, the circumstances and facts averred by the prosecution and stated in the applications would reveal that the four (4) first information reports are filed by the District Supply Officer on account of alleged defaults committed by the applicant which are of civil nature. There also, prima facie, existed political rivalry between the then Deputy Chief Minister (Mr. Gopinath Mundhe) and aunt of the applicant. The criminal prosecution cannot be permitted when the dispute seems to be purely of civil nature. In this view of the matter, all the four (4) applications filed by the applicant will have to be allowed and the first information reports need to be quashed.

This takes me to the first information report on basis of which Crime No. 284/1998 is registered. The crime alleged is one u/s 420, 465, 468, 471 and 472 of the I.P. Code. The genesis of the prosecution case is said to be the fact that the applicant furnished seven (7) Bank Guarantees of State Bank of Hyderabad which were found to be false, fabricated and forged documents. It appears that the Bank refused to allow encashment of the said seven (7) Bank Guarantees as the same were not genuine documents. Mr. Talekar, would submit that furnishing of such Bank Guarantees was not required as per terms of the contracts. He would submit that the fact that the Bank Guarantees were found improper and could not be encashed, will not be sufficient reason to continue the prosecution. I do not agree. Once it is found that the Bank Guarantees were furnished by the applicant and are prima facie not the genuine documents, then it follows that investigation by the police is necessary. The applicant was required to furnish the cash security or the guarantee amount in demand draft or likewise mode by way of security deposit. It prima facie appears that he intentionally submitted doctored documents with knowledge that they were being used to obtain the civil contracts. The criminal prosecution initiated vide F.I.R. -Crime No. 284/1998 (Criminal Application No. 1483/1998) cannot be, therefore, said to be outcome of only civil liability. Nor it prima facie appears to be based on false averments. The accusations made in the F.I.R. are required to be thoroughly investigated. The F.I.R. cannot be quashed in the exercise of inherent powers u/s 482 of the Criminal Procedure Code.

For the reasons aforestated, the four (4) applications (Criminal Applications No. 1481/1998, 1482/1998, 1484/1998 and 1298/1998) are allowed and the concerned four (4) First Information Reports are quashed. The Criminal Application No. 1483/1998 is, however, dismissed and the First Information Report whereupon Crime No. 284/1998 is registered, is directed to be investigated, as per the Law.