Tabasahib Patilbha Gawali and Another vs The State of Maharashtra and Another

T.K. Chandrashekhara Das, J.—This application arises out of a complaint filed by the second respondent against the petitioners before the Additional Chief Metropolitan Magistrate, Ballard Pier Court, Bombay in Case No. 114/S/91 alleged to have been committed an offence u/s 420 read with Section 34 of the I.P.C.

I heard the counsel for the petitioner. None represented for the respondent No. 2 though notice was served on them. Ms. Usha Kejariwal appeared for the respondent No. 1, State of Maharashtra. I also examined the complaint filed before the Metropolitan Magistrate by the respondent No. 2. On a close reading of the complaint, it can be seen that the matter relates to a clear commercial transaction. It is stated in the complaint that the petitioners placed orders with the second respondent for supply of electric motors which were manufactured by them. It also can be seen from the statement made in the complaint that the petitioners used to place orders of electric motors for themselves and also for Kashti No. 2, a Cooperative Society on commission basis. It is profitable to extract the relevant portion of the complaint filed before the Magistrate, as under:

The accused No. 1 represented to us that they through their political influence had struck a big deal with leading buyers, namely M/s. Kashti No. 2. Vividh Karyakari Seva Sahakari Society Ltd., Taluka Shrigonda, Dist. Ahmednagar, who have huge demand for agriculture monoblock pumping sets fitted with 3 HP and 5 HP Electric Motors for supplying to their own members against loan facility i.e. Kashti No. 2 from the said Society. He stated with that the said society i.e. Kashti No. 2 would place orders with us through their said partnership concern and they would act as Commission Agents for procuring business for our Company and we should issue bills from time to time in the name of the said society i.e. Kashti No. 2 for whom, they were acting as Agents on commission basis. It was is suggested to us that out of 15% trade discount which our Company give them on our list price when the material is sold by us to them. We should pass on 15% discount to the said society i.e. Kashti No. 2, in our bills and the balance 20% should be paid by us to them as their commission for procuring the business for us. He suggested that the material required fur and on behalf of the said society together with the relative bills should be given or sent to them for passing on the same to the society for enabling it to effect payment to us within a period of 8 to 9 weeks. We were assured that since we were to issue the bills directly in the name of the society, we would be receiving the payments from the society. We were further told that the commission of 20% which we were required to pay to the form of the accused would be payable to them only after the bill amount is realised. We were impressed with the scheme of the accused as we realised that we were going to sell our material to a well known society and so the recovery of the payment was safe.

* * * * * * **

At times the accused used to instruct us on pho, ne to despatch the material on account of the said society and we used to comply with the requisition. I say that between 17.6.1989 to 16.4.1990 i.e. within a period of 10 months we sold arid delivered approximately 82 Monoblock Pumping sets, valued at approximately Rs. 3,55,979.00 under 23 bills excluding the trade discount of 15% which we had agreed to give to the society i.e. Kashti No. 2. I say that our Company had paid approximately Rs. 7,666.00 to the firm of the accused on account of 20% settled commission for the material supplied on the account of the society in respect of which the payment had been received by our Company. I say that he accused i.e. their firm during the said period of 10 months, were also getting material from our Company on credit basis and also from our other 2 sister concerns on account of their requirements of their own firm as usual as before the said scheme was finalized for supplying of the material to the society for whom the accused were acting as Commission Agents as stated above.

From the above statements made in the complaint it is very difficult to infer that an offence u/s 420 of the IPC is made out. Of course, there may be some failure on the part of the petitioner to make payment as per agreed terms. But that alone will not be sufficient to implicate the petitioners for the offence u/s 420 of the IPC. In order to constitute an offence u/s 420 of the IPC an element of fraud or dishonest intention on the part of the accused could be demonstrably inferred or discernible from the very allegations set out in the complaint. From the circumstances stated in the complaint it cannot be said that the petitioner entered into a contract with oblique motive to defraud the other party. If this element is absent, no offence u/s 420 of the IPC is constituted. In view of this the learned Magistrate has not at all justified in entertaining the complaint and issued process against the petitioners.

In the result the application is allowed. Rule is made absolute in terms of prayer Clause (b).

Prayer Clause (b):

Record and proceeding of the case namely Case No. 114/S/1991, pending before the learned Metropolitan Magistrate, 33 Court, Ballard Pier, Bombay be called for and after examining them quash and set aside the same.