AI Structured Summary
Not yet generated for this judgment
Judgment
Servesh Kumar Gupta, J.—This judgment will dispose of both the above titled petitions together as they have arisen out of the same Complaint No. 1253 of 2004, filed in the Court of Judicial Magistrate, Kashipur and the order of cognizance nay the order of issuing non-bailable warrants thereafter against Petitioner Sri Jayant Verma (Manager Law, Pradeshiya Industrial Investment Corporation of Uttar Pradesh Limited) (hereinafter called as PICUP) passed in the said complaint case.
Having heard the Learned Counsel of both the parties, it transpires that M/s Shivangi Crafts Limited applied for a loan of Rs. 7,25,00,000/- from PICUP, which is State Government body for sanctioning loans to develop industries in the State. This PICUP, virtually a middle body, plays the role to coordinate in sanctioning the loans, which is ultimately granted by Industrial Development Bank of India (hereinafter called as IDBI).
This loan was sanctioned on 4.8.1997 with the condition to deposit 1 per cent of the aggregate amount of the loan by M/s Shivangi Crafts Limited (for convenience hereinafter called as the Company) to PICUP towards the charges of process fee, up front fee and legal services fee. The company deposited this 1 per cent amount aforementioned to the tune of ` 7,25,000/- by draft on 18.11.1997 to PICUP.
The circumstances changed and the company passed a resolution on 15.11.1997 not to take loan from PICUP (already sanctioned) after taking stock of the situation of the market being non-profitable for the ensuing business proposed to be commenced on the basis of the said loan. Consequently, the company wrote repeated letters on 7.2.1999, 11.2.1999, 15.2.1999 and ultimately on 18.2.1999 apprising PICUP of its changed motives and asked to return the amount of Rs. 7,25,000/-, which was so deposited by it to PICUP.
Responding to above letters, PICUP replied on 27.2.1999 informing that the process fee, up front fee and legal service charges so deposited by the company at the time of legal documentation are neither refundable nor adjustable against any group company''s payment in future, and further the company was requested to contact the legal department of PICUP for release of the title papers, which were executed by the company at the time of legal documentation.
Feeling aggrieved by this letter, the company moved an application to the Monopoly and Restrictive Trade Practice Commission (hereinafter called as MRTPC), New Delhi, seeking the relief of issuing directives to PICUP for return of the said amount, but MRTPC did not provide any relief to the company and rejected its application with the remark that "the applicant, if so advised may / take resort to and approach the Civil Court". With this remark, the preliminary objections filed by PICUP were allowed and the application moved by the company was rejected on 24.10.2000.
The company again moved a review petition before MRTPC, which met the same fate on 13.9.2002, as earlier one. The company then through its representative Sri Laxman Prasad Agarwal as Commercial Manager filed a complaint bearing No. 1253 of 2004 under Sections 405/406 Indian Penal Code against PICUP and its Chairman on 28.9.2004 in the court of Judicial Magistrate, Kashipur. The learned Magistrate recorded the statement of Sri Agarwal u/s 200 Code of Criminal Procedure., and having perused all the other relevant papers, passed an order of cognizance on 29.8.2005 u/s 406 I.P.C. only against PICUP. The protest petition was filed by PICUP in the court of the Magistrate, which was rejected by the learned court and issued an arrest warrant on 5.9.2006 against Sri Jayant Verma (Manager Law of PICUP). These petitions are, thus, to challenge the order of cognizance dated 29.8.2005 as well as the arrest warrant dated 5.9.2006.
It has been contended on behalf of Learned Counsel of the Petitioner that as per circular order issued by PICUP on 20.1.1998, legal service charges, up front fee and process fee, which were deposited at the rate of 1 per cent of the total amount of the sanctioned loan are not refundable under any circumstance. On the other hand, Learned Counsel of the company / Respondent No. 3 has drawn the attention of this Court at the last paragraph of that circular letter, which is as under:
The above revised process fee structure shall be applicable for the cases sanctioned loan after 30th Dec. 97. The cases sanctioned up to 30th Dec. 97 would carry the processing and other fees as per existing norms circulated vide Office Order No. PRJ/SBU-III dated 23rd Aug. 95.
Learned Counsel of the company / Respondent No. 3 argued that since the loan was sanctioned on 4.8.1997, hence this circular order of 20.1.1998 is not applicable, rather in the instant case, the circular order dated 23.8.1995 is applicable, which has not been produced before this Court by either party.
Be that as it may, in either case, this Court is of the view that the contention of the Learned Counsel of both the parties is misconceived because insofar as the applicability of the circular order may be of 20.1.1998 or 23.8.1995 is concerned, it envisages the process fee structure at different levels of loans. Nowhere it depicts, the eventuality, which has arisen in the instant case i.e. the change of mind of the company to deny the receipt of loan, after depositing 1 per cent of the total amount as the various charges. So neither the circular order dated 20.1.1998, nor that of 23.8.1995 is applicable in the present case.
It is pertinent to mention that the eventuality, as exists in the present case, does not find place anywhere in the whole terms and conditions, which were displayed by PICUP to the debtor at the time of sanctioning the loan.
So far as attracting the provisions of Section 405 I.P.C. making it punishable u/s 406 I.P.C. is concerned, this Court is of the view that the same penal provision is also not applicable in the present scenario. Applying the loan, sanctioning of the same and depositing 1 per cent of the total amount of loan towards the various charges, as has been contemplated in the general terms and conditions of the sanction, asking by the company to return the said 1 per cent amount from PICUP, after changing of the mind, nowhere attracts the penal provisions of Sections 405 and 406 I.P.C. The clause in the last paragraph of the order made by MRTPC that "the applicant, if so advised, may / take resort to and approach the Civil Court" does not contemplate the instigation to the company for filing the criminal complaint under Sections 405 and 406 I.P.C., and that too against PICUP without being represented through its Chairman or any other competent authority.
There is no propriety at all to issue the non-bailable arrest warrant against Sri Jayant Verma (Manager - Law of PICUP), against whom even no cognizance was taken by the Magistrate.
Besides, Section 406 I.P.C. envisages the punishment extendable upto three years and if at all any cause of action giving rise to the offence punishable u/s 406 is made out, then it commenced since 27.2.1999, when PICUP wrote a letter to the company expressing its inability to return the said amount and the complaint was filed on 28.9.2004 i.e. more than five and half years after arising out of the cause of action (if any). This way also, cognizance is barred by Section 468 Code of Criminal Procedure., which prescribes the maximum period of three years for filing such a complaint.
In view of the above, both the petitions have force and deserve to be allowed. Both the petitions are allowed. The order of cognizance dated 29.8.2005 as well as the order dated 5.9.2006 issuing the arrest warrant of Sri Jayant Verma (Manager- Law of PICUP) are hereby quashed. It is further made clear that this order of quashing the complaint will not hamper the course otherwise available (if any) under the law to the company to recover the said amount from PICUP.