Varghese K.P. and Others v. State of Kerala

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS TUESDAY, THE 14[TH] DAY OF MARCH 2023 / 23RD PHALGUNA, 1944 CRL.MC NO. 864 OF 2020 ``` ``` AGAINST CC 146/2018 OF JUDICIAL FIRST CLASS MAGISTRATE ``` ``` COURT, KALADY ``` ``` CRIME NO.1483/2017 OF KALADY, ERNAKULAM RURAL ``` ``` PETITIONERS: ``` ``` 1VARGHESE K.P. AGED 59 YEARS, S/O. POULOSE, PRESENTLY RESIDING AT KUZHUPPILLY HOUSE, KANJOOR P.O., 683 575, MANAGING PARTNER OF CHAITANYA ENTERPRISES KURI DIVISION KANJOOR, A PARTNER SHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT (PRESENTLY KNOWN AS KANJOOR KURIES PRIVATE LIMITED), BEARING REGISTRATION NO. 1623/85, AND ITS KURI DIVISION REGISTERED AT 2639, SECTOR 7A, HOUSING BOARD COLONY, FARIDABAD PIN 121006, AND HAVING ITS BUSINESS OFFICE AT SNDP BUILDING, KANJOOR NEAR KANJOOR POST OFFICE, ERNAKULAM 683 575, KERALA. 2TONY CYRIAC.M., AGED 54 YEARS, S/O. CYRIAC, HAVING RESIDENTIAL ADDRESS AT MULAVERICKAL HOUSE, CHOWRA 683 571. PARTNER OF CHAITHANYA ENTERPRISES KURI DIVISION KANJOOR, A PARTNERSHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT (PRESENTLY KNOWN AS KANJOOR KURIES PRIVATE LIMITED), BEARING REGISTRATION NO. 1623/85, AND ITS KURI DIVISION REGISTERED AT 2639, SECTOR 7A, ``` Crl.M.C. 864/20 ## **-:2:-** ``` HOUSING BOARD COLONY, FARIDABAD 121006, AND HAVING ITS BUSINESS OFFICE AT SNDP BUILDING, KANJOOR NEAR KANJOOR POST OFFICE, ERNAKUAM 683 575, KERALA. ``` ``` 3ARUN.S., AGED 39 YEARS, S/O. MUKUNDAN C.P. SMITHA BHAVAN, KANJOOR HAVING RESIDENTIAL ADDRESS AT SMITHA BHAVAN, KANJOOR P.O. 683 575. 4MUKUNDAN, AGED 72 YEARS, S/O. PADMANABHAN, HAVING RESIDENTIAL ADDRESS AT SMITHA BHAVAN, KANJOOR P.O. PIN 683 575. ``` ``` *5VALSAMMA MUKUNDAN, AGED 64 YEARS, W/O MUKUNDAN, HAVING RESIDENTIAL ADDRESS AT SMITHA BHAVAN, KANJOOR P.O., 683575 *(ADDL. P5 IS IMPLEADED AS PER ORDER DATED 14/03/2023 IN CRL.M.APPL. NO.1/2020) ``` ``` BY ADVS. JOLLY JOHN SMT.LIZA MEGHAN CYRIAC SMT.ANUPAMA SIBI ``` ## **`RESPONDENTS:`** ``` 1STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR HIGH COURT OF KERALA ERNAKULAM 682 031. ``` ``` 2STATION HOUSE OFFICER, KALADY POLICE STATION, KALADY MALAYATTOOR ROAD, KAIPPATTOOR, KALADY, ``` Crl.M.C. 864/20 **-:3:-** ``` KERALA, 683 574. ``` ``` 3LUBEENA ABOOBACKKER, AGED 41 YEARS, W/O. ABOOBACKKER, KANELI HOUSE, PARAPURAM, KANJOOR, KALADY, ERNAKULAM, KERALA INDIA 681009. ``` ``` BY SMT.SREEJA V, PUBLIC PROSECUTOR ``` ``` THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 07.03.2023, THE COURT ON 14.03.2023 PASSED THE FOLLOWING: ``` Crl.M.C. 864/20 **-:4:-** ## **BECHU KURIAN THOMAS, J. ----------------------------------Crl.M.C. No.864 of 2020 -----------------------------------** Dated this the 14[th] day of March, 2023 ## **ORDER** Petitioners are the accused in C.C. No.146 of 2018 on the files of the Judicial First Class Magistrate's Court, Kalady. Through this petition under section 482 of the Code of Criminal procedure, 1973 (for short 'Cr.P.C'), they seek to quash the final report and all further proceedings in the aforesaid case. 2. Petitioners 1 and 2 are the Managing Partners of a business establishment by name 'Chaitanya Enterprises Kury Division Kanjoor', which is presently known as 'Kanjoor Kuries Private Limited'. It is alleged that petitioners 3 and 4 have no involvement in the business establishment, though they have been arrayed as accused. 3. The prosecution alleges that the accused had, with intent to commit breach of trust and cheating and to cause unlawful loss to the defacto complainant, induced the defacto complainant to join in a chitty conducted by the accused with a promise to pay the amount when the chitty is subscribed and believing them, she joined Chitty No.66/379 from 10.03.2010 onwards with a chitty amount of Rs.5,40,000/-. On the fifth Crl.M.C. 864/20 **-:5:-** month, the defacto complainant bid the chitty for Rs.3,00,000/- and put it in a fixed deposit. Later, when the balance instalments were defaulted, the accused failed to return the amount of Rs.1,80,000/- after adjusting from the fixed deposit and thereby committed the offences under sections 406 and 420 r/w section 34 of the Indian Penal Code, 1860 (for short 'IPC'). 4. Adv.Liza Meghan Cyriac appearing on behalf of the petitioners contended that even if the prosecution allegations are assumed to be admitted for the sake of arguments, still the same would not make out an offence under section 406 or section 420 IPC. The learned counsel contended that the entire proceedings against the petitioners are not only an abuse of the process of court but intended with malafide motives. 5. Even though notice was served on the defacto complainant, she has not deemed it fit to enter appearance. 6. The learned Public Prosecutor however opposed the petition and submitted that whether the dispute is one of a civil nature or not, is a matter to be decided after trial and therefore the jurisdiction under section 482 Cr.P.C ought not to be invoked. 7. The defacto complainant, even according to the prosecution, was a subscriber to the chitty conducted by the petitioners. She had admittedly bid in the chitty and thereafter failed to pay the instalments under the chitty account. According to the defacto complainant, despite adjusting the defaulted instalments from the amount deposited by her, a balance Crl.M.C. 864/20 ## **-:6:-** amount of Rs.1,80,000/- was due to the defacto complainant and the failure of the petitioners to pay the said amount is the basis for the prosecution case. 8. It is evident that the attempt of the defacto complainant is to convert a claim for return of money as a criminal case. It is trite that mere breach of contract cannot amount to the offence of cheating in the absence of evidence of fraudulent or dishonest intention from the beginning of the transaction. The inability to pay an amount or repay the amount by itself cannot give rise to criminal prosecution unless there was a dishonest or fraudulent intention from the very beginning. (See the decision in **Satishchandra Ratanlal Shah v. State of Gujarat and Another** [(2019) 9 SCC 148]. 9. Further, there is neither any allegation nor any material to suggest that from the beginning of the conduct of the chitty or when the petitioner subscribed to the chitty, the accused had any fraudulent or dishonest intention. In the absence of any such intention from the beginning, the culpability of the offence of cheating cannot be made out under law. Thus, in the absence of any allegation or intention or any circumstance to show that there was any intention to deceive or cheat the defacto complainant from the beginning of the transaction, an offence under section 420 IPC cannot be made out. 10. Even the offence under section 406 of the IPC is also not made Crl.M.C. 864/20 **-:7:-** out from the allegations. The primary ingredient for bringing home the offence under section 406 IPC is dishonest misappropriation of property. On a reading of the prosecution case, it is evident that the offence under section 406 IPC cannot be made out at all and merely because some amounts are allegedly due to a person and the refusal to pay such amounts or delay in payment of such amounts cannot partake the character of a criminal breach of trust, as contemplated under section 406 IPC. 11. Even otherwise, a reading of the prosecution case reveals that the issue is essentially one of civil in nature and the attempt of the defacto complainant is to convert the civil dispute into one of criminal nature. As held by the Supreme Court in **Mitesh Kumar J. Shah v. State of Karnataka and Others** [(2021) SCC OnLine SC 976] cases which are essentially of a civil nature cannot be permitted to be converted into a criminal case to take the advantage of a quick relief that may be obtained through criminal cases and such attempts will amount to an abuse of process of the court. 12. In the light of the discussions, this Court is satisfied that the prosecution of the petitioners in C.C. No.146 of 2018 on the files of the Judicial First Class Magistrate's Court, Kalady arising from Crime No.1483 of 2017 of Kalady Police Station is an abuse of the process of court. Therefore, all proceedings in C.C. No.146 of 2018 on the files of the Crl.M.C. 864/20 **-:8:-** Judicial First Class Magistrate's Court, Kalady are quashed. The Crl.M.C. is allowed as above. **Sd/-** **BECHU KURIAN THOMAS JUDGE** vps Crl.M.C. 864/20 ## **-:9:-** ## **`APPENDIX OF CRL.MC 864/2020`** ``` PETITIONER'S/S' ANNEXURES ANNEXURE A1COPY OF REGISTRATION CERTIFICATE OF CHAITHANYA ENTERPRISES KURI DIVISION KANJOOR. ``` - **`ANNEXURE A2 COPY OF REGISTRATION CERTIFICATE OF KANJOOR KURIES PRIVATE LIMITED WITH THE ROC ERNAKULAM.`** - **`ANNEXURE A3 COPY OF THE VOUCHERS SHOWING THE PAYMENT MADE TO THE RESPONDENTS NO. 3 BY THE KURI COMPANY OF PETITIONERS NO. 1 AND 2.`** - **`ANNEXURE A4 COPY OF THE PRIVATE COMPLAINT CMP 1088/2017 FILED BY RESPONDENT NO. 3 LONG WITH ITS ANNEXURES IN JUDICIAL FIRST CLASS MAGISTRATE COURT, KALADY.`** - **`ANNEXURE A5 CERTIFIED COPY OF THE FIR NO. 1483/2017 REGISTERED BY RESPONDENT NO. 3 AS PER DIRECTIONS OF JFCM KALADY.`** - **`ANNEXURE A6 CERTIFIED COPY OF THE CHARGE SHEET IN CC. 146/18 ON THE FILES OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT, KALADY.`** - **`ANNEXURE A7 THE TUE COPY OF JUDGMENT DATED 15.01.2019 IN CRL.M.C. 7027/2017.`** - **`ANNEXURE A8 THE TUE COPY OF JUDGMENT DATED 09.12.2019 IN CRL.M.C. 7038/2017.`**