CR.MA/10314/2010 of NILESH V. MEKEL, SR. MANAGAER (LEGAL), ZEE ENTERTAINMENT ENT Vs STATE OF GUJARAT on 24 December 2014

ORAL JUDGMENT

1. By way of present application under section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'the Code'), the applicants have sought for quashment of Criminal Complaint No.12209 of 2008 dated February 01, 2008, as also the issuance of process by the learned Chief Judicial Magistrate, Surat in connection with the said complaint, lodged by the respondent No.2-original complainant against the applicants and the other co-accused person.

2. The facts in capsulized form are as under :

2.1The applicant No.1-original accused No.1 is a company incorporated under the Companies Act, 1956 and is engaged in the business of media 1956 and is engaged in the business of media and entertainment. The applicant No.2 is working as an Assistant Vice President with the applicant No.1-Company.

2.2It is the case of the applicants that in the year 2007, a programme was launched to telecast in the name of “Hero Honda Sa Re Ga Ma Pa in the name of “Hero Honda Sa Re Ga Ma Pa

Challenge 2007” (hereinafter referred to as 'the Challenge 2007'), which had gained popularity all across the globe. A renowned musician was appointed as one of the judges in musician was appointed as one of the judges in the said Challenge 2007 singing competition organised by the applicant No.1 encouraging the upcoming singers. In the finale of the said competition held at Mumbai, one Mr.Aneek was declared as a winner.organised by the applicant No.1 encouraging the upcoming singers. In the finale of the said competition held at Mumbai, one Mr.Aneek was declared as a winner.

2.3It is the say of the applicants that Shri Ismail Darbar in partnership with Destiny Club had organised Navratri Festival-2007 at Pragati Maidan, Piplod, Surat, where a request was made for arranging and providing some of the singers of the Challenge 2007 to perform at the venue. It is the say of the applicants that to oblige Shri Ismail Darbar and subject to availability Ismail Darbar in partnership with Destiny Club had organised Navratri Festival-2007 at Pragati Maidan, Piplod, Surat, where a request was made for arranging and providing some of the singers of the Challenge 2007 to perform at the venue. It is the say of the applicants that to oblige Shri Ismail Darbar and subject to availability

and other factors, the applicant No.1 had agreed to send some of the artists from October 12, 2007 to October 21, 2007 and two cheques were also issued towards the rates finalised for such performance. On October 14, 2007 and October 15, 2007, some of the artists performed agreed to send some of the artists from October 12, 2007 to October 21, 2007 and two cheques were also issued towards the rates finalised for such performance. On October 14, 2007 and October 15, 2007, some of the artists performed at Navratri Festival-2007 at Surat and after recovering pro-rata amount, the remaining sum was refunded to the complainant. However, on account of controversy having arisen pursuant to the interview of Shri Ismail Darbar, where he questioned the decision of the media channel on finalist, public uproar scared the artists and, therefore, they could not be sent for performance. This was, of course, communicated to the organisers. Therefore, another cheque dated October 16, 2007 was never deposited and consequently not realised, which has elapsed by efflux of time. Under these circumstances, on November 8, 2007, a notice was issued by the respondent No.2 to the applicants, claiming an amount of Rs.5.50 crore on the ground of breach of contract by the applicants, wherein it was alleged that on account of the failure in making arrangement for performance of the artists on the agreed dates during Navratri Festival-2007 at Surat, huge loss has been caused to the respondent No.2-original complainant.

2.4A reply to the said notice has been sent by the applicants on November 27, 2007, inter alia contending that no contract was executed between the applicants and the respondent No.2 with regard to performance of the artists at Surat and the same was arranged at the request of Shri Ismail Darbar.

2.5On February 01, 2008, a private criminal complaint bearing No.12209 of 2008 came to be filed before the Court of the learned Chief Judicial Magistrate, Surat, seeking issuance of process under sections 406, 420, 34 and 114 of the Indian Penal Code, whereby it is alleged essentially that the respondent No.2 had contacted the applicants in the first week of August, 2007, inspired by the success of the Challenge 2007 and requested for arrangement of top 10 artists of the Challenge 2007. The applicant No.2 and the Senior Manager Shri Ashish Kaul i.e. original accused No.3, had assigned different dates for 16 attendances, which was revised and consented to 10 artists

for 18 attendances. Pursuant to such understanding, cheques were issued. It is also the say of the respondent No.2 in the complaint in question that any opinion of Shri Ismail Darbar expressed before the media was exclusively his own opinion and had no concern with the Navratri Festival-2007 organised by the respondent No.2 in association with Shri Ismail Darbar. It is also alleged that considering the TRP of the applicant No.1-Zee Entertainment Enterprise Ltd., on account of success of the said Challenge 2007, since those artists had got higher rates elsewhere and, therefore, the applicants deliberately did not send the artists under the false pretext, which caused huge loss and damage to the respondent No.2, who is a well-known organiser of various events, who is carrying out business of managing and organising functions and had, accordingly, planned to organise the event on commercial basis during Navratri Festival between October 12, 2007 and October 21, 2007 at Surat.

2.6It is alleged that it was a deliberate act not to send the artists as stipulated and once not to send the artists as stipulated and once the advance payment was made and all arrangements with regard to accommodation, travel, food, beverages were made and licence from Police Commissioner was also obtained and sufficient provisions were made for security of the artists, it is alleged that with mala fide intention, the act of criminal breach of trust was done by the applicants herein. This had resulted into not only huge loss, but damage to the prestige of the respondent No.2-original complainant. Hence, present application.

3. Mr.S.N. Thakkar, learned counsel appearing for the applicants, has strenuously made his submissions urging this Court that a civil dispute is sought to be converted into a criminal complaint.

3.1It is further submitted that sufficient ingredients for invocation of section 420 of the Indian Penal Code are completely missing. According to him, there was neither any benefit ingredients for invocation of section 420 of the Indian Penal Code are completely missing. According to him, there was neither any benefit

accrued to the applicants from the purported act of deceit nor could there be any criminal intent to deceive the complainant to part with the property from the very beginning.

Indisputably, the learned counsel urged that when the singers were sent to perform on October 14, 2007 and October 15, 2007, there could not have been any intention from the beginning to deceive the respondent No.2.

3.2He has further submitted that the issuance of notice on the part of the respondent No.2 is of notice on the part of the respondent No.2 is indicative that it is a civil dispute. It was averred by the respondent No.2-original complainant that on account of increase in TRP rates resulting from publicity of the said Challenge 2007, the applicants had chosen to send them elsewhere. It is urged by the learned advocate that the complaint is gross abuse of process of the law.

3.3He relied on the following authorities to substantiate his submissions :substantiate his submissions :

(i) Dalip Kaur and others v. Jagnar Singh and another, reported in (2009) 14 SCC 696.

(ii) V.Y. Jose and another v. State of

Gujarat and another, reported in (2009) 3 SCC 78.SCC 78.

(iii) Harmanpreet Singh Ahluwalia and others

v. State of Punjab and others, reported in (2009) 7 SCC 712.(2009) 7 SCC 712.

(iv) Inder Mohan Goswami and another v.

State of Uttaranchal and others, reported in (2007) 12 SCC 1.(2007) 12 SCC 1.

(v) Dr.Sharma's Nursing Home v. Delhi

Administration and others, reported in

(1998) 8 SCC 745.

(vi) M. Sivaram and others v. State of Andhra Pradesh, reported in 2007 Cr.L.J. 1259.Andhra Pradesh, reported in 2007 Cr.L.J. 1259.

(vii) Joseph Salvaraj v. State of Gujarat and others, reported in AIR 2011 SC 2258.

4. Mr.Hardik A. Dave, learned counsel appearing for the respondent No.2-original complainant, has urged fervently that once the process has been issued by the Court concerned, this Court need not interfere. It was not the duty of Shri Ismail Darbar with whom the respondent No.2 entered into contract, to provide artists, but it was the direct responsibility of the applicant No.1 to provide artists, who had entered into a contract with the respondent No.2 by accepting the consideration given by way of two cheques. He further urged that the schedule was also provided of the artists at the eleventh hour, however, the applicants chose not to send the artists. Intention is a matter of trial and the act done pursuant to their having agreed at an appropriate time, the Court will decide in trial by way of evidence on record. It is further urged that it has been challenged after two years as the process had been issued on June 04, 2008, whereas the challenge has been made on August 25, 2010. He pointed out to the Court that those artists, who were said to be unwell, were performing

elsewhere, which is also a clear indication as to the fact that the applicants had no regard for the contract and had intention of cheating from the beginning. In support of his submissions, he has relied upon the following decisions :

(i) Ravindra Kumar Madhanlal Goenka v.

M/s.Rugmini Ram Raghav Spinners P. Ltd., reported in AIR 2009 SC 2383.reported in AIR 2009 SC 2383.

(ii) Sanjiv Bhardwaj and etc. v. Hasmukhlal Rambhai Patel and another, reported in 1989 Cr.L.J. 1892.Cr.L.J. 1892.

(iii) Radhakishan Dalmia and Sons v. Narayan and another, reported in 1989 Cr.L.J. 443.another, reported in 1989 Cr.L.J. 443.

5. Heard both the sides and considering all the authorities pressed into service, at the outset, the provisions of sections 415 and 420 of the Indian Penal Code, 1860, deserve reproduction, which read as under:authorities pressed into service, at the outset, the provisions of sections 415 and 420 of the Indian Penal Code, 1860, deserve reproduction, which read as under:

“415. Cheating—Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to ‘cheat’.

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420. Cheating and dishonestly inducing

delivery of property.--Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”

6. The offence of cheating speaks of the ingredients whereby any person fraudulently or dishonestly when induces a person by deceiving him and the person so deceived delivers the property or make him to do or not to do anything, which would not do or omit if not deceived, thus, cause damage or

harm to such person in body, mind, reputation or property is said to have “cheated”. And the punishment is provided under section 420 of the Indian Penal Code, which provides that the person who cheats and thereby induces to deliver any property to any person shall be punished with imprisonment and with fine. Mens rea is vital for any offence of cheating. Thus, while making promise or representation, dishonest intention must exist.

7. In the case of Harmanpreet Singh Ahluwalia v. State of Punjab, reported in (2009) 7 SCC 712, the Court was dealing with matrimonial dispute between the parties. The couple had married in India, but settled at Canada. Due to differences in the marriage, they started living separately. When they moved a petition for divorce, the wife's father came to India to lodge a complaint against the husband under sections 406 and 420 of the Indian Penal Code, inter alia alleging that the husband had married solely for the purpose of getting entry in Canada and had taken away all the dowry articles belonging to the respondent-wife. The investigation had concluded and the chargesheet was filed against the husband. In such circumstances, when a petition was moved for quashment of the criminal proceedings, the High Court refused to so do it.

The Apex Court held it to be an abuse of process of the Court and termed the same as the proceedings launched to harass the husband. It further held that since no prima facie case of cheating or criminal breach of trust was made out, the High Court ought to have exercised its discretion under section 482 of the Code of Criminal Procedure taking a holistic view. While discussing at length various other decisions on the subject, the definition of cheating and ingredients of section 420 of the Code of Criminal Procedure, are also elaborately dealt with in the said decision. It would be apt to reproduce the relevant discussion on the subject at this stage :

“25.

An offence of cheating cannot be

said to have been made out unless the following ingredients are satisfied:

“i) deception of a person either by making a false or misleading representation or by other action or omission;

(ii) fraudulently or dishonestly inducing any person to deliver any property; or

(iii) To consent that any person shall retainanypropertyandfinally intentionally inducing that person to do or omit to do anything which he would not do or omit.”

For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out. We may reiterate that one of the ingredients of cheating as defined in Section 415 of the

Indian Penal Code is existence of an intention of making initial promise or existence thereof from the very beginning of formation of contract.

25. In Ajay Mitra v. State of M.P. (2003) 3 SCC 11 , this Court held:

“15. Section 420 IPC says that “whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person ... shall be punished with imprisonment ...”.

Cheating has been defined in Section 415 IPC and it says that:

“415. Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to ‘cheat’.”

16. A guilty intention is an essential ingredient of the offence of cheating. In

other words “mens rea” on the part of the accused must be established before he can be convicted of an offence of cheating. (See Jaswantrai Manilal Akhaney v. State of Bombay [AIR 1956 SC 574). In Mahadeo Prasad v. State of W.Bi [AIR 1954 SC 724] it was held as follows: (AIR paras 4-5) Where the charge against the accused is under Section 420 in that he induced the complainant to part with his goods, on the understanding that the accused would pay for the same on delivery but did not pay, if the accused had at the time he promised to pay cash against delivery an intention to do so, the fact that he did not pay would not convert the transaction into one of cheating. But if on the other hand he had no intention whatsoever to pay but merely said that he would do so in order to induce the complainant to part with the goods then a case of cheating would be established.”

26. In Hira Lal Hari Lal Bhagwati v. CBI [(2003) 5 SCC 257], this Court held :

“40. It is settled law, by a catena of decisions, that for establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. From his making failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the exemption certificate contained necessary conditions which were

required to be complied with after importation of the machine. Since the GCS could not comply with it, therefore, it rightly paid the necessary duties without takingadvantageoftheexemption certificate. The conduct of the GCS clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as office-bearers right at the time of making application for exemption.”

{See also Indian Oil Corporation v. NEPC

India Ltd. & Ors. [(2006) 6 SCC 736]}

27. In Vir Prakash Sharma v. Anil Kumar Agarwal [(2007) 7 SCC 373], noticing, inter alia, the aforementioned decision, this Court held:

“8. The dispute between the parties herein is essentially a civil dispute. Non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Penal Code can be said to have been made out in the instant case.”

It was furthermore opined:

“13. The ingredients of Section 420 of the Penal Code are as follows:

(i) Deception of any persons;

(ii) Fraudulently or dishonestly inducing any person to deliver any property; or

(iii) To consent that any person shall retainanypropertyandfinally intentionally inducing that person to do or omit to do anything which he would not do or omit.

No act of inducement on the part of the appellant has been alleged by the respondent. No allegation has been made that he had an intention to cheat the respondent from the very inception.

14. What has been alleged in the complaint petition as also the statement of the complainant and his witnesses relate to his subsequent conduct. The date when such statements were allegedly made by the

appellant had not been disclosed by the witnesses of the complainant. It is really absurd to opine that any such statement would be made by the appellant before all of them at the same time and that too in his own district. They, thus, appear to be wholly unnatural.

15. In law, only because he had issued cheques which were dishonoured, the same by itself would not mean that he had cheated the complainant. Assuming that such a statement had been made, the same, in our opinion, does not exhibit that there had been any intention on the part of the appellant herein to commit an offence under Section 417 of the Penal Code.

16. Furthermore,admittedly,their

residences are in different districts. Whereas the appellant is a resident of the district of Ajamgarh, the respondent is a resident of the district of Rampur. Cheques were admittedly issued by the appellant at his place. There is nothing on record to show that any part of the cause of action arose within the jurisdiction of the court show that any part of the cause of action arose within the jurisdiction of the court concerned. Even if such statements had been made, the same admittedly have been made only at the place where the appellant resides. The learned Magistrate, therefore, had no jurisdiction to issue the summons.”

28. The said principle has been reiterated in All Cargo Movers (I) Pvt. Ltd. v. Dhanesh Badarmal Jain & Anr. [2007 (12) SCALE 391], stating:

“16. .. ..For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie cannot notice the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say thatforexercisingtheinherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the Court. Superior Courts while exercising this power should also strive to serve the ends of justice.

(See also Sharon Michael & ors. vs. State of Tamil Nadu & Anr. [2009 (1) SCALE 627]”

With regard to invocation of powers under section 482 of the Code of Criminal Procedure, in the said judgment the Apex Court has referred to some of the decisions. The relevant discussion and findings would be required to be reproduced, which reads as under :

“33. In All Cargo Movers (I) Pvt. Ltd. v. Dhanesh Badarmal Jain & Anr.[2007(12)SCALE 391], this Court held :

“For the said purpose, allegations in the complaint petition must disclose the necessary ingredients therefor. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie cannot notice the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say

thatforexercisingtheinherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the Court. Superior Courts while exercising this power should also strive to serve the ends of justice.” {See also V.Y. Jose & Anr. vs. State of Gujarat & Anr. [2008 (16) SCALE 167]}

34. In Hira Lal & Ors. vs. State of U.P. & Ors. [2009 (5) SCALE 418], this Court held :

“10. The parameters of interference with a criminal proceeding by the High Court in exercise of its jurisdiction under Section 482 of the Code are well known. One of the grounds on which such interference is permissible is that the allegations contained in the complaint petition even if given face value and taken to be correct in their entirety, commission of an offence is not disclosed. The High Court may also interfere where the action on the part of the complainant is mala fide.”

35. Upon taking a holistic view of the matter vis-a-vis the statutory provisions, we are of the opinion that the appellants

had made out an exceptional case to invoke the inherent jurisdiction of the High Court under Section 482 of the Code. It was, in our opinion, obligatory on the part of the High Court to exercise its discretionary jurisdiction to prevent the abuse of process of the court.”

8. In yet another decision in the case of Inder Mohan Goswami and another v. State of Uttaranchal and others, reported in (2007) 12 SCC 1, the Supreme Court was dealing with offence of cheating under sections 420 and 467 of the Indian Penal Code in a quashing petition. The Court held and observed that the powers possessed by the High Court under section 482 of the Code of Criminal Procedure are very wide and the very plenitude of the power requires great caution in its exercise. The Court must be careful to see that its decision in exercise of this power is based on sound principles. Apt would be reproduce relevant paragraphs of the said decision, which read as under :

“23. This court in a number of cases has laid down the scope and ambit of courts

powers under section 482, Cr.P.C. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under section 482, Cr.P.C. can be exercised - :

(i) to give effect to an order under the Code;

(ii) to prevent abuse of the process of court, and

(iii) to otherwise secure the ends of justice.

24. Inherent powers under section 482, Cr.P.C. though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the Court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the Statute.

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46. The court must ensure that criminal prosecution is not used as an instrument of harassment or for seeking private vendetta or with an ulterior motive to pressure the accused. On analysis of the aforementioned cases, we are of the opinion that it is neither possible nor desirable to lay down an inflexible rule that would govern the exercise of inherent jurisdiction. Inherent jurisdiction of the High Courts under Section 482 Cr.P.C. though wide has to be exercised sparingly, carefully and with caution and only when it is justified by the tests specifically laid down in the Statute itself and in the aforementioned cases. In view of the settled legal position, the impugned judgment cannot be sustained.”

The Apex Court in that case was dealing with a case of charitable society executing a power of attorney and sale agreement in respect of a land in favour of the respondent (No.3), who failed to pay the balance amount in respect of sale in question despite several requests made by the office bearers of the society. The respondents misusing the said deeds, made further sale of the property in question. The

due notice was given to the respondents forfeiting their earnest money and on cancellation of the said deeds, the part of land in question was sold. Aggrieved by such action, the respondent No.2 lodged a criminal complaint under sections 420 and 467 of the Indian Penal Code. The Supreme Court held that the matter was purely concerning a civil dispute as after taking into account the entire averments made in the FIR to be correct, no offence under sections 420 and 467 was made out.

9. In the case of V.Y. Jose and another v. State of Gujarat and another, reported in (2009) 3 SCC 78, the dispute between the parties was with regard to supply of a machine which served a specific purpose of purifying and desalting the dyes to a particular level as indicated by the party respondent. The price of the machine was settled at a particular amount, out of which some advance payment was made. When the same was ready and inspected by the respondent, the respondent found it not to have achieved the specified level of purifying and desalting the dyes. A criminal complaint was filed by the respondent and the Court took cognizance of offences punishable under sections 417, 420 read with section 114 of the Indian Penal Code, 1860. It was the grievance of the appellant before the Court that the respondent was not taking delivery of machine and had blocked the material worth Rs.14 lakh on account of contract entered by and between the parties. The Court in such circumstances had invoked powers under section 482 of the Code of Criminal Procedure, holding that only because civil law would be taken recourse to, would not necessarily mean that criminal proceedings should be barred. However, there exists a distinction between pure contractual dispute of a civil nature and an offence of cheating. Although breach of contract per se would not come in the way of initiation of a criminal proceeding, yet in the absence of the averments made in the complaint, wherefrom the ingredients of an offence can be found out. The Court should not be

hesitant to exercise its jurisdiction under section 482 of the Code of Criminal Procedure. The Court further held that section 482 of the Code serves a salutary purpose that a person should not undergo harassment of litigation for a number of years although no case has been made out against him and a matter which essentially involves dispute of a civil nature should not be allowed to be the subject-matter of a criminal offence, the latter being a short cut of executing a decree which is non-existent. The superior courts, with a view to maintain purity in the administration of justice, should not allow abuse of the process of Court and they have a duty in terms of section 482 of the Code to supervise functioning of trial Courts.

The Apex Court has also held in the said decision that the complainant, in order to prove offence of cheating, is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation and even in a case where allegations are made in

regard to failure on the part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise, no offence under section 420 can be said to have been made out against the accused.

10. In the case of Dalip Kaur and others v. Jagnar Singh and another, reported in (2009) 14 SCC 696, the Apex Court after referring to the ingredients of section 420 of the Indian Penal Code, has emphasised that the offence of cheating would be constituted if the accused had fraudulent or dishonest intention at the time of making promise or representation. A pure and simple breach of contract does not constitute an offence of cheating. A question ought to have been posed whether any act of inducement on the part of the appellant has been raised by the respondent and whether the appellant had an intention to cheat him from the very inception. It was a question of non-refund of amount of advance made to the appellant, which according to

the Court, would not constitute an offence of cheating.

11. In the case of Dr.Sharma's Nursing Home v.

Delhi Administration and others, reported in (1998) 8 SCC 745, the complainant had got his brother admitted in a nursing home on assurance given by the authorities that air-conditioned rooms will be available in the said nursing home. Later on the rooms which were provided were not found air-conditioned though he was charged for such a room. In such circumstances, a complaint had been lodged of cheating and the Court held that the ingredients of 'dishonest inducement' were not made out.

12. Following three decisions have been sought to be relied upon for and on behalf of respondent which deserve consideration at this stage:which deserve consideration at this stage:

(i) Decision of the Madhya Pradesh High Court rendered in the case of Radhakishan Dalmia and Sons. v. Narayan and another, reported in 1989 Cr.L.J. 443, is in respect of the dishonouring of Sons. v. Narayan and another, reported in 1989 Cr.L.J. 443, is in respect of the dishonouring of

the post-dated cheque issued by the Bankers. Subsequently, the payment of half of price was made. In view of failure on the part of the petitioner to pay the balance, the Court held that the same was not merely a civil wrong, but the mens rea writs large on the face of the matter.

(ii) The Apex Court in the case of Ravindra Kumar

Madhanlal Goenka v. M/s.Rugmini Ram Raghav Spinners P. Ltd., reported in AIR 2009 SC 2383, was dealing with a case of quashment under section 482 of the Code of Criminal Procedure, where the Magistrate had issued a process, the Court held that while entertaining a petition under section 482 of the Code of Criminal Procedure, the material furnished by defence cannot be looked into and can be entertained only at the time of trial. No interference was found desirable by the Apex Court.

(iii) The Gujarat High Court in a decision in the case of Sanjiv Bhardwaj and etc. v. Hasmukhlal

Rambhai Patel and another, reported in 1989 Cr.L.J. 1892, was dealing with a petition of quashing preferred under section 482 of the Code of Criminal Procedure to get the complaint quashed for the offence of cheating, where an advertisement was published in a daily newspaper for giving special offer to the tourists in Goa for Hotel Oberoi, where the complainant was asked to make a payment in advance. The Court had inferred the dishonest intention. The powers exercised by the Magistrate were held as not exercised wrongly.

13. In the present case, in light of the decisions discussed hereinabove, if the facts of the instant case are closely looked at, as could be noticed, the agreement was entered into between the respondent No.2, Destiny Fun Club and Shri Ismail Darbar, the Music Director for the purpose of organising Navratri Festival between October 12, 2007 to October 21, 2007. Clause 12 specifies that Shri Ismail Darbar i.e. Part-II of the agreement, holds the complete responsibility under the said agreement for handling and

synchronising musicians, singers, orchestra and other required performers in addition of giving his expert performance in Music and Music Direction. The respondent No.2 had especially hired and entered into contract with “Dholi Beats” and other artists as performing music artist signers on reference of Shri Ismail Darbar.

14. It is the say of the respondent No.2 that the applicants had agreed to provide the artists for the said event independent of their contract with Shri Ismail Darbar. It is also their say that having agreed to provide such singers/ performers after the success of Challenge 2007, the applicants had also encashed the amount as part consideration, whereas on the part the respondent No.2, both the cheques of total consideration had been handed over. It is also the say of the respondent No.2 that whether there was any intention of cheating at the time of accepting the amount of consideration and on having agreed to send the budding singers for

such performance applicants not having respected such contract mala fide or otherwise, are some of the issues to be gone into by the Court concerned at the time of trial. Once having issued process for the offences punishable under section under section 420 read with section 114 of the Indian Penal Code, the Court is not to interfere at this stage.

15. It would be sufficient to note prima facie that the applicants would not be in a position to say that they have discharged their obligation of sending the singers solely at the behest of Shri Ismail Darbar and only at his behest, the artists were sent for performing at Navratri Festival-2007 on October 14, 2007 and October 15, 2007. Assuming that it was Shri Ismail Darbar who had requested the applicants to assign some artists at Surat, the payment made by the respondent No.2 is not to Shri Ismail Darbar, but to the applicants and indisputably it is to the applicants that such amount of consideration has been paid. The applicants also in their reply to that the applicants would not be in a position to say that they have discharged their obligation of sending the singers solely at the behest of Shri Ismail Darbar and only at his behest, the artists were sent for performing at Navratri Festival-2007 on October 14, 2007 and October 15, 2007. Assuming that it was Shri Ismail Darbar who had requested the applicants to assign some artists at Surat, the payment made by the respondent No.2 is not to Shri Ismail Darbar, but to the applicants and indisputably it is to the applicants that such amount of consideration has been paid. The applicants also in their reply to the notice as well as in the present application contended that those artists who had been sent for performance on October 14, 2007 and October 15, 2007 were sent at a very nominal rate and the amount required to be paid towards their charges has already been honoured by the respondent No.2. Out of the two cheques, which were issued, one cheque has been honoured and the sum of Rs.5 lakh has been received by the applicants by way of charges towards such performance. It is also not in dispute that the remaining amount of Rs.50,000/- was refunded and another cheque bearing No.280327 for an amount of Rs.5,07,869/- had not been deposited and by efflux of time, the same had elapsed.

It is to be noted that after the exchange of notices by and between the parties, the complaint in question came to be filed by the respondent No.2 on February 01, 2008. The Court chose to undertake inquiry under section 202 of the Code. The Court subsequent to such order of inquiry under section 202 of the Code, issued process for the offences punishable under sections 420 and in question came to be filed by the respondent No.2 on February 01, 2008. The Court chose to undertake inquiry under section 202 of the Code. The Court subsequent to such order of inquiry under section 202 of the Code, issued process for the offences punishable under sections 420 and

16.

114 of the Indian Penal Code on June 04, 2008 and the same was made returnable on July 03, 2008.

The present application has been preferred on August 19, 2010, which had been admitted on January 24, 2011, where ad interim relief in terms of paragraph 3(B) has been granted by the Court. Prior to that the applicant No.2 was protected by directing the trial Court not to execute the non-bailable warrant issued against him.

17. It is in this background the Court shall have to consider whether this case requires invocation of extraordinary jurisdiction under section 482 of the Code of Criminal Procedure, 1973, inasmuch as whether the civil dispute has been given a colour of criminal complaint. have to consider whether this case requires invocation of extraordinary jurisdiction under section 482 of the Code of Criminal Procedure, 1973, inasmuch as whether the civil dispute has been given a colour of criminal complaint.

18. As can be noticed that the first notice issued on November 08, 2007 by the respondent No.2, which makes out the grievance against the present applicants of not fulfilling the obligations that had flown from the oral contract. It also clearly alleges that the issued on November 08, 2007 by the respondent No.2, which makes out the grievance against the present applicants of not fulfilling the obligations that had flown from the oral contract. It also clearly alleges that the

outburst or opinion of Shri Ismail Darbar before the electronic and print media during his interview, was his personal opinion, but that would not give any right to the applicants to backtrack from the obligations that it had undertaken. It is only in order to take vengeance upon Shri Ismail Darbar, the applicants chose not to send artists as stipulated under one or the other pretexts. It further had emphasised that total loss of about Rs.5 crore to Rs.5.5 crore had incurred to the respondent No.2 on account of such deliberate act on the part of the applicants, with a further allegation that act of not sending artists was actuated by deliberate and mala fide intention.

19. The applicants by way of their reply to the notice have attempted to give their predominant defence in the form of insecurity felt by the artists soon after the strong public reactions to the opinion of Shri Ismail Darbar. Even if the reply given by the applicants to such notice issued by the respondent No.2 is not taken into consideration, which was of course prior to

lodging of the complaint by the respondent No.2, it becomes apparently clear that the respondent No.2 was much aggrieved by the breach of the agreement and all along in the notice, he has emphasised on the huge loss which has been averredly incurred on account of the act of not sending the artists as was decided by and between the parties. It would not be appropriate for this Court to opine on merits of the demand made as also to dilate the issue of total loss of Rs.5 crore to Rs.5.5 crore as the respondent No.2 would have all rights to pursue the civil remedy if permissible under the law. Central argument of the respondent not of considerable security already lodged at the ground and the performance of the artists elsewhere on the same dates when they were otherwise to be sent to Surat, are some of the issues which can be gone into by the concerned Court when the competent Court would be required to adjudicate upon such civil dispute.

Conclusion

20. With regard to the culpable intention of cheating whether to have existed from the beginning, it can be said that the applicants cheating whether to have existed from the beginning, it can be said that the applicants

after having agreed to send the artists for the performance at the event of Navratri chose to so do it on October 14, 2007 and October 15, 2007, the subsequent events as averred had prevented them from sending the artists and whether there was any justification for breach of their contratual obligation which they had undertaken or not, the remedy surely, is to take recourse under the civil law. Had there been any intention from the start which is a must for an offence under section 420 of the Indian Penal Code to be made out no artists would have been sent on any of the dates. Mere allegation in regard to failure on the part of the accused-applicant to keep their promise would neither constitute any criminal offence nor would it allow the criminal proceedings to continue. In other words, in absence of any culpable intention of making promise from the beginning of formation of contract, no offence of cheating is constituted.

21. The respondent No.2 has chosen to take a shorter route by lodging a complaint. By no stretch of imagination, it can be said that the shorter route by lodging a complaint. By no stretch of imagination, it can be said that the

applicants at the time of entering into the obligations by way of oral contract towards which it accepted the consideration, had intention to cheat, as none of the ingredients of the provisions of sections 415 read with section 420 appear to be present. In such circumstances, to serve the ends of justice, interference is desirable. This Court is not oblivious of the basic principle that even when civil dispute provides for the remedy under the civil law, that ipso facto would not debar a person from taking recourse under the criminal law if the offence is otherwise made out from the very gamut of facts. However, in absence of any criminal ingredients, to prevent abuse of the process of Court, extraordinary powers deserve to be invoked. The trial Court even if has chosen to issue process, when nothing comes out to indicate that at the time of entering into such contract at an initial stage, there was an intention to cheat, the criminal complaint and the consequential proceedings, including process, deserve to be quashed.

For the foregoing reasons, the present application is hereby allowed. The complaint being Criminal Complaint No.12209 of 2008 pending before the Court of learned Chief Judicial Magistrate, Surat along with the process issued thereon and all the consequential proceedings emanating from the said complaint, are quashed and set aside qua the present applicants. Rule is made absolute.

22. Aakar

(MS SONIA GOKANI, J.)