The petitioners are directors of a company by name Kamadhenu Business Fortune Ltd., a company incorporated under the Companies Act. The company is involved in the activities of promoting the business of another company by name Sterling Resorts by selling coupons to interested persons to stay in the chain of resorts. A crime was registered as Crime No.672 of 2011 of Vadakara Police Station on 21.06.2011, wherein petitioners and their agents are the accused for the offence punishable under Section 420 of the Indian Penal Code. The crime was registered on the basis of the complaint preferred by the de facto complainant (2nd respondent), who approached the police with her complaint that she had spent Rs.3,999/- for purchasing a tour package coupon and it is alleged in the complaint that by purchasing a coupon she would get an amount of Rs.715/- as commission and if she sells the coupon she will continuously get this amount as commission from the above company and that she did not get the amount as promised and thereby the accused cheated her and the crime was registered alleging the aforesaid offence. After registration of crime the investigation was carried out by the CBCID and they filed the impugned Annexure I final report alleging the offence punishable under Section 420 of Indian Penal Code and Sections 3,4,5 and 6 of Price Chits and money Circulation Scheme (Banning) Act, 1978 implicating all the petitioners and their three agents as the accused in the said case. It is the case of the petitioners that their company has never involved in the business of money circulation scheme and that the intention of the petitioners' company is only to promote the business of Sterling Resorts for selling their tour package coupons and that even if the entire allegations are accepted at its face value, no offence as alleged in the final report is made out in this case. It is further averred that the 2nd respondent (de facto complainant) had misunderstood the nature of the business and filed the complaint on imaginary allegations that the company had never involved in money circulation scheme or resorted to multilevel marketing and money circulation scheme. That though they had not involved in money circulation business, when these allegations were raised against the company they had immediately stopped the business and returned the entire amount to the customers who purchased the coupons and those who had not used the coupon in the meanwhile, it is averred. It is further stated that the 2nd respondent (de facto complainant) had settled all her outstanding disputes with the petitioners company and that this is evident from Annexure II affidavit sworn to by her on 06.08.2014, which reads as follows: “ I had availed a holiday package of Rs.40,000/- for 2 Nights and 3 days stay at sterling resorts from its subsidiary Company Kamadhenu Business Fortune Ltd. Due to my inconvenience, I could not utilize the coupon during the periods mentioned therein. As per receipt above, the company has reimbursed Rs.4,000/-, the value of Holiday Coupon I have purchased. Without proper understanding that the Business Fortune Ltd had only promoted the holiday locations of Sterling Resorts through direct marketing and the company had never enrolled any one in any money circulation scheme and not even resorted to multilevel marketing, a complaint happened to be wrongfully preferred which is now pending as Crime No.529/CR/EOW III/KKD/11 of CBCID, Kozhikode happened out of my mistake on my part in distinguishing direct marketing from multilevel marketing and money circulation schemes. There was omission on my part in not reading the terms and conditions of the company that did the direct marketing of holiday packages of Sterling Holiday Resorts. I have no complaint against the company.
All the facts stated above are true.”
2. The 2nd respondent de facto complainant has also sworn to an affidavit dated 21.08.2014 produced as Annexure III in this Crl.M.C. In Annexure III, it is stated by the 2nd respondent that she has no objection to quash all the further proceedings in C.C No.136 of 2014, which arose out of Crime No.529/CR/EOWIII/KKD/11 originally registered by the Vadakara Police as Crime No. 672 of 2011 and now pending on the file of Chief Judicial Magistrate Court, Kozhikode. That the dispute is purely private and personal and there is no public element involved and that she has no objection in quashment of the entire impugned criminal proceedings which led to the institution of C.C No.136 of 2014 on the file of Chief Judicial Magistrate Court, Kozhikode. It is in the background of these facts and circumstances that the petitioner had filed the above Crl.M.C with the prayer to quash all further proceedings in C.C No.136 of 2014 on the file of the Chief judicial Magistrate Court, Kozhikode, which arose out of Crime No.529/CR/EOWIII/KKD/11 originally registered by the Vadakara police as Crime No.672 of 2011 and all further proceedings arising therefrom.
3. The Crl.M.C has been admitted and Sri. C.Vinod Kumar has taken notice for the 2nd respondent and the learned Public Prosecutor has taken notice for the 1st respondent.
4. The point in issue is no longer res integra as it is covered by a decision of the Supreme Court in the case Gold Quest International Pvt. Ltd. V State of Tamil Nadu and Others reported in 2014(2) KLD 738 (SC). In the said decision in Gold Quest International Pvt. Ltd.'s case, the appellant company therein had over 60,000 members as consumers in and around Chennai city alone and a complaint was made in 2003 by the private respondent therein against the appellant company alleging noncompliance of the issuance of numismatic gold coin on receipt of Rs.16,800/- from the wife of that party respondent and as per the promise made by the appellant company. Some other customers also had complaints on the basis of which the police registered a case under Section 420 of the Indian Penal Code r/w Section 4, 5 and 6 of the Prize Chits and Money Circulation (Banning) Act, 1978 and the appellant company filed a Writ Petition before the Madras High Court for quashing of the impugned FIR therein and since all the claimants including the complainant settled the dispute with the appellant company and entered into an agreement, the learned Single Judge of the High Court had quashed the FIR and allowed the Writ Petition. However the state challenged the order of the learned Single Judge which quashed the impugned FIR and the Division Bench allowed the writ appeal filed by the State and directed the police authority to investigate the crime. Aggrieved by this, the company had taken up the matter in Supreme Court in Appeal. After referring to a catena of rulings of the Apex Court as in B.S Joshi and Others v State of Haryana and Another reported in (2003(4) SCC 675), Nikhil Merchant V Central Bureau of Investigation and Another reported in 2008(9) SCC 677, Gian Singh V State of Punjab reported in 2012(10) SCC 603 and other cases, the Apex Court came to the conclusion that in cases which are substantially of civil disputes though with criminal facets, if the parties had entered into settlement and it has become clear that there are no chance of conviction, there is no illegality quashing the proceedings under Section 482 of the Code of Criminal Procedure r/w Article 226 of the Constitution of India. But that however such an approach may not apply where the nature of the offence is very serious like those involving offences like rape murder robbery dacoity and cases under the Prevention of Corruption Act, under the NDPS Act etc. in which punishment of life imprisonment or death can be awarded. In this view of the matter, the Supreme Court set aside the judgement of the Division Bench of the Madras High Court and restored the judgment of the learned Single Judge and upheld the quashment of the FIR for offences under Section 420 of the Indian Penal Code r/w Sections 4,5 and 6 of the Prize Chits and Money Circulation Scheme (Banning ) Act 1978. In the instant case the offence alleged is under Section 420 of the Indian Penal Code r/w Sections 3, 4, 5 and 6 of the Prize Chits and Money Circulation Scheme (Banning) Act 1978.
5. Sri. C.Vinod Kumar, learned counsel for the 2nd respondent has submitted on specific instructions from the 2nd respondent that the 2nd respondent has no objection whatsoever, for the quashment of the impugned criminal proceedings and the entire proceedings arising out of the impugned Calendar Case now pending on the file of the Chief Judicial Magistrate Court, Kozhikode and that the disputes are arose out of misunderstandings between the 2nd respondent and the petitioners' company and that the petitioner company has never involved any one in the money circulation scheme and has not given resort to multilevel marketing and that her complaint was preferred on the wrong premise due to her mistake in not able to distinguish between direct marketing, multilevel marketing and money circulation scheme. The counsel for the 2nd respondent has also submitted on the specific instructions from the 2nd respondent that the 2nd respondent has also settled all the disputes not only with the 12 petitioners herein who are accused 1 to 12 but also with accused 13 to 15, who are the agents of the petitioners' company and that the entire impugned criminal proceedings as against all the accused in the impugned Calendar Case may be quashed by this Court in the interest of justice. It is also to be noted that in the case dealt with by the Apex Court in Gold Quest International Pvt.Ltd.V State of Tamil Nadu reported in 2014(2) KLD 738 (SC), the admitted case of the appellant was that it had involved in multilevel marketing and that it conducted business with necessary licence etc. Whereas in the instant case the case even projected by the 2nd respondent is that the petitioner company had not involved themselves in multilevel marketing scheme or money circulation marketing scheme and that the 2nd respondent had preferred the complaint on account of her mistake in not able to correctly distinguish between direct marketing from multilevel marketing etc.
6. In this view of the matter, this Court is convinced that the chance of conviction are rather remote and as the entire transactions arose out of civil (Commercial) transaction between the petitioners' company and the 2nd respondent, this is a fit case for allowing the prayer for quashment of the impugned criminal proceedings, more so in view of the reasonings of the Supreme Court in the case Gold Quest International Pvt.Ltd.V State of Tamil Nadu reported in 2014(2) KLD 738 (SC) which in turn is based on other decisions of the Apex Court on the point.
Accordingly, the Crl.M.C is allowed and the impugned criminal proceedings arising out of the Calendar Case, C.C No.136 of 2014 on the file of the Chief Judicial Magistrate Court (arising out of Crime No.529/CR/EOWIII/KKD/11, originally registered by the Vadakara Police as Crime No.672 of 2011 and all further proceedings arising therefrom as against all the accused in this case. The petitioner shall produce a certified copies of this oder before the Chief Judicial Magistrate Court, Kozhikode and before the Investigating Officer concerned.
Sd/-
ALEXANDER THOMAS, JUDGE vdv //True Copy// P.A to Judge