JUDGMENT Amar Saran, J.
1. Heard learned Counsel for the applicant, learned Counsel for opposite party No. 2 and learned AGA.
2. Learned Counsel for opposite party No. 2 submits that he does not want to file a counter affidavit in this case and this application may be disposed of at this stage itself on the basis of the material in the application under Section 482 Cr.P.C.
3. The application has been moved with a prayer for quashing the criminal proceedings in Case No. 4230 of 2007, based on charge-sheet No. 138 of 2007 in Case Crime No. 327 of 2007: State v. Ram Prakash Kanodia and Ors., under Sections 406, 504, 506 IPC, PS Kotwali, District Kanpur Nagar, pending in the Court of Special CJM, Kanpur Nagar and order dated 7.1.2008 issuing a non-bailable warrant against applicant No. 1, Smt. Shail Kanodia, passed by the same court.
4. The allegations in the FIR were that in the FIR lodged by informant Rajni Agarwal on 1.8.2007 were that the applicants Ram Prakash Kanodia and Smt. Shail Kanodia were his acquaintances. They were engaged in the business of distribution of Pepsi cold drinks under the name and style of M/s. Kanodia Sales. On 20.11.1995 the said persons came to her residence and assured her that these days their business was running at a loss. If the informant helped them, their business might start yielding profits and then they might consider making the informant a partner in their firm. Believing them, she advanced a loan of Rs. 8,50,000/- through cash and cheques for investing the sane in their business. This advance was given in the presence of Rajendra Agarwal and Ravindra Agarwal. Later, the accused persons told her that they could not make her a partner in their business and that they would return her money after a year. After the expiry of the said period, when the informant asked them to return her money, the applicants started making excuses. On her repeated requests for the money, Ram Prakash Kanodia and Smt. Shail Kanodia issued three cheques out of which one cheque of Rs. 7,25,000/- was issued by Ram Prakash and the other of Rs. 50,000/- was issued by Shail Kanodia, but on account of insufficiency of funds both the cheques were returned as dishonoured by the concerned bank on 21.6.2007 and 22.6.2007. After that the informant approached the applicants on several occasions but they never returned the money to her. It appeared to the informant that the intention of the applicants was to cheat her and to expropriate her money from the very beginning and in pursuance of the said conspiracy they had realised Rs. 8,50,000/- from her in a dishonest manner after deceiving her. On 31.7.2007 when the informant again asked Ram Prakash Kanodia for the money, he refused and abused her and gave her life threats.
5. Learned Counsel for the applicants submits that essentially the dispute between the parties was of civil nature and from a mere inability to pay back the sum borrowed, criminal proceedings ought not to have been initiated. One cheque No. 753776 of Rs. 67,000/- was given by Ram Prakash Kanodia to the informant on 13.2.2006 and as per the statement of the bank (State Bank of Patiala), it was paid to the informant on 15.2.2006. As no counter affidavit has been filed, it is contended that this averment goes unrebutted.
6. Basically the applicants placed reliance on the decision of the Apex Court in the case of Vir Prakash Sharma v. Anil Kumar Agarwal and Anr. (2007) 3 SCC (Cri) 370, The allegations in this case were that the parties entered into a contract for sale and purchase of building rods. The appellant before the Apex Court did not pay the amount due from him towards the supply of the said article. He issued two cheques for the sums of Rs. 3559/- and Rs. 3776/- but the same were dishonoured. It was further mentioned in the complaint that the complainant wrote several times to the accused and also sent his representative but the accused kept making excuses in making the payment. At last, on 19.12.1985 he admitted that he had issued fabricated cheques knowingly with an intention to cheat the complainant and to grab his money and that the complainant could take any action he liked. In his statement under Section 200 Cr.P.C. also the complainant-respondent before the Supreme Court alleged that he himself went to the accused regarding dishonouring of the cheque and also sent his representative but the accused kept on making excuses in making the payment. At last, on 19.12.1985, the accused admitted that he knowingly issued the fabricated cheques only to deceive the complainant and to grab his money. He further stated that he would not pay his money and the complainant could do anything he liked. A witness of the complainant, Rajendra Kumar Saxena in his statement under Section 202 Cr.P.C alleged that the accused had purchased electric rods in 1983 from the company worth Rs. 3559.33 and Rs. 3776.73. Money was to be paid. Later on two bank cheques were issued and both the cheques were dishonoured by the bank. The statement of the accused that he had knowingly issued the fabricated cheques to grab the money of the complainant and that the complainant could do what he liked, was again repeated in the statement of this witness. A similar statement was made by another witness A. Khaliq. Cognizance was taken against the accused and he was summoned. However, the Allahabad High Court was of the view that the dispute being factual in nature, it could not be adjudicated in the application under Section 482 Cr.P.C., hence the High Court refused to quash the criminal proceedings and vacated the stay order. It has been observed in the aforesaid decision in Vir Prakash Sharma's case (supra), which set aside the decision of this Court, that the dispute between the parties was essentially of a civil nature, as non-payment or underpayment of the price of the goods by itself does not amount to commission of an offence of criminal breach of trust. Paragraph 8 of the said decision reads as follows:
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. Section 405 of the Penal Code reads, thus:
405. Criminal breach of trust.- Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust'.
Neither any allegation has been made to show existence of the ingredients of the aforementioned provision nor any statement in that behalf has been made.
7. In this connection, learned AGA, Sri A.N. Mulla, has drawn my attention to the illustration (d) of Section 415 IPC, which reads as under:
A, by tendering in payment for an article a bill on a house with which A keeps no money, and by which A expects that the bill will be dishonoured, intentionally deceives Z, and thereby dishonestly induces Z to deliver the article, intending not to pay for it. A cheats.
8. Learned Counsel for opposite party No. 2 has further placed reliance on another two-Judge decision of the Apex Court in Rajesh Bajaj v. State NCT of Delhi and Ors. 1999 SCC (Cri) 401. The allegations in this case were that the High Court had quashed the FIR in which the complainant/appellant belonged to a company which manufactured and exported ready-made garments. Respondent No. 5 (managing director of the company), based in Germany, induced the appellant to believe that respondent No. 5 would pay the price of the goods dispatched by the appellant-informant within 15 days from the date of receipt of the invoice in Germany. The appellant, believing the aforesaid representation as true, dispatched the goods worth 446597.25 DM (Deutsche Marks) in March/April, 1995, after the respondent received 57 different invoices and got the goods relieved. He only made the payment for about one-fourth of the amount of 1,15,194 DM. Subsequently, one of the representatives of the appellant-company went to Germany in October, 1995, because he was given to understand that the respondent would pay 200000 (Deutsche Marks) in lieu of the remaining part of the price but even this commitment was not honoured. The High Court had quashed the FIR, firstly, because the complainant did not disclose commission of any offence of cheating punishable under Section 420 IPC. Secondly that there was nothing in the complaint to suggest that the accused had a dishonest intention at the time the appellant exported the goods worth 446597.25 DM and there was nothing to indicate that the respondent by deceiving the appellant induced him to export the said goods. Thirdly, on the face of the allegations contained in the complaint it appeared to be purely a commercial transaction which in nutshell was that the seller did not pay the balance amount of price of the goods received by him as per his assurance.
9. Disagreeing with this conclusion of the High Court, it has been observed by the Apex Court that it is not necessary that the complainant should verbatim reproduce all the ingredients of the offence in the complaint nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent and the Court is not to engage itself in a meticulous scrutiny as to whether all the ingredients have been precisely spelt out in the complaint. If the factual foundation for the offence has been laid in the complaint, the Court should not hasten to proceed to quash the criminal proceedings at the state merely because one or two ingredients have not been stated in detail in the complaint. State of Haryana v. Bhajan Lal 1992 SCC (Cri) 426 was relied on for the proposition that an FIR can be quashed in the rarest of cases. It was also observed that the complaint could well reveal a commercial transaction but that is hardly a reason for holding that the offence of cheating would elude such a transaction and that many cheatings are committed in the course of commercial and also money transactions. It would be useful here to cite paragraphs 9 and 10 from the decision in Rajesh Bajaj's case (supra) which reads as follows:
9. It is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelled out in the complaint, is not the need at this stage. If factual foundation for the offence has been laid in the complaint the court should not hasten to quash criminal proceedings during investigation stage merely on the premise that one or two ingredients have not been state with details. For quashing an FIR (a step which is permitted only in extremely rare cases) the information in the complaint must be so bereft of even the basic facts which are absolutely necessary for making out the offence. In State of Haryana v. Bhajan Lal this Court laid down the premise on which the FIR can be quashed in rare cases. The following observations made in the aforesaid decisions are a sound reminder: (SCC p. 379, para 103)
103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice.
10. It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions. One of the illustrations set out under Section 415 of the Indian Penal Code [Illustration f ] is worthy of notice now:
(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats.
10. It was also observed that the High Court ought not to have adopted a strictly hypertechnical approach and to have sieved the complaint through a cullender of finest gauzes for testing the ingredients under Section 415 IPC. Paragraph 12 of the decision in Rajesh Bajaj's case (supra) may be usefully extracted here:
12. The High Court seems to have adopted a strictly hypertechnical approach and sieved the complaint through a cullendar of finest gauzes for testing the ingredients under Section 415 IPC. Such an endeavour may be justified during trial, but certainly not during the stage of investigation. At any rate, it is too premature a stage for the High Court to step in and stall the investigation by declaring that it is a commercial transaction simpliciter wherein no semblance of criminal offence is involved.
11. Ordinarily, I would have also taken the view that it would be premature at this stage to adjudicate as to whether the applicants had fraudulently and dishonestly deceived the complainant and obtained the advance and the issue could not have been examined at this stage when only the charge-sheet had been submitted. However, I am prevented from taking that view because of the later decision of the Apex Court in Vir Prakash Sharma's case (supra), where the facts of the case appeared to be worse than the facts of the present case, and still the Apex Court has quashed the criminal proceedings, observing that non-payment or underpayment of the price of the goods by itself does not amount to the commission of an offence of cheating or criminal breach of trust. In Vir Prakash Sharma's case (supra) the accused had purchased electric rods for which he gave two cheques, both of which bounced. He even told the complainant that he had knowingly issued those false and fabricated cheques only to deceive and grab his money and that the would not pay back the same. The illustration (d) of Section 415 IPC mentioned by the learned AGA that if the cheques are issued for purchase of goods, which are not honoured it may be assumed that there was an intention to get the cheque dishonoured, then prima facie the offence of cheating is disclosed. But in the case of Veer Prakash Sharma (supra) which relied on the decision in the Indian Oil Corporation v. NEPC India Ltd. , Mosaraf Hossain Khan v. Bhagheeratha Engineering Ltd. , and Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168, Apex Court held that the High Court was wrong in refusing quashing of the complainant and it could not be said that the accused had any intention to cheat the complainant from the very beginning. In my view, the facts in the present case are less grave than those of Veer Prakash Sharma's case because here admittedly the dealer of Pepsi Drinks had frankly stated at the outset that they were suffering business losses and that that they had sought the help of the complainant for a loan which was granted but which they were subsequently unable to honour and two of the three cheques issued by the applicants bounced but one cheque was cleared. So far as the allegation emphasized by the learned Counsel for the complainant that the applicants had promised making the complainant a partner in their business but they resiled from the said promise subsequently, which showed their dishonest intention, it was rightly pointed out by the learned Counsel that in the complaint it is mentioned that when the applicants subsequently told the complainant that they could not make her a partner but they would repay her the money after one year along with interest, she does not appear to have protested too much. Therefore, it could not be said that it was only on account of the inducement of the applicants that they would make the complainant a partner in a concern which was running at a loss and where they failed to make her a partner in the same subsequently, hence from these circumstance they had an intention to cheat her from the very beginning. I also find that the cheques were not issued at the initial stage as in Veer Prakash Sharm'a case (supra) but subsequently when pressure was brought on the accused by the complainant but the same could not be honoured. As it appears quite likely that the business of the applicants might not have turned around and might not have started making the profits expected in order to repay the complainant subsequently. In my view however it would have been better if these circumstances if the applicants' defence could have been considered during trial but in view of the decision on Veer Prakash Sharma's case (supra), where as I have pointed out above, the allegations were much graver, the Apex Court has quashed the criminal proceedings, I have no option but to follow the same as its the decision later in point of time to the decision in Rajesh Bajaj's case (supra) and this Court as well as the subordinate Courts are bound by the later decision of the Apex Court if the conflicting decisions are of co-equal Benches. This legal proposition has been enunciated in the decision of the Full Bench of the Allahabad High Court in Gopal Krishna v. 5th Addtl. Judge, Kanpur AIR 1981 SC 300 (paragraph 27).
12. The argument of the learned Counsel for the complainant that it is not necessary that the complaint should mention all the ingredients of the offence and that no meticulous scrutiny is required, can also not be given precedence to the observation in paragraph 8 in Veer Prakash Sharma's case (supra) that all the allegations have to be made to show the existence of the ingredients of the provisions of Section 405 IPC or of Section 415 IPC and if all the provisions are not mentioned then, the case ought to be quashed. Here again as the case of Veer Prakash Sharma is later in point of time to Rajesh Bajaj's case, I have no option but to give precedence to the observations in the said paragraph should be given precedence to the observations in paragraphs 9 and 12 in Rajesh Bajaj's case quoted above which mention that no meticulous scrutiny of the evidence is required at this stage, nor can the court sieve and sift the evidence through the cullender of finest qauzes to reach a conclusion whether an offence is made out or not, and the matter would only properly be adjudicated during trial. This view that the Court can look at the admitted defence material at this stage as held in Veer Prakash Sharma's case has again been reiterated in another recent two judge decision of the Supreme Court in All Cargo Movers (I) Pvt Ltd. v. Dhanesh Badarmal Jain 2008(60) ACC 375 (SC), (paragraph 17).
13. One other case relied on by the learned Counsel for the applicant, viz. G. Sagar Suri and Anr. v. State of UP and Ors. JT 2000 (1) SC 306 for the proposition that when a criminal complaint under Section 138 NI Act is already pending against the appellant and other accused it is improper that the complainant subsequently lodges a case under Sections 406 and 420 IPC and the same amounts to a clear abuse of the process of law. As in the present case the charge-sheet and cognizance under Sections 406, 504 and 506 IPC was prior in point of time to the complaint under the NI Act, the FIR and charge-sheet under these provisions could not be quashed and reliance on the case of G. Sagar Suri (supra) was misconceived as in that case an earlier complaint under Section 138 of the Negotiable Instruments Act had been filed, but subsequently on the same allegations (which could have been made with the earlier complaint under Section 138 of the N.I. Act), the accused had also been summoned under 420 and 406 IPC.
14. However, as I have mentioned above, that in view of the decision in Veer Prakash Sharma's case (supra), which is a later case in point of time to the case of Rajesh Bajaj and where the allegations, as I have already shown, are graver than the present case I have no option but to quash the criminal proceedings and trial against the applicants.
15. In view of the aforesaid, the present application under Section 482 Cr.P.C. is allowed and the aforesaid criminal proceedings against the applicants are quashed.