Case Note & Summary
The petitioner, Govindaraja, filed a writ petition under Articles 226 and 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, seeking to quash FIR in Crime No. 1/2021 registered by the Mariammana Police Station, Bellari, for offences under Sections 420, 467, 468, 464, 472 read with 34 of the Indian Penal Code. The complaint was lodged by the second respondent, an Additional Deputy General Manager of the third respondent company (M/s BMM Ispat Ltd.), alleging that the petitioner, as an intermediary, introduced the complainant to Nikat Capital, a UK-based company. An international sales contract was executed for the supply of Heavy Melting Scrap, and a sum of 735,000 USD was transferred despite short supply and non-delivery. The contract contained an arbitration clause, and the complainant invoked Section 9 of the Arbitration and Conciliation Act, obtaining an interim restraint order from the High Court on 27.11.2020, but the amount had already been transferred. Thereafter, the criminal complaint was filed, arraigning the petitioner as accused No. 1 and Nikat Capital as accused No. 2. The petitioner argued that he was merely an intermediary, not a party to the contract, received no commission, and was wrongly implicated. The respondents contended that the petitioner was the face of Nikat Capital and actively facilitated the fraudulent transaction, relying on email correspondences. The High Court, having heard arguments and perused the material, reserved the matter for orders; however, the provided judgment excerpt does not include the final decision or reasoning. The text includes only the court's recitation of email exchanges between the parties and no conclusion.
Issue of Consideration
Whether the petitioner being an intermediary or a facilitator for the transaction between the complainant-company and Nikat Capital can be hauled into by setting the criminal law in motion owing to the peculiar facts of the case at hand?
Law Points
- intermediary cannot be held criminally liable if not a party to contract and no consideration
- FIR can be quashed if it amounts to abuse of process
- court can examine email correspondences at pre-trial stage
Case Details
2022 LawText (KAR) (02) 14
WRIT PETITION No.101203 OF 2021 (GM-RES)
C.V. Nagesh, Mruthyunjaya S. Hallikeri, Ramesh Chigari, Udaya Holla, R.M. Kulkarni
State of Karnataka, Mahendra Pratap Singh, M/s BMM Ispat Ltd.
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Nature of Litigation
Criminal writ petition seeking quashing of FIR registered for offences of cheating, forgery, and criminal breach of trust.
Remedy Sought
Petitioner sought a writ or order quashing FIR in Crime No.1/2021 registered by the first respondent police.
Filing Reason
The petitioner was arraigned as accused No. 1 despite being a mere intermediary, not a party to the contract and receiving no consideration, and claimed abuse of process.
Previous Decisions
The High Court had earlier passed an interim order on 27.11.2020 in AP(IM)100001/2020 under Section 9 of the Arbitration Act, restraining the State Bank of India from transferring funds, but the amount had already been transferred.
Issues
Whether the petitioner, being an intermediary or facilitator for the transaction between the complainant-company and Nikat Capital, can be prosecuted based on the FIR.
Submissions/Arguments
Petitioner argued that he was not a party to the contract, received no commission, and was innocent; he was merely an introducer and should not face criminal proceedings.
Respondents argued that the petitioner was the face of Nikat Capital, the entire transaction was at his behest, and he conspired with Nikat Capital to defraud the company; the matter should proceed to trial.
Judgment Excerpts
The petitioner is before this Court calling in question proceedings in Crime No.1 of 2021 registered against the petitioner for offences punishable under Sections 420, 467, 468, 464, 472 and Section 34 of the Indian Penal Code.
Whether the petitioner being an intermediary or a facilitator for the transaction between the complainant-company and Nikat Capital can be hauled into by setting the criminal law in motion owing to the peculiar facts of the case at hand?
It is not in dispute that the role of the petitioner is an intermediary or facilitator between Nikat Capital and the complainant-company.
Procedural History
An international sales contract was executed between Nikat Capital (UK) and the third respondent for supply of Heavy Melting Scrap. An amount of 735,000 USD was transferred despite short supply. The contract contained an arbitration clause, and proceedings were invoked. The complainant filed a petition under Section 9 of the Arbitration and Conciliation Act before the High Court, obtaining an interim restraint order on 27.11.2020, but the amount had already been transferred. Subsequently, a criminal complaint was filed by the second respondent against the petitioner and Nikat Capital, leading to registration of FIR No. 1/2021 for offences under IPC. The petitioner then filed the present writ petition seeking quashing of the FIR.
Acts & Sections
- Constitution of India: 226, 227
- Code of Criminal Procedure, 1973: 482
- Indian Penal Code: 420, 467, 468, 464, 472, 34
- Arbitration and Conciliation Act, 1996: 9
