Case Note & Summary
The present application was filed by Ashokbhai Popatbhai Ramani, the applicant, seeking quashment of FIR No. 332 of 2018 registered with Puna Police Station, Surat, dated 04.11.2018, for offences punishable under Sections 406, 409, 420, 120B, 506(2), and 114 of the Indian Penal Code. The FIR was lodged by Kishorbhai Chhaganbhai Patodiya, the complainant, who was engaged in the business of saree job work as proprietor of M/s. Pramukh Fashion. The applicant was arraigned as accused No. 4 and was a broker in the textile market. The complainant alleged that the applicant introduced accused Nos. 1 to 3 as reputed businessmen and assured that if the complainant undertook job work for sarees supplied by them, he would earn substantial profit. Acting on this assurance, the complainant commenced business dealings with accused Nos. 1 to 3, and the applicant fixed his brokerage at 3%. The complainant carried out job work amounting to Rs. 3,18,36,502/- but payments were not made. The applicant sought quashing of the FIR on the ground that the dispute was purely civil in nature and no criminal offence was made out against him. The court analyzed the allegations and found that the applicant, as a broker, merely introduced the parties and had no dominion over the property. There was no entrustment of any property to the applicant, and the ingredients of criminal breach of trust under Section 406 IPC were not attracted. Regarding cheating under Section 420 IPC, the court noted that the complainant voluntarily entered into the business dealings based on his own assessment, and the applicant's assurance of timely payments did not amount to deception from the inception. The failure to pay dues subsequently did not constitute cheating. Consequently, the charge of criminal conspiracy under Section 120B IPC also failed. The court held that the dispute was essentially of a civil nature regarding non-payment of dues and that the criminal proceedings against the applicant were an abuse of the process of law. The court allowed the application and quashed the FIR and all consequential proceedings against the applicant.
Headnote
A) Criminal Law - Quashing of FIR - Section 482 CrPC - Civil Dispute - The court examined whether the FIR alleging criminal breach of trust and cheating against a broker in a textile job work transaction should be quashed. The court held that the allegations, even if taken at face value, do not disclose any criminal offence as the dispute is essentially of a civil nature regarding non-payment of dues. The applicant, as a broker, had no dominion over the property and no dishonest intention was established. (Paras 1-12) B) Criminal Breach of Trust - Section 406 IPC - Essential Ingredients - The court reiterated that for an offence under Section 406 IPC, there must be entrustment of property and dishonest misappropriation or conversion. In the present case, the applicant was only a broker who introduced parties and fixed brokerage; there was no entrustment of any property to him. Hence, the ingredients of Section 406 IPC are not attracted. (Paras 7-9) C) Cheating - Section 420 IPC - Deception and Dishonest Inducement - The court observed that the complainant voluntarily entered into business dealings based on his own assessment. The applicant's assurance of timely payments did not amount to deception or dishonest inducement from the inception. The failure to pay dues subsequently does not constitute cheating. (Paras 10-11) D) Criminal Conspiracy - Section 120B IPC - No Prima Facie Case - Since the substantive offences under Sections 406 and 420 IPC are not made out, the charge of criminal conspiracy under Section 120B IPC also fails. (Para 12)
Issue of Consideration
Whether the FIR alleging offences under Sections 406, 409, 420, 120B, 506(2), and 114 of the Indian Penal Code against the applicant, who acted as a broker, should be quashed on the ground that the dispute is purely civil in nature and lacks criminal intent.
Final Decision
The court allowed the application and quashed the FIR being C.R. No. 332 of 2018 registered with Puna Police Station, Surat, and all consequential proceedings arising therefrom against the applicant.
Law Points
- Criminal breach of trust requires dishonest misappropriation or conversion
- mere non-payment of dues does not constitute criminal offence
- civil dispute cannot be criminalized
- quashing of FIR under Section 482 CrPC when allegations are purely civil in nature
