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Anwarul Islam v. The State Of West Bengal

Calcutta High Court

Mar 21, 1996

Judgment

Subsequent
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Structured Summary of the Opinion — Asish Baran Mukherjee, J.

Factual and Procedural Background

This revisional application challenges Karaya P.S. Case No. 218 dated 20.9.95 (C.G.R. 128/95), which arose from a petition of complaint numbered C-1297 of 1995 that was sent to the police station under section 156(3) Cr.P.C. The petitioner (an accused) contends that the dispute is essentially a partnership/civil dispute among partners of Islam & Associates (partnership deed dated 1.4.88) and that certain actions alleged in the complaint amount only to breaches of partnership obligations rather than criminal offences. The complaint alleges misappropriation of Rs. 15 lakhs by some partners and a conspiracy dated 8.8.94; the complainant had earlier submitted a complaint to the O.C., Karaya P.S. and later filed the petition of complaint before the Chief Judicial Magistrate (C.J.M.), who sent it to the police under s.156(3) Cr.P.C. The revisional application seeks quashing of the FIR and the consequent investigation.

The State (O.P. No. 1) did not appear; the revisional application is contested by the de facto complainant (O.P. No. 2). The Court previously passed an interim order (27.9.95) noting that the dispute related to partnership assets and that the partnership deed contained an arbitration clause, after which a rule was issued.

Legal Issues Presented

Whether a second complaint filed after an earlier complaint containing the same allegations has been made to the police is maintainable (i.e., whether a later petition of complaint can be treated as an FIR where an earlier information was already given).
Whether the learned Magistrate, by perusing the petition and hearing submissions before sending it to the police under s.156(3) Cr.P.C., effectively took cognizance (the court refers to s.190(1A) and later s.191(A)) and was therefore required to follow the procedure under s.200 Cr.P.C. and subsequent sections instead of sending the matter to the police for investigation.
Whether the allegations made in the petition disclose ingredients of criminal offences under sections 420 (cheating) and 406 (criminal breach of trust) I.P.C., particularly given the partnership relationship among accused persons and the terms of the partnership deed (including an arbitration clause and expressly conferred managerial/signing powers).
Whether disputes among partners (including alleged unilateral acts by a partner) fall within the arbitral/civil remedies stipulated in the partnership deed and therefore render the criminal proceedings not maintainable.

Arguments of the Parties

Petitioner's Arguments (Accused Petitioner)

The dispute is purely civil between partners and has been given a criminal colour to pursue vengeance by one partner against others.
The same facts cannot give rise to two distinct offences of cheating and criminal breach of trust; the complaint does not allege cheating within its four corners.
The date of alleged conspiracy is 8.8.94, whereas the FIR/petition is filed more than a year later.
Clause 26 of the partnership deed requires disputes among partners to be referred to arbitrators, making the criminal prosecution not maintainable.
The learned Magistrate applied his mind sufficiently such that he must be deemed to have taken cognizance (referred to s.190(1A) Cr.P.C.) and therefore should have proceeded under s.200 Cr.P.C.; once a magistrate has applied his mind to take cognizance, he cannot merely send the matter to the police under s.156(3) Cr.P.C.
Para 6 of the petition at best shows that a sub-contractor was appointed by some partners without consent of others — even if a breach, that breach of agreement does not constitute a criminal offence.
The partnership deed (para 16) authorises management and signing by any partner, so signing of bills by one partner is not an offence.
Section 406 I.P.C. is not attracted where the alleged violation is committed by a partner; the petition lacks elements of cheating even on superficial scrutiny.

Opposite Party's Arguments (De facto Complainant, O.P. No. 2)

Quashing of an FIR is appropriate only where the FIR is made without jurisdiction; the first complaint did not result in the police starting a case and therefore cannot be treated as an FIR for the purpose of barring the subsequent petition.
There is nothing illegal in the Magistrate's order sending the petition to the police under s.156(3) Cr.P.C.
While conceding that s.406 I.P.C. may not be sustainable between partners, the complainant argued that some accused fall outside the category of partners and therefore criminal provisions might apply to them.
Reference was made to the Court's interim order of 27.9.95 (noted by the revisional bench) which observed that the dispute related to partnership assets and that there was an Arbitration Clause in the partnership deed.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court proceeded through a stepwise analysis of the record and the submissions:

On the sequence of complaints: The Court relied on the averment in paragraph 9 of the petition of complaint that an earlier complaint supported by xerox copies of documents and correspondence had been submitted to the O.C., Karaya P.S. and that that earlier petition "revealed the self-same offences" as the subsequent petition. The earlier petition was said to have been received by the police station, and the Court held that where such an information is made to the police, the police are bound to record an FIR. Once an information of commission of a cognizable offence has been given to the police (the "first in point of time" principle for an FIR), filing a second complaint on the same facts to obtain FIR treatment is not tenable. Therefore any case started on the basis of the second complaint is not in accordance with law.
On the Magistrate's conduct and procedural requirement: The Court scrutinized the C.J.M.'s order dated 15.9.95 and found that the learned Magistrate had perused the petition, heard counsel, and given consideration before sending the matter to the police under s.156(3) Cr.P.C. The Court treated those acts as amounting to taking of cognizance under s.190(1A) Cr.P.C. (the opinion also refers to s.191(A) Cr.P.C. in its analysis). Given such taking of cognizance, the Court held the Magistrate was required to proceed under s.200 Cr.P.C. and the subsequent provisions (which govern examination of complainant, issuance of process, etc.) rather than simply sending the matter to the police for investigation under s.156(3). The implication is that procedural steps mandated when a magistrate takes cognizance were not followed.
On the substance of the allegations and applicability of criminal sections: The Court examined the partnership deed and the petition of complaint and concluded:
- The partnership deed contains an arbitration clause for disputes arising between partners; where an act by a partner is contrary to the partnership deed, such an act is within the contractual/arbitral domain and "cannot form the basis of an offence."
- The deed expressly authorized management and control to vest jointly and severally in the partners and specifically authorised signing of contracts, bills and documents by any partner (para 16), meaning that signing of bills by one partner, as alleged, is not necessarily criminal.
- A scrutiny of the petition of complaint showed no pleaded elements of section 420 I.P.C. (cheating). The Court accepted the concession that section 406 I.P.C. (criminal breach of trust) could not be invoked where the alleged violation was committed by a partner against the partnership, i.e., between partners.
Combined effect: Because (a) an earlier information to the police existed about the same facts and (b) the Magistrate's handling of the second petition amounted to taking cognizance without following the s.200 Cr.P.C. procedure, and (c) the petition on its face did not displace the civil/arbitral character of the dispute or disclose necessary ingredients of the criminal offences invoked, the Court concluded the FIR based on the second petition was not legally tenable and the investigation thereon could not lawfully proceed.

Holding and Implications

Holding: The revisional application is allowed; the impugned FIR (Karaya P.S. Case No. 218 dated 20.9.95) and the investigation commenced on its basis are quashed.

Implications:

Direct effect: The FIR dated 20.9.95 (C.G.R. 128/95) and any investigation initiated because of that FIR are quashed and cannot proceed further pursuant to this order.
Procedural observation: The Court found fault with the Magistrate's procedure—by perusing and considering the petition and counsel's submissions and then sending the matter to the police, the Magistrate was treated as having taken cognizance and ought to have followed the procedural route under s.200 Cr.P.C.; failing to do so rendered the later proceedings defective.
Substantive observation: The Court concluded the complaint, on its face, did not disclose ingredients of section 420 I.P.C. and that section 406 I.P.C. could not be made out between partners; the partnership deed's arbitration clause and the deed's grant of signing/management authority to partners meant many of the allegations were within the civil/arbitral domain rather than criminal law.
Broader precedent: The opinion does not purport to create a novel precedent beyond the quashing of the specific FIR; no other broader legal rule was expressly announced beyond the application of existing procedural and substantive principles to the facts of this case.

Application allowed.

S.C

This summary is confined strictly to the facts, arguments, reasoning and conclusions contained in the provided opinion. No material beyond the opinion text has been relied upon or added.

Show all summary ...

Asish Baran Mukherjee, J.:—The revisional application has been filed to quash the proceeding being Karaya P.S Case No. 218 dated 20.9.95 (C.G.R 128/95) pending before the learned Chief Judicial Magistrate, Alipore and arising out of a petition of complaint being C-1297 of 1995 which was sent to the P.S concerned under s. 156(3) Cr. P.C

2. The case of the accused petitioner is that the complainant being O.P No. 2 is the senior partner of Islam & Associates, Calcutta, the other partners being accused Nos. 1 & 2 by virtue of a partnership deed dated 1.4.88 It has been alleged that the said firm received a contract from Larsen & Toubro Ltd. for work of a chimney at Tenughat Thermal Power Station, Giridi. Pursuant to the discussion dated 16.1.93, the partners of the said firm placed a number of orders for supply of various materials on different manufacturers and engaged United Engineering Works of Begusarai at Bihar as sub-contractor to look after the labour part of the job. One Syed. Julfikar Ali of Calcutta Office was sent to Tenughat for keeping accounts of payments and expenses at the site. It has been alleged that the accused have misappropriated Rs. 15 lacs and as such the functioning of the firm became impossible pursuant to a conspiracy entered into and between the accused persons on 8.8.94 when the complainant wrote to the O.C, Karaya, P.S on 9.9.95 As no action was taken, the petition of complaint was filed under s. 156(3) Cr. P.C which was sent to the O.C, Karaya P.S for investigation.

3. It is alleged that the dispute arising between the parties is absolutely of civil nature between the partners and it has been given the colour of a criminal offence for the purpose wrecking vengence on the part of one partner against the other. It is alleged that the same facts cannot give rise to two offences of cheating as well of criminal breach of trust. There is also no allegation of cheating averred in the four corners of the complaint. It is alleged that date of alleged conspiracy is 8.8.94 and the F.I.R was made more than a year thereafter. In terms of Clause 26 of the partnership deed, dispute arising between the partners are required to be referred to the arbitrators and as such the instant criminal case is not maintainable.

4. O.P No. 1, the State has not entered appearance but the revisional application is being contested by the de facto complainant of the criminal case who is O.P No. 2 in the revisional application.

5. The learned Advocate appearing for the petitioner has referred to the petition of complaint under s. 156(3) Cr. P.C from para 6 onwards. It has been argued that the learned Magistrate before whom the application under s. 156(3) Cr. P.C was filed applied his mind so much so that he must be deemed to have taken cognizance of the alleged offence under s. 190(1A) Cr. P.C and as such it was incumbent for him to have recourse to s. 200 Cr. P.C and the provisions laid down thereafter. It has been argued that after application of mind necessary for taking cognizance of an offence the learned Magistrate has no jurisdiction to send the same to P.S for treating the same as F.I.R and to investigate according to law.

6. The learned Advocate also drew my attention to para 6 of the petition of complaint and argued that in terms of the averment it can at best be stated that sub-contractor was appointed by some of the accused persons without consent of the other partners. It is argued that such appointment even if, it be by way of breach of the agreement as contained in the partnership deed cannot form the basis of a criminal action.

7. My attention has also been invited to para-9 of the petition of complaint where it has been stated that the complainant earlier submitted a complaint in writing to O.C, Karaya P.S along with the xerox copies of some documents and correspondence after collecting those documents from the records of Larsen & Toubro Ltd. disclosing commissions of cognizable offences with a view to start a case against them by treating the same complaint as F.I.R It has also been stated as no case was started by O.C, Karaya P.S, he filed a second complaint before the Learned C.J.M, which was sent to the police station for treating the same as F.I.R From this, it has been argued that once an information containing commission of cognizable offence is made to the P.S second complaint on the self-same facts is not tenable in law. It has also been argued that at the time of filing the second complaint, xerox copies of the said documents stated to have formed part of the earlier F.I.R were not incorporated. It is submitted that in the absence of said copies the petition of complaint filed before the Magistrate does not disclose commission of any cognizable offence and as such the said petition cannot form the basis of an F.I.R

8. The Learned Advocate has also drawn my attention to para-16 of the deed of agreement where it has been specially mentioned that management and control of the partnership business shall vest in the partners jointly as well as severally and for that purpose all or any of them shall be entitled to sign the name of the firm on all contracts, bills etc. and each other documents and papers which are required to be signed on behalf of the firm. From this it has been argued that signing of bill by one of the partners can be of no offence.

9. It has been argued that in case any of the partners violate the terms of the partnership agreement, s. 406 I.P.C cannot come in. It has also been argued that element of cheating is wanting even on a superficial scrutiny of the petition of complaint.

10. On the other hand, it has been argued for O.P No. 2 that quashing of F.I.R arises only when an F.I.R is made without any jurisdiction. It is submitted that the first F.I.R cannot be treated as such since no case was started over the same. It has also been argued that there is nothing wrong or illegal in the order passed by the learned Magistrate on the petition of complaint. It is however, conceded that s. 406 I.P.C cannot be invoked by a partner against another partner but at the same time it has been argued that in the category of accused, there are persons who are not partners. It has also been argued for the O.P that the initial order passed on the revisional application by this Court on 27.9.95 should govern to final disposal of the said revisional application. My attention has been drawn to that part of the order where it has been stated that the dispute is in respect of partnership assets and there is an Arbitration Clause in the partnership deed. Thereafter, a rule was issued.

11. I have given my careful consideration to the submissions of both the sides and I propose to dispose of the objections one by one.

12. From para-9 of petition of complaint, there is a clear averment that the earlier complaint which was started by xerox copies of documents and correspondences revealed the self-same offences as has been stated in the subsequent complaint. There is also the averment that the said petition was actually received at the Police Station. Obviously, in such a case it is incumbent for the police authority to draw an F.I.R in terms of the complaint. In the event of omissions the remedy does not lie by way of filing a second application for treating the same as F.I.R but the remedy is to move the Court concerned by way of drawing the attention of the Court and praying for obtaining report from the P.S concerned about the action taken on the F.I.R and F.I.R as the names suggests is information of the commission of an offence, first in point of time and as such once a complaint alleging commission of cognizable offence is made to the P.S, a second complaint on the self-same application is not tenable under the law. Therefore, any case started on the basis of the said second complaint cannot be said to have been started in accordance with law and as such, such acceptance of the F.I.R is without jurisdiction and consequently, the investigation carried on its basis can not be allowed to proceed being an abuse of process of the Court.

13. A scrutiny of the order passed by the learned C.J.M on 15.9.95 on the second complaint clearly reveals that the learned Magistrate not only perused the petition of complaint itself, he is bound to do even if he wants to send the same to P.S under s. 156(3) Cr. P.C He also heard the learned Advocate and also gave his consideration over the matter following which he sent the same to the P.S This is in my opinion amount to taking of cognizance under s. 191(A) Cr. P.C and as such it was incumbent for the learned Magistrate to proceed in accordance with the s. 200 Cr. P.C and subsequent sections before a process could be issued under s. 204 Cr. P.C

14. A scrutiny of the deed of partnership clearly reveals that there was an Arbitration Clause in the event of one partner committed an act contrary to the provisions of the deed of partnership and as such, such an act on the part of one partner cannot form the basis of an offence. So far as, signing of the bill is concerned the deed actually authorises to one partner to act on behalf of the firm.

15. A scrutiny of the petition of complaint also reveals that there are no element of s. 420 I.P.C pleaded there even if the petition of complaint is taken on its face value. So far as, s. 406 I.P.C is concerned, it is conceded that since the alleged violation has been committed by one partner there cannot be an offence under the said section.

16. Therefore, on consideration of the entire materials on record I come to the conclusion that the F.I.R give the rise to Karaya P.S Case No. 218 dated 20.9.95 is not legally tenable and as the investigation started on its basis cannot also proceed. In the result the impugned F.I.R as also the investigation started on its basis is quashed. The revisional application stands allowed.