Madhumati Mitra, J.:— This is an application under Section 482 read with Section 401 of the Code of Criminal Procedure filed by the petitioners praying for quashing of the proceedings being G.R. Case No. 1221 of 2013 pending before the Court of the Learned Chief Metropolitan Magistrate, Kolkata. The criminal proceeding of G.R. Case No. 1221 of 2013 has arisen out of Bowbazar Police Station Case No. 168 dated 28.03.2013, under Sections 420/406/120B of the Penal Code, 1860. The petitioners have also challenged the order dated 14.02.2017 passed by the Learned Chief Metropolitan Magistrate, Calcutta, regarding taking of cognizance of the aforesaid offences.

2. Petitioner no. 1 is a company registered under the Companies Act, 1956. The company is engaged in the manufacture and trade of apparels through chain of retail stores under the brand name and style of Priknit.

3. The petitioner no. 2 is the Managing Director of the Company. Petitioner nos. 3 and 4 are the Directors of petitioner no. 1 company. Petitioner no. 4 joined petitioner no. 1 company on 30.11.2009.

4. Opposite party no. 2 is a company registered under the provisions of the Companies Act and is member of the National Stock Exchange of India Ltd. and is also an Indian Financial Service provider.

5. On 28.03.2013, a person namely K. Adil, Authorised Signatory of SMC Global Securities Ltd. lodged a complaint under Sections 406/420/120B of the Penal Code, 1860 against the present petitioners. It has been alleged in the said complaint that the petitioner nos. 2 and 3 approached opposite party no. 2 and made an offer of good returns on investment in the petitioner no. 1 company. Initially the opposite party no. 2 did not show any interest. Petitioner nos. 2 and 3 frequently visited the main office of the opposite party no. 2 at Delhi and Regional Office at Calcutta to encourage the opposite party no. 2 to invest in their company. They stated to the opposite party no. 2 that the retail business of the apparel under the Prinkit brand through a network of exclusive band outlets was witnessing a high growth. The petitioners also stated that they would provide exist route through I.P.O. (Initial Public Offer)(an act of offering the stock of a company on a public stock exchange for the first time) to the opposite party no. 2 for their safe investment within three years of their investment and if the I.P.O. does not come by that date then the petitioner company would pay the entire amount along with interest. On 25.03.2008, the opposite party no. 2 filed share application form along with a cheque of Rs. 2,50,00,000/- for the purchase of Rs. 2,50,000/- equity share of the petitioner no. 1 company. On 29.03.2008, petitioner no. 1 through petitioner no. 2 had issued an allotment letter to the opposite party no. 2 wherein, confirming the allotment of Rs. 2,50,000/- shares in the name of opposite party no. 2 and had also undertaken to issue share certificate at the earliest. On 20.08.2009, the petitioner company allotted shares to the opposite party no. 2 only after one year of making investment and thereafter re-confirmed the terms and conditions. The petitioners vide letter dated 20.08.2009, confirmed to bring an I.P.O. within three years from the date of investment on 25.03.2008 and if the petitioners failed to do so, they would be liable to pay interest @ 12% per annum with effect from 01.04.2009 and thereafter the opposite party no. 2 shall be entitled to recover from the petitioners, the investment amount with interest @ 24% per annum for delayed period beyond the said period of three years. The petitioners failed to bring the I.P.O. on 06.12.2011 the opposite party no. 2 issued a legal notice upon the petitioners. On 31.01.2012, the petitioners sent reply to that notice denying each and every allegation.

6. On the basis of the complaint lodged by opposite party no. 2, Bowbazar Police Station Case No. 168 dated 28.03.2013 under Sections 406/420/120B of the Penal Code, 1860 was started. Investigating agency filed final report vide final report no. 551 of 2013 dated 16.12.2013. Opposite party no. 2 filed an application against the said final report and on 08.03.2016, the said application was allowed by the Learned Magistrate and directed for further investigation. That further investigation culminated in the submission of charge-sheet against the present petitioners for commission of the alleged offences under Sections 406/420/120B of the Penal Code, 1860.

7. While making his submission in favour of quashing of the criminal proceeding, the Learned Counsel appearing for the petitioners has submitted that the opposite party no. 2 lodged the First Information Report with Bowbazar Police Station on 28.03.2013 and prior to lodging that F.I.R. on 06.06.2012, the opposite party the SMC Global Securities Ltd. filed a petition of complaint under Section 156(3) of the Code of Criminal Procedure in the Court of Metropolitan Magistrate, District Court, Tis Hazari Delhi against the present petitioners under Sections 406/409/420/468/34 of the Penal Code, 1860 and 01.09.2012 the opposite party no. 2 also filed one complaint case being 190/3 of 2012 before the Learned A.C.J.M., Tis Hazari Court, New Delhi under Section 68 of the Companies Act and on 28.02.2013, the Learned Metropolitan Magistrate, District Court, Tis Hazari, Delhi was pleased to dismiss the prayer under Section 156(3) Cr.P.C. and the petition of complaint has been registered as C.C. No. 253/1/15. Learned Counsel has contended that the F.I.R. in connection with Bowbazar Police Station case was lodged during the pendency of the complaint case at Tis Hazari Court. He has also contended that at first police submitted charge-sheet in connection with Bowbazar Police Station case and thereafter the opposite party filed one application under Section 173(8) of the Code of Criminal Procedure for further investigation and said prayer was allowed. After further investigation charge-sheet was submitted against the present petitioners on 13.02.2017. The complaint case was dismissed by the Learned Magistrate Tis Hazari Court on 19.09.2016.

8. In this connection, Learned Counsel has submitted that the opposite party no. 2 lodged the F.I.R. with Bowbazar P.S. after suppressing the fact that one complaint in respect of the same facts was pending in the Court of Learned Magistrate, New Delhi. He has also contended that in order to bring an action in Calcutta, the opposite party no. 2 has suppressed that fact. The further contention of the Learned Advocate for the petitioner is that the allegations contained in the F.I.R. are purely contractual disputes of civil nature and although breach of contract does not come within the purview of an offence of cheating. Learned Counsel has further contended that there are no allegations in the complaint that accused had fraudulent or dishonest intention at the time of making the representation. Learned Counsel has stated that failure to fulfil the terms of a contract and the offence of cheating are not the same thing.

9. Another contention of the Learned Counsel for the petitioner is that the petitioners sold the shares in question to the opposite party no. 2 and in case of sale transaction the question of entrustment does not arise at all.

10. On the other hand, the Learned Counsel appearing for the opposite party no. 2 has submitted that the allegations contained in the complaint disclosed all the ingredients of the alleged offences and moreover, the criminal proceedings have not been initiated with mala fide intention. Learned Counsel for the opposite party has further contended that the complaint case filed before the Learned Magistrate of Tis Hazari Court was not decided on merit and as such the complainant cannot be debarred from making a fresh complaint.

11. In support of his contention, the Learned Counsel for the petitioners has placed his reliance on the following decisions:—

1) State Of Gujarat v. Jaswantlal Nathalal . reported in AIR 1968 Supreme Court 700,

2) Munshi Ram v. Delhi Administration reported in AIR 1968 Supreme Court 702,

3) Murari Lal Gupta v. Gopi Singh . reported in (2005) 13 SCC 699,

4) Venu Menon v. Hathway Investment (P) Ltd. . reported in (2005) 13 SCC 701,

5) V.Y. Jose v. State of Gujarat reported in (2009) 3 SCC 78,

6) Union of India v. Shantiranjan Sarkar reported in (2009) 3 SCC 90,

7) Alpic Finance Ltd. v. P. Sadasivan reported in (2001) 3 SCC 513,

8) Keyur J. Shah v. State Of West Bengal reported in 2013 SCC OnLine Cal 22825.

12. On the other hand, the Learned Counsel for the opposite party has placed his reliance on the following judgments:—

1) Indian Oil Corporation v. NEPC India Ltd. reported in (2006) 6 SCC 736 : AIR 2006 Supreme Court 2780.

2) Vikrama Shama Shetty v. State of Maharashtra reported in (2006) 6 SCC 70 : AIR 2006 Supreme Court 2792.

3) Smti Rita Mazumdar v. The State of Assam of the Gauhati High Court in Criminal Petition No. 702 of 2012.

4) State of NCT of Delhi v. Sanjay of the Hon'ble Supreme Court in Criminal Appeal No. 499 of 2011.

5) V. Ravi Kumar v. State, Rep. by Inspector of Police, District Crime Branch, Salem, Tamil Nadu of the Hon'ble Supreme Court in Criminal Appeal No. 111 of 2011.

6) Sau. Kamal Shivaji Pokarnekar v. The State of Maharashtra of the Hon'ble Supreme Court in Criminal Appeal No. 255 of 2019.

7) State of Karnataka v. M. Devendrappa reported in (2002) 3 SCC 89.

8) Radhey Shyam Khemka v. State of Bihar reported in 1993 CriLJ 2888.

9) Rajiv Modi v. Sanjay Jain of the Hon'ble Supreme Court in Criminal Appeal No. 1214 of 2009.

13. Before going into factual details, rival contentions and the legal issues involved in the case at hand, it is useful to refer the relevant provisions of the statute.

14. In the instant case, after completion of investigation charge-sheet was submitted for the commission of the alleged offences punishable under Section 406/420/120B of the Penal Code, 1860.

15. Section 415 of the Penal Code, 1860 defines cheating as under:—

“415. Cheating.- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to “cheat”.

16. Section 405 of the I.P.C. defines criminal breach of trust as under:—

“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, or dishonestly uses or disposes of 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”.”

17. All the Learned Advocates appearing for the parties took much pain and advanced their eloquent arguments. They have cited a series of decisions.

18. I have carefully examined submission and counter submission advanced by the Learned Counsel for the parties both on the legal and factual aspects.

19. Before proceeding further, I intend to cite the celebrated judgment of our Apex Court in State of Haryana v. Bhajan Lal reported in 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426. In the said judgment our Apex Court laid down the parameters when the power under Section 482 of the Code of Criminal Procedure and under Article 226 of the Constitution of India can be exercised. Paragraph 102 of the said judgment is mentioned below:—

“102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”

20. Before delving deep into the matter, it would be better to have look at the First Information Report on the basis of which the present criminal proceedings have been initiated.

21. In the First Information Report, the complainant company described how the accused persons induced the complainant company to purchase shares in question for the purpose of investment and issued a letter dated 29.03.2008 stating falsely that the shares in questions were allotted to the complainant company. From the materials placed on record it appears that the petitioners falsely informed the complainant that the shares were allotted.

22. Learned Counsel for the petitioners has argued that the transaction in question between the parties as revealed from the contents of the First Information Report was purely a sale transaction or commercial transaction and the question of cheating does not arise at all. At the time of perusal of the First Information Report, it appears that the petitioners induced the complainant company to purchase the shares in question by misrepresentations and false assurance.

23. In view of the provision contained in Section 420 of the Penal Code, 1860, the intention of the offender who induces the complainant is the decisive in discerning whether the offence of cheating was committed or not. In fact, it cannot be denied that many a cheatings are being committed in the course of commercial and also money transactions.

24. In the present case, the allegation in the First Information Report disclosed the offences alleged. Moreover, the allegations made in the F.I.R. disclosed that the petitioners induced the complainant to purchase share or invest money by wilful misrepresentation.

25. I have carefully gone through the complaint/F.I.R. It is true that the complaint discloses that there was a commercial transaction between the parties but at the same time, it cannot be overlooked that the averments made in the complaint/F.I.R. prima facie reveal the commission of an cognizable offence. Allegation contained in the F.I.R. involve appreciation of evidence. Moreover, when complaint discloses that the commercial transaction between the parties involves criminal offences, then the question of quashing the complaint cannot be allowed.

26. In order to exercise the power under Section 482 of the Code of Criminal Procedure, the only requirement is to see whether continuance of the criminal proceedings would be a total abuse of the process of Court.

27. In view of above, I am of the view that continuance of criminal proceedings against the present petitioners/accused would not be an abuse of the process of the Court. Hence, the prayer for quashing of the proceedings and setting aside the impugned order are hereby dismissed.

28. Before parting with the case, I would like to clarify that the observations as made in this judgment should not be taken as an expression of any opinion regarding the merit of the criminal proceedings pending before the Learned Magistrate. The Learned Trial Magistrate shall proceed with the complaint and dispose of the same in accordance with law.

29. Certified copy of the case diary be handed over to the Learned Counsel for the State immediately.

30. Urgent Photostat certified copy of this judgment be supplied to the parties, if applied for, upon compliance of all formalities.