Madhya Pradesh High Court
Damodar Das Singhal vs The State Of Madhya Pradesh on 19 November, 2024
Author: Gurpal Singh Ahluwalia
Bench: G. S. Ahluwalia
NEUTRAL CITATION NO. 2024:MPHC-GWL:20633
1 MCRC-21886-2024
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE G. S. AHLUWALIA
ON THE 19 th OF NOVEMBER, 2024
MISC. CRIMINAL CASE No. 21886 of 2024
DAMODAR DAS SINGHAL AND OTHERS
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Gagan Sharma - Advocate for the applicants.
Shri Ajay Kumar Nirankari - Public Prosecutor for respondent No.1/State.
Shri Vijay Dutta Sharma- Advocate for respondent No.2.
ORDER
This application, under Section 482 of Cr.P.C., has been filed for quashment
of Crime No.115/2023 registered at Police Station Inderganj, District Gwalior
(M.P.) for the offence under Section 420, 34 of IPC and all other consequential
proceedings arising out of the aforesaid FIR.
2. It is submitted by counsel for applicants that on the basis of complaint
made by respondent No.2, the police has registered FIR in Crime No.115/2023 at
Police Station Inderganj, District Gwalior. The crux of the FIR is that applicants as
well as respondent no.2 entered into an agreement to sell and accordingly an
amount of Rs.14 lacs was also paid but now applicants are not executing sale-deed.
It was further alleged that now it has come to the notice of respondent No.2 that
applicants do not want to execute the sale-deed.
It is submitted by counsel for applicants that even if the entire allegations
made in the FIR are considered on their face value, then it is predominantly of
civil in nature and therefore conversion of this case into a criminal case is
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unwarranted and bad in law.
3. Per contra , it is submitted by counsel for respondent no.2 that the
applicants after having received an amount of Rs.14 lacs entered into an agreement
to sell and it was decided that remaining amount of Rs.08 lacs would be paid at the
time of execution of sale deed but now the intention of the applicants has become
dishonest and they are not executing the sale deed.
4. Heard learned counsel for the parties.
5. The primary question for consideration is as to whether the allegations
made against the applicants make out a prima facie case under Section 420 of IPC
or not?
6. It is well established principle of law that in order to bring the act within
the purview of Section 420 of IPC, it has to be prima facie shown that the intention
of the accused right from very inception was to cheat the complainant. A mere
breach of contract would not give rise to criminal prosecution for cheating.
7. The Supreme Court in the case of Vijay Kumar Ghai & Others Vs. The
State of West Bengal & Others reported in 2022 LiveLaw (SC) 305 has held as
under:-
7. Predominantly, the Indian Judiciary has time and again reiterated that
forum shopping take several hues and shades but the concept of ‘forum
shopping’ has not been rendered an exclusive definition in any Indian
statute. Forum shopping as per Merriam Webster dictionary is:-
“The practice of choosing the court in which to bring an action
from among those courts that could properly exercise jurisdiction
based on determination of which court is likely to provide the
most favourable outcome”
8. The Indian judiciary’s observation and obiter dicta has aided in
streamlining the concept of forum shopping in the Indian legal system.
This Court has condemned the practice of forum shopping by litigants
and termed it as an abuse of law and also deciphered different categories
of forum shopping.
9. A two-Judge bench of this Court in Union of India & Ors. Vs. Cipla
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Ltd. & Anr. (2017) 5 SCC 262 has laid down factors which lead to the
practice of forum shopping or choice of forum by the litigants which are
as follows:-
“148. A classic example of forum shopping is when litigant
approaches one Court for relief but does not get the desired relief
and then approaches another Court for the same relief. This
occurred in Rajiv Bhatia Vs. Govt. of NCT of Delhi and Others,
(1999) 8 SCC 525. The respondent-mother of a young child had
filed a petition for a writ of habeas corpus in the Rajasthan High
Court and apparently did not get the required relief from that
Court. She then filed a petition in the Delhi High Court also for a
writ of habeas corpus and obtained the necessary relief.
Notwithstanding this, this Court did not interfere with the order
passed by the Delhi High Court for the reason 8 that this Court
ascertained the views of the child and found that she did not want
to even talk to her adoptive parents and therefore the custody of the
child granted by the Delhi High Court to the respondentmother
was not interfered with. The decision of this Court is on its own
facts, even though it is a classic case of forum shopping.
149. In Arathi Bandi v. Bandi Jagadrakshaka Rao & Ors. (2013)
15 SCC 790 this Court noted that jurisdiction in a Court is not
attracted by the operation or creation of fortuitous circumstances.
In that case, circumstances were created by one of the parties to
the dispute to confer jurisdiction on a particular High Court. This
was frowned upon by this Court by observing that to allow the
assumption of jurisdiction in created circumstances would only
result in encouraging forum shopping.
150. Another case of creating circumstances for the purposes of
forum shopping was World Tanker Carrier Corporation v. SNP
Shipping Services Pvt. Ltd. and others, (1998) 5 SCC 310 wherein
it was observed that the respondent/plaintiff had made a deliberate
attempt to bring the cause of action namely a collision between
two vessels on the high seas within the jurisdiction of the Bombay
High Court. Bringing one of the vessels to Bombay in order to
confer jurisdiction on the Bombay High Court had the character of
forum shopping rather than anything else.
151. Another form of forum shopping is taking advantage of a
view held by a particular High Court in contrast to a different view
held by another High Court. In Ambica Industries v.
Commissioner of Central Excise (2007) 6 SCC 769 the assesse
was from Lucknow. It challenged an order passed by the Customs,
Excise and Service Tax Appellate Tribunal (the CESTAT) located
in Delhi before the Delhi High Court. The CESTAT had
jurisdiction over the States of Uttar Pradesh, NCT of Delhi and
Maharashtra. The Delhi High Court did not entertain the
proceedings initiated by the assessee for want of territorial
jurisdiction. Dismissing the assessee’s appeal this Court gave the
example of an assessee affected by an assessment order in Bombay
invoking the jurisdiction of the Delhi High Court to take advantage
of the law laid down by the Delhi High Court or an assessee
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affected by an order of assessment made at Bombay invoking the
jurisdiction of the Allahabad High Court to take advantage of the
law laid down by it and consequently evade the law laid down by
the Bombay High Court. It was said that this could not be allowed
and circumstances such as this would lead to some sort of judicial
anarchy.
155. The decisions referred to clearly lay down the principle that
the court is required to adopt a functional test vis-à-vis the
litigation and the litigant. What has to be seen is whether there is
any functional similarity in the proceedings between one court and
another or whether there is some sort of subterfuge on the part of a
litigant. It is this functional test that will determine whether a
litigant is indulging in forum shopping or not.”
10. Forum shopping has been termed as disreputable practice by the
courts and has no sanction and paramountcy in law. In spite of this
Court condemning the practice of forum shopping, Respondent No. 2
filed two complaints i.e., a complaint u/s 156(3) Cr.P.C before the Tis
Hazari Court, New Delhi on 06.06.2012 and a complaint which was
eventually registered as FIR No. 168 u/s 406, 420, 120B IPC before PS
Bowbazar, Calcutta on 28.03.2013. ie., one in Delhi and one complaint
in Kolkata. The Complaint filed in Kolkata was a reproduction of the
complaint filed in Delhi except with the change of place occurrence in
order to create a jurisdiction.
11. A two-Judge bench of this Court in Krishna Lal Chawla & Ors. Vs.
State of U.P. & Anr.(2021) 5 SCC 435 observed that multiple
complaints by the same party against the same accused in respect of the
same incident is impermissible. It held that Permitting multiple
complaints by the same party in respect of the same incident, whether it
involves a cognizable or private complaint offence, will lead to the
accused being entangled in numerous criminal proceedings. As such he
would be forced to keep surrendering his liberty and precious time
before the police and the courts, as and when required in each case.
12. The legality of the second FIR was extensively discussed by this
Court in T.T. Antony Vs. State of Kerala & Ors. (2001) 6 SCC 181. It
was held that there can be no second FIR where the information
concerns the same cognisable offence alleged in the first FIR or the
same occurrence or incident which gives rise to one or more cognizable
offences. It was further held that once an FIR postulated by the
provisions of Section 154 of Cr.P.C has been recorded, any information
received after the commencement of investigation cannot form the basis
of a second FIR as doing so would fail to comport with the scheme of
the Cr.P.C. The Court further held that barring situations in which a
countercase is filed, a fresh investigation or a second FIR on the basis of
the same or connected cognizable offence would constitute an “abuse of
the statutory power of investigation” and may be a fit case for the
exercise of power either under Section 482 of Cr.P.C or Articles
226/227 of the Constitution of India
13. A two-Judge bench of this Court in K. Jayaram and Ors. Vs.
Bangalore Development Authority & Ors. 2021 SCC OnLine SC 1194
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observed:
“16. It is necessary for us to state here that in order to check
multiplicity of proceedings pertaining to the same subject-matter
and more importantly to stop the menace of soliciting inconsistent
orders through different judicial forums by suppressing material
facts either by remaining silent or by making misleading
statements in the pleadings in order to escape the liability of
making a false statement, we are of the view that the parties have
to disclose the details of all legal proceedings and litigations either
past or present concerning any part of the subject-matter of dispute
which is within their knowledge. In case, according to the parties
to the dispute, no legal proceedings or 10 court litigations was or is
pending, they have to mandatorily state so in their pleadings in
order to resolve the dispute between the parties in accordance with
law.”
14. The genesis of the present appeal originates from the impugned
order pronounced by the High Court whereby the High Court dismissed
the application filed under Section 482 as well as 401 Cr.P.C. Taking
that into concern, it is necessary to advert to the principles settled by
judicial pronouncements laying down the circumstances under which
High Court can exercise its inherent powers under Section 482 Cr.P.C.
15. This Court in the widely celebrated judgment of State of Haryana &
Ors. Vs. Bhajan Lal & Ors. 1992 Supp (1) SCC 335considered in detail
the scope of the High Court powers under Section 482 Cr.P.C. and/or
Article 226 of the Constitution of India to quash the FIR and referred to
several judicial precedents and held that the High Court should not
embark upon an inquiry into the merits and demerits of the allegations
and quash the proceedings without allowing the investigating agency to
complete its task. At the same time, this Court identified the following
cases in which FIR/complaint can be quashed:
“102. (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.
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(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 Act concerned (under which a
criminal proceeding is instituted) to the institution and
continuance of the 21 proceedings and/or where there is a specific
provision in the Code or the Act concerned, 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.”
16. This Court in R.P. Kapur Vs. State of Punjab, (1960) 3 SCR 388
summarized categories of cases where inherent power can and should be
exercised to quash the proceedings:-
(i) Where it manifestly appears that there is a legal bar against the
institution or continuance e.g. want of sanction;
(ii) Where the allegations in the first information report or
complaint taken at its face value and accepted in their entirety do
not constitute the offence alleged;
(iii) Where the allegations constitute an offence, but there is no
legal evidence adduced or the evidence adduced clearly or
manifestly fails to prove the charge.
17. This Court in Inder Mohan Goswami & Anr. Vs. State of
Uttaranchal & Ors. (2007) 12 SCC 1 observed:-
“27. The powers possessed by the High Court under Section 482 of
the Code are very wide and the very plenitude of the power
requires great caution in its exercise. The court must be careful to
see that its decision in exercise of this power is based on sound
principles. The inherent power should not be exercised to stifle a
legitimate prosecution. The High Court should normally refrain
from giving a prima facie decision in a case where all the facts are
incomplete and hazy; more so, when the evidence has not been
collected and produced before the court and the issues involved,
whether factual or legal, are of such magnitude that they cannot be
seen in their true perspective without sufficient material. Of
course, no hard and fast rule can be laid down in regard to cases in
which the High Court will exercise its extraordinary jurisdiction of
quashing the proceedings at any stage”
18. In Indian Oil Corpn. v NEPC India Ltd. & Ors., (2006) 6 SCC 736 a
two-judge Bench of this Court reviewed the precedents on the exercise
of jurisdiction under Section 482 of the Code of Criminal Procedure
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1973 and formulated guiding principles in the following terms:
“12. … (i) A complaint can be quashed where the allegations made
in 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 the case alleged against the accused. For this purpose,
the complaint has to be examined as a whole, but without
examining the merits of the allegations. Neither a detailed inquiry
nor a meticulous analysis of the material nor an assessment of the
reliability or genuineness of the allegations in the complaint, is
warranted while examining prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of
the process of the court, as when the criminal proceeding is found
to have been initiated with mala fides/malice for wreaking
vengeance or to cause harm, or where the allegations are absurd
and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or
scuttle a legitimate prosecution. The power should be used
sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal
ingredients of the offence alleged. If the necessary factual
foundation is laid in the complaint, merely on the ground that a
few ingredients have not been stated in detail, the proceedings
should not be quashed. Quashing of the complaint is warranted
only where the complaint is so bereft of even the basic facts which
are absolutely necessary for making out the offence.
(v) ..”
19. A two-Judge Bench of this Court in State of Madhya Pradesh Vs.
Awadh Kishore Gupta & Ors. (2004) 1 SCC 691 made the following
observation :-
“11. The powers possessed by the High Court under Section 482 of
the Code are very wide and the very plenitude of the power
requires great caution in its exercise. Court must be careful to see
that its decision in exercise of this power is based on sound
principles. The inherent power should not be exercised to stifle a
legitimate prosecution. High Court being the highest Court of a
State should normally refrain from giving a prima facie decision in
a case where the entire facts are incomplete and hazy, more so
when the evidence has not been collected and produced before the
Court and the issues involved, whether factual or legal, are of
magnitude and cannot be seen in their true perspective without
sufficient material. Of course, no hard and fast rule can be laid
down in regard to cases in which the High Court will exercise its
extraordinary jurisdiction of quashing the proceeding at any stage.
In proceeding instituted on complaint, exercise of the inherent
powers to quash the proceedings is called for only in a case where
the complaint does not disclose any offence or is frivolous,
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do not constitute the offence of which cognizance has been taken
by the Magistrate, it is open to the High Court to quash the same
in exercise of the inherent powers under Section 482 of the Code.”
20. This Court in G. Sagar Suri & Anr. Vs. State of UP & Ors. (2000) 2
SCC 636 observed that it is the duty and obligation of the criminal court
to exercise a great deal of caution in issuing the process, particularly
when matters are essentially of civil nature.
21. This Court has time and again cautioned about converting purely
civil disputes into criminal cases. This Court in Indian Oil Corporation
(Supra) noticed the 13 prevalent impression that civil law remedies are
time consuming and do not adequately protect the interests of
lenders/creditors. The Court further observed that:-
“13. …any effort to settle civil disputes and claims, which do not
involve any criminal offence, by applying pressure through
criminal prosecution should be deprecated and discouraged.”
34. There can be no doubt that a mere breach of contract is not in itself
a criminal offence and gives rise to the civil liability of damages.
However, as held by this court in Hridaya Ranjan Prasad Verma & Ors.
Vs. State of Bihar & Anr. (2000) 4 SCC 168, the distinction between
mere breach of contract and cheating, which is criminal offence, is a
fine one. While breach of contract cannot give rise to criminal
prosecution for cheating, fraudulent or dishonest intention is the basis of
the offence of cheating. In the case at hand, complaint filed by the
Respondent No. 2 does not disclose dishonest or fraudulent intention of
the appellants.
36. Having gone through the complaint/FIR and even the chargesheet, it
cannot be said that the averments in the FIR and the allegations in the
complaint against the appellant constitute an offence under Section 405
& 420 IPC, 1860. Even in a case where allegations are made in regard
to failure on the part of the accused to keep his 17 promise, in the
absence of a culpable intention at the time of making promise being
absent, no offence under Section 420 IPC can be said to have been made
out. In the instant case, there is no material to indicate that Appellants
had any malafide intention against the Respondent which is clearly
deductible from the MOU dated 20.08.2009 arrived between the
parties.”
8. The Supreme Court in the case of Radheshyam and others Vs. State of
Rajasthan and another decided on 22.07.2024 passed in Criminal Appeal
No.3020/2024 has held that breach of contract does not call for any criminal
action. A civil wrong cannot be given criminal colour merely to coerce the
applicant into registering the sale. The judicial process cannot be used as a tool to
enforce specific performance of agreement.
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9. Thus, it is clear that mere breach of contract would not give rise to
criminal prosecution and there is nothing on record to suggest that fraudulent or
dishonest intention on the part of the applicants was there from very inception of
the contract. The criminal law cannot be utilized for getting the specific
performance of contract.
10. Under these circumstances, this Court is of considered opinion that even
if the entire allegations made in the FIR are taken on their face value, still matter is
predominantly of civil in nature and respondent No.2 has a remedy of filing a civil
suit for specific performance of contract.
11. Accordingly, the FIR in Crime No.115/2023 registered at Police Station
Inderganj, District Gwalior (M.P.) for the offence under Section 420, 34 IPC is
hereby quashed with liberty to respondent No.2 that if so advised, he can take
recourse to civil law for redressal of his grievance.
12. The application is allowed.
(G. S. AHLUWALIA)
JUDGE
pd
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