BACKGROUND FACTS:
This very arises out of a complaint against the accused, where a case under section 406 and 420 was registered against petitioners. Petitioner 1 is the managing director of premier footwear Pvt Ltd. the petitioner is the son in law of the first petitioner, 3rd petitioner is the manager and the rest are the directors of the company. The petitioners were accused of criminal conspiracy to deceive the respondents. They allegedly have entered into a sale agreement of certain machinery and factory to the complainant which was already hypothecated with Canara Bank situated at Kerala. Complainant allegedly suffered losses worth 25 Lakh to get other liabilities dispensed. He lodged a complaint thereon while petitioners with objection filed application before Court in Pollachi under section 239 to get discharged.
PETITIONERS CONTENTION:
At the point when Judicial Magistrate II has dismissed the application after its perusal, petitioners filed a revision application before the session court which was later Dismissed by Learned Additional District and sessions judge. Aggrieved by the dismissal the accused approached the honorable high court of madras to seek the remedy where he contends that the respondent had a prior knowledge of the hypothecation and all the liabilities of the factory are paid by appellants. Hence, in absence of an intention of deception, charges of 406 or 420 shall not attract any liability.
The appellants further submit that the court while taking cognizance must have looked into enough materials for the purpose of framing charges but they didn’t do so and misconstrued the guidelines laid in various cases by the supreme court. they learned counsel for the appellants Manjeri S. Sundarraj, relied upon various judgements such as, Saroj Kumar Poddar v. State NCT of Delhi, Saju v. State of kerala, Trilochan v. Karnail, State v. Nalini, K.M Mathew v. State of kerala.
Petitioners further submitted about the breach of the contract on the part of respondents as a notice to pay balance of 75 lakhs was served to the respondent to take the possession of the property but he failed to do so, a complaint was also filed against him at Calicut district court. all these details were disclosed to the trial court while adjudication of CrPC 239 Application.
RESPONDENTS CONTENTION:
The respondents submitted that at the time of framing charges the court is not supposed to do complete enquiry over the all-defense evidence and materials. The court is under section 239
of the code of criminal procedure, only bound to examine police reports and other relevant documents and hearing the parties. He relied upon the judgement of State of Orissa v. Debendra Nath Padhi. The learned public prosecutor strengthened the above statement by agreeing with below court’s right consideration of police report and other documents and properly hearing the case at this juncture this court needed to disturb the trial court’s judgement.
The respondent entered into agreement with petitioners’ company and made an advance payment of 25 lakhs, he also cleared other dues like electricity and other arrears with approx. 25 lakhs. However, when he came to know about the hypothecation with Canara bank in Kerala, hence respondents were cheated by the appellants and bank initiated SARFAESI Act for dues recovery.
OBSERVATIONS:
The Honorable High Court has made several observations after perusing the case with the holding of several judgements of the honorable Supreme court in order to draw the true intent of provision in concern.
They submit the case of Union of India v. Prafulla Kumar Samuel and Another, holding that though court under section 227 of the code may weigh the defense evidence for limited purpose and when it appears to court that there exists probability of prima facie case it may frame the charges and proceed further, but it would not mean to give him power to enter inquiry of the matter as that of trial.
On the contrary, Supreme court in Satish Mehra v. Delhi Administration and Anor, supreme court noted that the code of criminal procedure does not support narrow application of mind and if the accused may produce such material which might change the entire landscape of the case, then it would not be just to ignore such submission. The honorable high court noted that if an accused is capable enough to produce such evidence which may save the time of the court from moving into prolonged trial, then it would be in vain, hence the session court is within the ambit of section 227 if accused produces such evidence.
The honorable high court analyses the case of Hridaya Ram Pd Verma and others v. State of Bihar and another in which the Supreme court held that the distinction of breach of contract and of cheating demands intention of the accused. Unless fraudulent or deceptive intention would not appear the breach of contract cannot result in criminal prosecution. Mal-intention is sine qua non to fix the criminal liability.
The hon’ble court took note of a judgement of supreme court in Saju v. State of Kerala where apex court held that unless there is nothing circumstantial to show the criminal conspiracy the court cannot opine that the accused cannot be convicted and sentenced under section 120B or
section 109 of IPC. However, no fact pertaining to section 109 was brought into picture. At this juncture nothing found that the accused has abetted an offence hence prosecution has failed to establish the existence of any abetment. The ratio of the judgement in State of UP v. Sukh Basi (AIR 2001 SC 2960) was taken into consideration.
However, supreme court in Satish Mehra v. Delhi Administration and Another, held that in the interest of justice, equity, and good conscience an accused if may be able to produce suc evidence which is undeniable and changes the entire landscape of the case as to no possibility of conviction then court may look into such evidence, but Supreme court Again in case of State of Orissa v. Debendra Nath Padhi (AIR 2005 SC 359) has overruled the judgment.
This honorable court notes that at the time of framing charge, it is not valid to hold the entire investigation of the accused, framing of charge is itself a primary order. a mind trial would start if the defence evidence will be perused. It will defeat the very purpose of the code. As per criminal jurisprudence it is not permissible to allow an accused to place his defence at the stage of framing of charge.
A view from the case of Rukmini Narvekar v. Union of India was taken as, even though adduced defence materials cannot be taken into consideration but there cannot be an absolute cap in this point that there in all circumstances is possible. When it appears that the prosecution version of the story is entirely baseless and absurd then in exceptional circumstances or in rare cases it could be permissible. Thus, it was observed that under section 227 of the act it is not permissible but it is allowed at the stage of CrPC 482 proceeding this court is free to consider all the materials produced.
It was found by the honorable court that the respondents had entered into an agreement with the accused for the sale of factory and machinery for the same respondents had failed to pay the sum of 75 Lakh. Hence a notice was served to the respondent for the defaults of payment.
A subsequent complaint was also filed against the respondents in Kozhikode Police Station. Due to a high court order of Kerala high court proceedings were stayed under SARFAESI Act.
JUDGEMENT.
The petitioners were granted bail by citing that the machinery and factory were available for the accused to have his possession on the same. This also reflects from the chargesheet filed. Certain documents produced such as Statement under 161 CrPC, Sale Agreement, Lease Agreement, and others. Witnesses also did testify the same as stated all were charged under Criminal Conspiracy, abetment, and Fraud.
The 1st petitioner against whom the allegation of concealing hypothecation is levelled. On the Perusal of the Police report and other documents there is nothing to show that the involvement of the petitioner 2 to 5 in the concerned case. But as far as the 1st petitioner is in concern, the proceedings must go on. This appeal stands partly allowed and charged against all petitioners are dismissed but petitioner 1st.
CONCLUSION:
The case appears to strike the balance between the importance of Procedural Law’s compliance and principles of justice, equity and good conscience with the eyes of Criminal Jurisprudence. Perusal of many judgements reflects the active and commendable role of judges in safeguarding the very interests of justice. It is now settled that at the stage of framing charge there is no need to conduct a mini trial by giving accused evidence in his favor while allowing the same at CrPC 482 stage weighing all evidence is valid and just. This is the beauty of law with maintenance of hierarchy of courts and sanctity of the procedure.
written by, Swarnim Tripathi, Lloyd School of Law
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