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CASE NO.:

Appeal (crl.) 70 of 2003

PETITIONER:

U. Dhar & Anr.

RESPONDENT:

The State of Jharkhand & Anr.

DATE OF JUDGMENT: 20/01/2003

BENCH:

M.B. Shah & ARUN KUMAR

JUDGMENT:

J U D G M E N T

ARUN KUMAR, J.

WITH

CRIMINAL APPEAL NO. 71 OF 2003

(Arising out of SLP(CRL) No. 2698 of 2002

(Arising out of SLP (CRL.) NO.2654 OF 2002

February 17, 2003.

#

N Santosh Hegde & B P Singh.

$

Crl.A.No. 70 of 2003 @ SLP(Crl)No.2654 of 2002 :

Leave granted.

This Appeal is filed by U. Dhar, Managing Director and

Mr. Asis Ray, Vice President (Operation), both of Tata

Construction & Project Ltd. against an order dated 3rd May,

2002 passed by the High Court of Jharkhand in Crl.M.P.

No.4780/2001 whereby the High Court dismissed the petition

filed by the appellant herein for quashing an order dated 19th

June, 2001 whereby cognizance was taken of offence

against the appellants under Sections 403, 406, 420 and

120B of Indian Penal Code by the learned Chief Judicial

Magistrate, Bokaro.

Briefly, the facts are that Bokaro Steel Plant, a unit of

Steel Authority of India Limited (for short, SAIL) awarded a

contract to M/s. Tata Iron & Steel Co. Ltd. (for short, TISCO),

Growth Shop for certain works. TISCO growth shop

completed supply part of the work and erection part of the

work was entrusted by it to M/s. Tata Construction &

Projects Ltd. (for short TCPL). TCPL in turn issued Tender

Enquiry and awarded the work to M/s. Singh Construction

Co., the complainant. According to the complainant after

completing the work it demanded payment of the balance

amount under the contract from TCPL. The appellants

herein are the Managing Director and President (Operations)

of TCPL. When the complainant failed to receive the

payment for the work done, they filed a complaint on 11th

January, 2001 under Sections 403, 406, 420 and 120B IPC

at Bokaro. The concerned Magistrate took cognizance of

the alleged offences and issued summons vide order dated

19.6.2001 to the appellants. The appellants challenged the

said order by filing a Crl.M.P.4780/2001 in the High Court of

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Jharkhand at Ranchi. The impugned order was passed by

the High Court dismissing the said petition on 3rd May, 2002.

The present appeal has been filed against the said

order of the High Court whereby the High court refused to

quash the order of the learned Chief Judicial Magistrate

taking cognizance of the alleged offences against the

appellants. The learned counsel for the appellants argued

that a perusal of the complaint would show that no case is

made out against the appellants for the alleged offences,

and, therefore, the order passed by the learned Chief

Judicial Magistrate is wholly without jurisdiction. According

to the learned counsel for the appellants, the controversy

relates to purely a civil dispute regarding payment of money

and no case for criminal complaint for the alleged offences is

made out. We have been taken through the complaint as

well as our attention has been drawn to the impugned order

passed by the Chief Judicial Magistrate and the confirming

order of the High Court. After careful consideration of the

facts placed on record, it appears to us that the dispute

between the parties is of a purely civil nature. The

grievance of the complainant is about the failure of TCPL to

pay the balance amount under the contract even though

according to it the work stands completed. The appellants

have disputed this.

In our view, what is relevant is that the contract

between TCPL and the complainant is an independent

contract regarding execution of certain works and even

assuming the case of the complainant to be correct, at best it

is a matter of recovery of money on account of failure of

TCPL to pay the amount said to be due under the contract.

The complainant has alleged that TCPL has already

received the money from SAIL for the work in question and it

has misappropriated the same for its own use instead of

paying it to the complainant and it is for this reason that the

offences are alleged under Sections 403, 406 and 420 etc.

The courts below have overlooked the fact that the

contract between Bokaro Steel (a unit of SAIL) and TCPL is

a separate and independent contract. The contract between

complainant and TCPL is altogether a different contract.

The contractual obligations under both the contracts are

separate and independent of each other. The rights and

obligations of the parties i.e. the complainant and TCPL are

to be governed by the contract between them for which the

contract between TCPL and Bokaro Steel (SAIL) has no

relevance. Therefore, even if Bokaro Steel has made the

payment to TCPL under its contract with the latter, it will not

give rise to plea of misappropriation of money because that

money is not money or movable property of the complainant.

Further Section 403 uses the words 'dishonestly' and

'misappropriate'. These are necessary ingredients of an

offence under Section 403, IPC. Neither of these ingredients

are satisfied in the facts and circumstance of the case. In

para 14 of the complaint, the complainant has stated as

under:

".Release of payments to complainant was

never depended on the payment released by

Bokaro Steel Plant a Unit of SAIL to TISCO

growth shop and TCPL".

Thus admittedly, the two contracts are independent of

each other and payment under one has no relevance qua

the other. It cannot be said that there is any dishonest

intention on the part of appellants nor it can be said that

TCPL or the appellants have misappropriated or converted

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the movable property of the complainant to their own use.

Since the basic ingredients of the relevant Section in the

Indian Penal Code are not satisfied, the order taking

cognizance of the offence as well as the issue of summons

to the appellants is wholly uncalled for. Such an order brings

about serious repercussions. So far as the appellants are

concerned when no case is made out for the alleged

offences even as per the complaint filed by the complainant,

there is no reason to permit the appellants to be subjected to

trial for the alleged offences. Hence, the appeal is allowed.

The impugned orders of the High Court as well as of Chief

Judicial Magistrate are hereby ordered to be quashed.

CRIMINAL APPEAL NO. 71 OF 2003 @ SLP(CRL)NO.2698/2002:

In view of the above judgment, this appeal is also

allowed.