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CASE NO.: Appeal (crl.)  1443 of 2007

PETITIONER: All Cargo Movers (I) Pvt. Ltd. & Ors

RESPONDENT: Dhanesh Badarmal Jain & Anr

DATE OF JUDGMENT: 12/10/2007

BENCH: S.B. Sinha & Harjit Singh Bedi

JUDGMENT: J U D G M E N T (Arising out of SLP (Crl.) No.1547 of 2007)

S.B. Sinha, J.

1.      Leave granted. 2.      The parties hereto entered into a contract of carriage.  First  Respondent approached the appellants which are companies registered and  incorporated under the Indian Companies Act for delivery of six  consignments valued at US $ 98,715.29 to the original consignee, M/s.  Universal Apparels (EPZ), Mombassa, Kenya.   By reason of a fax message,  Appellants asked their counterparts in Mombassa, Kenya (Walford  Meadows) to confirm delivery of consignment asking it to see that the cargo  is delivered only against presentation of original Bills of Lading.  The goods  in question were said to have been delivered by the agent of the petitioner to  the original consignee but the same allegedly was rejected on the ground of  being inferior in quality.  Goods are said to have been delivered to M/s.  Fashionette Industries Ltd.  Complainant-Respondent issued a notice to the  accused persons as also the aforementioned Walford Meadows and M/s.  Universal Apparels stating : \023That with utter disregard to the procedures and  practice prevalent internationally, and being fully  conscious of the consequences of delivering the  consignments without production of the Bills of  Lading, you M/s. Walford Meadows Ltd., as  agents of the Carrier at Mombassa Ltd. effected  delivery of the consignments covered under the  aforesaid original bills of lading to the consignees,  without their producing the Bills of Lading.  That  my clients are shocked at your act of negligence,  which is contrary, violative and in breach of your  duties under the Contract and Law.\024

4.      Negligence was, thus, attributed to the agencies in delivering the  cargo without the original Bill of Lading.  It was also alleged that the  carriers and their agent have committed a breech of carriage and acted in  violation of their contract and obligation.  A claim for a sum of US$  84,353.31 was made.  In the said notice, it was stated : \023That you, M/s. Walford Meadows, sent a fax  dated 19.9.1996 to M/s Universal Apparels, copy  of which was faxed to my clients by you M/s All  Cargo Movers (India) Pvt. Ltd.  By the said fax,  you M/s Walford Meadows Ltd. have clearly  pointed out the procedures to be followed in  respect of Through Bills of Lading or House Bills  of Lading and have admitted that no cargo should  be released to the importer without the

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presentation of the original Bills of Lading.  That  you, M/s. Walford have gone one step further and  stated that you had delivered the consignments to  Universal Apparels as a favour, since Universal  Apparels were your regular customers etc. etc. and  lodged a claim for the value of the said  consignments being the amount they have been  debited with you, M/s. All Cargo.\024

5.      On or about 14.9.1996, Mahabir Apparels in a letter addressed to the  petitioner company, lodged a statement of claim stating : \023PLEASE TREAT THIS AS OUR FORMAL  CLAIM FOR RS.27,87,795/- INVOLVED ON  THIS CONSIGNMENT.  YOU ARE HEREBY  ADVISED TO LOOK INTO THE MATTER  AND GIVE US THE EXACT STATUS OF THE  ABOVE CARGOES IMMEDIATELY.\024

6.      Yet again by a fax message dated 19.9.1996 sent by Darius Macharo  to the Universal Apparels, it was stated : \023The above shipments were realeased and  delivered to you without your showing to us the  original Bills of Lading. The procedure of the through bills of lading or  house bills of lading (illegible) should be released  to the importer without presentation of the original  bill of lading.  However, this favour was extended  to you because  1.      You are our regular customer. 2.      To save you for heavy post storage charges  which you would ((illegible) you were to  wait until you got the original bill from your  supplier. 3.      You needed the material very urgently as  you were out of stock. We have now been advised by our Principals, All  Cargo that your supplier Mahavir Apparels is  demanding US Dollar 84,353.31 from us as we  released the goods in absence of the original B/L.  (illegible) Please revert now as we have to advise our  Principal in India before close of business today. In the meantime we are holding all your shipments  until this matter is resolved.\024

7.      A copy of the said fax message was sent to the appellant herein  stating: \023CC : All Cargo India, Mumbai.         Attn : Vevek Kele We shall come back to you with full details upon  receiving reply from Universal Apparels.  Cargo  was released without Bank Guarantee.\024

8.      A bare perusal of the aforementioned letters/notices would clearly  indicate that no allegation had been made at the material time that it was the  appellant who had caused delivery of the goods.   9.      It is furthermore not in dispute that a suit has been filed by the  respondent herein in the Original Side of the Bombay high Court which has  been marked as suit No.1861 of 1997.   10.     In the said suit, the following have been arrayed as defendants : \0231.  ACE Lines Ltd. a company

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       Incorporated under Foreign Laws,         Having its office at 29 Bis Mere         Bathelemy Street, Port Louis,         Mauritius.

2.      All Cargo Container Lines Ltd. A company incorporated under  Foreign laws having its office at 29, Bis Mere, Bathelemy Street, Port Louis Mauritius.

3.      All Cargo Movers (India) Pvt. Ltd.         A company incorporated in India         Under the Companies Act, 1956         And having its office at 204,         National Insurance Building,         Dr. D.N. Road, Bombay \026 400001.

4.      M/s Walford Meadows Limited,         A company incorporated under         Foreign Laws having its office at         1st American Bank Building,         2nd Floor, No.1 Avenue,         Mombassa.\024

11.     Whereas defendant Nos.1 to 3 are alleged to be inter-related/sister  companies, the fourth defendant is said to be their agent.  In the said suit,  neither the aforementioned M/s. Walford Meadows Ltd. nor M/s. Universal  Apparels have been implicated as parties.  Plaintiff in the said suit averred  that entrustment of the six consignments have been made to Mahabir  Apparels.  The case made out in the plaint by the first respondents is as  under : \023The respective ships carrying the said six  consignments sailed from the Port of Bombay on  different dates and arrived at Mombassa.  The 3rd  Defendants addressed 2 fax messages dated  30.8.1996 and 2.9.1996 to the 4th Defendant  specifically instructing them to deliver the said six  consignments only against presentation of original  Bills of Lading.  The Plaintiff is crave leave to  refer to and rely upon the aforesaid  correspondence. XXX                             XXX                      XXX The plaintiff immediately addressed a fax dated  11.9.1996 to the 3rd Defendant (with a copy to M/s.  Harilal Bhawanji) questioning the legality,  propriety in giving delivery of the cargo without  production of the Bills of Lading.  The plaintiff  also pointed out that they had not given any  written permission to give delivery of the cargo  without production of the Bills of Lading.  The  Plaintiff whilst emphasizing that the matter was  very serious informed the 3rd Defendant to inform  their Mombassa Agents not to release the goods  without production of the original Bills of Lading  in respect of their consignments.  The plaintiff  craves leave to refer to and rely upon the said  correspondence when produced.

12.     The said suit is still pending.  More than one year after filing of the  said suit, i.e., on or about 6.5.1998, a complaint petition was filed wherein,  inter aila, it was alleged : \023Thereafter in and subsequent to September, 1996,  the complainant was shocked to learn that the

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accused have delivered away the goods materials  of the complainant\022s above described 6  consignments without \026 presentation of and  securing the original 6 Bills of Lading, which were  till with the complainant and not negotiated i.e.  paid off by the purchasing party and thus the  accused in abetment of each other and acting in  common concern have committed criminal breach  of Trust by causing criminal misappropriation of  the valuable property of the complainant and have  committed offences punishable u/s.407, 34 and  114 of I.P. Code. By issuing their said Bills of Lading in acceptance  and compliance of the complainants invoices, the  accused represented, assured and induced the  complainant to believe that the complainant\022s  goods \026 material delivered to the accused by the  complainant would be delivered by the accused to  the receiving party only \023TO ORDER\024 i.e. only on  the presentation of original bills of Lading to the  party receiving the delivery of the goods material.   If the accused had not to represented assured and  induced the complainant, he would not have risked  his gods material of the value of US$ 98,715.29  (i.e. Rs.38,49,896.31 at dollar rate about Rs.39/-)  to be delivered to the accused.  Thus, the accused  have in abetment and concert of each other,  cheated the complainant and committed offences  u/s 420, 34 and 114 of I.P. Code.\024

13.     Agent of the Kenyan counterpart of the petitioner, namely M/s.  Walford Meadows Ltd. against whom allegations have been made that it had  delivered the consignments to the assignee without original bills of lading  had not been made an accused.   14.     A bare perusal of the complaint petition would show that it did not  contain any averment in regard to the ingredients of the offence under  Sections 406 and 420 of the Indian Penal Code.  There is no allegation that it  was the petitioner who had delivered the goods.   15.     An application for quashing of the order issuing summons to the  appellant by the learned Metropolitan Magistrate has been dismissed by the  High Court of Gujarat by reason of the impugned judgment dated 19.1.2007  holding : \023Perusing the complaint in light of the above  arguments and legal propositions, it was clear that  the allegations made therein, prima facie, disclosed  the offence of breach of trust and the important  averments were substantiated by the statement on  oath of the complainant.  There is no reason to  examine the documents and defences of the  petitioner at this stage to find out whether the  complainant was likely to result in conviction.  It is  not established though alleged, either that the  complainant did not disclose any offence or that  the criminal proceedings were a gross abuse of the  process of law, instead, it appears from the record  that hearing of the present petition is unduly  delayed after grant of ex-parte interim relief on  1.9.1998.  Therefore, petition is dismissed, Rule is  discharged and interim relief is vacated with no  order as to costs.

16.     Mr. P.H. Parekh, learned counsel appearing on behalf of the  respondents, has drawn our attention to several documents to show that it  had all along been contended by the first respondent that the appellant was  also guilty of violating the terms of the Bill of Lading.

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17.     We are of the opinion that the allegations made in the complaint  petition, even if given face value and taken to be correct in its entirety, do  not disclose an offence.  For the said purpose, This Court may not only take  into consideration the admitted facts but it is also permissible to look into the  pleadings of the plaintiff-respondent No.1 in the suit.  No allegation  whatsoever was made against the appellants herein in the notice.  What was  contended was negligence and/or breach of contract on the part of the  carriers and their agent.  Breach of contract simplicitor does not constitute an  offence.  For the said purpose, allegations in the complaint petition must  disclose the necessary ingredients therefor.  Where a civil suit is pending and  the complaint petition has been filed one year after filing of the civil suit, we  may for the purpose of finding out as to whether the said allegations are  prima facie cannot notice the correspondences exchanged by the parties and  other admitted documents.  It is one thing to say that the Court at this  juncture would not consider the defence of the accused but it is another thing  to say that for exercising the inherent jurisdiction of this Court, it is  impermissible also to look to the admitted documents.  Criminal proceedings  should not be encouraged, when it is found to be mala fide or otherwise an  abuse of the process of the Court.  Superior Courts while exercising this  power should also strive to serve the ends of justice. 18.     In G. Sagar Suri & Anr. v. State of U.P. & Ors. [(2000) 2 SCC 636,  this Court opined : \0238. Jurisdiction under Section 482 of the Code has  to be exercised with great care. In exercise of its  jurisdiction the High Court is not to examine the  matter superficially. It is to be seen if a matter,  which is essentially of a civil nature, has been  given a cloak of criminal offence. Criminal  proceedings are not a short cut of other remedies  available in law. Before issuing process a criminal  court has to exercise a great deal of caution. For  the accused it is a serious matter. This Court has  laid certain principles on the basis of which the  High Court is to exercise its jurisdiction under  Section 482 of the Code. Jurisdiction under this  section has to be exercised to prevent abuse of the  process of any court or otherwise to secure the  ends of justice.

19.     Therein also, having regard to the fact that a criminal complaint under  Section 138 of the Negotiable Instruments Act had already been pending, a  criminal complaint under Section 406/420 was initiated which was found to  be an abuse of the due process of law. 20.     In Anil Mahajan v. Bhor Industries Ltd. & Anr. [(2005) 10 SCC 228],  this Court held : \0238. The substance of the complaint is to be seen.  Mere use of the expression \023cheating\024 in the  complaint is of no consequence. Except mention of  the words \023deceive\024 and \023cheat\024 in the complaint  filed before the Magistrate and \023cheating\024 in the  complaint filed before the police, there is no  averment about the deceit, cheating or fraudulent  intention of the accused at the time of entering into  MOU wherefrom it can be inferred that the  accused had the intention to deceive the  complainant to pay. According to the complainant,  a sum of Rs.3,05,39,086 out of the total amount of  Rs.3,38,62,860 was paid leaving balance of  Rs.33,23,774. We need not go into the question of  the difference of the amounts mentioned in the  complaint which is much more than what is  mentioned in the notice and also the defence of the  accused and the stand taken in reply to notice  because the complainant\022s own case is that over  rupees three crores was paid and for balance, the

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accused was giving reasons as above-noticed. The  additional reason for not going into these aspects is  that a civil suit is pending inter se the parties for  the amounts in question.\024

21.     In Hira Lal Hari Lal Bhagwati v. CBI, New Delhi [(2003) 5 SCC  257}, this Court opined : \023It is settled law, by a catena of decisions, that for  establishing the offence of cheating, the  complainant is required to show that the accused  had fraudulent or dishonest intention at the time of  making promise or representation. From his  making failure to keep promise subsequently, such  a culpable intention right at the beginning that is at  the time when the promise was made cannot be  presumed. It is seen from the records that the  exemption certificate contained necessary  conditions which were required to be complied  with after importation of the machine. Since the  GCS could not comply with it, therefore, it rightly  paid the necessary duties without taking advantage  of the exemption certificate. The conduct of the  GCS clearly indicates that there was no fraudulent  or dishonest intention of either the GCS or the  appellants in their capacities as office-bearers right  at the time of making application for exemption .  As there was absence of dishonest and fraudulent  intention, the question of committing offence  under Section 420 of the Indian Penal Code does  not arise.\024

    {See also Hira Lal Hari Lal Bhagwati v. CBI, New Delhi [(2005) 3  SCC 670] and Indian Oil Corporation v. NEPC India Ltd. & Ors. [(2006) 6  SCC 736]}. 22.     For the reasons aforementioned, the impugned judgment cannot be  sustained.  It is set aside accordingly.  Appeal is allowed and the order  taking cognizance against the appellant is set aside.