Upset by an Allahabad High Court judge permitting criminal prosecution in what the Supreme Court said was essentially a civil dispute, the top court has barred the judge from hearing criminal matters till his retirement.
“The Chief Justice shall make the concerned judge sit in a division bench with a seasoned senior judge of the high court. We further direct that the concerned judge shall not be assigned any criminal determination, till he demits office. If at all at some point of time, he is to be made to sit as a single judge, he shall not be assigned any criminal determination,” a bench of Justices J B Pardiwala and R Mahadevan said in its August 4 order.
The case involved a dispute between the owners of M/s Lalita Textile Concern, which was in the business of wholesale and retail business of yarn used in fabric manufacturing, and M/s Shikhar Chemicals, which was involved in the business of manufacturing and selling cloth made from yarn supplied by the former. Lalita Textile Concern had supplied thread worth Rs 52,34,385 to Shikhar Chemicals, of which Rs 47,75,000 was paid and the rest Rs 4,59,385 remained unpaid since August 2019.
As per the complainant owner of Lalita Textile Concern, he made several attempts to contact the opposite party telephonically for payment, but no amount was paid. The GST department also initiated proceedings, but to no avail. He added that he also served a legal notice to the other side through his advocate, but all notices sent to the factory/home/office addresses were returned with remarks such as “Premises Locked.” Again, he sent recovery notices and legal notices for initiating criminal action for fraud and cheating, but they too were returned.
It was following this that he filed a complaint with the police, but no FIR was lodged. He then moved a magistrate court, which took cognisance of the complaint, and issued summons for the offence punishable under Section 406 (criminal breach of trust) of the Indian Penal Code. This was challenged before the high court, which, however, dismissed the same.
Shikhar Chemicals then moved the Supreme Court.
‘One of the worst and most erroneous orders’
Deciding it, the Supreme Court said, “With all due deference and humility at our command, we are constrained to observe that the impugned order is one of the worst and most erroneous orders that we have come across in our respective tenures as judges of this court.”
The top court added, “The judge concerned has not only cut a sorry figure for himself but has made a mockery of justice. We are at our wits’ end to understand what is wrong with the Indian judiciary at the level of high court. At times, we are left wondering whether such orders are passed on some extraneous considerations or it is sheer ignorance of law. Whatever it be, passing of such absurd and erroneous orders is something unpardonable.”
Story continues below this ad
The Supreme Court said, “It was expected of the Additional CJM to know that in a case of sale transaction where is the question of any entrustment of goods so as to bring the case within the ambit of criminal breach of trust punishable under Section 406 of the IPC.” The court also referred to judgments “wherein this Court stated that a mere transaction of sale cannot amount to an entrustment”.
The court said, “We are not taken by surprise with the magistrate exhibiting complete ignorance of law as regards the position of law, as to what constitutes cheating punishable under Section 420 of the IPC and criminal breach of trust punishable under Section 406 of the IPC. However, we expected at least the high court to understand the fine distinction between the two offences and the necessary ingredients to constitute the offence of cheating and criminal breach of trust.”
It further said that the “most disturbing part” of this matter is the “manner in which the high court dealt with the quashing application filed by the petitioner-herein and the observations made in para 12 of its impugned order”.
The court said, “The judge has gone to the extent of saying that asking the complainant to pursue civil remedy for the purpose of recovery of the balance amount will be very unreasonable as civil suit may take a long time before it is decided and, therefore, the complainant should be permitted to institute criminal proceedings for the purpose of recovery of the balance amount.”
Story continues below this ad
The bench said, “Is it the understanding of the high court that ultimately if the accused is convicted, the trial court would award him the balance amount? The observations recorded in para 12 are shocking.”
The court added, “It is an extremely sad day for one and all to read the observations contained in para 12 of the impugned order. It was expected of the high court to know the well-settled position of law that in cases of civil dispute, a complainant cannot be permitted to resort to criminal proceedings, as the same would amount to abuse of process of law.”
Consider matter afresh, says Supreme Court
The Supreme Court said that it was expected of the high court to understand the nature of the allegations levelled in the complaint. “In substance, the high court has said in so many words that the criminal proceedings instituted by the complainant in a case of pure civil dispute is justified because it may take considerable time for the complainant to recover the balance amount by preferring a civil suit,” the bench said.
The Supreme Court set aside the high court order and remanded the matter to the high court for considering it afresh. The court asked the Chief Justice of the Allahabad High Court to assign the matter to any other high court judge as he may deem fit.
Story continues below this ad
“…we have been constrained to issue directions…keeping in mind that the impugned order is not the only erroneous order of the concerned judge that we have looked into for the first time. Many such erroneous orders have been looked into by us over a period of time,” the court said.
