ARVIND PANDALAI Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THESE applications under Section 482 of the Code of Criminal Procedure, 1973 are preferred by the petitioners of both these applications with a prayer to quash and set aside the complaint bearing FIR no. 619 of 2005 lodged at A- Division Police Station, Bhavnagar, by the respondent no.-2 ?arun Kumar Hansraj Jain on 29-9-2006 for the offence punishable under Sections 406, 420, 467 read with Section 120-B and 114 of the Indian Peal Code as also the subsequent proceedings arising therefrom. 1. 1 It may be stated that petitioner (accused no. 3) of Criminal Misc. Application no. 2270 of 2007 is the Branch Manager of State Trading Corporation of India (STC) while the petitioners nos. 1 and 2 (accused nos. 4 and 5) of Criminal Misc. Application no. 2265 of 2007 are the Chairman-cum-Managing Director, and Director (Finance) of the said Corporation and both these applications arise from the same complaint filed by Arun Kumar Hansraj Jain, Chairman-cum Managing Director of Garg Casteels Pvt. Ltd. Since the question involved as also the facts are common in both these petitions, the same are being disposed of by this common judgment.

(2.) THE respondent no. 2 ?complainant ?arunkumar Hansraj Jain who is the Chairman and Managing Director of Garg Casteels Pvt. Ltd. in his complaint has alleged that he has been cheated by the accused nos. 1 to 5 by using forged documents and misappropriating an amount of Rs. 3 crores. It has also been alleged therein that the present accused nos. 3-Branch Manager, accused no. 4-Chairman-cum-Managing Director, and accused no. 5-Director (Finance ) are in charge of the business of the State Trading Corporation (STC) and are completely aware of the day to day business. According to the complainant, he was contacted by the accused no. 1 ?rajeev Somani, Chairman and Managing Director of M/s. Samraj Exim India Pvt. Ltd. in February 2006 with an order for exporting 60,000 MT iron ore to China, and was told that a Memorandum of Understanding has been executed with the accused nos. 3,4 and 5 (present petitioners) of STC for financial transactions. It is further alleged that the accused no. 1 assured him that the export contract will be over in June, 2006 and that the deal would fetch a profit of Rs. 150 lakhs and further added that they would provide a bank guarantee of Rs. 3 crores to STC for implementation of the contract. It was decided that a minimum profit of Rs. 50 lakhs will be paid to the complainant. , and therefore, in good faith and on the assurance given by the accused nos. 1 and 3, the complainant had got issued two separate bank guarantees of Rs. 2. 50 crores and Rs. 50 lakhs in favour of STC from Punjab National Bank, Raiwai Branch, Opp. Bhid Bhanjan Mahadev, Bhavnagar. It is further alleged in the complaint that the said two bank guarantees were invoked prior to the expiry period and on inquiry it was found that as per the MOU entered into between the accused no. 1 and STC , 60,000 MT of iron ore were exported in the month of June 2006, however, a dispute arose between the accused no. 1-Shipping Company and the party in China. According to the complainant on making further inquiries it was learnt that in terms of MOU dated 13-4-2005 the accused nos. 3, 4 and 5 (present petitioners ) had given the value of the goods exported to China in advance to the accused no. 1 (SEIPL), however, the accused nos. 1, 2, 3, 4 and 5 have entered into a criminal conspiracy and with an intention to cheat the complainant the accused nos 1,2,3,4 and 5 put up a false case before the complainant that for implementation of the aforesaid contract of MOU a bank guarantee is required to be furnished and the complainant in good faith gave two bank guarantees which were invoked prior to the expiry period illegally, even though , in fact,nothing was remaining to be done for the implementation of the contract. and thereby all the accused (including the present accused nos. 3, 4 and 5) have committed breach of trust, forgery and misappropriation of funds. Under these circumstances, the complainant had lodged the complaint as referred to in para-1 of this judgment.

(3.) IT is the case of the applicants of both these applications that on 6-11-2004, Mr. Rajeev Somani i. e. the accused no. 1 ?chairman and Managing Director of M/s. Samraj Exim Pvt. Ltd (SEIPL) approached the State Trading Corporation with a proposal for export of iron ore from India to China and the estimated profit for the said deal of export was US $1,20,000. Accordingly, on 18-3-2005 SEIPL had signed a contract with M/s. Creatway Pte. Ltd, Singapore, under which M/s. Creatway Pte. Ltd. was to supply 60,000 MT of iron ore Fines Fe 58% to China. SEIPL had confirmed that the foreign buyer had obtained Letter of Credit in their favour for the shipment of 60,000 M. T of iron ore Fines Fe58% and a Memorandum of Understanding (MOU) was executed between SEIPL and STC on 13-4-2005. According to the petitioners, the above said Letter of Credit was issued on 8-4-2005 and the beneficiary was M/s. Creatway Pte. Ltd. , Singapore. That on 14-4-2005 subsequent to the execution of the said MOU on request of M/s. Creatway Pte. Ltd the Letter of Credit was transferred in favour of STC by Overseas Chinese Banking Corporation Ltd. It is further the case of the petitioners that after the first shipment of iron ore on 30-4-2005, again on 14-6-2005, 440007 WMTS of iron Ore Fines Fe 58% valued at US$. 18,65,580 was supplied to M/s. Genera Nice Resources, Hongkong, and since at the first delivery STC had realized full export proceeds, this time STC had released 75% of the value of the goods in advance in terms of the MOU in favour of SEIPL and had also agreed to pay Ocean freight separately against securing 10% of the value. However, after the shipment a dispute occurred between M/s. Createway Pte. Ltd (Charters) and M/s. Arya Shipping ( Owners of ship) with regard to payment of Ocean Freight and as the dispute remained unresolved till the ship reached the Chinese Port, the ship owner did not unload the cargo at its destination port and the cargo remained afloat outside the sea port upto 29-7-2005. In the meanwhile, the buyer of the goods (importer) went back and refused to take delivery of the goods on account of the dispute with regard to payment of Ocean Freight. SEIPL then intervened and another buyer M/s. Sinochem Ind. , China agreed to purchase the entire goods on condition that they will retain USD 7,25,000/- as the cost of Ocean Freight and that they shall release the same in favour of the party on settlement of the dispute between M/s Creatway Pte. Ltd. and M/s Arya Shipping. Thereafter, SEIPL by their letter dated 29-7-2005 requested the Branch Manager of STC to give an undertaking and permit M/s. Sinochem Ind. , China, to retain USD 7,25,000/- and to make the balance payment of the goods. Thereafter, SEIPL had given a bank guarantee of Rs. 37,37,000/- apart from the payment of Rs. 30,00,000/- and also agreed to give a bank guarantee for the amount equivalent to US$ 7,25,000/- being the disputed Ocean Freight. and so on 29-7-2005, STC agreed to issue letter of confirmation to M/s. Sinochem Ind. , China to retain US$ 7,25,000/ -. Accordingly, letter of confirmation was issued to M/s. Sinochem Ind. , China and M/s. Sinochem Ind. ,china retained US$ 7,25,000/-, released the balance payment and took delivery of the goods. The dispute with regard to payment of Ocean Freight between M/s Creatway Pte. Ltd. (charters) and M/s. Arya Shipping is pending before the International Arbitrators. According to the petitioners, after repeated demands by STC, SEIPL, as agreed earlier, handed over bank guarantee bearing no. 0051lg000606 dated 7-3-2006 for Rs. 2. 50 crores as also bank guarantee bearing no 0051lg000706 dated 21-3-2006 for Rs. 50 lakhs through M/s. Garg Casteels (Pvt.)Ltd for the due performance of the MOU dt. 13-4-2005. It is further the case of the petitioners that as SEIPL had failed to make the balance payment of US$ 7,23,000 or equivalent amount as agreed between the parties, STC invoked the bank guarantees on 9-5-2006 for Rs. 3 crores. Thereupon, the respondent no. 2-complainant- Arun Kumar Hansraj Jain in his capacity as Chairman and Managing Director of M/s. Garg Casteels Pvt. Ltd. , who furnished third party bank guarantee in favour of STC lodged complaint being FIR no. 619 of 2006 at ?a? Division Police Station, Bhavnagar which is the subject matter of challenge in these Misc. Criminal Applications.