A H DOSHI Vs. DAYABHAI SHAH

JUDGEMENT

(1.) THIS petition filed under Section 482 of the Criminal Procedure Code and under Article 227 of the Constitution of India seeks to quash the prosecution against the petitioners pending in the Court of Metropolitan Magistrate 29th Court, Dadar, Bombay in Case No.14/s/1990.

(2.) FEW facts which are necessary to be stated for better appreciation of the controversy may be summed up in a nutshell. (a)Respondent no. 1 is the Senior Manager (Sales) of India United Mills Parel Bombay and petitioners no. 1 and 2 are the partners of firm M/s. Thakershi Chhaganlal, petitioner no. 3 herein. Petitioner no. 3 has two kinds of business activities. The said firm is the selling agents of Sikova Embroidery. It also buys grey cloth from the mills and powerlooms and gets the same bleached or dyed in the mills processing house. After getting this done it sends the same for Embroidery work to the local and upcountry embroidery job workers by fixing job work with them. After getting the said goods back the said firm sends them back for further processing and thereafter the goods are delivered to the customers in various parts of India. (b)India United Mills No.1 manufactures textile goods and sells those goods by accepting offers from the merchants. It is the case of the petitioners that they have been purchasing textile required for their embroidery business from Respondent no. 1 and others and the petitioners are having business relations with Respondent no. 1 for the last 20 years. (c)In the course of their business dealing with Respondent no. 1 the petitioners in the month of June and July 1987 entered into 3 contracts with Respondent no. 1 for the purchase of textile goods. Particulars of those contracts are as under:- Date contract No. Quality No. Quantity 20.6.87 G 114 j-1590 10 bales 04.7.87 G 128 j-1707 21 bales 04.7.87 G 129 j-1590 41 bales (d)According to the petitioners pursuant to the contracts mentioned above Respondent no. 1 partly delivered the goods under those contracts and failed and neglected to supply the remaining quantity of the goods inspite of various reminders from the petitioners. It is the case of the petitioners that they continuously telephoned Respondent no. 1 and also wrote letters and demanded delivery of the goods particularly of quality No. J-1590. However, Respondent no. 1 did not supply those goods. According to the petitioners they had addressed various letters dated 22.8.87, 1.9.87, 18.9.87 and 27.10.87 but the said correspondence was of no use. (e)Respondent no. 1 by letter dated 25th August 1987 informed the petitioners their inability to deliver the goods. According to Respondent no. 1 the goods could not be supplied on account of non availability of cotton. An assurance was given that the goods would be delivered before 31st of October, 1987. (f)Respondent no. 1 then asked the petitioners to take delivery of quality No. J-1707 for which Respondent no. 1 had sent advance bills nos. 1023 and 1025 both dated 30th of July 1987. Respondent no. 1 asked the petitioners to take delivery of quality No. J-1707 as Respondent no. 1 had those goods in their stock. According to the petitioners they informed Respondent no. 1 to supply quality No. J-1590 under contract G 114 and 129. (g)Respondent no. 1 Dayabhai Shah assured the petitioners again that the said goods would be delivered. On such assurance given by Respondent no. 1 the petitioners gave cheques bearing Cheque no. 727423 dated 29.8.87 on Dena Bank, Tardeo Branch for the sum of Rs. 63,894. 01 to Respondent no. 1. The goods delivered on 30.8.87 of cambric cloth were found defective. They were sent to the petitioner's embroidery job work at Pune from where they received the report that the goods were defective. Therefore, the petitioners wrote to Dena Bank to stop payment of cheque dated 29.8.87 in favour of Respondent no. 1 and at the same time they addressed a letter dated 1.9.1987 to Respondent no. 1, narrating the circumstances under which they had asked the bank to stop payment. Due to this lapse on the part of the Respondent the petitioners had to purchase textile goods at higher price from the open market and they suffered losses. It is the say of the petitioners that Respondent no. 1 again visited the shop of the petitioners and explained to the petitioners the position of manufacture of textile goods at the mills and he promised that he would send the remaining quantity of the goods of the quality J-1590. He promised that the same would be delivered latest by 31st October, 1987. He also assured that the issue of damaged goods delivered on 30.8.87 would also be settled. On the above assurance the petitioners issued Cheques No.727778 and 727777 for Rs. 3000/- and Rs. 33,894/- respectively, dated 24.9.87 and 26.9.87 respectively drawn on Dena Bank Ltd. Those cheques were sent alongwith letter dated 18.9.87 by hand delivery. The petitioners have annexed copy of the said letter to the petition which indicates that the petitioners have reserved their right to claim, if the contracted goods still remained undelivered. They have also reserved their right to claim for defective goods received by them. However, though respondent no. 1 had promised to deliver the remaining goods according to the petitioners the goods were not delivered and hence the petitioners had to stop payment of the cheques dated 24.9.87 and 26.9.87. According to the petitioners Respondent no. 1 again visited the shop of the petitioners and assured the petitioners that the remaining goods would be delivered and requested the petitioners to issue new cheques. He stated that he would not lodge the cheques with the bank till the remaining contracted goods are not delivered. Relying on this assurance the petitioners issued two cheques for Rs. 30,000/- and for Rs. 33,894. 01 dated 16.10.87 and 17.10.87 respectively. According to the petitioners since Respondent no. 1 did not carry out the promise and the undertaking given by him the payment of these two cheques had also to be withheld. (h)The petitioners in the circumstances in order to settle the dispute regarding the damaged goods supplied on 30.8.87 addressed a letter dated 2.11. 87 to Respondent no. 1 detailing therein the circumstances under which the petitioners had deducted Rs. 52,693/- for satisfying their claim on account of non-delivery of the remaining goods. After deducting Rs. 52,693/- out of the Respondent no. 1's bill amount of Rs. 63,894. 01 the petitioners sent pay-slip for Rs. 11,201. 01 in favour of the Respondent issued by Dena Bank Tardeo Branch. That pay-slip was sent alongwith letter dated 2nd November, 1987 by Registered Post to the Respondents. A reference is made to further correspondence between the parties making allegations and counter allegations which ultimately culminated in Respondent no. 1's filing a complaint in the Court of Metropolitan Magistrate's 29th Court at Dadar Bombay, making allegation that the petitioners had ab initio intention of cheating India United Mills and hence they stopped payment of the first cheque dated 29.8.87 immediately after lifting goods on 30.8.87. It appears that on 19th March 1990 the learned magistrate issued process. As stated above in the present petition it is prayed that the said prosecution against the petitioners pending in the Court of Metropolitan Magistrate's 29th Court, Dadar, Bombay be quashed.

(3.) SHE further drew my attention to the fact that there was an arbitration clause in the three contracts by which any disputes could be referred to the arbitration. SHE further submitted that instead of going in for arbitration, with a view to pressurising the petitioners Respondent has taken recourse to criminal law. Since the criminal complaint does not disclose any offence whatsoever she submitted that this court under its inherent jurisdiction under Section 482 of the Code of Criminal Procedure and also under Article 227 of the Constitution of India should quash the said pending proceedings.