Smt Chitra Mavinkurve vs. State Of Karnataka

The summary of the allegations in the FIR is as follows:

In terms of the agreement, the company/industry and its assets were sold to respondent No.2 for total sale consideration of Rs.25,00,000 on as is where basis. Out of which Rs.10,00,000 was paid through RTGS and balance of Rs.10,00,000 in cash.

Petitioner No.2 was hired to provide technical assistance to the said company/industry for a period of two years and a sum of Rs.40,000 was paid through cheque for the services to be rendered by petitioner No.

Later a sum of Rs.2,00,000/- was paid to petitioner NO.2 through cheque and an unit of the said company/industry was shifted to Peenya Industrial Area. Since petitioner No.1 was hospitalized, petitioner No.2 requested respondent No.2 to pay an amount of Rs.2,00,000 in form of cash. Respondent No.2 paid a sum of Rs.2,00,000 in cash to the petitioner and thereafter the petitioner with an intention to make wrongful gain, did not return the said cheque, but got the cheque dishonoured and NC: 2023:KHC:40231 issued a legal notice. When the respondent No.2 sent a reply, petitioner No.2 abused and threatened respondent No.2 and with forged documents raised the bill for Rs.6,04,153 for illegally selling the goods belonging to the Company using the old PAN number of BHEL and raised the GST invoice. Thereby committing criminal breach of trust and causing loss to a tune of Rs.18,00,000 to the respondent No.

The police after investigation submitted the charge sheet before the Trial Court. The Trial Court took cognizance of the aforesaid offence and issued summons.

Learned counsel for petitioner submits that respondent No.2 having not honoured the terms of MOU by not paying the balance consideration amount has defrauded the petitioner. He further submits that the invoice produced along with the charge sheet establishes that the purchase orders were placed prior to the execution of MOU and therefore the allegation that the petitioners by fabricating the purchase orders, created invoices is without any substance. He further submits that the FIR was lodged only to circumvent the proceedings initiated by petitioner No.1 under section 138 of Negotiable Instruments Act. He further submits that transfer of goods belonging to the establishment was subject to preparing an inventory and the inventory having not been prepared, the goods cannot be said to have been handed over to respondent No.2 under the MOU. He further submits that the respondent No.2 got registered the new establishment on 26.09.2019 under the GST Act. NC: 2023:KHC:40231

NC: 2023:KHC:40231 want of funds and petitioner No.1 has initiated proceedings for offence punishable under section 138 of the Negotiable Instruments Act. The five invoices which form part of the charge sheet indicates three purchase orders that were placed prior to execution of MOU, though two purchase orders pertains to after the execution of MOU. However, the petitioner has produced correspondence exchanged between the petitioner No.1 and the purchaser, which indicates that the purchase orders were placed prior to the execution of MOU. The clause-6 of MOU reads as under:

The existing proprietary firm which is now running under the name and style of M/s.Suchitra Industries, upon transfer in the manner stated in this MOU, all existing assets shall be transferred to the New Firm at written down value plus GST as applicable on the day of the signing of the MOU. However, it is further agreed that, physical inventory shall be taken and inventory sheet shall be signed by Smt.Chitra Niranjan Mavinkurve, and Smt.Manjula and the same shall be transferred to the New Firm at the mutually agreed price plus GST as applicable so as to close/defunct the proprietary firm M/s.Suchitra Industries owned by Smt.Chitra Niranjan Mavinkurve."

The transfer of the goods of the industry to the second respondent was subject to preparation of inventory. The handing over of goods belonging to the establishment after execution of MOU is disputed, and there is no material to substantiate that the goods belonging to the establishment NC: 2023:KHC:40231 were transferred after the execution of MOU . When the terms of MOU have not been honoured in its entirety, it cannot be said that the petitioners have misappropriated and cheated the second respondent. The GST certificate which forms part of the charge sheet stands in the name of the establishment which earlier belonged to the petitioner and second respondent got registered the new establishment under the GST Act only on 26.09.2019. The entire dispute between the parties arises out of breach of terms and conditions contained in MOU which is purely civil in nature. Therefore, in the absence of any material, the allegation that the petitioner committed criminal breach of trust or cheating is without any substance, and the continuation of criminal proceedings will be an abuse of process of law. Accordingly, I pass the following: ORDER i. Criminal Petition is allowed. ii. The impugned proceedings in C.C.No.10328/2021 on the file of IV Additional Chief Metropolitan Magistrate, Bengaluru stands quashed. JUDGE