- (1.) ORDER :- By means of this application moved under Section 482 of the Code of Criminal Procedure (in short to be referred to as Cr. P. C.) inherent powers of the Court are being invoked for quashing the criminal complaint filed by respondent No. 3 and by a supplementary affidavit a prayer has been made to quash the order dated 20-9-98 passed by the learned C. J. M. Ghaziabad summoning the applicants as accused in the aforesaid complaint for the offences punishable under Section 418/420 of the Indian Penal Code (in short Penal Code).
(2.) Copy of the criminal complaint filed by respondent No. 3 is Annexure-6 to the application. The allegations made therein may be stated in short as under :That the complainant is a Public Ltd. Company under the provisions of the Companies Act having its Registered Office at Solan Brewery, District Solan, Himachal Pradesh and one of the Branches of the Factory/Administration Unit of the complainant Company is situate at Mohan Nagar Ghaziabad.That accused No. 1 is a Limited Company incorporated under the Companies Act with its Registered office at 73/81 Salai Road, Thillai Nagar, Tiruchiripallai and its Regional Office at Delhi. The accused No. 3 is the Joint Managing Director, accused No. 2 is the Executive Director, accused No. 4 is the Director Marketing and accused No. 5 is the Regional Director of the accused company and the accused persons were engaged in the supply, erection and commissioning of Oil or Coal Fired Boilers and they assured the complainant that they could as well deal in the supply of Natural Gas Fired Boilers.That the complainant company is engaged in the manufacture, inter alia, of glass bottles and various alcoholic and non-alcoholic beverages at its unit amongst others at Mohan Nagar, Ghaziabad.That with the laying of the Hazira Bijapur Jagdishpur (HPJ) Pipeline by the Gas Authority of India, it became possible for the complainant company to consider the use of gas as a cheaper, more efficient and environmentally friendly alternative to coal as a fuel in its industry at Mohan Nagar.That the complainant company applied for the supply of 42,000/- standard Cubic Metres of Natural Gas per day to the Gas Authority of India Ltd. and the said Authority made available the natural gas to the complainant Company w.e.f. March, 1993. Out of 42,000 standard Cubic Metres approximately 20,000 standard Cubic Metres was required to fire the Boiler Approximately 12,000 kgs. per hour of the steam for manufacturing operations on a continuous basis was required by the complainant Company for its unit at Mohan Nagar. The complainant company floated an enquiry for a Gas Fired Boiler to produce 72,000 Kgs of steam per hour on a continuous basis consuming approximately 955 Standard Cubic Meters of gas per hour. The accused persons taking advantage of previous acquaintance with the complainant company induced to place order for the Gas Fired Boiler to the complainant Company and they further persuaded to design, supply, install and commission to the satisfaction of the complainant Company in accordance with the said enquiry. In order to secure order from the complainant Company accused persons impressed upon the officials of the complainant company to the effect that accused No. 1 was a company of repute and was quite efficient in erecting installing and commissioning of Gas Fired Boiler also. It was also impressed upon the complainant company that the Boilers would be installed well in advance of the flow of gas from the pipeline to the complainant company.That accused Nos. 2 to 5 at times separately and at times collectively represented to the complainant company that a Gas Fired Boiler was no different from a Coal Fired or Oil Fired Boiler in its essential characteristics and design. They further represented that in anticipation of demand for Gas Fired Boiler with the advent of the HBJ pipeline, the accused No. 1 company had already prepared designs for the Gas Fired Boilers in collaboration separately with M/s. Dunphy and M/s. Credfeld, both of United Kingdom. A 'Gas Burner Train' is the most critical equipment in any Gas Fired Boiler and the accused persons on various occasions assured the complainant companythat the Gas Fired Boiler required to be installed at the site of the complainant Company would be fitted with the 'gas burner train the design of which would be approved either by M/s. Dunphy or M/s. Credfeld depending upon whether the gas burner train manufactured by M/s. Credfeld or by M/s. Dunphy was fitted in the Boiler.That the accused No. 2 further represented to and assured the complainant Company that the Boiler as manufactured and supplied to it would be based entirely on designs prepared by international designers and approved by one of the two internationally renowned gas burner train manufacturers as referred to above, whose gas burner train would be incorporated in the boiler, with a view that the gas boiler supplied to complainant company would operate as a model and show piece to other prospective customers.That the accused persons further guaranteed and assured the complainant company that the Boiler as supplied would perform in all respects to the standards required and would produce the required 12,000 kgs. of steam per hour on a gas consumption of not more than 955 cubic meters of natural gas per hour, so as to be able to meet the entire demand of steam of the complainant company and that the Boiler supplied would be of the best quality incorporating materials of the highest specifications and design safety margins, fabricated to the highest standards of workmanship so as to provide a most efficient and reliable boiler system. That based on the said representations, inducement, persuasion and assurances given from time to time by accused persons, the complainant company placed on accused Company a purchase order for the design, supply and commissioning of the promised Natural Gas Fired Boiler at 12,00 kgs. per hour capacity along with related machinery (including one Credfeld/Dunphy Gas Burner Train) at a basic price of Rs. 32,40,000.00.That the accused persons thereafter purporting to make delivery of the Boiler and related machinery/equipment under the purchase order under cover of its invoice dated September, 1992 for Rupees, 39,50,856/- against which the complainant Company arranged payment of Rupees 37,60,911/- on their persuasion and the balance amount was payable after the accused had successfully commissioned the Boiler.That after when the machinery was commissioned, during testing and trial it was found that the Boiler installed by the accused company could generate steam only to a maximum of 7,500 kgs. per hour with a consumption of approximately 950 Standard Cubic Meters of Natural Gas per hour. In addition, fuel gases escaped from the boiler at various points which resulted not only in a waste of fuel gases and consequent heat but also caused the steel plates severally warning around the exit note on the top of the Boiler and around the explosion doors.That the complainant company inquired further into the matter and was shocked to find out that each and every material representation made and assurances given by the accused with respect to the Boiler had been breached and disregarded and complainant company has been cheated inasmuch as :a. The design for the Boiler had been locally prepared by the accused company without any collaboration, review or approval either from M/s Dunphy or M/s Credfled or any other organisation experienced in the design and/or manufacture of Natural Gas Fired Boiler system.b. The Gas Burner Train supplied was of local substandard make and design and was to-tally incapable of burning gas or generating heat with the efficiency required and the design, material and workmanship of the Boiler was such that not only was the Boiler as designed, fabricated and supplied totally unable to perform to the contracted specification but the Boiler as supplied was incapable of generating even to any substantial degree the heat and steam necessary and was unable to withstand the pressure of the limited heat and steam generated in the Boiler, with the result that the plates and the fuel gases escaped from all the weaker spots and in spite of haphazard attempts by the accused persons to improve the performance of the Boiler and associated equipment/machinery they still remained wholly incapable of improved performance and remained a produce substantially different from the product contracted for.As a consequence of accused persons failure to either rectify the defects in the Boiler and the associated machinery/equipment or to refund the aforesaid sum of Rupees 37,60,911/- the complainantcompany suffered a huge loss of more than two crores sixty five lakhs rupees as the complainant company was being burdened with the cost of gas supplied by the Gas Authority of India.That accused Nos. 2 to 5 for and on behalf of the accused No. 1 severally and jointly deceived the complainant company by making misrepresentations and thereby dishonestly induced the complainant company to deliver an amount of Rupees 37,60,911/- but for the aforesaid representation, inducement and assurances extended to the complainant company from time to time by accused Nos. 2 to 5, the complainant company would not have placed the order for the installation of Gas Fired Boiler. The accused persons had full knowledge that they were likely to cause wrongful loss to the complainant company and to get wrongful gain from the transaction by supplying articles not suited to work as Gas Fired Boiler.That the accused persons thus committed offences punishable under Section 415, 418 and 420 of the Penal Code.
(3.) On a consideration of the complaint, statement of S. K. Kochar and the documents placed on record from the side of the complainant, the learned Magistrate by the order dated 10-5-1996 came to the conclusion that there were sufficient grounds to proceed against the applicants under Sections 418 and 420 I. P. C. It appears that an application for recalling the order summoning the accused was filed along with an application dated 16-3-1998 on behalf of the present applicants. The Chief Judicial Magistrate, Ghaziabad vide his order dated 4-4-1998 rejected both the applications. The said order, however, has been not challenged in the present application moved under Section 482 Cr. P. C.;