Full Judgment Text
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CASE NO.:
Appeal (crl.) 980 of 2007
PETITIONER:
Veer Prakash Sharma
RESPONDENT:
Anil Kumar Agarwal & Anr.
DATE OF JUDGMENT: 01/08/2007
BENCH:
S.B. Sinha & Harjit Singh Bedi
JUDGMENT:
J U D G M E N T
[Arising out of SLP (Crl.) No. 2272 of 2006]
S.B. SINHA, J :
1. Leave granted.
2. The parties hereto entered into a contract for sale and purchase of
welding rods. Appellant allegedly did not pay some amount due from him
towards supply of the said article. He issued two cheques for a sum of Rs.
3,559/- and Rs. 3,776/- in the year 1983. The said cheques were
dishonoured. Alleging that by reason of such act, the appellant has
committed offences under Sections 406, 409, 402 and 417 of the Indian
Penal Code, a complaint petition was filed by the First Respondent in the
Court of Special Judicial Magistrate, Rampur which was marked CC No.
132 of 1986. The principal allegation made therein against the appellant
reads as under:
\023That applicant, regarding these cheques and
payment of money, wrote several times to accused
and also sent his representative. But he kept on
making excuses in making payment. At last he
told on 19.12.1985 that he had issued fabricated
cheques knowingly with an intention to cheat him
and grab his money. He would not pay his money,
he is free to take any action, whatever he likes.\024
3. In his statement under Section 200 of the Code of Criminal Procedure,
Respondent No. 1 alleged:
\023...Both the Cheques were, thus, dishonoured. I
also wrote to accused regarding dishonour of
Cheques, even I, myself, visited him and also sent
to my Representative, but the accused kept on
making excuses for making the payment. At last,
on 19.12.1985, he told that he had knowingly
issued these false and fabricated Cheques only to
deceive and grab his money. He further told that
he shall never pay back his money. You can do
whatever you like. I went to lodge the Report, but
Thana Officials did not note down the Report.\024
4. One of the witnesses Shri Rajendra Kumar Saxena in his statement
alleged:
\023I was working as Supervisor in Hira
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Electronics during 1983. Accused Vir Prakash has
purchased Electric Rods from the company worth
Rs. 3599.33 P and Rs. 3776.73 P. Money was paid
later on through Bank Cheques both cheques were
dishonored by Bank. When accused was later on
asked for the payment of the amount taken accused
refused to pay and said that he had knowingly
issued the fabricated cheques to deceive and grab
the money. You can do what you like.\024
5. Another witness A. Khalik also made similar statements which were
recorded in the following terms:
\023Stated on oath that I was an employee of
Hira Electronics since 1983. Accused Vir Prakash
has purchased articles worth Rs. 3599.33 P and Rs.
3776.73 P. in 1983 for which payment was made
through Bank. Both cheques issued by the accused
were dishonored. On when reminder for payment
is made to the accused then he said that \023I have
knowingly issued the fabricated cheques to cheat
him and grab his money. I will not pay.\024
6. Cognizance was taken against the appellant. He was summoned. An
application was filed by him on 25.08.1987 for quashing of the said criminal
proceeding before the High Court. A learned Single Judge of the Allahabad
High Court by reason of the impugned order dated 3.01.2006 while refusing
to exercise his jurisdiction stated:
\023As the allegations against the applicant are factual
in nature, that cannot be adjudicated in the present
application, there is no ground for quashing
criminal proceedings. Stay order, if any, stands
vacated. The trial court is directed to conclude the
trial expeditiously.\024
7. The principle underlying exercise of jurisdiction by the High Court
under Section 482 of the Code of Criminal Procedure is now well-settled
viz. that the allegations contained in the complaint petition even if given face
value and taken to be correct in its entirety do not disclose an offence or not
is the question.
8. The dispute between the parties herein is essentially a civil dispute.
Non-payment or under-payment of the price of the goods by itself does not
amount to commission of an offence of cheating or criminal breach of trust.
No offence, having regard to the definition of criminal breach of trust
contained in Section 405 of the Indian Penal Code can be said to have been
made out in the instant case.
Section 405 of the Indian Penal Code reads, thus:
\023Whoever, being in any manner entrusted with
property, or with any dominion over property,
dishonestly misappropriates or converts to his own
use that property, or dishonestly uses or disposes
of that property in violation of any direction of law
prescribing the mode in which such trust is to be
discharged, or of any legal contract, express or
implied, which he has made touching the discharge
of such trust, or wilfully suffers any other person
so to do, commits "criminal breach of trust".\024
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Neither any allegation has been made to show existence of the
ingredients of the aforementioned provision nor any statement in that behalf
has been made.
Ordinarily, bouncing of a cheque constitutes an offence under Section
138 of the Negotiable Instruments Act. No complaint thereunder had been
taken.
9. We are, therefore, left only with the question as to whether in a
situation of this nature any offence of cheating can be said to have been
made out.
Section 415 of the Indian Penal Code defines cheating to mean:
\023Whoever, by deceiving any person, fraudulently
or dishonestly induces the person so deceived to
deliver any property to any person, or to consent
that any person shall retain any property, or
intentionally induces the person so deceived to do
or omit to do anything which he would not do or
omit if he were not so deceived, and which act or
omission causes or is likely to cause damage or
harm to that person in body, mind, reputation or
property, is said to "cheat".
In Hridaya Ranjan Prasad Verma and Others v. State of Bihar and
Another [(2000) 4 SCC 168], this Court held:
\02314. On a reading of the section it is manifest that
in the definition there are set forth two separate
classes of acts which the person deceived may be
induced to do. In the first place he may be induced
fraudulently or dishonestly to deliver any property
to any person. The second class of acts set forth in
the section is the doing or omitting to do anything
which the person deceived would not do or omit to
do if he were not so deceived. In the first class of
cases the inducing must be fradulent or dishonest.
In the second class of acts, the inducing must be
intentional but not fraudulent or dishonest.
15. In determining the question it has to be kept in
mind that the distinction between mere breach of
contract and the offence of cheating is a fine one.
It depends upon the intention of the accused at the
time to inducement which may be judged by his
subsequent conduct but for this subsequent
conduct is not the sole test. Mere breach of
contract cannot give rise to criminal prosecution
for cheating unless fraudulent or dishonest
intention is shown right at the beginning of the
transaction, that is the time when the offence is
said to have been committed. Therefore it is the
intention which is the gist of the offence. To hold a
person guilty of cheating it is necessary to show
that he had fraudulent or dishonest intention at the
time of making the promise. From his mere failure
to keep up promise subsequently such a culpable
intention right at the beginning, that is, when he
made the promise cannot be presumed.\024
[See also Indian Oil Corpn. v. NEPC India Ltd. and Others (2006) 6
SCC 736]
The ingredients of Section 420 of the Indian Penal Code are as
follows :
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i) Deception of any persons;
ii) Fraudulently or dishonestly inducing any person to deliver any
property; or
iii) to consent that any person shall retain any property and finally
intentionally inducing that person to do or omit to do anything
which he would not do or omit.
No act of inducement on the part of the appellant has been alleged by
the respondent. No allegation has been made that he had an intention to
cheat the respondent from the very inception.
What has been alleged in the complaint petition as also the statement
of the complainant and his witnesses relate to his subsequent conduct. The
date when such statements were allegedly made by the appellant had not
been disclosed by the witnesses of the complaints. It is really absurd to
opine that any such statement would be made by the appellant before all of
them at the same time and that too in his own district. They, thus, appear to
be wholly unnatural.
In law, only because he had issued cheques which were dishonoured,
the same by itself would not mean that he had cheated the complainant.
Assuming that such a statement had been made, the same, in our opinion,
does not exhibit that there had been any intention on the part of the appellant
herein to commit an offence under Section 417 of the Indian Penal Code.
10. Furthermore, admittedly, their residences are in different districts.
Whereas the appellant is a resident of the district of Ajamgarh, the
respondent is a resident of the district of Rampur. Cheques were admittedly
issued by the appellant at his place. There is nothing on record to show that
any part of the cause of action arose within the jurisdiction of the court
concerned. Even if such statements had been made, the same admittedly
have been made only at the place where the appellant resides. The learned
Magistrate, therefore, had no jurisdiction to issue the summons. [See
Mosaraf Hossain Khan v. Bhagheeratha Engg. Ltd. and Others, (2006) 3
SCC 658]
11. For the reasons aforementioned, the impugned judgment is set aside.
The order taking cognizance is quashed. The appeal is allowed. In the facts
and circumstances of the case, no offence is made out.