Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6
CASE NO.:
Appeal (crl.) 313-314 of 2000
PETITIONER:
HRIDAYA RANGAN PD. VERMA AND ORS.
RESPONDENT:
STATE OF BIHAR AND ANR.
DATE OF JUDGMENT: 31/03/2000
BENCH:
K.T. THOMAS & D.P. MOHAPATRA
JUDGMENT:
JUDGMENT
2000 (2) SCR 859
The Judgment of the Court was delivered by D.P. MOHAPATRA, J. Leave
granted.
The three appellants,’Hridaya Ranjan Prasad Verma, Manoranjan Prasad Verma
and Rajiv Ranjan Prasad Verma are sons of Late Shri Kashi Nath Prasad
Verma. They have three other brothers who are not directly involved in the
present proceedings. Late Kashi Nath Prasad Verma was the owner of Khasra
No. 213, Plot No. 1172, in Village Srinagar, within Siwan Police Station.
On his death his six sons succeeded to the property. Appellant No. 1 is a
neuro-surgeon at Patna; appellant no.2 is the Manager of Pathar Jhora Tea
Gardens in Jalpaiguri and appellant no. 3 is a retired marketing manager of
Jay Shree Tea and Industries Ltd., Delhi. Respondent No. 2, Manish Prasad
Singh, an advocate, is the secretary of Kanishka Sahkari Grih Nirman Samiti
Limited, Sewan, (hereinafter referred to as the Society) a cooperative
socieity engaged in purchasing land from different persons and after
developing and dividing it into small pieces selling the plots to different
customers. The appellants agreed to sell the land in village Srinagar to
respondent no. 2 for a consideration of Rs. 16,00,000. The respondent paid
a sum of Rs. 11,00,000 to the appellants by way of drafts drawn in their
favour on 7.12.92. The appellants executed a registered sale deed in
respect of the land in favour of the Society. It is the case of the
appellants that on insistence of respondent no.2 two other brothers of the
appellants signed the sale deed as witnesses. By way of a further safeguard
the appellants executed a separate indemnity deed on the same day in which
they undertook to indemnify any loss caused to the society on account of
any objection which may be raised by any co-sharer against transfer of the
land in future. The appellants assert that they have delivered possession
of the land to the society on the same day. Another brother of the
appellants Priya Ranjan Prasad Verma also executed a sale deed in favour of
the society alienating his portion of the land.
On registration of the sale deed respondent No. 2 handed over three cheques
to the appellants for the sum of Rs. 5,50,000. When the appellants
presented the said cheques in the bank, the same were dishonoured on
account of insufficiency of amount in the account of the drawer. The
respondent no. 2 had issued a separate cheque in favour of Priya Ranjan
Prasad Verma which was also dishonoured for the same reason.
Prior to the execution of the sale deed Akhil Ranjan Prasad Verma brother
of the appellants had filed a suit, Title Suit No. 118 of 1990 for
partition alleging inter alia that though the properties left by their
father had been partitioned amongst the brothers in 1971 no division by
metes and bounds had taken place. On 5.12.1992 on the applicaton filed
under Order 39 Civil Procedure Code the learned subordinate judge, Siwan
passed an interim order restraining the appellants from disturbing the
status quo or transferring the land of Schedule I to the plaint but no
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6
injunction was passed in respect of the land described in Schedule-VI of
the plaint in which the property in dispute in the present proceeding is
included. According to the appellants the plaintiff Akhil Ranjan Prasad
Verma did not press his prayer for injunction in respect of the Schedule IV
properties. It is the further case of the appellants that between 9.12.92
to 18.12.92 the respondent No. 2 sold portions of the land sold by them to
several other persons.
When the cheques issued by the respondent No. 2 in their favour bounced the
appellants made several requests to the said respondent for payment of the
amount. On each such occasion the said respondent avoided to pay the amount
promising to do so within a short time. Finally on 21.10.1995 the
appellants through their advocate sent a notice to respondent No. 2
reminding him that the cheques issued by him in favour of the appellants
had bounced due to insufficiency of funds. Finding that respond-ent no. 2
had no intention to pay the amount, the appellants lodged a first
information report under sections 406, 420 and 120 B IPC with the Siwan
Police Station on 11.11.1995 which was registered as Siwan Mafsil Case No.
191/95. In the said FIR the respondent No. 2 and Avdesh Narayan Rai who was
the Vice President of the cooperative society were named as the accused.
The police after investigating into the allegations made in the FIR filed a
charge-sheet against respondent no. 2 and Avdesh Narayan Rai. The appel-
lants also filed three suits for realisation of the amount due to them.
Shortly thereafter on 14.12.1995 the respondent no. 2 filed complaint no.
1282/95 in the Court of the Chief Judicial Magistrate, Siwan against the
appellants alleging commission of offences under section 418 (Cheating with
knowledge that wrongful loss may ensue to person whose interest offender is
bound to protect), section 420 (Cheating and dishonestly inducing delivery
of property), section 423 (Dishonest or fraudulent execution of deed of
transfer containing false statement of consideration), section 469 (Forgery
for purpose of harming reputation), section 504 (intentional insult with
intent to provoke breach of the peace) and section 120B IPC (criminal
conspiracy). It is the case of the appellants that the FIR was filed as a
counter blast to the criminal case and the civil suits filed by them
against the respondent No. 2.
In the complaint respondent no. 2 alleged inter alia that by conspiring
together all the accused have defaulted and cheated the society and the
complainant by giving false, concocted and wrongful information and assur-
ances saying to have a Sada "Kora" and thus they induced the complainant to
enter into negotiations and also to advance them a heavy amount with their
ulterior design to acquire wrongful gain to themselves and for wrongful
loss to the society and the complainant - both monitory and reputational.
Some averments in the complaint relevant for the purpose of this proceeding
are extracted hereunder :
"That at the time of giving proposal to the complainant for buying the said
land, accused No. 1 asserted that the said land has fallen exclusively to
the share and possession of three brothers (all accused) after the
partition of the estate left by late Kashi Nath Prasad Verma among all his
six sons and a "Kora" to this effect has also been prepared and signed by
all the brothers. Accused No. 1 also said that the said Kora was not
available at that time and he would show as and when need be.
That all accused hail from a very sound and respectable family and accused
No. 1 specially being a renowned doctor, appeared to be more trustwrothy to
the complainant. The complainant showing due respect to accused No. 1
believed him and entered into negotiation with him for purchase of said
land.
That ultimately all the accused appeared at Siwan for executing the sale
deeds in favour of the Society on a date fixed earlier by them. Just before
the execution of the sale deed the complainant asked the accused to show
the "Kora" prepared and signed by them (all the six brothers). The accused
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6
did not show the "Kora" and assured that all the brothers will join the
deed. The accused will execute the sale deeds and rest three brothers will
join the sale deeds as attesting witnesses.
That the sale deeds in question were scribed at the direction and dictation
of the accused in favour of the Society in respect of entire land but only
two brothers out of rest three came to join the deeds as attesting
witnesses and one of them i.e. sixth brother namely Praful Ranjan Prasad
Verma did not appear to do the same as assured by accused No. 1 to die
complainant.
That in order to avoid future complications the complainant proposed the
accused either to retain l/6th share of land for themselves and to execute
sale deeds in respect of only five shares of land or to refund the money to
the complainant given to them as advance consideration money. But the
accused did not agree to the proposals of the complainant saying that they
will execute an agreement to the effect that in case of any future trouble
to the Society, the executant i.e. the accused will be liable to compensate
the Society. Thus the complain-ant, seeing no alternative, agreed to the
proposal of the accused to execute sale deeds in respect of entire lands
and sale deeds were executed accordingly.
That in the meantime, some days after the execution of the said sale deed,
the complainant came to know that Title Suit No. 118/90 tiled by Akhil
Ranjan Prasad Verma, one of the six brothers of the accused as plaintiff
against Priya Ranjan Prasad Verma & five others as defendants was subjudice
in the court of Sub-Judge-Ill, Siwan, long before the starting of the
negotiation for the sale and purchase of said land. Besides, another suit
bearing no 68/83, Nagendra Nath Sinha & Others-plaintiffs v. Singhoshani
Devi and Ors., defendants has also been pending in the Court of Munsif-1
Siwan from long before the starting of the negotiation of sale and purchase
of the said land. The accused had concealed these facts from the
complainant at the time of negotiation and execution of the aforesaid sale
deeds.
That from the facts detailed above, it is quite clear that accused have
deliberately and intentionally defrauded and cheated the Society and the
complainant by suppressing some facts and giving false and concocted
information and assurances to the complainant so as to make him believe
that the deal is a fair one and free of troubles. The accused did so with
an intention to acquire wrongful gain for themselves and to cause wrongful
loss to the society and the complainant the accused have always kept the
complainant in wrong box and thus they have induced the complainant to
enter into negotiation and advance consideration money to them.
That by suppressing facts relating to two pending cases from before and
filing criminal case against the complainant and civil cases against the
Society the accused have lowered down the prestige and reputation of the
Society and. the complainant in the eyes of the members, customers and the
public at large, although the complainant has committed no fault since the
amount due to the accused has already been entered into the Cash Book of
the Society and it has come in the audit Report done for the year 1994-95."
In the case of State of Haryana and Others v. Bhajan Lal and Others, [1992]
Supp. 1 SCC 335, this Court in the back drop of interpretation of various
relevant provisions of the Code of Criminal Procedure under Chapter XIV and
of the principles of law enunciated by this Court in a series of decisions
relating to the exercise of the extraordinary power under Article 226 or
the inherent powers under Section 482 of the Cr.P.C. gave the following
categories of cases by way of illustration wherein such power could be
exercised either to prevent abuse of the process of the Court or otherwise
to secure the ends of justice, making it clear that it may not be possible
to lay down any precise, clearly defined and sufficiently channelised and
inflexible guidelines or rigid formulae and to give an exhaustive list to
myriad kinds of cases wherein such power should be exercise :
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6
(1) Where the allegations made in the first information report or the
complaint, even if they are taken at their face value and accepted in their
entirety do not prima facie constitute any offence or make out a case
against the accused.
(2) Where the allegations in the first information report and other
materials, if any, accompanying the FIR do not disclose a cognizable
offence, justifying an investigation by police officers under Section
156(1) of the Code except under an order of a Magistrate within the purview
of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and
the evidence collected in support of the same do not disclose the
commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable
offence but constitute only a non-cognizable offence, no investigation is
permitted by a police officer without an order of a Magistrate as
contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and
inherently improbable on the basis of which no prudent person can ever
reach a just conclusion that there is sufficient ground for proceeding
against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions
of the Code or the concerned Act (under which a criminal proceeding is
instituted) to the institution and continuance of the proceedings and/or
where there is a specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide
and/or where the proceeding is maliciously instituted with an ulterior
motive for wreaking vengeance on the accused and with a view to spite him
due to private and personal grudge.
In the decision this Court added a note of caution to the effect that the
power of quashing a criminal proceeding should be exercised ’very sparingly
and with circumspection and that too in the rarest of rare cases’.
The principles laid down in this decision have been followed in several
decisions of this Court like [1995] 5 SCC 194 Rupan Deal Bajaj (Mrs.) and
another v. Kanwar Pal Singh Gill and another, [1999] 3 SCC 259; Rajesh
Bajaj v. State NCT of Delhi and others, [1992] 2 SCC 651; State of Kerala
and others v. O.C. Kuttan and others, [1996] 9 SCC 1 and P.S. Rajya v.
State of Bihar, [1996] 2 SCC 194 State of Orissa v. Bansidhar Singh.
The question is whether the case of the appellants comes under any of the
categories enumerated in State of Haryana and others v. Bhajan Lal and
others (supra) ? Is it a case where the allegations made in the first
information report or the complaint, even if they are taken at their face
value and accepted in entirety do not make out a case against the accused?
For determination of the question it becomes relevant to note the nature of
the offences alleged against the appellants, the ingredients of the
offences and the averments made in the complaint.
On a reading of the complaint portions of which have been extracted earlier
it is clear that the main offence alleged to have been committed by the
appellants is ’cheating’ punishable under section 420 IPC.
Cheating is defined in Section 415 of the Code as, "Whoever, 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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6
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".
Explanation - A dishonest concealment of facts is a deception within the
meaning of this section.
The section requires - (1) Deception of any person.
(2) (a) Fraudulently or dishonestly inducing that person (i) to
deliver any property to any person; or (ii) to consent that any person
shall retain any property; or
(b) intentionally inducing that person 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.
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 fraudulent or dishonest. In
the second class of acts, the inducing must be intentional but not
fraudulent or dishonest.
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.
Judged on the touchstone of the principles noted above, the present case,
in our considered view warrants interference inasmuch as the ingredients of
the offence of cheating punishable under section 420 IPC and its allied
offences under sections 418 and 423 has not been made out. So far as the
offences under sections 469, 504 and 120B are concerned even the basic
allegations making out a case thereunder are not contained in the
complaint. That being the position the case comes within the first category
of cases enumerated in State of Haryana & Ors. v. Bhajan Lal and Ors.
(Supra) and as such warrants interference by the Court. Reading the
avernments in the complaint in entirety and accepting the allegations to be
true, the ingredients of intentional deception on the part of the accused
right at the beginning of the negotiations for the transaction has neither
been expressly stated nor indirectly suggested in complaint. All that the
respondent No. 2 has alleged against the appellants is that they did not
disclose to him that one of their brothers had filed a partition suit which
was pending. The requirement that the information was not disclosed by the
appellants intentionally in order to make the respondent No. 2 part with
property is not alleged expressly or even impliedly in the complaint.
Therefore the core postulate of dishonest intention in order to deceive the
complainant-respondent no.2 is not made out even accepting all the
averments in the complaint on their face value. In such a situation
continuing the criminal proceeding against the accused will be, in our
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6
considered view, an abuse of process of the court. The High Court was not
right in declining to quash the complaint and the proceeding initiated on
the basis of the same.
Accordingly the appeals are allowed. The Judgment/Order dated 13-4-1999 of
the Patna High Court in Criminal Misc. No. 22880/1998 and Criminal Misc.
No. 24068 of 1998 is set aside and the proceeding in Criminal Case No.
22/96 pending in the Court of Chief Judicial Magistrate, Siwan is quashed.