Where only criminal breach of trust is proved, conviction for cheating cannot be sustained.

The complainant, an employee of the Atomic Minerals Division, alleged that petitioner no. 2, his co-employee and friend, introduced petitioner no. 1—his son—as an agent of various financial institutions and postal investment schemes.

Acting on their representations, the complainant paid approximately Rs.2,07,400 through cheques for Kishan Vikas Patra, ICICI Bonds and certificates of various companies, but the petitioners neither made the investments nor supplied the promised documents.

Petitioner no. 1 subsequently issued a cheque for Rs.51,000, which was repeatedly dishonoured for insufficiency of funds; the complainant proved the cheque, bank-return memos and statutory notices.

The trial court convicted both petitioners under Sections 406 and 420/34 of the IPC and convicted petitioner no. 1 under Section 138 of the Negotiable Instruments Act, 1881. The appellate court affirmed the conviction and sentences, leading to the present criminal revision.

The court applied Section 138 of the Negotiable Instruments Act, 1881, which penalises the dishonour of a cheque issued towards a legally enforceable liability, together with the statutory presumption under Section 139 that the cheque was issued for such liability unless rebutted by the accused.

Section 406 IPC concerns dishonest misappropriation or conversion of property entrusted to the accused, while Section 405 IPC defines criminal breach of trust.

Section 420 IPC requires the ingredients of cheating under Section 415 IPC, including dishonest or fraudulent inducement, and Section 34 IPC requires proof of a common intention shared by the participants in the criminal act.

A criminal conviction cannot rest merely on suspicion or relationship; the prosecution must establish the requisite acts and mental elements beyond reasonable doubt.

In revisional jurisdiction, concurrent findings are not interfered with in the absence of perversity or illegality.

As against petitioner no. 1, the complainant’s testimony, the cheque counterfoils and the subsequent issuance of the Rs.51,000 cheque established the underlying liability.

The cheque and repeated bank-return memos proved dishonour for insufficiency of funds, while petitioner no. 1 failed to rebut the presumption under Section 139 of the Negotiable Instruments Act with cogent material; his conviction under Section 138 was therefore upheld.

The same evidence, read with the representations that the amounts would be invested and the failure to make the promised investments or return the money, established criminal breach of trust under Section 406 IPC against petitioner no. 1.

However, the court held that the evidence did not sufficiently prove the ingredients of cheating under Section 415 IPC so as to sustain Section 420 IPC.

In relation to petitioner no. 2, his friendship with the complainant and introduction of his son did not, without more, prove entrustment, misappropriation, dishonest intention, or a shared common intention from the outset.

There was no sufficient independent documentary or specific oral evidence showing that he received or misappropriated the money or participated in the offence with petitioner no. 1.

Petitioner no. 1’s conviction under Sections 406 IPC and 138 of the Negotiable Instruments Act was affirmed, while his conviction and sentence under Section 420 IPC were set aside.

Petitioner no. 2’s convictions under Sections 406 and 420/34 IPC were set aside, and he was acquitted by extending the benefit of reasonable doubt.

Since petitioner no. 1 was on bail, his bail bond was cancelled and he was directed to surrender before the trial court within two months to serve the remaining sentence; failing surrender, coercive steps were authorised.