GANGA TRADERS AND INDUSTRIES (P) LTD. v. SANTOSH KUMAR AGARWALLA
1989-04-04
K.P.MOHAPATRA
body1989
DigiLaw.ai
JUDGMENT : K.P. Mohapatra, J. - In this criminal revision under Sections 397 and 401 read with Section 482 of the Code of Criminal Procedure ('Code' for short) the Petitioners have challenged the order of cognizance of an offence u/s 420. I.P.C. against them and for quashing the criminal proceeding in I. C.C. Case No. 8 of 1985 of the court of Sub-Divisional Judicial Magistrate, Bolangir. 2. The opposite party is the complainant of the case and the Petitioners are dealers of vehicles chassis of trucks manufactured by TELCO). The opposite party placed orders on 4-4-1980 with the Petitioners for purchase of a truck chassis with the condition that the same would be delivered to him within five years. Along with the purchase order he deposited Rs. 7920/- and Rs. 2349.75 with the Petitioners in two instalments as advance. The truck chassis was not delivered to the opposite party according to the contract and so he demanded return of the amounts paid to the Petitioners at the time at booking. With much difficulty and persuation and after several correspondences the Petitioners issued two account payee cheques bearing No. 946437 for Rs. 2349.74 on 28-11-1982 and No. 246438 for Rs. 7920/- on 6-12-1982 to be drawn from the State Bank of India at Bolangir fully knowing that they bad no cash in their account in the Bank. Their intention was to deceive the opposite party. Naturally the cheques were dishonoured by the Bank and he was further made to pay P. and T. charges. They did not make payments subsequently on demand, but on the other hand took away the cheques from the opposite party. It was, therefore, alleged that the Petitioners committed an offence u/s 420. I.P.C.. 3. The learned Magistrate conducted an enquiry u/s 202 of the Code, during which be examined a witness and accepted a few documents produced by the opposite party. He found a prima facie case and so took cognizance of the offence u/s 420, I.P.C. against the Petitioners by the impugned order dated 31-5-1985 and issued process. The prosecution did not proceed because the appearance of the Petitioners could not be secured for the criminal revision was filed. 4. Mr.
He found a prima facie case and so took cognizance of the offence u/s 420, I.P.C. against the Petitioners by the impugned order dated 31-5-1985 and issued process. The prosecution did not proceed because the appearance of the Petitioners could not be secured for the criminal revision was filed. 4. Mr. P. Palit, learned Counsel appearing for the Petitioners, urged that the element of cheating as defined in Section 415 being singularly absent and the necessary intent to deceive while issuing the cheques being not there, the Petitioners cannot he said to have committed an offence u/s 420. I.P.C. and if they are put to trial, there shall be abuse of process of the court. Mr. S.S. Basu, learned Counsel appearing for the opposite party, on the other hand urged that fully knowing that they had no cash in their account in the Bank, the Petitioners issued the cheques. This being the position, the element of deception and the requisite intent were very much in existence from the beginning and 50 there being a prima facie case u/s 420. I.P.C. interference by the Court at this stage is unwarranted. 5. Section 415 defines cheating. It consists of two parts, namely: (1) By fraudulently or dishonestly deceiving any person and inducing the person so deceived - (a) to deliver any property to any person, or (b) consent that any person shall retain any property. (2) Intentionally inducing the person deceived to do or to omit to do anything which he would not do or omit if he was not so deceived, such doing or omission causing or likely to cause to the person cheated, damage, or harm in body, mind, reputation or property. From the above analysis it is clear that deceiving is common in both parts and cheating may be committed in either ot the two ways. Further, fraudulent inducement and dishonest inducement is covered by the first part, intentional inducement is comprised in the second part. So far as the first part is concerned the moment a person is deceived by fraudulent or dishonest means resulting in his parting of property or consent to his retention of property, the offence of cheating is complete. Regarding the second part, it will be necessary to show chat by reason of the intentional inducement, damage or harm in body and mind reputation or property was caused to the person deceived.
Regarding the second part, it will be necessary to show chat by reason of the intentional inducement, damage or harm in body and mind reputation or property was caused to the person deceived. (From 'Raghavan on Law of Crimes', Third Edition). 6. In M.M.S.T. Chidambaram Chettiar v. Shanmucham Pillai AIR 1938 Mad. 129 the facts were that the Petitioner was an owner of motor buses plying for hire from Tanjore to other places. He used to take petrol and oil on credit from the firm of A.S. Manickam and Co. By the beginning of 1937 he owed this firm over Rs. 3,000/-. The firm refused him further credit and threatened to sue him. On 23-3-1937 the Petitioner gave the firm a post dated cheque for Rs. 3.250/- (dated 2-4-1937). On 5-4-1937 the firm presented the cheque at the Bank for encashment but the cheque was dishonoured. Thereafter a criminal complaint of cheating against the Petitioner was filed. A petition was filed before the Stationary Sub-Magistrate, Tanjore, to quash the criminal proceedings which was refused. Thereafter the High Court was moved. It was held that in the offence of cheating there are two elements deception and dishonest inducement to do or omit to do anything. Mere deception is not a criminal offence. Mere dishonesty is not also a criminal offence. To establish an offence of ('heating, the complainant would have to show not only that he was induced to do or to omit to do a certain act but that this induced commission or omission on his part caused or was likely to cause him some harm or damage in body, mind, reputation or property, which are presumed to be the four cardinal assets of humanity. It was further held that a post-dated cheque in payment of goods already received is a mere promise to pay on a future date and a broken promise is not a criminal offence, though it may amount to certain business relations to discreditable behaviour. In Duryodhan Khuntia Vs. Ali Ahmed the facts were that the Petitioner draw on his Bank account which be gave to the opposite party for the cash of Rs. 3000/- which the latter parted with. The cheque was, however, dishonoured on the ground that the Petitioner had not sufficient funds to his credit to cover the cheque.
In Duryodhan Khuntia Vs. Ali Ahmed the facts were that the Petitioner draw on his Bank account which be gave to the opposite party for the cash of Rs. 3000/- which the latter parted with. The cheque was, however, dishonoured on the ground that the Petitioner had not sufficient funds to his credit to cover the cheque. The opposite party approached the Petitioner for repayment, but the latter not having done so, the former filed a complaint petition against the Petitioner for having committed an offence u/s 420, I.P.C. Indicating the ingredients of the offence of cheating, it was held that the Petitioner might have been under an honest though erroneous Impression that the amount to his credit might cover the cheque, and even otherwise, he might have honestly intended of paying in the necessary money before presentation of the cheque. There was no evidence to show that the Petitioner had made a representation that he had sufficient cash in his Bank account to cover the cheque. It was, therefore, found that a case of cheating could not be made out. In G. Anji v. Sunaanda Kar alias Gora Babu 46 (1971) C.L.T. 570, the facts were that the Respondent and his mother Mrs. Kamala Kar were heavily indebted to the Appellant. When he pressed for payment of his dues, the Respondent issued a crossed cheque dated 30-4-1967 for a sum of Rs. 9.500/- on the United Bank of India Limited, Cuttack. When the cheque was presented in the aforesaid Bank on three occasions it was dishonoured with the endorsement "Full cover not received". The Appellant alleged that the Respondent know that he had no Bank balance sufficient to Cover the cheque and he issued the cheque with the dishonest motive of silencing the Appellant when he demanded payment of his dues. The case came up before a learned single Judge of this Court who found that the Respondent had been acquitted on the ratio of the decision reported in Duryodhan Khuntia v. Ali Ahamedi. (supra). The learned Judge, however, did not agree with the principle and referred the case to a larger Bench.
The case came up before a learned single Judge of this Court who found that the Respondent had been acquitted on the ratio of the decision reported in Duryodhan Khuntia v. Ali Ahamedi. (supra). The learned Judge, however, did not agree with the principle and referred the case to a larger Bench. The case came up before a Division Bench of this Court which approved the decision reported in Duryodhan Khuntia v. Ali Ahamed, (supra) and held that the act of drawing a cheque implies three statements as to the state of affairs existing at the time when the cheque is drawn first that the drawer has an account with the Bank in question; secondly, that he has authority to draw on it for the amount shown on the cheque, and thirdly; that the cheque, as drawn, is a valid order for the payment of the amount, or that the present state of affairs is such that in the ordinary course of events, the cheque will, on future presentment, be honoured. It does not, however, imply any representation that the drawer already has money in the Bank to the amount shown on the cheque, for be may either have authority to overdraw, or have an honest: intention of paying in the necessary money before the cheque can be presented. In M.S. Jaggi v. R.S. Das, Manager, Spencer and Co. 61 (1986) C.L.T. 119, also a case of dishonour of cheques, the principles laid down in the cases at G.K. Mohanty Vs. Pratap Kishore Das, were followed: In G.K. Mohanty Vs. Pratap Kishore Das which was also a case of dishonoured cheques, the same view as had earlier been taken by this High Court was taken and it was found that there was no prima facie case for taking cognizance of an offence u/s 420, I.P.C.. In P. Eswara Reddy v. State of Andhra Pradesh 1986 Cri. L.J. 207, the Andhra Pradesh High Court also took an identical view and held that dishonour of a cheque did not amount to cheating. Mere taking of the cheque by the complainant for encashment did not, in case of its dishonour, amount to any damage to the body, mind, reputation or property. 7. Because of the consistent view of this Court referred to in the above decisions, it is not possible to sustain the charge u/s 420, I.P.C. against the Petitioners.
Mere taking of the cheque by the complainant for encashment did not, in case of its dishonour, amount to any damage to the body, mind, reputation or property. 7. Because of the consistent view of this Court referred to in the above decisions, it is not possible to sustain the charge u/s 420, I.P.C. against the Petitioners. The facts of this case and the facts of the decisions being almost identical a different view cannot be taken. Because ot absence of the necessary intent to deceive at the rime of issuance of the cheques and also for non-fulfillment of one of the essential ingredients, namely, inducing the deceived party to deliver any property, as well as the other ingredients of Section 415, I.P.C. already elucidated above. So even though there has been some delay in moving this Court for exercise of inherent powers u/s 482 of the Code, this Court will not be reluctant for its exercise in order to prevent abuse of the process of the Court. In this respect one of the latest decisions reported in State of Bihar Vs. Murad Ali Khan and Others has been followed. 8. Before parting with the case, I would like to observe that the opposite party should have been better advised to approach the civil court for recovery of the dues if any, than to move the criminal court. It is also pertinent to note that under the Banking, Public Financial Institutions and Negotiable instruments Act, 1988 which comes into force from 1-4-1989 a person issuing cheque will be committing an offence if the cheque is dishonoured for Insufficient of funds. 9. For the reasons stated above, the impugned order of cognizance as well as the criminal, proceeding, is quashed. 10. Revision allowed. Final Result : Allowed