Order: These two Revision Petitions arise out of the judgment of the learned Sessions Judge of Ernakulam in Criminal Appeal No. 54 of 1962 confirming the conviction of the petitioners of the offence under section 420, Indian Penal Code, Criminal Revision Petition No. 159 of 1963 is by the first accused and Criminal Revision Petition No. 126 of 1963 is by the second accused. They have both been, convicted of the offence under section 420, Indian Penal Code, and sentenced to rigorous imprisonment for one year. This case had a very chequered career. It was started in the year 1958. Charges were framed on 18th February, 1958. The accused pleaded not guilty and the case after being sent up from one Court to another finally came up before the Additional First Class Magistrate, Ernakulam, for hearing. Alter an elaborate trial, judgment was pronounced on 31st December, 1960, convicting the petitioners. The matter was taken up in appeal when the conviction was set aside and a retrial was ordered. The case was subsequently heard by the District Magistrate, Ernakulam, and judgment was pronounced on 5th October, 1962. In the appeal that followed the learned Sessions Judge confirmed the conviction and sentence and the petitioners have now come up in revision. The case against the accused was that with the intention of cheating the public, they advertised in the papers and circulated bit notices regarding the conduct of a. lottery and in pursuance of this, tickets worth about Rs. 867 and odd were sold and they dishonestly misappropriated the amount without drawing the lots and published a bogus prize-list. The case of the accused was one of complete denial but there is evidence in the case that P.W. 10 had let out Room No. 1/335 in Chakkarayidukku, Mattancherry to the second accused for the purpose of running a press. Exhibit P-40 rent note was executed by the second accused and Exhibit P-41 is a letter sent by the second accused promising to pay the arrears of rent. There is no reason to disbelieve the witness. He has sworn that after the room was rented out the first accused was residing in the house. There is then the testimony of P.W. 24 Postman who has sworn to the delivery of several letters and money orders to the first accused at the said building. There is no reason to disbelieve the witness. He has sworn that after the room was rented out the first accused was residing in the house. There is then the testimony of P.W. 24 Postman who has sworn to the delivery of several letters and money orders to the first accused at the said building. The evidence of the Postmaster P.W. 23 and P.W. 24 read along with the several letters of instructions sent by accused 1 and 2 to the Postmaster bear out the fact that the first accused and the second accused purported to run an institution called the Indian State Club in that premises. The first accused described himself as the Secretary of the State Club and Exhibits P-64 and P-65 bear the signature of the second accused describing himself as the President of the Club. The Post-man’s book which has been produced in the case shows that the first accused had accepted money orders in his capacity as the Secretary of the Indian State Club. P.W. 24 has sworn that he had delivered letters and money orders to the second accused also. There is no reason to doubt the evidence of P.W. 24 and his identification of the signature of accused 1 and 2 in the various money order coupons. Then we come to the evidence of the Sub-Inspector. P.W. 25. He conducted a search and recovered several articles under mahazar Exhibit P-19. P.Ws. 4 and 10 are the attesting witnesses to the mahazar. The counterfoils of tickets produced by P.Ws. 1, 2, 5, 6 and 9 were seized from the premises. Notices which are printed copies of Exhibits P-7, P-45 and P-46 were also seized. There can, therefore, be no doubt that the Indian State Club was conducting a lottery at Room No. 1/335, Chakkarayidukku, Mattancherry. P.W. 1 has deposed that he saw an advertisement in the Deepika paper relating to the Indian State Club and he got Exhibit P-1 notice sent to him by the club. Exhibit P-1 makes mention of the collection by lottery tickets and about the proposal to draw lots on roth August, 1957. P.Ws. 2 and 6 have deposed that on perusal of the advertisement in the Navajeevan paper they wrote to the Indian State Club and purchased tickets. Exhibit P-1 makes mention of the collection by lottery tickets and about the proposal to draw lots on roth August, 1957. P.Ws. 2 and 6 have deposed that on perusal of the advertisement in the Navajeevan paper they wrote to the Indian State Club and purchased tickets. P.W. 3 the Manager of the Navajeevan paper has given evidence about the insertion of the advertisement in pursuance of letters Exhibits P-15 and P-16. P.W. 12 the Manager of the Sahodaran Press has given evidence that copies of Exhibit P-45 notice were printed in his press. Exhibit P-48 is the bill for printing and P.W. 12 has sworn that it was the first accused who paid the amount due under the bill. It is difficult to accept the suggestion that P.W. 12 is giving false evidence. P.Ws. 1, 2, 5, 6 and 9 have sworn to seeing notices and purchasing the tickets Exhibits P-3, P-4, P-9, P.21 P-29 and P-38. The counterfoils of these tickets have all been recovered by P.W. 25.‘The money order acknowledgments for remittance have also been proved. All the witnesses have stated that but for the attractive offers made in the notice and advertisement and the chance of winning prizes they would not have taken tickets and parted with their money. The prosecution has also tendered evidence to show that the lots were not drawn on the 10th August, 1957, and that a bogus prize list was published. Exhibit P-46 is said to be the printed prize list which, P.W. 12 stated, was got printed in the Sahodaran press. According to him several such notices were printed at the instance of the accused and Exhibit P-49 is the bill in the name of the Indian State Club for the printing charges. The first accused paid the charges. The accused, no doubt, denies having given this for printing but we have the recovery of M.O. 28, two papers written in ink containing a true manuscript copy of Exhibit P-46. There is no reason to doubt that this manuscript copy was actually recovered from inside the room. The first accused paid the charges. The accused, no doubt, denies having given this for printing but we have the recovery of M.O. 28, two papers written in ink containing a true manuscript copy of Exhibit P-46. There is no reason to doubt that this manuscript copy was actually recovered from inside the room. The Courts below have on a consideration of the evidence both oral and documentary come to the conclusion that accused 1 and 2 were in fact conducting the club, that they had advertised for the running of the lottery, that they had collected money by the sale of tickets, that no lots were drawn as stated in the notice and that the amounts collected were in fact misappropriated by the accused and that bogus prize lists were got printed and circulated. All these are questions of fact found by the Courts below and sitting in Revision I am bound by the concurrent findings of fact. Elaborate arguments were addressed to challenge this finding but I am not tempted to disagree with the conclusions reached by the Courts below. The only question that remains to be decided is whether these facts are sufficient in law to hold that an offence of cheating has been committed. In order to constitute an offence of cheating under section 420, Indian Penal Code there should be dishonest or fraudulent intention. The offence of cheating should be distinguished from mere breach of contract. The distinction is well marked though it is not often manifest. It would depend upon the intention of the accused at the time of inducement which no doubt can be judged by subsequent acts but of which the subsequent act is not the sole criterion. Court’s Penal Law of India, 7th Edition Vol. 3 at page 2200 refers to a case of an accused whom the complainant engaged at Madras to serve him as a cook for six months. He received an advance of a half-a-month’s pay and travelling expenses and joined his master at a Hill Station, but after serving for twenty four days he left. He was prosecuted for cheating, but the Court held that there was nothing to show that at the time the accused induced the ccmplainant to part with his money he intended to act fraudulently or dishonestly. He was prosecuted for cheating, but the Court held that there was nothing to show that at the time the accused induced the ccmplainant to part with his money he intended to act fraudulently or dishonestly. He did not intend to go to the Hill Station on the pretext of serving the complainant. The fact that something afterwards supervened which caused the defendant to break his contract to remain in complainant’s service for six months, does not convert the previous honest intention into a dishonest one so as to support the conviction for cheating. The Supreme Court had to deal with a case under section 420, Indian Penal Code, in the case in Mahadev Pershad v. State of West Bengal1, and their Lordships observed: “Where the charge against the accused is under S. 420, Indian Penal Code, in that he induced the complainant to part with his goods, on the understanding that the accused would pay for the same on delivery but did not pay, if the accused had at the time he promised to pay cash against delivery, an intention to do so, the fact that he did not pay would not convert the transaction into one of cheating.” I might also refer to the case in Public Prosecutor v. Bhimeswara Rao2. In that case Rs. 1,000 was paid by P.Ws. 1 and 2 partners of a firm to the accused who was their Auditor to be given as bribe to the Income-tax Officer for exempting them from the payment of excess profits tax. The bribe was not paid and the accused was charged with the offence of cheating for having dishonestly induced P.Ws. 1 and 2 to deliver to him Rs. 1,000. On the merits it was found that the amount was actually paid on the representation made by the accused. Rajamannar, C.J., held that the offence of cheating was not made out and observed: “Nevertheless in my opinion the accused cannot be held to be guilty of the offence of cheating, because there is one essential ingredient which has not been made out in this case. According to P.Ws. 1 and 2 the accused represented that he wanted the sum to be offered as a bribe to the Income Tax Officer. They also admit that they agreed to pay the amount for that purpose. According to P.Ws. 1 and 2 the accused represented that he wanted the sum to be offered as a bribe to the Income Tax Officer. They also admit that they agreed to pay the amount for that purpose. But it has not been conclusively established that at the time when the payment was made the accused did not intend to so utilise the amount. It may be that the amount was not really paid to P.W. 3. But it has not been shown that the accused, when he induced P.Ws. 1 and 2 to give him the money, never had any intention of -attempting to bribe the Income-tax Officer. The accused might be foolish in assuming that he could have bribed a public officer. But there is nothing to show that at the time when P.Ws. 1and 2 delivered the property, i.e., the money to the accused, there was an actual deceit in the sense that it was not the intention of the accused ever to try to utilise the amount in that way. For aught we know it may be the accused at the time thought that he might be able to achieve his object by resorting to illegal means. P.Ws. 1 and 2 whole heartedly agreed to such a proposal. Whether the accused was bound to return the money to P.Ws. 1 and 2 when he did not as a fact pay it over to the Income Tax Officer and whether on his failure to do so P.Ws. 1 and 2 had a cause of action against the accused for the return of the money, it is unnecessary for me to decide. It is enough to say that it has not been proved that at the time the accused made the alleged representation he made it falsely and with the intention to deceive P.Ws. 1 and 2. In the absence of this ingredient, which I consider essential, it cannot be said that the prosecution has established that the accused is guilty of cheating.” Illustrations (f) and (g) to section 415, Indian Penal Code, would make the point very clear. It reads: “(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it, Acheats. It reads: “(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it, Acheats. (g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats, but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract.” In this case there is only the fact that the accused did not draw the lots and is said to have misappropriated the amount collected and to cover it up a bogus prize-list was published. No doubt it was vehemently contended by the learned Counsel that there is no proper evidence to prove that the list was bogus or that it had been published and if so by whom. But whatever that may be, the mere fact that lots were not actually drawn would not by itself lead to the conclusion that at the time they issued the notice and sold the tickets they had no intention whatsoever to conduct the lottery. It may well be, that the accused genuinely wanted to hold the lottery and collected the amount by sale of tickets and had no dishonest or fraudulent intention at that time but later after only a small amount was collected they could not keep up the promise of drawing the lots and distribute the prizes. Where there is no clear and convincing evidence of criminal intention of the accused at the time the offence is said to have been committed, and that must be at the time when they made the representation and induced payment of money, the offence cannot be said to have been proved beyond reasonable doubt. Where the necessary intention has to be inferred, the circumstances must be such as to exclude any reasonable hypothesis of good faith of the accused. Any way it is a border line case and I am not therefore sure in my mind that the offence of cheating has been brought home to the accused. Where the necessary intention has to be inferred, the circumstances must be such as to exclude any reasonable hypothesis of good faith of the accused. Any way it is a border line case and I am not therefore sure in my mind that the offence of cheating has been brought home to the accused. The doubt that lingers has to go to the accused. Whether the offence would have amounted to one of criminal breach of trust it is unnecessary to consider at this stage. There was no permission obtained from Government for running the lottery and the accused could well have been prosecuted under section 294-A, Indian Penal Code, and it would have been a very simple case. Therefore, though with some amount of reluctance, I am constrained to set aside the conviction and sentence passed on the accused and order that they be acquitted. The Revision Petitions are allowed. M.C.M. ----- Petitions allowed.