Research › Search › Judgment

Punjab High Court · body

2001 DIGILAW 462 (PNJ)

K. K. Sood v. Union Territory

2001-04-26

S.S.NIJJAR

body2001
JudgmentJudgment S.S.Najjar, J. 1. This petition under Section 482 Cr.P.C. seeks quashing of FIR Annexure P-1, registered at Police Station, West, Chandigarh on 31.1.1995; the order 17.10.2000, Annexure P-5, rejecting the application for discharge and Annexure P-6 framing of charges against the petitioner. 2. The facts may be briefly noticed. 3. The petitioner is a Reader in the Department of Correspondent Courses, Panjab University, Chandigarh. He has a saving bank account No. 15149 and current account No 1627 with the State Bank of India, Sector-14, and Chandigarh (hereinafter referred to as the `bank. The petitioner is holding the account in the bank for the past over 20 years. On 25.8.1994, the petitioner presented a cheque No. 67662 dated 25.8.1995 for a sum of US Dollar 8300 drawn on bank of Nova Scotia-44 King Street West Toronto Ontario (Canada), for payment. He requested the bank to purchase the cheque as a DD transaction. The bank did not agree. The bank, however, agreed to make a book entry in his saving bank account for the equivalent amount in rupees. Even this entry was made on the condition that the payment out of the cheque amount would be made only after the cheque is collected. While doing so, the bank charged a service charge of Rs. 2983/-. On 15.9.1994 the petitioner came to know about the service charge. He immediately objected to the bank and asked for the return of the cheque as the same has not even been sent for collection. After discussion, the cheque was agreed to be deposited in a fixed deposit. The amount was converted into fixed deposit on 19.9.1994. The bank marked a lien on the amount represented by the FDR. It was made clear that no transaction would be made in regard to this amount unless the cheque was cleared. On 15.10.1994, the petitioner made an application for increase in line of credit in his current account by 75% of the fixed deposit. The Bank accepted the same on 19/21.10.1994. Thus, the matter was under consideration of the bank for a period of six days. Earlier lien on the fixed deposit in the fixed deposit register was cancelled and a new lien was marked in the register on the basis of new line of credit. The Bank accepted the same on 19/21.10.1994. Thus, the matter was under consideration of the bank for a period of six days. Earlier lien on the fixed deposit in the fixed deposit register was cancelled and a new lien was marked in the register on the basis of new line of credit. The petitioner was in need of money which was to be sent to his son, who was undergoing higher education in U.K. On the basis of over-draft facility, the petitioner was entitled to withdraw a sum of Rs. 1,95,000/-. The petitioner required only a sum of Rs. 1,75,000/-. He withdrew only that amount. This amount was withdrawn on 21.10.1994. The cheque in the sum of US Dollars 8300 was sent to the petitioner by Rakesh Sood, his brother, who is settled in U.S.A. The petitioner, therefore, held a bona fide belief that the cheque will be honoured. However, the cheque was received back by the Bank with the objection "invalid account". The bank issued a notice to the petitioner on 22.10.1994 informing him about the objection raised by the bank in Nova Scotia. 4. In the meantime, the petitioner had been directed to pay interest at the rate of 22.5% on the overdraft facility enjoyed by him. He was also directed to regularise the over drawn account. The monthly salary of the petitioner was being deposited with the bank. As a further measure to protect the bank from any loss, this account of the petitioner was frozen. No withdrawals were permitted to the petitioner from his account for a period of over four months. In the meantime, the petitioner agreed to pay the entire amount along with interest by the end of January, 1995. Even for this intervening period, the bank charged advance interest on the entire amount debiting his account on or around 21.11.1994. The entire liability has been cleared by the petitioner by 10.2.1995. 5. Inspite of all this, the bank registered FIR on 31.1.1995. The matter was investigated. Challan was presentsd in Court. Charges were framed against the petitioner under Sections 420/467/468/471 IPC on 28.11.1996. The petitioner challanged the framing of the charges by filing Crl. Misc. No. 14239-M of 1997, under Section 482 Cr.P.C. and sought quashing of the FIR as well as charge-sheet. The matter was investigated. Challan was presentsd in Court. Charges were framed against the petitioner under Sections 420/467/468/471 IPC on 28.11.1996. The petitioner challanged the framing of the charges by filing Crl. Misc. No. 14239-M of 1997, under Section 482 Cr.P.C. and sought quashing of the FIR as well as charge-sheet. This petition was disposed of by this Court by directing the petitioner to file a revision petition in the Court of Session at the first instance. The petitioner filed the revision petition. By order dated 6.4.1998, the revision petition was allowed. It was observed as under : "Before framing of the charges, learned Magistrate ought to have applied his mind as provided under Section 239 G.P.C. He has not even heard the parties before framing of the charges". 6. The order framing the charges was set aside. Thereafter, the matter went back to the trial Court. All the facts narrated above, were reiterated by the petitioner before the trial Court in the application under Section 239 Cr.P.C. The trial Court dismissed the application without giving any reasons and again framed the same charges. Even wording of the charge-sheet dated 17.10.2000, Annexure P-6, is identical to the earlier charge-sheet dated 28.11.1996, Annexure P-2. 7. I have heard the learned counsel for the parties at length. 8. A perusal of the FIR itself shows that the disputed cheque has been issued by Rakesh Sood, who is the brother of the petitioner. Thereafter, even if one accepts the allegations contained in the FIR to be correct, no offence under Sections 467/468/471 IPC can be said to have been committed by the petitioner. 9. Even otherwise, a perusal of the facts narrated above, would clearly indicate that all along, the dispute has been treated by the bank as a normal banking transaction. Throughout, it has been treated as if an account had gone bad. The petitioner has been directed to pay interest which is normally charged on over drafts. Not only has he been directed to pay the interest, but the entire amount has also been recovered from the petitioner. In such circumstances, it would be apparent that the petitioner could not have been charged under Section 420 IPC. The petitioner has been directed to pay interest which is normally charged on over drafts. Not only has he been directed to pay the interest, but the entire amount has also been recovered from the petitioner. In such circumstances, it would be apparent that the petitioner could not have been charged under Section 420 IPC. The offence of cheating is defined in Section 415 of the IPC as under : "Section 415 IPC (Cheating) : 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 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". 10 This provision has been considered by the Honble Supreme Courtin the case of Hridaya Ranjan Pd. Verma and others v. State of Bihar and another, 2000(2) RCR (Criminal) 484. The Honble Supreme Court observed in paragraphs 15 and 16 as under : "15. 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. 16. 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 of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. 16. 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 of 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". It is matter of record that the petitioner has been banking with this particular bank for a period of over 20 years. Furthermore, the petitioner still continues to bank with the same bank. This clearly illustrates that even the bank has not lost faith in the credibility and honesty of the petitioner. Otherwise, he would have been banned from any further dealings with bank. The subsequent conduct of the petitioner clearly goes to show that there was no dishonest intention on his part at any stage of the proceedings. Even otherwise, the petitioner has not held out any inducement as required under Section 415 IPC. I am of the considered opinion that a normal banking transaction has been disguised as the criminal act of cheating. As held in the case of Hridaya Ranjan Pd. Verma and others v. State of Bihar and another, 2000(2) RCR (Criminal) 484, a mere breach of contract cannot give rise to criminal prosecution unless fraudulent or dishonest intention is shown right on the beginning of the transaction. In the present case, the cheque has been issued by the brother of the petitioner. This fact is accepted in paragraph 2 of the FIR where it is stated that "the cheque seems to be signed by one Mr. Rakesh Sud". I am of the considered opinion that an unfortunate situation has been blown out of all proportion. In the present case, the cheque has been issued by the brother of the petitioner. This fact is accepted in paragraph 2 of the FIR where it is stated that "the cheque seems to be signed by one Mr. Rakesh Sud". I am of the considered opinion that an unfortunate situation has been blown out of all proportion. Furthermore, from the facts narrated above, it becomes evident that, at best, it would have been a case of civil liability. However, the bank could not have even filed a suit for recovery as the entire amount has been recovered together with interest. In the case of G. Sagar Suri v. State of U.P., 2000(1) RCR (Criminal) 707 : [2000(1) All India Criminal Law Reporter 855 (SC)], the Honble Supreme Court observed in paragraphs 8 and 9 as under : "8. Jurisdiction under Section 482 of the Code has to be exercised with a great care. In exercise of its jurisdiction High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal Court has to exercise a great deal of caution for the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this Section has to be exercised to prevent abuse of the process of any Court or otherwise to secure the ends of justice. 9. In State of Karnataka v. L. Muniswamy and others, AIR 1997 SC 1489 : 1977(3) SCR 113 this Court said that in the exercise of the wholesome power under Section 482 of the Code High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the ends of justice require that the proceedings are to be quashed." 11. Keeping the aforesaid principles in view, it becomes evident that the order Annexure P-6 framing the charges cannot be sustained. The order dismissing the application Annexure P-5, under Section 239 Cr.P.C. and the Charge Sheet suffer from the vice of non-application of mind. Keeping the aforesaid principles in view, it becomes evident that the order Annexure P-6 framing the charges cannot be sustained. The order dismissing the application Annexure P-5, under Section 239 Cr.P.C. and the Charge Sheet suffer from the vice of non-application of mind. A perusal of the facts narrated above clearly shows that the matter was essentially of a civil nature. This has been given the cloak of a criminal offence. It has been held by the Honble Supreme Court in G. Sagar Suris case (supra) that the criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal Court has to exercise a great deal of caution. I am of the opinion that the trial Court has failed to exercise its discretion in accordance with law while framing the charges. In the order dated 6.4.1998, Annexure P-3, the revisional Court had observed that the learned Magistrate should hear the parties before passing the order in the application under Section 239 Cr.P.C. Though specific instructions were issued to the trial Court to apply its mind before framing charges, yet again the charges have been framed without application of mind. I am of the considered opinion that permitting these criminal proceedings to continue would amount to an abuse of the process of the Court. It would also be in the interest of justice to put an end to this sorry chapter in the life of the petitioner. 12. In view of the above, present petition is allowed. FIR Annexure P-1, registered at Police Station, West, Chandigarh, order rejecting application under Section 239 Cr.P.C. Annexure P-5 and charge-sheet dated 17.10.2000, Annexure P-6, are hereby quashed. No costs.