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Allahabad High Court · body

2010 DIGILAW 2394 (ALL)

USHA GUPTA v. STATE OF U. P.

2010-08-09

SHRI KANT TRIPATHI

body2010
JUDGMENT Hon’ble Shri Kant Tripathi, J.—Heard the learned counsel for the applicant and the respondent No. 2 and learned AGA for respondent No. 1 and perused the record. 2. These four petitions under Section 482 Cr.P.C. have been filed by the applicant Smt. Usha Gupta against the respondents and the controversy involved in the petitions is common, therefore, they are being disposed of together by this common order. 3. It appears that the respondent No. 2 is a partnership firm involved in the business of sale of paper and materials relating thereto. The applicant Smt. Usha Gupta is the Proprietor of M/s Ultra Pack, Kanpur. The respondent No. 2 and the applicant entered into a commercial contract on which basis the applicant agreed to purchase paper and paper materials from the respondent No. 2. It further appears that several transactions took place between the respondent No. 2 and the applicant and there had been sale of paper and paper materials by the respondent No. 2 to the applicant but according to the complaint, the applicant failed to pay certain amount in regard to few sale transactions due to which the respondent No. 2 filed four different complaints against the applicant in the Court of concerned Magistrate at Meerut with the allegations that the applicant had given full assurance to pay the entire sale consideration and on the basis of that assurance the respondent No. 2 made supplies but the applicant, despite receiving the supplies, failed to carry out her promises and thereby caused a wrongful loss to the respondent No. 2. It is also stated in the complaints that the applicant’s intention was dishonest from very beginning and she entered into the contract with that intention. 4. In Misc. Application (482) No. 3205/2008 the proceedings of the complaint case No. 4249 of 2007 has been impugned. The subject-matter of the said complaint is 08 Bills on which basis a supply of materials to the tune of Rs. 13,28,726.65 had been made and the applicant has made the payment of Rs. 9,62,492.60 and a sum of Rs. 3,66,234.05 has yet not been paid by the applicant and is due. 5. In Misc. Application (482) No. 3206/2008 the proceedings of the complaint case No. 4086 of 2007 has been impugned. The subject-matter of the said complaint is 14 Bills on which basis a supply of materials to the tune of Rs. 9,62,492.60 and a sum of Rs. 3,66,234.05 has yet not been paid by the applicant and is due. 5. In Misc. Application (482) No. 3206/2008 the proceedings of the complaint case No. 4086 of 2007 has been impugned. The subject-matter of the said complaint is 14 Bills on which basis a supply of materials to the tune of Rs. 25,03,934.75 had been made and the applicant has made the payment of Rs. 18,50,000.00 and a sum of Rs. 6,53,934.75 has yet not been paid by the applicant and is due. 6. In Misc. Application (482) No. 13532/2008 the proceedings of the complaint case No. 4250 of 2007 has been impugned. The subject-matter of the said complaint is 04 Bills on which basis a supply of materials to the tune of Rs. 6,00,933.60 had been made and the applicant has made the payment of Rs. 70,701.00 and a sum of Rs. 5,30,232.60 has yet not been paid by the applicant and is due. 7. In Misc. Application (482) No. 20617/2008 the proceedings of the complaint case No. 231 of 2008 has been impugned. The subject-matter of the said complaint is 18 Bills on which basis a supply of materials to the tune of Rs. 34,30,761.90 had been made and the applicant has made the payment of Rs. 30,25,565.45 and a sum of Rs. 4,05,196.45 has yet not been paid by the applicant and is due. 8. The learned counsel for the applicant submitted that the dispute between the applicant and the respondent No. 2 is of civil nature and there is no material to show that the intention of the applicant was dishonest on the date of entering into the contract with the respondent No. 2. In the course of business the applicant received certain goods from the respondent No. 2 and made payment but if due to certain reasons could not make payment of the entire amount, the proper course for the respondent No. 2 was to file a civil suit for recovery instead of filing the complaints by bringing the dispute within the purview of the criminal Court. 9. The learned counsel for the respondent No. 2, on the other hand, submitted that in the complaint it is very specifically pleaded that the intention of the applicant was dishonest from very beginning, therefore, the criminal liability is made out. 9. The learned counsel for the respondent No. 2, on the other hand, submitted that in the complaint it is very specifically pleaded that the intention of the applicant was dishonest from very beginning, therefore, the criminal liability is made out. It was next submitted that if both civil and criminal liability are made out,the criminal proceeding cannot be dropped on the ground that a civil remedy is also available. 10. The learned counsel for the respondent No. 2 relied on N. Devindrappa v. State of Karnataka, (2007) 5 SCC 228 , in support of his submissions. In my opinion the principles propounded in that case hardly helps the respondent No. 2. In that case the accused had knowledge that he was not the owner of the plot, even then entered into the transaction for sale and receipts relied upon by him were bogus. On the basis of facts and circumstances of that case the Apex Court held that both civil and criminal liability could be fastened against the accused. But in the instant case the position is different. 11. It is now well settled as to how the question whether or not a particular transaction is of civil in nature is to be decided. 12. Section 415 IPC defines cheating, which reads : “415. 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’.” 13. An offence of cheating, therefore, is not made out unless the following ingredients exist : (i) deception of a person either by making a false or misleading representation or by other action or omission; (ii) fraudulently or dishonestly inducing any person to deliver any property; or to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit. 14. 14. In the case of V.Y. Jose and another (supra), the Apex Court has held that for the purpose of constituting an offence of cheating the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise, no offence under Section 420 IPC can be said to have been made out. In para 21 and 28 the Apex Court further observed : “21. There exists a distinction between pure contractual dispute of a civil nature and an offence of cheating. Although breach of contract per se would not come in the way of initiation of a criminal proceeding, there cannot be any doubt whatsoever that in the absence of the averments made in the complaint petition wherefrom the ingredients of an offence can be found out, the Court should not hesitate to exercise its jurisdiction under Section 482 of the Code of Criminal Procedure. .................................... 28. A matter which essentially involves dispute of a civil nature should not be allowed to be the subject-matter of a criminal offence, the latter being not a short cut of executing a decree which is non-existent. The superior Courts, with a view to maintain purity in the administration of justice, should not allow abuse of the process of Court. It has a duty in terms of Section 483 of the Code of Criminal Procedure to supervise the functionings of the trial Courts.” 15. A similar principle has been propounded in the case of S.V.L. Murthy v. State represented by CBI, Hyderabad, (2009) 6 SCC 77 . In that case the Apex Court has held that one of the ingredients of cheating, as defined in Section 415 IPC, is existence of an intention to cheat at the time of making initial promise or existence thereof from the very beginning of formation of contract. 16. In the case of Anil Mahajan v. Bhor Industries Ltd. and another, (2006) 1 SCC (Cri) 746, the Apex Court has held that the substance of the complaint is to be seen. Mere use of expression “cheating” in the complaint is of no consequence. 16. In the case of Anil Mahajan v. Bhor Industries Ltd. and another, (2006) 1 SCC (Cri) 746, the Apex Court has held that the substance of the complaint is to be seen. Mere use of expression “cheating” in the complaint is of no consequence. In other words the intention of the accused is to be gathered from the facts and circumstances of the case and not from the words and expression used in the complaint. If the facts and circumstances of the case do not support that the intention of the accused was dishonest at the inception of the transaction, dishonest intention cannot be inferred merely on the basis of the allegation that the intention was dishonest at the beginning of the transaction. 17. A mere failure of a person to keep up the promise subsequently a culpable intention, right at the beginning, i.e. when he made the promise, cannot be presumed. A distinction must be kept in mind between mere breach of contract and the offence of cheating. It depends upon the intention of the accused at the time of entering into the contract. Any subsequent conduct has no relevance. A breach of promise simplicitor does not constitute an offence under Section 420 IPC. 18. The instant case needs to be examined in the aforesaid backdrop. In the complaint case No. 4249/2007 transactions for Rs. 13,28,726.65 took place and the applicant has already made payment of Rs. 9,62,492.60. In the complaint case No. 4086/2007 transactions for Rs. 25,03,934.75 took place and the applicant has already made payment of Rs. 18,50,000.00. In the complaint case No. 4250/2007 transactions for Rs. 6,00,933.60 took place and the applicant has already made payment of Rs. 70,701.00. In the complaint case No. 231/2008 transactions for Rs. 34,30,761.90 took place and the applicant has already made payment of Rs. 30,25,565.45. It is, therefore, clear that whatever transactions regarding purchase of paper and paper material from the respondent No. 2 took place, the applicant has made payment of substantial amount to the respondent No. 2, which itself indicates that the intention of the applicant was not in any way dishonest at the beginning of the transaction. If his intention had been dishonest, the applicant would not have made payment of substantial amount in relation to the aforesaid transactions. If his intention had been dishonest, the applicant would not have made payment of substantial amount in relation to the aforesaid transactions. If the applicant became a defaulter in making the payment of balance amount, it cannot be contended that the intention of the applicant was dishonest at the beginning of the transaction. There may be variety of reasons for non payment, may be due to lack of sufficient fund with the applicant or some differences between the applicant and the respondent No. 2. From the averments made in the complaints it is clear that the applicant and the respondent No. 2 had entered into commercial transactions, in pursuance whereof the respondent No. 2 made various supplies to the applicant and in lieu of supplies, the applicant had been regularly paying the prices of the materials supplied and if certain amounts could not be paid during the course of business by the applicant, a mere non-payment of the prices would not constitute any criminal liability on the applicant because payments and non-payments are usual features of business transactions. Therefore, the allegations made in the complaints do not indicate that the intention of the applicant was dishonest when she entered into the transactions in the beginning. If the contents of the complaints are read together, the intention behind filing the complaints was to recover the balance amount from the applicant and the respondent No. 2 was aggrieved because of non-payment of the balance amount. 19. Keeping in view the facts and circumstances of the case, I am of the view that a civil dispute has been given the shape of criminal case for ensuring the recovery of the balance amount. It is true that both civil and criminal proceedings may be held simultaneously if the facts and circumstances of the case make out a civil as well as criminal liability. If in a given situation merely a dispute of civil nature with no criminal intent is made out, the criminal proceedings in such situation cannot be maintained and must be struck out. 20. Therefore, continuance of the proceedings of the aforesaid complaint cases would be nothing except an abuse of the process of the Court. The ends of justice would be secured if the proceedings of the complaint cases are quashed. 21. 20. Therefore, continuance of the proceedings of the aforesaid complaint cases would be nothing except an abuse of the process of the Court. The ends of justice would be secured if the proceedings of the complaint cases are quashed. 21. For the reasons discussed above, I am of the view that the facts and circumstances of all the four cases merely make out a dispute of civil nature with no criminal intent or dishonest intention on the part of the applicant, therefore, all the four petitions are allowed and proceedings of the complaint case Nos. 4249/2007 (A.A. Traders v. Smt. Usha Gupta), 4086/2007 (Anurodh Paper Marketing v. Smt. Usha Gupta), 4250/2007 (Anurodh Paper Marketing v. Smt. Usha Gupta) and 231/2008 (A.A. Traders v. Smt. Usha Gupta), all pending in the Court of Special Chief Judicial Magistrate, Meerut, are quashed. 22. The original judgment shall be kept on the file of Criminal Misc. Application (482 CrPC) No. 3205 of 2008. —————