ORDER 05.02.2010 — I have heard learned counsel for the petitioner, learned Addl. Government Advocate and learned counsel for opposite party no.2 on 4th February. The case was then posted to today for further argument on points of law only. At this stage, learned counsel for the petitioner filed a memo to the effect that the petitioner wants to withdraw Crl. Misc. Case as not pressed seeking liberty of this Court to raise all the grounds before the Court below at the time of framing of charge. Hence, he prays that the Crl. Misc. Case may be accordingly disposed of as not pressed. Copy of the Memo has not been served on the learned Addl. Government Advocate nor on the learned counsel appearing for opposite party no.2. It is further seen that while disposing of the Special Leave Petition No. 6110 of 2008, Hon’ble the Supreme Court has requested this Court to dispose of this Crimi¬nal Misc. Case as expeditiously as possible, but not later than three months from the date of passing of the order dated 10.11.2009. It is further observed by the Hon’ble Supreme Court that if for any reason, the learned Judge, before whom the matter is stated to be pending as part-heard, finds it difficult to dispose it within the said time, he shall forthwith release the same from his Court, whereafter the Hon’ble Chief Justice will assign the case to some other Judge for disposal within the stipulated time. Such observations clearly indicates that the Hon’ble Supreme Court directed that the case should be disposed of on merit. Thereafter, the case was taken up for hearing on many occasions and it was part-heard. The matter was assigned to this Court on 03.02.2010 and it was listed on 04.02.2010 in view of the fact that the Hon’ble Supreme Court has given a time limit to dispose of the application within three months. The case was listed on 04.02.2010, when it was taken up for hearing. This Court heard the case extensively on 04.02.2010, It is posted today for further hearing. At such stage, the learned counsel for the petitioner, as afore-stated, filed a Memo for withdrawal of the Criminal Misc. Case. The learned Addl. The case was listed on 04.02.2010, when it was taken up for hearing. This Court heard the case extensively on 04.02.2010, It is posted today for further hearing. At such stage, the learned counsel for the petitioner, as afore-stated, filed a Memo for withdrawal of the Criminal Misc. Case. The learned Addl. Government Advocate and learned counsel for opposite party no.2 raised objections to the second part of the Memo, wherein the petitioner has sought liberty to raise all such grounds raised at this stage, at the time of framing of charge. The Memo filed by the learned counsel for the petitioner after a substantial part of the argument is misconceived. In such view of the matter, the Court feels in¬clined to dispose of the application under Section 482 of the Code of Criminal Procedure, 1973, hereinafter referred to as the ‘Code for brevity, on merit. 2. The undisputed fact of the case was that information was lodged before the Officer In-charge of Barbil Police Station by the authorised representative of the Monnet Ispat & Energy Ltd., Santikunj on the allegation that the petitioner has committed the offence of cheating along with the other offences. The said information was registered as F.I.R. for the alleged offence under Sections 420, 467 and 468 of the Indian Penal Code, 1860 (hereinafter referred to as the “I.P.C.” for brevity). The peti¬tioner was arrested by the Investigating Officer on 16.03.2007. On being produced before the learned J.M.F.C., Barbil, he moved for grant of bail before the learned Magistrate, which was re¬jected. Then an application was preferred before the Sessions Judge and later an application was preferred to this Court under section 439 of the Code. At the same time another application was filed under Section 482 of the Code, which was registered as Crl. Misc. Case No. 1044 of 2007. The said application was later withdrawn after filing of the charge sheet. Thereafter, on 21.12.2007, the present application has been made challenging the cognizance taken by the learned J.M.F.C., Barbil for the offence under Section 420, I.P.C. on the report of the Investigating Officer. 3. Misc. Case No. 1044 of 2007. The said application was later withdrawn after filing of the charge sheet. Thereafter, on 21.12.2007, the present application has been made challenging the cognizance taken by the learned J.M.F.C., Barbil for the offence under Section 420, I.P.C. on the report of the Investigating Officer. 3. In course of argument, learned counsel for the petitioner has submitted that there is no prima facie case against the petitioner for taking cognizance under section 420, I.P.C. The second contention was that the matter arises out of a contract, which is purely civil in nature for which an arbitra¬tion proceeding has been initiated, and in such dispute a crimi¬nal case should not have been initiated nor the Magistrate should have taken cognizance of the offence under section 420,I.P.C. Learned counsel for the opposite party, on the other hand, sub¬mitted that this is not a matter purely civil in nature, rather a criminal implication is also forthcoming. 4. In order to appreciate the case it is apposite to reit¬erate the admitted facts of this case:- (i) The petitioner admittedly holds a mining lease consist¬ing of an area of 26.243 hectors of Mining area at village-Raika, Barbil in the district of Keonjhar. The lease was for extracting minerals like Iron Ore and Manganese from the said mining area. The informant alleges that the petitioner represented before the opposite party no.2 that the mining area, for which he has ob¬tained the lease, is under his possession and is free from any kind of encumbrances, charges and litigations. He has full au¬thority to enter into an agreement, sell the entire Iron Ore and Manganese Ore excavated by engaging one B.K. Coalfields Pvt. Ltd. a contractor-company for the said leasehold area. (ii) Being thus induced by the statement of the petitioner, Monnet Ispat and Energy Ltd., opposite party no.2 entered into an agreement on 07.03.2006 with the petitioner, whereunder the informant agreed to buy exclusively entire Iron ore and Manganese ore which was to be excavated by raising contractor from the leasehold area. On the basis of the aforesaid representation of the petitioner, opposite party no.2 made an advance of Rs.4,00,00,000/- (Rupees four crores only) vide bank draft bear¬ing No. 171551 dated 04.03.2006 drawn on ICICI Bank Ltd. payable at Kolkata. On the basis of the aforesaid representation of the petitioner, opposite party no.2 made an advance of Rs.4,00,00,000/- (Rupees four crores only) vide bank draft bear¬ing No. 171551 dated 04.03.2006 drawn on ICICI Bank Ltd. payable at Kolkata. (iii) It is further alleged that the raising Contractor M/s. B.K. Coalfields Pvt. Ltd. has received a letter dated 02.09.2006 issued by the petitioner through its Manager intimating that some disputes have arisen in connection with boundary between the petitioner and M/S. Orissa Mining Corporation Ltd. and the Deputy Director, Mines, Joda has advised them to stop mining activity in that area. (iv) It was found out by the informant that the petitioner was well aware of the dispute with regard to the demarcation of the mining lease area. Without being in the exclusive possession of the entire mining area, the petitioner had made completely false, fraudulent and dishonest representations and thereby induced the petitioner to part with a huge amount of Rs.4 Crores. (v) There was a joint verification on 29.06.1991, wherein it was directed that the operation of the quarry in question should be forthwith stopped within 300 feet on either side of the exist¬ing boundary of M/s. Orissa Mining Corporation Ltd. (hereinafter referred to as the “OMC”) from station 100-103, until survey of the area was conducted and final decision is arrived at. It is further directed that any violation of such condition will be treated as contravention of the lease covenants. 5. On such factual backdrop, the petitioner made a repre¬sentation before the complainant that he was in peaceful posses¬sion of the land in question for the purpose of mining thereby he induced the complainant company to enter with an agreement with him. To appreciate the nature of the contract between them, it is apposite to refer to certain clauses therein:- (i) Whereas SDS (Shiv Dutt Sharma i.e. the petitioner) has represented that they are the lessee of the leasehold area and are enjoying the peaceful and exclusive possession and control over the leasehold area having right, title and interest, which is free from any encumbrances i.e. mortgages, attachments, Court injunctions, gifts, wills, exchanges etc. Further SDS has de¬clared that the mining lease of leasehold area is legally valid and subsisting and SDS has duly complied with all the rules and regulations as prescribed; (ii) Whereas SDS has approached the Buyer with the proposal to exclusively sell the entire Manganese and Iron Ore excavated by its raising contractor on his behalf from the leasehold area as delineated and marked in the plan annexed hereto; and (iii) Whereas relying upon the said promises, representa¬tions and assurances of SDS and believing the same to be correct, buyer has agreed to purchase exclusively the entire excavated Manganese and Iron Ore from the leasehold area of SDS, on the terms and conditions mutually agreed and contained therein. 6. The Buyer agreed to pay an advance of Rs.4,00,00,000/- (Rupees four crores only) vide bank draft bearing No.171551 dated 04.03.2006 drawn on ICICI Bank Limited payable at Kolkata favour¬ing SDS, which was to be adjusted @ Rs.50/- per ton of Iron Ore and Manganese supplied till the same is fully repaid. In case, the buyer has stopped work as per the requirement, then the balance amount is liable to be repaid forthwith by the SDS. The term of contract was for 20 years. There is also a clause in the agreement that in case SDS goes for termination of the contract, then the SDS is liable to pay Rs.25,00,00,000/- (Rupees twenty five Crores) towards damages for the notice to stop work to the buyer. On such terms and conditions, the agreement was executed by the parties, but after some time, the petitioner has directed to the raising contractor not to extract any Manganese ore or Iron ore from the leasehold side in view of the dispute with the OMC, which resulted in filing of the FIR and finally on submis¬sion of charge sheet under Section 420, IPC. On such submission of charge sheet, the learned JMFC, Barbil took cognizance of the offence. 7. At the stage of cognizance, it is to be decided whether a case, prime facie, has been made out or not. It is the duty of the Court to look only into the material placed by the prosecu¬tion in support of the allegations. On such submission of charge sheet, the learned JMFC, Barbil took cognizance of the offence. 7. At the stage of cognizance, it is to be decided whether a case, prime facie, has been made out or not. It is the duty of the Court to look only into the material placed by the prosecu¬tion in support of the allegations. The following ingredients are necessary to attract Section 415 of the IPC:- (i) Deception of any person; (ii) (a) Fraudulently or dishonestly inducing that person; (iii) to deliver any property to any person; or (iv) to consent that any person shall retain any property; or (iv) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so de¬ceived; and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. (v) 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. In explanation to the Section it is provided that a dishonest concealment of facts is a deception within the meaning of this section. 8. The fact that there was a boundary dispute between the petitioner and the OMC, for which a joint verification was con¬ducted and the petitioner was asked not to extract any Iron Ore or Manganese Ore upto 300 feet from either side from station no. 100 to 103 was not revealed to the opposite party no.2. This shows that there was a concealment of fact. Since the amount of advance is more than Rs.4,00,00,000/- (Rupees four Crores only) in this case, at this stage it can be inferred, without deciding the case finally, which is to be done by the trying Judge, that such concealment was dishonest. 9. Once it is held that there was concealment of fact by the petitioner, the second limb of Section 415 is also inferable and it is held that, prima facie, in this case there was dishon¬est inducing to deliver the property to the petitioner. 10. 9. Once it is held that there was concealment of fact by the petitioner, the second limb of Section 415 is also inferable and it is held that, prima facie, in this case there was dishon¬est inducing to deliver the property to the petitioner. 10. Now coming to the question of contention raised by the learned counsel for the petitioner that this a case of civil in nature, for which an arbitration proceeding has been initiat¬ed, and for a matter like this, a criminal case should not be initiated, this Court relies on the reported decision of Kamala¬devi Agarwal v. State of W.B. and others, (2002) 1 SCC 555 , wherein the Court has held that Criminal prosecution cannot be thwarted at the initial stage merely because civil proceedings are also pending. The Supreme Court has further held that the nature and scope of civil and criminal proceedings and the stand¬ard of proof required in both matters is different and distinct, whereas in civil proceedings the matter can be decided on the basis of probabilities, the criminal case has to be decided by the adopting the standard of proof of “beyond reasonable doubt”. The Apex Court further rules that the inherent powers of quashing the proceedings at the initial stage should be exercised sparing¬ly and only where the allegations made in the complaint or the F.I.R., even if taken at their face value and accepted in entire¬ty, do not, prima facie, disclose the commission of an offence. Disputed and controversial facts cannot be made the basis for the exercise of the jurisdiction. In R. Kalyani v. Janak C. Mehta and others, 2008(14) SCALE 85, the Apex Court has further held that if the allegations disclosed a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue. In Hridaya Ranjan Prasad Verma and others v. State of Bihar and another, (2000) 4 SCC 168 , the Apex Court has held that there is a very thin line of distinction between mere breach of contract and the offence of cheating. It depends upon the inten¬tion of the accused at the time to inducement which may be judged by his subsequent conduct, but for this subsequent conduct is not the sole test. It depends upon the inten¬tion of the accused at the time to 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 crimi¬nal 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. 11. Applying the above principle to the case in hand, this Court comes to the conclusion that the fact of joint verification held on 29.06.1991 was not brought to the notice of the complainant. The fact that in the joint verification, the peti¬tioner was debarred from raising Iron Ore and Manganese Ore from 300 feet either side of station no. 100 to 103 of that leasehold area was also not brought to the notice of the complainant. Thus, the representation that the petitioner was in possession of the whole of 26.243 hectors of land was not correct. In fact a por¬tion of the leasehold area was taken out of his zone of opera¬tion. If the complainant were made aware of such a situation, the complainant might not have agreed for advance of Rs.4,00,00,000/- (Rupees four crores). Therefore, this Court comes to the conclusion that while taking cognizance of the of¬fence, the learned Magistrate has not committed any illegality or irregularity. The facts presented before him reveals a, prima facie, case under section 420, I.P.C. for taking cognizance and issuance of process. Hence, this Court is not inclined to inter¬fere with the cognizance taken by the learned Magistrate on 22.07.2007 in G.R. Case No. 27 of 2007. 12. But before parting with the case, this Court takes notice of the behaviour shown by the petitioner in time and again filing application under section 482 of the Code and then with¬drawing it. However, it is further observed that the observation made in course of this order refusing to interfere with the order of cognizance shall not stand on the way of the trial Court for considering the materials either at the time of framing of charge or at the time of final disposal of the case. However, it is further observed that the observation made in course of this order refusing to interfere with the order of cognizance shall not stand on the way of the trial Court for considering the materials either at the time of framing of charge or at the time of final disposal of the case. Learned Magistrate shall decide the case in accordance with law and as per his own understanding of the facts of the case and should not be preju¬diced by the observations made by this Court at this stage. The Criminal Misc. Case is accordingly disposed of. Crl. Misc. Case disposed of.