Judgment : 1. These two Criminal Petitions have been taken out under Section 482 Cr.P.C. by the accused in C.C.No.36 of 2009 on the file of I Additional Chief Metropolitan Magistrate, Visakhapatnam City, to quash the proceeding therein. 2. Background facts, in a nutshell, are: Chavakula Venkata Subba Raju filed a complaint on the file of I Additional Chief Metropolitan Magistrate, Visakhapatnam City, on 19.01.2006, alleging, inter alia, that Chelluboyina Satyanarayana-A1 is the father of Chelluboyina Suresh Kumar-A2. They approached him with a request to advance a sum of Rs.20,00,000/-for the purpose of higher education of the latter in United States of America. He acceded to their request and advanced a sum of Rs.5,00,000/-on 10.04.2005 and Rs.15,00,000/-on 21.04.2005. The father and the son promised to pay back the amount within a month. After repeated requests and reminders, the son issued a cheque bearing No.563526, dated 21.07.2005, for Rs.20,00,000/-drawn on ING Vysya Bank Limited, Bhimavaram Branch. Both the father and the son requested him not to present the cheque till the last week of November, 2005. He presented the cheque in the month of November, 2005. The said cheque came to be dishonoured for want of sufficient funds on 30.11.2005. He issued a notice, dated 14.12.2005 calling upon the father and the son to make good the amount covered under the cheque in question. The notice sent to the father returned unserved on 16.12.2005 with an endorsement ‘addressee out of country’ and whereas the notice sent to the son returned on 16.12.2005 with an endorsement “intimation served”. Since the father and the son issued the cheque without maintaining sufficient funds in the account, it constitutes an offence of cheating punishable under Section 420 and also an offence punishable under Section 138/142 of the Negotiable Instruments Act. For better appreciation, I may refer relevant portion of the complaint, which reads as hereunder: “The complainant got issued a Registered Notice, dt.14.12.2005 to both Accused requiring them to pay the outstanding loan amount within 15 days from the date of receipt of the notice. The notice Addressed to Accused -1 was returned on 16.12.005 with an endorsement “Addressee out of Country”. Accused-2 was returned on 16.12.2005 with an endorsement ‘Intimation Served”. Thus, the notices sent to the ordinary place of residence stood served as per Law. In spite of the notices, Accused did not pay the amount covered by the Cheque. The notice Addressed to Accused -1 was returned on 16.12.005 with an endorsement “Addressee out of Country”. Accused-2 was returned on 16.12.2005 with an endorsement ‘Intimation Served”. Thus, the notices sent to the ordinary place of residence stood served as per Law. In spite of the notices, Accused did not pay the amount covered by the Cheque. It is submitted that issuance of cheque without having sufficient funds and the subsequent dishonour attracts the Penal provisions under Section 138 and 142 of Negotiable Instruments Act r/w.120-B, 415 and 420 of Indian Penal Code, thereby the Accused are liable for the punishment. Hence the Complaint.” Learned Additional Chief Metropolitan Magistrate, forwarded the complaint to the Station House Officer, IV Town Police Station, Visakhapatnam, under Section 156(3) Cr.P.C. Thereupon, the Station House Officer, IV Town Police Station, Visakhapatnam, registered a case in Crime No.67 of 2006 for the offences under Sections 138, 142 of Negotiable Instruments Act and Sections 415, 420 r/w.120-B of IPC. After completing the investigation, a charge-sheet came to be presented in the Court of I Additional Chief Metropolitan Magistrate, Visakhapatnam. The learned Magistrate took the charge-sheet on file as CC No.36 of 2009. Hence, these two Criminal Petitions by A1 and A2 in C.C.No.36 of 2009 under Section 482 Cr.P.C. with the prayer stated supra. Crl.P.No.5289 of 2011 is filed by A1 Chelluboyina Satyanarayana and Crl.P.No.11259 of 2011 is filed by A2 Chelluboyina Suresh Kumar. 3. Since both the Criminal Petitions are relatable to C.C.No.36 of 2009 on the file of the 1st Additional Chief Metropolitan Magistrate, Visakhapatnam, they are heard together and are being disposed of by this Common Order. 4. Heard Sri P.Nagendra Reddy, learned counsel appearing for the A1 and Sri C.Praveen Kumar, learned counsel appearing for the A2 and Sri M.S.Ramachandra Rao, learned counsel appearing for the complainant. 5. Sri P.Nagendra Reddy, learned counsel appearing for the A1 submits that A1 is not a drawer of the cheque and therefore, he cannot be held responsible for dishonour of the cheque, in which case, proceeding against A1 in CC No.36 of 2009 is liable to be quashed. 6. Sri C.Praveen Kumar, learned counsel appearing for the A2 submits that mere dishonour of the cheque is not sufficient to infer the intention of the drawer i.e. A2 to deceive the complainant right from the inception of issuance of the cheque. 6. Sri C.Praveen Kumar, learned counsel appearing for the A2 submits that mere dishonour of the cheque is not sufficient to infer the intention of the drawer i.e. A2 to deceive the complainant right from the inception of issuance of the cheque. In support of his submission, reliance has been placed on judgment of the Supreme Court in Subodh S.Salaskar v. Jayprakash M.Shah AIR 2008 S.C. 3086 and the judgment of this Court in J.Vidya Sagar v. State of A.P. 2010 (2) ALT (Crl.) 270 (A.P.). 7. Sri M.S.Ramachandra Rao, leaned counsel appearing for the complainant submits that A1 and A2 borrowed Rs.20,00,000/-for the purpose of higher education of A2 and subsequently, A2 issued a cheque for Rs.20,00,000/-towards discharge of the liability and on presentation, the cheque came to be dishonoured on the ground of insufficient funds. Both A1 and A2 induced the complainant to part with an amount of Rs.20,00,000/-and it constitutes fraudulent and dishonest inducement to deliver the property, which comes within the meaning of cheating as defined in Section 415 of IPC and therefore, the proceeding initiated against the petitioners for the offence under Section 420 r/w.34 IPC is to be allowed to reach its logical conclusion. In support of his submissions, reliance has been placed on the judgment of the Supreme Court in Iridium India Telecom Ltd. v. Motorola Inc. (2011) 1 SCC 74 . Much emphasis has been laid on paras.75 and 76 of the cited judgment, which read as hereunder: “75. The aforesaid observations leave no manner of doubt that the appellants were entitled to an opportunity to prove the averments made in the complaint. They were entitled to establish that they have been deliberately induced into making huge investments on the basis of representations made by respondent No.1 and its representatives, which representations subsequently turned out to be completely false and fraudulent. The appellants were entitled to an opportunity to establish that respondent No.1 and its representatives were aware of the falsity of the representations at the time when they were made. The appellants have given elaborate details of the positive assertions made by respondent No.1 which were allegedly false to its knowledge. The appellants were entitled to an opportunity to establish that respondent No.1 and its representatives were aware of the falsity of the representations at the time when they were made. The appellants have given elaborate details of the positive assertions made by respondent No.1 which were allegedly false to its knowledge. It is also claimed by the appellants that the respondent No.1 and its representatives willfully concealed facts which were material and ought to have been disclosed, but were intentionally withheld so as to deceive the appellant into advancing and expending a sum of Rs.500 Crores. 76. As noticed earlier, both the appellants and the respondents have much to say in support of their respective viewpoints. Which of the views is ultimately to be accepted, could only be decided when the parties have had the opportunities to place the entire materials before the Court. This Court has repeatedly held that power to quash proceedings at the initial stage have to be exercised sparingly with circumspection and in the rarest of the rare cases. The power is to be exercised ex debito justitiae. Such power can be exercised where a criminal proceeding is manifestly attended with mala fide and have been instituted maliciously with ulterior motive. This inherent power ought not to be exercised to stifle a legitimate prosecution.” 8. Section 415 IPC defines cheating and it reads as hereunder: “415. 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.” 9. Explanation.—A dishonest concealment of facts is a deception within the meaning of this section.” 9. The section requires: (1) Deception of any person; (2) (a) Fraudulently or dishonestly inducing that person – (i) to deliver any property to any person; or (ii) to consent that any person shall retain any property; or (b) intentionally inducing that person 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. The definition of the offence of cheating embraces some cases in which no transfer of property is occasioned by the deception and some in which such a transfer occurs; for these cases generally provision is made in Section 417 of the Code. For cases in which property is transferred a more specific provision is made by Section 420 IPC. 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 which the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution under Section 420 IPC, 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. 10. The Supreme Court in B.Suresh Yadav v. Sharifa Bee 2007 (12) SCALE 364 held that for the purpose of establishing the 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. The proposition of law laid down in the B.Suresh Yadav’s case (4 supra) has been quoted with approval in Subodh S.Salaskar’s case (1 supra). 11. The complaint filed by the complainant before I Additional Chief Metropolitan Magistrate, Visakhapatnam, indicates that A2 issued the cheque bearing No.563526, dated 21.07.2005, for Rs.20,00,000/-towards discharge of the liability. It is not the case of the complainant that he would not have parted the amount, but for the cheque. It is well settled that deception cannot be inferred basing on the mere dishonour of the cheque. It is not the case of the complainant that he would not have parted the amount, but for the cheque. It is well settled that deception cannot be inferred basing on the mere dishonour of the cheque. The provision of Section 420 IPC is not attracted unless mala fide intention of the person issuing the cheque is established. Here, no specific instances have been pleaded about the existence of mala fide intention. Dishonest intention and misrepresentation are to be specifically indicated to attract the provision of Section 420 IPC and if such specific allegations are not there and general allegations of dishonour of cheque is there, only Section 138 of the Negotiable Instruments Act will be attracted. No specific instances have been pleaded in the complaint about the existence of mala fide intention. A1 is not a signatory to the cheque and therefore, proceeding initiated against him basing on the said cheque amounts to abuse of process of Court. 12. The complainant filed complaint before I Additional Chief Metropolitan Magistrate, Visakhapatnam as provided under Section 142 of the Negotiable Instruments Act, 1881. Under Section 142 of the Negotiable Instruments Act, no court shall take cognizance of any offence punishable under Section 138 of the Act except upon a complaint in writing made by the payee or, as the case may be, the holder in due course. The learned Magistrate, instead of recording the sworn statement of the complainant, to make up his mind, as to any ingredients of offence under Section 138 of the Negotiable Instruments Act are made out proceeded to refer the complaint under Section 156(3) Cr.P.C. Thereupon, the Station House Officer, IV Town P.S., Visakhapatnam registered a case in Crime No.67 of 2006 for the offences under Sections 138 and 142 of the N.I.Act and Sections 415, 420 read with 120-B IPC. When the complainant being payee of the cheque presented a complaint, as provided under Section 142 of the N.I.Act, the learned Magistrate ought not to have referred the complaint to the police under Section 156(3) Cr.P.C. Therefore, the very referring of the compliant is not in accordance with the provisions of Section 142 of the N.I.Act. The complainant cannot be made to suffer for the irregular procedure adopted by the Court. However, the complainant cannot be made remedyless. The complaint in C.C.No.36 of 2010 as it is cannot be quashed. The complainant cannot be made to suffer for the irregular procedure adopted by the Court. However, the complainant cannot be made remedyless. The complaint in C.C.No.36 of 2010 as it is cannot be quashed. What is to be quashed is the order of the learned Magistrate in taking cognizance of the case for the offence under Section 420 read with 34 IPC. The complainant is at liberty to adduce evidence at pre-cognizance stage relatable to A2 alone and thereupon, the learned Magistrate has to consider the evidence and pass appropriate orders as to whether the evidence brought on record is sufficient to take cognizance of the case under Section 138/142 of the N.I.Act. 13. Accordingly, both the Criminal Petitions are allowed quashing the order passed by I Additional Chief Metropolitan Magistrate, Visakhapatnam taking cognizance of the offence under Section 420 read with Sec.34 IPC, reserving liberty to the complainant to adduce evidence at pre-cognizance stage and thereupon, the learned Magistrate has to consider the evidence and pass appropriate orders as to whether the evidence brought on record is sufficient to proceed further against Chelluboyina Suresh Kumar-A2.