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2014 DIGILAW 188 (GAU)

PRAN JYOTI BHUYAN v. STATE OF ASSAM

2014-02-14

A.K.GOSWAMI

body2014
JUDGMENT AND ORDER (CAV) This is an application under Section 482 of the Code of Criminal Procedure, 1973, (for short, ‘the Code’) and/or under Article 227 of the Constitution of India praying for quashing of the Complaint Case No. 268C/11 pending in the Court of Sub-Divisional Judicial Magistrate (S), Bongaigaon, for short, SDJM(S) and the order dated 29.2.2012 passed by learned SDJM(S), Bongaigaon, taking cognizance of the offence under Section 420 IPC and issuing summons to the petitioner for appearance. 2. Heard Mr. N. Dutta, learned senior counsel for the petitioner and Mr. S.K.Ghosh, learned counsel or the opposite party No.2/complainant. 3. Mr. N.Dutta, learned senior counsel for the petitioner submits that the complaint petition discloses that there is good and friendly relationship in between the complainant and the petitioner since a long time back and because of the same, when the petitioner approached the complainant in the first week of December, 2009 with a request to the complainant to give a loan of Rs.8 lakhs to meet his urgent personal need, the loan was advanced to the petitioner on the understanding that the petitioner will repay the loan amount on or before 12.3.2010. The learned senior counsel submits that there is no whisper in the compliant petition that there was a dishonest or fraudulent intention on the part of the petitioner at the time of taking the loan and that the complainant was deceived by any representation made by the petitioner at the time of giving of the loan amount to the petitioner. Learned senior counsel submits that the dispute is purely a civil dispute and the same cannot be converted to a criminal offence. 4. It is also submitted by him that the mere fact that the cheque issued by the petitioner at the time of taking loan for an amount of Rs.8 lakhs was not honoured when presented due to insufficieny of fund, does not satisfy, in the facts and circumstances of the case, the ingredients of Section 420 IPC. After the cheque was dishonoured, the complainant requested the petitioner to refund the amount of Rs.8 lakhs on monthly instalment of Rs.50,000/-per month till the amount of loan was liquidated and to that effect an agreement was also entered into on 28.4.2010 and in terms of the said agreement, the petitioner had also paid a sum of Rs.50,000/- on that very day. It is submitted by him that refusal and/or failure to refund the amount does not make it an offence of cheating in absence of any dishonest or fraudulent intention at the very inception. In support of his submission, learned senior counsel has also drawn the attention of the court to the initial deposition of the complainant which was made available at the time of hearing of this case to contend that the said deposition leaves no manner of doubt that the complaint was filed for failure of the petitioner to repay the loan amount. The learned senior counsel has relied on the following decisions: (i) (1973) 2 SCC 823 (Hari Prasad Chamaria –vs- Bishun Kumar Surekha & ors), (ii) (2011) 7 SCC 59 (Joseph Salvaraja-vs- State of Gujarat & ors), (iii) (1983) 2 GLR 110 (Sri Manoranjan Halder–vs-M/S Machfab Engineering Industries represented by its partner, Shri Bhawarlal Agarwal). 5. Mr.S.K.Ghosh, learned counsel for the opposite party submits that on the basis of the averments made in the complaint petition and the initial deposition, a prima facie case for an offence under Section 420 IPC is made out and as such, the learned trial court rightly took cognizance of the offence under Section 420 IPC and issued process. He submits that the fact that the cheque issued by the petitioner at the time of taking the loan was dishonoured when presented on 12.3.2010, by which date the petitioner was required to refund back the amount of loan taken, leaves no room for doubt that the petitioner had dishonest and fraudulent intention at the time of taking of the loan. 6. I have heard the learned counsel for the parties and have perused the materials on record. 7. Section 415 IPC, which defines cheating, reads as follows: “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”. Explanation.- A dishonest concealment of facts is a deception within the meaning of this section.” 8. Explanation.- A dishonest concealment of facts is a deception within the meaning of this section.” 8. It follows that an offence of cheating cannot be made out unless the following ingredients are satisfied: (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. 9. It will also be appropriate to reproduce Section 420 IPC for ready reference in order to appreciate the contention of the learned counsel for the parties. The section reads thus: “420. Cheating and dishonestly inducing delivery of property-Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.” 10. Before proceeding further, it will be apposite to consider the cases cited by the learned senior counsel for the petitioner. 11. The facts in Hari Prasad (supra) are to the effect that the complainant had filed a complaint against two accused persons, who were respondents in the proceeding before the Apex Court, stating that the complainant was running a business at Samastipur in Bihar and at Calcutta and the respondents were known to him and he had full faith on them. In order to start some business, he had talked to the respondents who informed him that they would start transport business under the name and style of Drang Transport Corporation. It was further stated by the respondents that the complainant would be the proprietor of the said Corporation and the respondents would work as his agents. The complainant paid Rs.35,000/- to the respondents in Samastipur in January, 1967 and when in March, 1967, the complainant went to Calcutta, he found that Respondents were doing transport business but he was not shown as proprietor. The complainant paid Rs.35,000/- to the respondents in Samastipur in January, 1967 and when in March, 1967, the complainant went to Calcutta, he found that Respondents were doing transport business but he was not shown as proprietor. Assurances were given by the respondents that once the firm is registered, the complainant would be shown as the proprietor and the respondents had agreed to settle the business accounts in the month of December every year. At one point of time, the complainant asked for refund of money and when the respondents did not comply with the demand of the complainant, complaint petition was filed. Against the order of the learned Magistrate taking cognizance of the offence under Section 420 IPC, the respondents had moved the High Court. The High Court took the view that the case of the complainant was based upon contract and accordingly, quashed the criminal proceedings. The Apex Court took note of the fact that there was nothing in the complaint to show that the respondents had dishonest or fraudulent intention at the time when the complainant parted with the amount of Rs.35,000/- or that the accused induced the complainant to pay Rs.35,000/- by deceiving him or that a representation was made by the respondents to him at or before the time the complainant paid the money to them and that at the time the representation was made, the respondents knew the same to be false and accordingly, dismissed the appeal by upholding the order of the High Court. 12. The facts in Joseph Salvaraja (supra), in a nutshell, are that complainant was an Administrative Officer in “Amaaru Family Education Trust” at Ahmedabad and he had close relationship with one Dharmendra P.Rami alias Lalabhai, who was running business of Siti Cable in Bapi Nagar area at Ahmedabad. He had occasion to watch “GOD TV”, a religious channel, at Hyderabad and was deeply influenced by that channel. He approached Mr. Lalabhai to have that channel in the bouquet of channels offered by him and also contacted the company to allow broadcasting of “GOD TV” in certain areas of Ahmedabad through Siti Cables. Broadcasting of “GOD TV” commenced in certain zones of Ahmedabad. It was stated in the complaint that three cable operators including Mr. Lalabhai had agreed to broadcast “GOD TV” after the Company had agreed to pay a sum of Rs.10 lakhs to Mr. Lalabhai. Broadcasting of “GOD TV” commenced in certain zones of Ahmedabad. It was stated in the complaint that three cable operators including Mr. Lalabhai had agreed to broadcast “GOD TV” after the Company had agreed to pay a sum of Rs.10 lakhs to Mr. Lalabhai. Apparently, the amount was not paid to Mr. Lalabhai and the cable operators, who had started telecasting “GOD TV”, were pressurising the complainant to pay the amount. Some communications ensued between the complainant and the company and subsequently, the company, through a letter dated 18.7.2006, denied all accusations and liabilities. On the aforesaid allegation, an FIR was lodged against the company. The challenge made before the High Court under Section 482 of the Code was negated and the petition was dismissed. On the background of the aforesaid facts, the Apex Court held that the dispute was civil in nature which was given the colour of a criminal offence. Apex Court also opined that on the basis of facts disclosed in the complaint, there was no cheating or a dishonest inducement for the delivery of the property or breach of trust by the appellant and accordingly, quashed the FIR. 13. In Manoranjan Halder (supra), this court had held that the knowledge of the petitioner that he had only a sum of Rs.700/- in the Bank whereas the cheque issued by him on 7.9.1981 was for a sum of Rs.24,500/- by itself does not lead to the inference that he had the dishonest intention of cheating the complainant at the time when he placed the order for supply of the goods or at the time when he accepted the goods. It was held that there should be circumstances showing in a clear way that the accused had such a dishonest intention at the initial stage. 14. The principles that have emerged are that in order to sustain a plea of offence under section 420 IPC, the complaint has to show that the accused had dishonest or fraudulent intention at the time the complainant had parted with the property or that the accused by making a representation at or before the time the complainant had parted with property, deceived the complainant and thereby induced the complainant to deliver property and that the accused knew such representation to be false. It is inbuilt in section 415 IPC that there has to be dishonest intention from the very beginning, which is sine qua non to hold the accused guilty for commission of the said offence. When allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of culpable intention at the time of making initial promise, no offence under section 420 IPC can be said to be made out. 15. It is now time to advert to the complaint petition. It appears from the complaint petition that the petitioner and the complainant had shared a friendly relationship for a long time. The petitioner was in need of Rs.8 lakhs and he requested the complainant to give him a loan for the said amount. Because of the friendship and bonafide need, the complainant advanced the loan to the petitioner on the understanding that loan will be repaid on or before 12.3.2010 and in token of the assurance and promise, the petitioner also issued one cheque for Rs.8 lakhs. The complainant had deposited the cheque after 12.3.2010 and the same came to be dishonoured for insufficiency of fund. The complainant again met the petitioner with a request to refund back the said loan. Though the understanding, when the loan was advanced, was that the loan was required to be repaid on or before 10.3.2010, complainant agreed to accept Rs.50,000/- only per month on instalment basis till the entire loan money was liquidated and to that effect an agreement dated 28.4.2010 was also executed. A sum of Rs.50,000/- was also paid by the petitioner on the date of execution of the said agreement. The averments made in the complaint gives a clear picture that the complainant was aware of the financial predicament of the petitioner and to help his friend in need, he had advanced the loan of Rs.8 lakhs. Even after the cheque was dishonoured, he wanted to give some more breathing time to the petitioner by agreeing to accept Rs.50,000/- per month towards re-payment of the loan. It appears that the petitioner did not harbour any apprehension that the complainant will not pay the amount and that also perhaps explains why he had not initiated proceeding under Negotiable Instruments Act, 1881 and why he had agreed for re-payment of the loan amount on instalment of Rs.50,000/- per month. It appears that the petitioner did not harbour any apprehension that the complainant will not pay the amount and that also perhaps explains why he had not initiated proceeding under Negotiable Instruments Act, 1881 and why he had agreed for re-payment of the loan amount on instalment of Rs.50,000/- per month. As such, no averment or allegation in the complaint was made that there was any fraudulent or dishonest intention on the part of the petitioner at the time of taking of the loan. 16. The complaint petition further alleges that the petitioner refused to pay the balance amount of the loan on 20.11.2011 when the complainant had met the petitioner. The refusal to pay loan amount on 20.11.2011 does not relate back to the point of time when the loan was made available to the petitioner so as to attract the provision of Section 420 IPC. 17. From the averments made in the complaint petition and the initial deposition of the complainant, where the complainant only says that accused did not repay the loan as per promise made despite his many requests and as the accused finally refused to re-pay the loan, he had filed the complaint, it appears to me that the dispute between the parties is purely of civil nature arising out of breach of contract. Subsequent refusal to pay the balance amount does not satisfy the ingredients of cheating inasmuch as dishonest intention at the time of initial transaction is lacking. An offence of cheating would be constituted when the accused had fraudulent or dishonest intention at the time of making promise or representation. The complaint petition is conspicuously silent and there is no statement that the respondent had dishonest or fraudulent intention at the time when the loan was advanced. It is also not the case of the complainant that he was induced to pay the loan to the petitioner as a result of being deceived by the petitioner. 18. In view of the above discussions, no criminal liability can be fastened upon the petitioner under section 420 IPC. Resultantly, this petition is allowed. The impugned order dated 29.2.2012 passed by the learned SDJM(S), Bongaigoan, in Complaint Case No. 268C/11 and the Complaint Case No. 268C/11 pending in the court of SDJM(S), Bongaigaon, are set aside and quashed. No costs.