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2019 DIGILAW 938 (GAU)

Indrajit Das v. State of Assam

2019-08-27

RUMI KUMARI PHUKAN

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JUDGMENT : Rumi Kumari Phukan, J. Heard Mr. SC Biswas, learned counsel appearing for and on behalf of the petitioner as well as Mr. M.H. Rajbarbhuiyan, learned counsel representing the respondent. 2. By way of this present application, the petitioner has sought for quashing of the complaint case No.744/2013 pending before the learned Additional CJM, Karimganj taking cognizance under Section 406/420/506 of IPC. 3. The case in brief of the petitioner, is that that the respondent No.2 /Ujjal Kanti Chanda, who was his business associate has filed the aforesaid complaint case on 05.02.2013 before the learned CJM, Karimganj alleging that on the approach made by the petitioner to set up a sub-service centre at Karimganj under his authorized service centre namely, M/s Global Technologies and his assurance that he has the authority to set up such sub-service centre, the complainant respondent provided him Rs.2,17,000/- as asked by the petitioner to be required for providing tools and machineries etc.. The complainant accordingly started Samsung sub-service centre by entering into a bilateral agreement dated 01.04.2012, whereby the petitioner made the complainant a SIS Service Provider entrusting the complainant to provide repairing service of mobile phones. It is stated that no receipt was provided against such payment. However, after receipt of the said amount, the accused visited the shop house of the complainant and provided requisite tools, software, signboard etc. necessary for running the said Samsung service centre, in the name and style of M/s Smile Concept. It is further alleged in the complaint petition that the complainant rendered required service to more than 2000 warranty set of the said brand and duly submitted his warranty claims to the petitioner for payment for his service charge as per company norms and initially 2/3 months the accused paid meager amount to the complainant by way of adjustment to the spare parts purchased by the complainant assuring that rest of the service charge would be paid later on. On several occasions, on demand for payment, the accused did not make any payment on different pretext thus, outstanding amount of Rs.2,25,000/- remained unpaid. 4. Thus, it is alleged that the accused with ill motive has totally stopped making any payment and cooperation and restrained him from supplying spare parts to the complainant, as a result of which, business of the complainant has been hampered. 4. Thus, it is alleged that the accused with ill motive has totally stopped making any payment and cooperation and restrained him from supplying spare parts to the complainant, as a result of which, business of the complainant has been hampered. As the accused (petitioner) did not pay heed to the claim of the complainant (respondent), he also served a Legal Notice upon the petitioner on 13.05.2013 and subsequent thereto, the accused petition has sent a termination notice dated 31.05.2013. Hence, it is the allegation of the complainant that the accused has intentionally and deliberately committed the illegal act with dishonest intention with a view to misappropriate the entrusted amount, in violation of discharging contractual obligation. 5. On the basis of the aforesaid complaint, the learned trial court took cognizance of the offence u/s 406/420/506 IPC against the accused person (present petition herein) by its order dated 25.07.2013. Challenging the aforesaid order of cognizance and the entire proceeding present petition has been preferred. 6. Learned counsel for the petitioner, Mr. Biswas has vehemently contended that the cognizance taken by the learned trial court is bad in law inasmuch as the entire episode revealed by the complainant that the transaction between the parties is based on bilateral agreement and termination notice was also served upon the complainant for non-compliance of the condition of the agreement and the matter may have a civil profile in view of violation of conditions of agreement but it cannot be a subject matter of criminal offence like breach of trust and cheating etc. The learned counsel has led this Court towards the averment made in the complaint petition to submit that complaint case was filed with oblique motive to compel the petitioner to bow down before him and the petitioner is no way liable for any criminal offence. It is submitted that the petitioner still have efficacious alternative civil remedy for getting compensation etc. for violation of condition of agreement, if any but continuance of criminal proceeding would cause prejudice to the petitioner and the same is liable to be set aside and quashed. 7. Per contra, learned counsel for the respondent/complainant Mr. It is submitted that the petitioner still have efficacious alternative civil remedy for getting compensation etc. for violation of condition of agreement, if any but continuance of criminal proceeding would cause prejudice to the petitioner and the same is liable to be set aside and quashed. 7. Per contra, learned counsel for the respondent/complainant Mr. Rajbarbhuiya submitted that although the matter has a civil profile but still the conduct of the present petitioner to the entire episode reveals that he has no intention to carry out the agreement between the parties and has misappropriated the amount taken by him without returning the same on repeated demand. Subsequent conduct of the petitioner to evade due payment to the complainant on different pretext indicative of fact that he has no intention to repay the amount and as such, criminal liability of the petitioner cannot be denuded. It is contended that there is no bar to proceed with the criminal trial despite having a civil profile on the same subject. 8. The learned counsel for the petitioner has placed reliance on the decisions of the Hon'ble Apex Court in (Hridaya Ranjan Pd. Verma and others vs. State of Bihar and another, (2000) 4 SCC 168 ), (Sri Debabrata Phukan vs. State of Assam, (2014) 3 GauLR 132 ) and (Sumi Gupta vs. Anil Trilok Nath Sarma and others, (2008) 11 SCC 670 ) and submitted that there is a distinction between breach of contract and the offence of cheating. It is contended that mere breach of contract cannot raise to criminal prosecution for cheating unless fraudulent or dishonest is shown right at the beginning of the transaction i.e. at the time when the offence is said to have been committed. 9. Referring to the averments in the complaint petition, it has been submitted by the learned counsel for the petitioner that the complaint does not disclose any dishonest intention of the petitioner at the beginning of transaction as the parties being intimate to each other entered into a written agreement voluntarily without any inducement on the part of the petitioner. 9. Referring to the averments in the complaint petition, it has been submitted by the learned counsel for the petitioner that the complaint does not disclose any dishonest intention of the petitioner at the beginning of transaction as the parties being intimate to each other entered into a written agreement voluntarily without any inducement on the part of the petitioner. Further, it also shows that the petitioner used to provide requisite parts to the complainant to run his shop and also made some payment to the complaint so his subsequent conduct also reveals that the petitioner adhered to the terms of the agreement but ultimately, termination notice was served on the certain conditions, which cannot amount to any criminal offence as has been alleged. Therefore, it is stated that the core condition of dishonest intention in order to deceive the complainant is not made out even accepting all the averments in the complaint petition on the face value. 10. Learned counsel for the respondent referring to the decisions of (Md. Saquie Vs. Rohinidhar Baruah,1997 3 GauLT 398) , (Mahesh Chandra Sarma vs. Umashankar Mishra, 1997 3 GauLT 183 ) and (Abdul Rahaman Sheikh vs. Mukut Bhattacharjee, 2012 1 GauLT 485 ), it has been submitted that supervisory of the High Court u/s 482 CrPC should be exercised with care and caution and High Court should be circumspect to quash a criminal proceeding at the stage of taking cognizance. 11. Due consideration is given to the rival contention of the parties as well as the legal pronouncement as above as well as gone through the LCR and other related documents. 12. So far as the case of the complainant/respondent is concerned, it is obvious that the entire transaction between the parties run into after entering into a bilateral agreement between the parties. Pursuant to the agreement, the petitioner continued to provide support to the complaint in his business and make some payment towards the claim of the complainant. On a reading of the complaint petition, which has been referred above, reveals that there was a good relation between the parties as a result of which the agreement was entered into. That being so, the ingredients of offence of Section 420 IPC will not come into play. 13. On a reading of the complaint petition, which has been referred above, reveals that there was a good relation between the parties as a result of which the agreement was entered into. That being so, the ingredients of offence of Section 420 IPC will not come into play. 13. Offence of 'cheating' read as follows: Section 420 of Indian Penal Code (IPC) provides that whoever cheats and thereby dishonestly induces the person deceived 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. The offence 'cheating' is proceeded under criminal law. In S.W. Palanitkar V. State of Bihar,2001 10 TMI 1150 - SUPREME COURT, the Supreme Court held that in order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating. In Anil Mahajan V. Bhor Industries Limited, (2005) 10 SCC 228 , the Supreme Court held that a distinction has to be kept in mind between mere breach of contract and the offence of cheating. The subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent, dishonest intention is shown at the beginning of the transaction. The Supreme Court held that the substance of the complaint is to be seen. Mere use of the expression 'cheating' in the complaint is of no consequence. Except mention of the words 'deceive' and 'cheat' in the complaint filed before the Magistrate and 'cheating' in the complaint filed before the police, there is no averment about the deceit, cheating or fraudulent intention of the accused at the time of entering into MoU wherefrom it can be inferred that the accused had the intention to deceive the complainant to pay. The breach of contract will always lies in a civil court." 14. The breach of contract will always lies in a civil court." 14. In a case reported in (International Advanced Research Centre for Powder Megallurgy and New Materials (ARCI) and others vs. Nirma Cerglass Technics (P) Ltd. and others, (2015) 10 SCALE 136 , it has been held as under: "The making of a false representation is one of the essential ingredients to constitute the offence of cheating under Section 420 IPC. In order to bring a case for the offence of cheating, it is not merely sufficient to prove that a false representation had been made, but, it is further necessary to prove that the representation was false to the knowledge of the accused and was made in order to deceive the complainant. Distinction between mere breach of contract and the cheating would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the very time when he made a promise and entered into a transaction with the complainant to part with his property or money, then the liability is criminal and the accused is guilty of the offence of cheating. On the other hand, if all that is established that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a civil court. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown at the beginning of the transaction." 15. In Hriday Ranjan (supra), the Hon'ble Apex Court in para-13 & 14, 15 and 16 held as follows: "13. Cheating is defined in Section 415 of the Code as, "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. Explanation - A dishonest concealment of facts is a deception within the meaning of this section. 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. 14. 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. 15. 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 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 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. 16. 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." "The Hon'ble Supreme Court pointed out the distinction between the breach of contract and the cheating. 16. 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." "The Hon'ble Supreme Court pointed out the distinction between the breach of contract and the cheating. The Supreme Court held that the distinction would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the very time when he made a promise and entered into a transaction with the complainant to part with his property or money, then the liability is criminal. The accused is guilty of the offence of cheating. If it is established that a representation made by the accused has subsequently not kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a civil court." 16. The court exercising its inherent jurisdiction must examine even if on the face value, the averments made in the complaint constitutes the ingredients necessary for the offence. The condition necessary for an act to constitute an offence under Section 405 of IPC punishable under Section 406 IPC, it is to be proved that the accused entrusted with some property or has dominion over the property. In the present case, it is not the case of the respondent that the accused was entrusted with any sort of property and the amount paid under any agreement cannot be stated as an entrustment. 17. In the case (Satishchandra Ratanlal Shah vs. State of Gujarat and others, 2019 3 SCALE 298 ), on the similar point has been reiterated that any breach of promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 IPC without there being any clear case of entrustment. The mere inability of the accused to return the loan amount could not give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. 18. The mere inability of the accused to return the loan amount could not give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. 18. On the touchstone of the principles laid down above, the present case in my considered view warrant interference inasmuch as the ingredients of cheating punishable u/s 420 IPC and offence u/s 406/506 IPC has not been made out. That being the position, the first category of cases enumerated in the State of Harayana and others vs. Bhajan Lal, (1992) Supp1 SCC 335, which mandates that the inherent power u/s 482 CrPC can be exercised, where the allegation made in the FIR/complaint even if taken at their face value and accepted in their entirety do not prima face constitute an offence or make out a case against the accused persons. Further, it is to be noted in the present case that the complainant along with the complaint petition has not submitted the entire agreement copy, but has submitted only one page of agreement which did not reflect the terms and conditions of the agreement, which is a suppression of material fact. It can be inferred that the criminal proceeding has been initiated without valid ground whereas he has efficacious civil remedy to realize the compensation/damage, if any, for violation of conditions of agreement and challenging the termination of the agreement. 19. There is a general tendency in a section of people to file criminal case, which is a purely civil dispute, with the prevalent impression that criminal proceeding will serve their purpose as civil remedies are time consuming and do not adequately protect their interest. There is also an impression that if a person is anyhow entangled with criminal prosecution, there is likelihood of early settlement. 20. In the given criminal proceeding without there being any basic ingredient of criminal offence would be nothing but abuse of process of law and liable to be interfered with the same. 21. Resultantly, entire proceedings pertaining to C.R. Case No. 744/2013 pending before the court of learned Addl. Chief Judicial Magistrate, Karimganj under Sections 420/406/506 of IPC, is hereby quashed and set aside. 22. Return back the LCR.