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2024 DIGILAW 1797 (ALL)

Manoj Kumar Rai Alias Manoj Rai v. State of U. P.

2024-08-01

SAURABH SHYAM SHAMSHERY

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JUDGMENT : Saurabh Shyam Shamshery, J. 1. Heard learned counsel for the applicants and learned AGA for the State. 2. Present application U/S 482 Cr.P.C. has been filed seeking quashing of the charge-sheet dated 26.12.2017, being C.S. No.708 of 2017 as well as the entire proceedings, arising out of Case Crime No.330 of 2017, in its pursuance as Criminal Case No.834 of 2018, State of U.P. Vs. Arvind Pande and others, under Sections 420, 406, 504, 506 IPC, Police Station Deoband, District Saharanpur. 3. In present matter, the applicant and opposite party had commercial transactions even prior to alleged occurrence, supported by documents placed in present application and not substantially denied by complainant in counter affidavit. 4. The FIR lodged by the complainant was essentially based on a dispute arising out of commercial transaction alleging that though product was received by the applicant but due payment of it was not paid despite repeated reminders. The contents of the FIR are substantially corroborated by the statements of the witnesses recorded during investigation. After investigation, a charge-sheet was filed, on which cognizance was taken and the applicants were summoned by the order dated 27.03.2018 to face trial for an offence under Sections 420, 406, 504, 506 IPC. The statement of the complainant, (Basant Kumar) for reference is reproduced hereinbelow:- 5. Sri Amit Daga and Sri Mangalam Pandey, learned counsels for applicants, vehemently submits that on basis of material available, dispute is essentially arising out of a commercial dispute and complainant has tried it to clock a criminal case, though, dispute was essentially a civil dispute and for that civil remedy was the correct approach. They also submits that on basis of statement of complainant, offence under Section 420, 406, 504, 506 IPC would not made out as neither there was any entrustment nor any cheating nor any alarm was raised nor nature of insult was of such nature that complainant would breach peace. 6. In support of above submissions, learned counsels for the applicants have placed reliance on a recent judgment passed by Apex Court in the case of Lalit Chaturvedi Vs. State of Uttar Pradesh and Another 2024 SCC OnLine SC 171 and relevant paragraph thereof is referred hereinbelow:- "....5. 6. In support of above submissions, learned counsels for the applicants have placed reliance on a recent judgment passed by Apex Court in the case of Lalit Chaturvedi Vs. State of Uttar Pradesh and Another 2024 SCC OnLine SC 171 and relevant paragraph thereof is referred hereinbelow:- "....5. This Court, in a number of judgments, has pointed out the clear distinction between a civil wrong in the form of breach of contract, non-payment of money or disregard to and violation of the contractual terms; and a criminal offence under Sections 420 and 406 of the IPC. Repeated judgments of this Court, however, are somehow overlooked, and are not being applied and enforced. We will be referring to these judgments. The impugned judgment dismisses the application filed by the appellants under Section 482 of the Cr.P.C. on the ground of delay/laches and also the factum that the chargesheet had been filed on 12.12.2019. This ground and reason is also not valid. 6. In "Mohammed Ibrahim v. State of Bihar", this Court had referred to Section 420 of the IPC, to observe that in order to constitute an offence under the said section, the following ingredients are to be satisfied:— "18. Let us now examine whether the ingredients of an offence of cheating are made out. The essential ingredients of the offence of "cheating" are as follows: (i) deception of a person either by making a false or misleading representation or by dishonest concealment or by any other act or omission; (ii) fraudulent or dishonest inducement of that person to either deliver any property or to consent to the retention thereof by any person or to intentionally induce that person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived; and (iii) such act or omission causing or is likely to cause damage or harm to that person in body, mind, reputation or property. 19. To constitute an offence under section 420, there should not only be cheating, but as a consequence of such cheating, the accused should have dishonestly induced the person deceived (i) to deliver any property to any person, or (ii) to make, alter or destroy wholly or in part a valuable security (or anything signed or sealed and which is capable of being converted into a valuable security)." 7. Similar elucidation by this Court in "V.Y. Jose v. State of Gujarat", explicitly states that a contractual dispute or breach of contract per se should not lead to initiation of a criminal proceeding. The ingredient of 'cheating', as defined under Section 415 of the IPC, is existence of a fraudulent or dishonest intention of making initial promise or representation thereof, from the very beginning of the formation of contract. Further, in the absence of the averments made in the complaint petition wherefrom the ingredients of the offence can be found out, the High Court should not hesitate to exercise its jurisdiction under Section 482 of the Cr.P.C. Section 482 of the Cr.P.C. saves the inherent power of the High Court, as it serves a salutary purpose viz. a person should not undergo harassment of litigation for a number of years, when no criminal offence is made out. It is one thing to say that a case has been made out for trial and criminal proceedings should not be quashed, but another thing to say that a person must undergo a criminal trial despite the fact that no offence has been made out in the complaint. This Court in V.Y. Jose (supra) placed reliance on several earlier decisions in "Hira Lal Hari Lal Bhagwati v. CBI", "Indian Oil Corporation v. NEPC India Ltd.", "Vir Prakash Sharma v. Anil Kumar Agarwal" and "All Cargo Movers (I) (P) Ltd. v. Dhanesh Badarmal Jain". 9. We will assume that the assertions made in the complaint are correct, but even then, a criminal offence under Section 420 read with Section 415 of the IPC is not established in the absence of deception by making false and misleading representation, dishonest concealment or any other act or omission, or inducement of the complainant to deliver any property at the time of the contract(s) being entered. The ingredients to allege the offence are neither stated nor can be inferred from the averments. A prayer is made to the police for recovery of money from the appellants. The police is to investigate the allegations which discloses a criminal act. Police does not have the power and authority to recover money or act as a civil court for recovery of money. 10. The chargesheet also refers to Section 406 of the IPC, but without pointing out how the ingredients of said section are satisfied. No details and particulars are mentioned. Police does not have the power and authority to recover money or act as a civil court for recovery of money. 10. The chargesheet also refers to Section 406 of the IPC, but without pointing out how the ingredients of said section are satisfied. No details and particulars are mentioned. There are decisions which hold that the same act or transaction cannot result in an offence of cheating and criminal breach of trust simultaneously.10 For the offence of cheating, dishonest intention must exist at the inception of the transaction, whereas, in case of criminal breach of trust there must exist a relationship between the parties whereby one party entrusts another with the property as per law, albeit dishonest intention comes later. In this case entrustment is missing, in fact it is not even alleged. It is a case of sale of goods. The chargesheet does refer to Section 506 of the IPC relying upon the averments in the complaint. However, no details and particulars are given, when and on which date and place the threats were given. Without the said details and particulars, it is apparent to us, that these allegations of threats etc. have been made only with an intent to activate police machinery for recovery of money." 7. Learned AGA has vehemently opposed the above statements that on basis of statements recorded during investigation, element of entrustment was present. Though, it was not seriously disputed that the applicant and complainant has commercial transactions. Opposite party no.2 is represented by Sri Amit Rana, Advocate, who has also supported charge-sheet and summoning order. 8. I have learned counsel for the parties and perused the record. 9. It is well settled that a dispute which is essentially of the commercial nature or civil dispute cannot be given colour of a criminal offence and this has been not only reiterated in Lalit Chaturvedi (supra) but also in A.M. Mohan Vs. State Represented by SHO and another, 2024 SCC OnLine SC 339. 10. In order to appreciate rival submissions, I have carefully perused contents of FIR which are substantially reproduced by complainant in his statement which has already been referred hereinabove. From the above referred statement, it is clearly evident that there was supply of material which was allegedly received by the applicants' company, however, its amount was not paid. 10. In order to appreciate rival submissions, I have carefully perused contents of FIR which are substantially reproduced by complainant in his statement which has already been referred hereinabove. From the above referred statement, it is clearly evident that there was supply of material which was allegedly received by the applicants' company, however, its amount was not paid. The basic requirement to prove the case under Section 420 IPC there must be element of cheating as mentioned in Section 415 IPC and that intent should be from the commencement of the act which does not reflect from the above statement. Since it was a commercial transaction as agreed between the parties, therefore, element of entrustment is also missing. 11. So far as Section 504 and 506 IPC are concerned, the Court takes note of Mohammad Wajid and another vs. State of U.P. and others, 2023 INSC 683 and since in the above statement neither there was any element in regard to raise alarm or intentional insult to the extent that complainant may be provoked to breach peace as well as rightly pointed out by Sri Daga that even nature of insult is not also evident from the statement. 12. In the aforesaid circumstances, I find that facts of the present case and law involved is squarely covers with the judgments in Lalit Chaturvedi (supra) as well A.M. Mohan (supra), therefore, I am of the considered opinion that it is a fit case where inherent power could be invoked since not only ingredients of above referred offences are not present but complainant has tied to give a criminal colour to a dispute which is essentially of a civil nature, accordingly, charge-sheet dated 26.12.2017, arising out of Case Crime No.330 of 2017, cognizance order dated 27.03.2018 as well as summoning order dated 27.03.2018 are hereby quashed and consequently, present application is allowed.