SC and HC Judgments Online at MyNation

Judgments of Supreme Court of India and High Courts

Mukund Das Gujarati And Others vs State Of U.P. And Another on 6 December, 2019

HIGH COURT OF JUDICATURE AT ALLAHABAD

Court No. – 34

Case :- APPLICATION U/S 482 No. – 9417 of 2006

Applicant :- Mukund Das Gujarati And Others

Opposite Party :- State of U.P. and Another

Counsel for Applicant :- R.B. Singh, A.P. Srivastava, B.D. Pandey

Counsel for Opposite Party :- Govt. Advocate, K.K. Singh

Hon’ble Sudhir Agarwal,J.

1. Heard Sri A.P. Srivastava, learned counsel for applicants and learned AGA for State of U.P.

2. Applicants have invoked jurisdiction of this Court under Section 482 of Code of Criminal Procedure, 1973 (hereinafter referred to as “SectionCr.P.C.”) with a prayer to quash summoning order dated 08.12.2005 and 31.07.2006 as well as further proceedings of Complaint Case No. 1050 of 2004, under Sections 420, Section406, Section467, Section468, Section471, Section120-B IPC, Police Station Kotwali, District Varanasi, pending in the Court of Chief Judicial Magistrate, Varanasi.

3. A perusal of complaint shows that no offence under Sections 420, Section406, Section467, Section468, Section471, Section120-B IPC is made out, inasmuch as, complaint is basically with regard to non-accounting of shares in the partnership business and the liability in partnership business are joint and several, therefore, present dispute is with regard to apportionment of shares and does not amount to transfer of money from one person to another, hence, aforesaid sections are not at all attracted in the case in hand and entire proceedings are vitiated in law.

4. Section 420 is “cheating” which is defined in Section 415 and both these provisions read as under:

“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.”

“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.”

5. In order to attract allegations of “cheating”, following things must exist:

(i) deception of a person;

(ii) (A) fraudulent or dishonest inducement of that person,

(a) to deliver any property to any person; or,

(b) to consent that any person shall retain any property,

(B) intentional inducing that person to do or omit to do any thing,

(a) which he would not do or omit if he was not so deceived, and,

(b) such act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. (Emphasis added)

6. Then in order to attract Section 420 I.P.C., essential ingredients are:

(i) cheating;

(ii) dishonest inducement to deliver property or to make or destroy any valuable security or any thing which is sealed or signed or is capable of being converted into a valuable security; and,

(iii) mens rea of accused at the time of making inducement and which act of omission.

7. In Mahadeo Prasad Vs. State of West Bengal, AIR 1954 SC 724 it was observed that to constitute offence of cheating, intention to deceive should be in existence at the time when inducement was offered.

8. In Jaswantrai Manilal Akhaney Vs. State of Bombay, AIR 1956 SC 575, Court said that a guilty intention is an essential ingredient of the offence of cheating. For the offence of cheating, “mens rea” on the part of that person, must be established.

9. In G.V. Rao Vs. L.H.V. Prasad and others, 2000(3) SCC 693, Court said that Section 415 has two parts. While in the first part, the person must “dishonestly” or “fraudulently” induce the complainant to deliver any property and in the second part the person should intentionally induce the complainant to do or omit to do a thing. In other words in the first part, inducement must be dishonest or fraudulent while in the second part, inducement should be intentional.

10. In Hridaya Ranjan Prasad Verma and others Vs. State of Bihar and another, 2000(4) SCC 168 Court said that in the definition of ‘cheating’, 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, inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest. It was pointed out that there is a fine distinction between mere breach of contract and the offence of cheating. It depends upon the intention of 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. In order to hold a person guilty of cheating it would be obligatory to show that he had fraudulent or dishonest intention at the time of making the promise. Mere failure to keep up promise subsequently such a culpable intention right at the beginning, i.e, when he made the promise cannot be presumed.

11. In S.W. Palanitkar and others Vs. State of Bihar and another, 2002(1) SCC 241, while examining the ingredients of Section 415 IPC, the aforesaid authorities were followed.

12. In Hira Lal Hari lal Bhagwati Vs. CBI, New Delhi, 2003(5) SCC 257, Court said that to hold a person guilty of cheating under Section 415 IPC it is necessary to show that he has fraudulent or dishonest intention at the time of making promise with an intention to retain property. The Court further said:

“Section 415 of the Indian Penal Code which defines cheating, requires deception of any person (a) inducing that person to: (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, anybody’s mind, reputation or property. In view of the aforesaid provisions, the appellants state that person 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.” (Emphasis added)

13. In Devender Kumar Singla Vs. Baldev Krishan Singh 2004 (2) JT 539 (SC), it was held that making of a false representation is one of the ingredients of offence of cheating.

14. In Indian Oil Corporation Vs. NEPC India Ltd., 2006(6) SCC 736 in similar circumstances of advancement of loan against hypothecation, the complainant relied on Illustrations (f) and (g) to Section 415, which read as under:

“(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money, A not intending to repay it. A cheats.”

“(g). A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contact and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract.”

15. Court said that crux of the postulate is intention of the person who induces victim of his representation and not the nature of the transaction which would become decisive in discerning whether there was commission of offence or not. Court also referred to its earlier decisions in Rajesh Bajaj Vs. State NCT of Delhi, 1999(3) SCC 259 and held that it is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent.

16. In Vir Prakash Sharma Vs. Anil Kumar Agarwal and another, 2007(7) SCC 373 it was held that if no act of inducement on the part of accused is alleged and no allegation is made in the complaint that there was any intention to cheat from the very inception, the requirement of Section 415 read with Section 420 IPC would not be satisfied. The Court relied on the earlier decisions in Hridaya Ranjan Prasad Verma (supra) and Indian Oil Corporation Vs. NEPC India Ltd.(supra).

17. The aforesaid authorities have been referred to and relied on in reference to offence under Section 420 I.P.C. by a Division Bench of this Court in which one of us (Hon’ble Sudhir Agarwal, J.) was also a member in Sh. Suneel Galgotia and another Vs. State of U.P. and others 2016 (92) ACC 40.

18. Similarly, Section 406 I.P.C. also I do not find is attracted in the case in hand. It talks of punishment for “criminal breach of trust” which is defined in Section 405 I.P.C. and both these provisions read as under:

“405. Criminal breach of trust.

Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits “criminal breach of trust”.

Explanation 1.– A person, being an employer of an estab­lishment whether exempted under Sectionsection 17 of the Employees’ Provident Funds and SectionMiscellaneous Provisions Act, 1952 (19 of 1952), or not, who deducts the employee’s contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

Explanation 2.– A person, being an employer, who deducts the employees’ contribution from the wages payable to the employee for credit to the Employees’ State Insurance Fund held and admin­istered by the Employees’ State Insurance Corporation established under the Employees’ SectionState Insurance Act, 1948, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.”

“406. Punishment for criminal breach of trust.

Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.”

19. “Criminal breach of trust” talks of entrustment of property and dishonest misappropriation or conversion thereof for own use or dishonest use or disposal of property in violation of any direction of law prescribing mode in which property in which such trust is to be discharged, or of any legal contract by a person who has contravened the said provision.

20. Next provisions under which cognizance has been taken by Magistrate are Sections 467 and Section471 IPC.

21. Section 467 IPC deals with forgery of valuable security, will, etc. and reads as under:-

“467. Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with 1[imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine”.

22. The essential ingredients of Section 467 IPC as is evident from a bare perusal of above provision are:-

(i) accused has committed forgery;

(ii) such forgery was committed in relation to a document which purports to be;

(a) valuable security; or

(b) a will; or

(c) an authority to adopt a son; or

(d) which purports to give authority to any person to make or transfer any valuable security; or

(e) to receive the principal, interest or dividends thereon; or

(f) to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money; or

(g) an acquittance or receipt for the delivery of any movable property or valuable security.

23. In order to bring an offence under Section 467 IPC, all above ingredients must be pleaded but I do not find that the same stand satisfied.

24. Section 471 IPC talks of use of forged document and reads as under:-

“471. Whoever fraudulently or dishonestly uses as genuine any [document or electronic record] which he knows or has reason to believe to be a forged [document or electronic record], shall be punished in the same manner as if he had forged such [document or electronic record].”

25 Since the substantive offences are not made out, Section 120-B IPC is also not attracted.

26. In view of discussions made hereinabove and considering the allegations contained in the complaint in the case in hand in the light of above authorities, the impugned order cannot be sustained.

27. The application is allowed. Impugned summoning order dated 08.12.2005 and 31.07.2006 as well as further proceedings of Complaint Case No. 1050 of 2004, under Sections 420, Section406, Section467, Section468, Section471, Section120-B IPC, Police Station Kotwali, District Varanasi, pending in the Court of Chief Judicial Magistrate, Varanasi are hereby quashed.

Order Date :- 6.12.2019

Siddhant Sahu

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *


Not found ...? HOW TO WIN 498a, DV, DIVORCE; Search in Above link

All Law documents and Judgment copies
Laws and Bare Acts of India
Landmark SC/HC Judgements
Rules and Regulations of India.

STUDY REPORTS

Copyright © 2021 SC and HC Judgments Online at MyNation
×

Free Legal Help, Just WhatsApp Away

MyNation HELP line

We are Not Lawyers, but No Lawyer will give you Advice like We do

Please read Group Rules – CLICK HERE, If You agree then Please Register CLICK HERE and after registration  JOIN WELCOME GROUP HERE

We handle Women Centric biased laws like False Sectioin 498A IPC, Domestic Violence(DV ACT), Divorce, Maintenance, Alimony, Child Custody, HMA 24, 125 CrPc, 307, 312, 313, 323, 354, 376, 377, 406, 420, 497, 506, 509; TEP, RTI and many more…

MyNation FoundationMyNation FoundationMyNation Foundation