The High Court · 2025

The State of Telangana, Rep. by its Public Prosecutor, High Court Buildings, Hyderabad Beranki Suresh, S/o Rama Murthy, aged UU ,"rr., lll:::ti:::; Employee, Flat No. 102, Shubhadarshini Residency, Nayeemnagar, Hanamkonda District ...RespondenUQuash Petitioner Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim orders Dt: 0210312022 passed in Crl.P.No.1B95 oI 2022. This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri V Ravi Kiran Rao, Senior Counsel representing Sri V Rohith, Advocate for the Petitioner and Smt S.Madhavi, Assistant Public Prosecutor on behalf of the Respondent No.1 and of Sri A.Gangadhar, Advocate for the Respondent No.2. The Court made the following: ORDER THE HONOURABLE SMT JUSTICE JUVVADI SRIDEVI CRIMINAL PETITION No.1895 OF 2022 ORDER: This Criminal Petition is filed by the petitioner- accused No.2 seeking to quash the proceedings against him in FIR/Crime No.36 of 2022 on the file of the Station House Officer, Vemulawada (T) Police Station, Rajanna- Sircilla District, registered for the offence under Section 420 of the lndian Penal Code (for short 'lPC').

02. l'leard Sri V. Ravi Kiran Rao, learned Senior Counsel representing Sri V. Rohith, learned counsel for the petitioner-accused No 2 and Smt.S.lVadhavi, learned Assistant Public Prosecutor for the State-respondent No.1 as well as Sri A.Gangadhar, learned counsel for the unofficial respondent No.2. Perused the record. 03(a). ln brief, the case of the prosecution is that the accused No.1 approached the father of respondent No.2 late Moturi Shankaraiah, in August 20'18 and requested a hand loan of Rs.6,00,0001, undertaking to repay the same with interest at the rate of 24o/o per annum until full 2 realization, for his personal and family needs. Respondent No.2 who was present at that time, alleged that his father agreed to extend the loan on the condition th::t the accused shall furnrsh a government employee a:; surety and provides collateral security. ln fulfillment of these conditions, the accused No.1 executed an assurance agreement dated 13.08.2018 in the presence of witnesses, and received the said amount fronr late Moturi Shankaraiah, pledging the original Pattedar' Passbook of Badhineni Balaiah and furnishing the personal sureties of petitioner-accused No.2 and the accused No.3 as guarantors on the promissory note and agreement. 03(b). Despite repeated requests, panicularly during the COVID-19 pandemic when late Moturi Shankaraiah was hospitalized and incurred substantial medical expenses, the accused No.1 failed to repay the loan. Following his demise on 09.05.2021, the respondent No.2 approached the accused Nos.l to 3 for repayment. However, the accused persons, acting in collusion with each other, have deliberately evaded repayment by giving false assurances and avoiding communication. Hence, the 3 respondent No.2 requested for necessary action against the accused Nos,1 to 3.

04. Learned counsel for the petitioner submits that the petitioner.accused No.2 has no involvement whatsoever in the alleged offence. lt is contended that there is no dishonest or fraudulent intention attributable to the petitioner-accused No.2 from the inception of the transaction. The petitioner-accused No.2 is merely a witness to the promissory note and did not stand as a guarantor for the loan availed by accused No.'l . lt is further submitted that there is no incriminating material on record to substantiate the allegations against the petitioner- accused No.2. The dispute, if any, is purely civil in nature, and the respondent No.2 is attempting to give a criminal colour to a civil dispute. The contents of the FIR do not disclose the necessary and essential ingredients required to constitute the offence of cheating under Section 420 of the lPC.

05. With the above submissions, learned counsel for the petitioner-accused No.2 while praying for the quashment of criminal proceedings relied upon a decision 4 of the Honourable Supreme Court in A.M.Mohan v. Sfate represented by SHO1 , wherein it was held at Paragraph Nos.9(Sub-Para13), 1 1(Sub-Para17), 19 that "9. 13 While on thrs lssue, lt ls nece..rsary to take notice of a growing tendency in buslness circles to convert purely civil dist'utes into criminal cases. Ihls is obviousll on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the nferesl-s of lenders/creditors. Such a tendency ls .set:n ln several family dr'sputes a/so, leadingr to irretrievable breakdown of marriages/faniilies. There is also an impression that if a pe'rson could somehow be entangled in a crrninal prosecution, there is a likelihood of imntinent settlement. Any effori fo selt/e civil distrtutes and claims, which do not involve any critninal offence, by applying pressure through cruninal prosecution should be deprecated and discouraged. ln G. Sagar Suri v. State of U.P. [(2000) 2 SCC 636 : 2000 SCC (Cri) 5131 this Court observed (SCC p. 643, para B) '/l ls to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before lssuing process a criminal couft has to exercise a great deal of caution. For the accused il is a serious matter. This Court has laid certain pinciples on the basis of which the High Coutt ls to exercrse its jurisdiction under Sectior, 482 of the Code. Juisdiction under this sectiorr has to be exercised to prevent abuse ol the r AIR 2024 SC (CRIMINAL) 623 I 7 7 5 process of any court or otherwise to secure the ends of justice.

11......17. A fraudulent or dishonest inducement is an essenfra I ingredient of the offence. A person who dishonestly induces another person to deliver any property is liable for the offence of cheating.

19. At the cost of repetition, it has to be noted that no role of inducement at all has been attributed to the present appellant. Rather, from the perusal of the FIR and the charge- sheel, 11 would reveal that there was no transactiort of any nature directly between the appellant and the complainant. The version, if accepted at its face value, would reveal that, at the instance of accused No. 1, the complainant transferred the amount of Rs.20,00,000/- in the account of the appellant. On receipt of the said amount. the appellant immediately executed the sale deed in favour of accused No.1 , who thereafter executed the GPA in favour of the complainant. After that, no role is attributed to the present appellant and whatever happened thereafter, has happened between accused No. 1, the complainant and the other accused persons. ln that view of the matter, we find that the FIR or the charge-sheet, even if taken at its face value, does not dlsc/ose the ingredients to attract the provision of Section 420 of IPC qua the appellant."

06. On the other hand. learned Assistant Public Prosecutor appearing for the State-respondent No.1 as well as learned counsel for the unofficial respondent No.2 contended that there are triable issues and factual aspects 6 to be examined by the learned trial Court and it is not a fit case to quash the proceedings against the pertitioner at this juncture and the matter is to be decided afler conducting trial by the learned trial Court and prayed to dismiss this Crinrinal Petition

07. Having regard to the submissi,:ns made on either side and upon perusal of the material available on record, it is evident that there existed a loan transaction between the father of respondent No.2 and .rccused No.1 It is an admitted fact that accused No' executed a promissory note and an agreement dated 13.08.2018 in respect of the said loan. Subsequently, the father of respondent No.2 passed away, and it is alleged that, despite repeated demands, the loan amount has not been repaid. The only allegation against the petit oner-accused No.2 is that he stood as a guarantor for the said loan transaction and, in collusion with the other accused, has been willfully avoiding repayment of the said .amount

08. ln order to attract the provisions of Section 420 of the lPC, it is a well-settled principle of law that there must be a dishonest or fraudulent intention to deceive the \ 7 complainant right from the inception of the transaction. Upon a meticulous examlnation of the promissory note and agreement dated 13 08.20'18, it is evident that the petitioner-accused No.2 has merely subscribed his name and affixed his signature as the'second witness'to the said documents. Nowhere in the said promissory note or agreement, was the petitioner-accused No.2 shown to have undertaken any obligation or assumed the role of a 'guarantor' in respect of the loan transaction between late lVloturi Shankaraiah i.e. the father of respondent No.2 and the accused No.1 . There is, therefore, no material to suggest that any act of inducement or fraudulent intent can be attributed to the petitioner-accused No.2.

09. ln that view of the matter, a plain reading of the FIR contents reveals that there was no direct transaction of any nature between the father of the respondent No.2 and the petitioner-accused No.2. ln such circumstances, even if the contents of the FIR are taken at their face value, they do not disclose the essential ingredients necessary to attract the offence under Section 420 IPC insofar as the petitioner-accused No.2 is concerned.

10. ln Stafe of Haryana and others v. Ch.Bhajan Lal and others2 the Hon'ble Supreme Court of lndia held that. ''ln the exercise of the extra-ordinary power under Article 226 or the inherent powers under Section 482 of the Code of Criminal Procedure, the following categories of cases are given by way of illustration wherein such power could be exercised either to prevent abuse ol the process of any Couri or otherwise to st>cure the ends of justice, though it may nc't be posslb/e to lay down any precise, ciearly defined and sufficiently channelised and inflexible guide myiad kinds of cases w,herein such power should be exercised: (l) where the allegations made in the First lnformation Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused; (Z where the allegations in the First lnformation Repoft and other materials, i' any, accompanying the F.l.R. do not disclc'se a cognizable offence, justifying an investigation by police officers under Seclion 1 56(1) of the Code except under an order of a MaEstrate within the puNiew of Section 155(2) of the Code; (!) where the uncontroverted allegations made in the FIR or 'complaint ancl the evidence collected in support of the same ' 1992 SCC (SUPP) .1 335 I do not disc/ose the commission of any offence and make ouf a case against the accused; (!) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Sectlon 155(2) of the Code; (!) where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused; (9) where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and c,tntinuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party; (!) where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

11. ln the present case, as discussed hereinabove, it is evident from the material on record that the petitioner- accused No.2 merely signed as a 'witness' and not as a 'guarantor' to the loan transaction between the father of 10 .! respondent No.2 and the accused No.1. There is no elenrent of cheating or fraudulent intention attributable to the petitioner-accused No.2. The FIR is conspicuously silent regarding any specific role, overt act, or involvement of the petitioner-accused No.2 in the alleged offence. The principal allegations pertain solely to the accused No.1 Even if the allegations in the FIR are taken at their face value and accepted in their entirety, they do not prima facie disclose the commission of any offence against the petitioner-accused No.2. Therefore, the present case falls within the parameters of point Nos.1 and 3 of Ch.Bhajan Lal's case cited supra

12. ln view of the aforementioned facts and circumstances and having regard to the well-settled principles of law enunciated by the Honourable Supreme Court in the decisions referred supra, this Court is of the considered view that the essential ingredients necessary to constrtute the offence under Section 420 c'f IPC are not made out against the petitioner-accused No.2. Hence, the continuation of the criminal proceedings against the 11 petitioner-accused No.2 amounts to sheer abuse of process of law and the same are liable to be quashed. '13. Accordingly, this Criminal petition is allowed and the criminar proceedings against the petitioner_accused No.2 in FIR/Crime No.36 of 2022 on the fite of the Station House Officer, Vemulawada (T) police Station, Rajanna_ Sircilla District, are hereby quashed. As a sequel, pending miscellaneous applications, if any, shall stand closed I SD/- L.VIJAYA LAXMI AS STANT REGISTRAR //TRUE COPY// ECTION OFFICER One Fair Copy to the Hon'ble Smt. Justice Juvvadi Sridevi (For Her Ladyships kind Perusal) To,

1. The Judicial First Class Magistrate, Vemulawada 2. The Station House Officer, Vemulawada (T) Police Station, Rajanna Sircilla 3. 11 LR Copies 4. The Under Secretary, Union of lndia, Ministry of Law, Justice and Company Affairs, New Delhi

5. The Secretary, Advocates Association Library, High Court for the State of Telangana, High Court Buildings at Hyderabad

6. Two CCs to Public Prosecutor, High Court for the State of Telangana at Hyderabad [OUT]

7. One CC to Sri V Rohith, Advocate [OPUC] B. One CC to Sri A.Gangadhar, Advocate IOPUC] 9. Two CD Copies grO I t' ,*-'i;;;;\-_..- - (,. ;t\ /;/rJ io 21[tI 2ffi la) j.\ -\" t)FS,-,r TCt\ HIGH COURT DATED: 2510712025 ORDER CRLP.No.1895 of 2022 t ALLOWING THE CRIMINAL PETITION a\ It >i e3 I i I I