V. Y. Jose and another v. State of Gujarat and another r

Order

This Crirninal Petition has been hled r.ndcr Section 482 of the Code of Criminal Procedure, 1973, by the pctitioner/ accused seeking to qr-rash the proceedings in C.C.No.944 of 2015 on the frle of the XXIII Metropolitan Magistrate. Cyberabad at Rajcndranzrgar, Ranga Reddy District, for tl-re olfence under Section 42O of thc Indian Penal Code, 186O (for short, 'the IPC').

2. Brief facts of the case: Respondent No.2 / de facto cornplainant filed a complaint stating that it is a reputed construction cornpany engaged in scveral dcvelopmcnt projccts in Hyderabad and Sccunderabad. One such vcnture, styled as "The Trails", rvas undertaken at Pokalwada Villagc, lRa.jencl ranagar Mandal, Ranga Rcddy District, consisting of about 63 villas. Out of these, 31 villas fell to his share r-rnder devclopment agreements with the landowners. Thereafter, the pctitioner approached him seeking to purchase Villa No.4O in thc said project. Accordingly, an Agreernent of SaIe dated 2a.Ol.2O1O was executed for a consideration of Rs.1,1O,OO,OOO/-, together with a Construction Agreernent on the same day for Rs. 65,00,O00/ -. Later, a Supplementar5r Agreernent dated 24.O5.2O 1O was entered into, whereby the petitioner agrcccl to pay :rn additiona-l Rs.71,OO,OOO/- towards 2 interiors and arnenities. DesPi non-payment of the entire agreed consideration, tre comPlet d the construction work. The petltloner issued three post-dated cheques for Rs.85,1 1,32O / - along with a cove ng ietter dated 27.O9.2O1O, on which, he executed a registered S e Deed dated 29 .O9 .2O 10 and d.eU.vered possession of Villa No. 4 . One of the cheques when he presented in the bank, the sam was dishonoured and on the request of the Petitioner, he Thereafter, by an Agreernent da acknowledged liabilitY of Rs.85, cheques and part PaYrnent of R thheld the remaining ts'o ed 27.04.2012, the Petitioner 1,32o- / - and issued six fresh .IO,OO,OOO/- in cash. These cheques too were dishonoured. Subsequently, under a Ietter dated 07.72.2012, two fi'rrt er cheques amounLing to Rs.76,22,673f - were isstred with an undertaking that in case of dishonour, he will be entitled to epossess the villa and Procecd lega1ly. On presentation, both these cheques were returned unpaid. A legal notice dated 29.

4.2013 was then issued, whicLr ttre petitioner denied bY waY reP dated 22.05.2O 1 3. Thereafter, he lodged a comPlaint leading to registration of Crime No. 487 of 2013 trnder Section 42O IPC at police, after investigation, Raidurgam Police Station. The hnal report oPining that the rnatter was ciwil in nature. Aggri ed, he fited a Protest Petition, resnlting in C.C.No.944 of 2015. In the meantirre, during efforts of settlement, the Petitioner a ed to pay Rs.99,46,000/- and J executed an unregistered Mortgage Deed dated 12.O9.2O13 mortgaging Ac. 1.OO of land in Sy- No. 86 of Mokila Village, as security for repayment. It was agreed that the said amor_rnt would be cleared by 30.1 1.2073, failing which interest at 3%o per month v,,ould be payable. On verification, he cliscovered that the mortgaged property was already pledged earlier to the State Bank of Hyderabad, thereby giving rise to the allegation of dor.rble mortgage and delibcrate cheating.

3. Heard Mr. B. Venkateshwar Rao, learned counsel, rcpresenting Mrs. Anuraclha Cherukuri, learncd counsel for tl-re petitioner, Mr. G. Ashok Reddy, learned counsel for respondent No.2 and learned Assistant Public Prosecutor, appearing for respondent No. 1-State.

4. Subrnissions of learned counsel for the petitio,rer:

4.1. Learned counsel for tLre petitioner submitted that the petitioner has not committed any offence and the ingredients under Section 42O of the IPC are not attracted against hirn. He further subrnitted that re spondent No.2 lodged a complaint on 24.O8 .2013 , ba sing on which, Crirne No.487 of 20 1 3 was registered for the offence r..rnder Section 42O o1'the IPC. The Investigating Officers after conducting investigation hled the {inal report on O5.O3.2O15 stating that the matter is purely 'civil nature'. Thereafter, respondent No.2 frled a protest petition on O3.O9.2O15 and the learned Magistrate took cognizance and 4 isstred snrnmons to the Petiti ner, without assigning anY reasons, recorded a finding that Section 42O of the IPC. The pima facie case exists under d order is cryptic ald Passed without application of mind and e same is contrary to law

4.2. He further submitted that e transaction which has been taken place between the Petitione to the purchase of Plot No.4O ( 9(P), 1O(P), 11 to i4 at Pokka and respondent No.2 Pertains ) situated in Sy.Nos. 1, 2. 3, awada Village, Rajendranagar Mandal. Respondent No.2 exec ted a registered sale deed on 29 .O9.2OlO after recelvlng e tire sale consideration and possession was handed over to e petitioner and therebY entire transaction was concluded.

4.3- He also sllbrnitted that re sr-rit, namely O.S.No.103 of 2 pondent No.2 has alreadY hled 14 for recovery of arnount of Rs.aO,57,951 / - before the Princi al District Judge, Ranga ReddY District at L.B. Nagar and he aI Iiled a compla.int in C.C.No.893 of 2013 before the III Addition Chief Metropolitan Magistrate, Nampally, for the offences unde Sections 138 and 142 of the NI Act against the Petitioner on

2.O5.2OI3 and the above said CASCS are pending. The Inves ating Officer after conducting detailed investigation fiIed the report stating that the nature of allegation levelled in the co plaint dated 28.08.2013 is of a ciwil natr-rre. He further submi without applying mind Pas d that the learned Magistrate, the docket order and took .) cognizance and issued sllmmons withor.rt verifying the docurnents, especially withor.rt giving any reasons and the sarne is non est in the eye of law. Hence, the ingredients as envisaged under Section 415 of the IPC are not attracted, and therefore, cognizance taken under Section 42O of the II)C is not permissible under law.

4.4. In support of his contention, he relied upon the following judgrnents:

1. V. Y. Jose and another v. State of Gujarat and another r 1

2. V. P. Shrivastava w. Indian Explosiwes Lirnited and othersz;

3. Inder Mohan Goswatni and another w. State of Uttaranchal and otherss;

4. Ahrnad Ali Quraishi and another v. State of Uttar Pradesh and anothera;

5. Vineet Kurnar and others v. State of Uttar Pradesh and anothers;

6. Suryalakshrni Cotton Mills Limited v. Rajvir Industries Lirnited and others6;

7. M. Saravana Porselrri v. A.R. Chandrashekar @ Parthiban and others?; ' (zoo9) 3 scc 78 'z lzoroy ro scc lor 3 lzoozy rz scc r o lxrg r: scc +:s s lzorzlr: scc:os 6 lzooa; r: scc oz8 ' (2008) 11 scc 520 6 8 M. Srikanth w. S te of Telangana and anothersl ent of I(arnatakas;

9. Som Mittal v. Gover 1O. M/s. Pacific Internat nal Private Lirnited w Comrnissioner (APPe rl (w.P.(Cl No.9943 of 2o25 of Orissa High C urt at Cuttackl 5 Sub rnissions of learned co nsel for res ondent No.2

5.1. Per contra, learned counsel for respondent No.2 subrnitted that the petitioner with a dishone t intention had entered several agreements with resPondent constructron agreement, suPPl mentary agreernent and an rein he admitted his liabilitY to agreement dated 24.07 .2O I 1 , u'h agreernent of sa1e, o.2 l.€. , pay a sum of Rs.85,11,320/- d issued chequ.es, whictr were itted that the petitioner with dishonor.rred. He further sub rnalafide intent settled the matt r by agreeing to pay a sum of un-registered rnortgage deed, Rs.99,46,000 l- und executed dated 12.O9.20 13, dlrlY Pledgin Ac.1.OO of land in SY.No.86 30.11.20 13, in default, he situated at Mokila Village b per annum. undertook to pay interest @ 3 respondent No.2 came to know already been mortgaged to the State Balrk of India, Rarnkoti as plrt up for amction, bY the at the rnortgaged proPertY had branch and the said ProPertY Subsequently, above said branch. u( ,( 2019) 10 SCC 373 2008) 3 SCC 7s3 tF+ 7

5.2. He further submitted that the Investigating Officer, withor.rt properly conducting investigation, hled the final report stating that the dispute is purcly civil in nature. respondent No.2 filed protest petition. After recording the sworn lmrnediately, statement of respondent No.2 and statement of ernother u'itness and after pemsal of all thc documents, which are liled along with protest petition, learned Magistrate passed the discretionary order by giving reasons and cognizance was taken against the petitior-rer and issued slrmmons and the same is ir-r accordance u,ith law.

5.3. FIe also subrnitted that the petitioner filed a suit for recovery of amount and a crirninal case filed for the offence under Section 138 of the N.I. Act and the said cases are totally diflerent and distinctive and pendency of the sairl cases is not a bar to irritiate the proceedings for the penal offcnces under I.P.C, especizrlly, the ingredients under Section 415 of the IPC are attracted against the petitioner. Hence, thc learned Magistrate has rightly took cognizance and issued sr.rmmons for the offence rrnder Section 42O ol the IPC.

5.4. In support of his contention, he relied upon the following judBmcnts: - . 8 1 2 3 4 5 6 Sangeetaben Mahen Gujarat and anotherlo V. S. Reddy and son Reddy and ors. r 1; V. I(uturnba f,lao v. M anothert2; Mr. OPTS Marketing of A.P. & Anr.13; bhai Patel w. State of v. Muthyala Ramalinga Chandrasekhar f,lao arrd . Ltd. & Ors. v. State Smt. Nagawvra v. I(onjalgi dnd othersral eeranlla Shiwalingappa Delhi Race Club (194 State of Uttar Prades I Limited and others v. and anotherls Arralysis:

6. Having considered the r al submissions made by the respective parties and after pe sal of the material available on record, it revea,ls that respo n ent No.2 company undertook developrnent and construction projects in the vicinity of Hyderabad ald Secr-rnderabad, etc.,. In the course of its business, respondent No.2 has s arted a venture under the name and style of "fhe Trails' consisti g of iand in Sy.Nos. L, 2, 3, glP), 1 1 to 14 admeasuring Ac- 12 07 gts of Poka,lwada Village, Manikonda, Rajendranagar Man al, Ranga Reddy District. 'o (2012) 7 scc 6zt " )ors sccbnrme sc 1925 12 2oo3 scc Online AP 1247 '3 zoor 1r1 A.P.1.J.276 (HC) to (1976) 3 scc 736 . 's lzoz+110 scc 690 9 7 - Respondent No.2 entered into a development agreement with the original owners agreeing to constmct villas on the above said iand and approxirnately 63 villas were proposed to be constructed. According to the terms and conditions of the development agreement, respondent No.2 rvas entitlcd to 31 villas and all the said villas were sold to the various pr-rrchasers and the petitioner is one among thern. The petitioner agreed to purchase a scrni-hnished Villa No.40 and entered agrcement of sale for a tot:rl consideration of Rs.1,1O,OO,OOO/ . Sirnilarly, the petitioner cntcred into a constmction agreement to complete the remaining cotlstruction works for a sllm of Rs.65,OO,OO0/-. Pursuant to the agreement of sale, the petitioner llaid an arlrotrnt of Rs.25,OO,OOO/- towards advance and agrccd to pay the remaining srrle consideration of Rs.85,OO,OOO/ , howevcr, he failed to pav lhe same.

8. The spccihc case of respondent No.2 is lhat respondent No.2 spent huge amount to complete the villa and the petitioner entered supplementary agreernent on 24-O5.2OlO for ttre interiors and to rnake some additions to the villa and further agreed to pay a sum of Rs.71,OO,OOO/- for the work specified in the supplementary agreement and also agreed to pay the amenities charges along with VAT and service tzrx etc.,

9. The rccord furttrer reveals that thcrc are specihc allegations lcvelled against the petitioner tkrat he approached 1 respondent No.2 and issued th e (3) post-dated ctreques dated

01.11.2O10 for balalce outstan ing amount of Rs.85,11,32O/- along with covering letter da d 27.O9.2O|O and requested respondent No.2 to hand over possession of Villa/ Bungalow No.40. Beiieving the same, respondent No.2 executed a registered sale deed dated

9.O9.2OlO and delivered the possession to the pelitioner. Th reafter, ttre petitioner requested respondent No.2 to present one cheque bearing No.39 1551 for Rs.4O,OO,OOO/-, which was di honoured and the sarne \ /as informed to the petitioner. At th t stage, the pctitioner requested respondent No.2 not to be depos ed the other two cheques- 1O. Sr.rbsequently, the petition r entered into an agreernent on 27 .O4.2012 with respondent o.2 adrnitting the liability of Rs.85,11,32O/-, issued six (6) esh cheques and also paid an amount of Rs. 1O,OO,OOO/- in ca h. However, the cheques issued by the petitioner were dishon ured. Then, respondent No.2 issued a lega-l notice dated 29 .2013, to which, ttre petitioner issrred reply on 22.05.2013. T ereafter, respondent No.2 frled C.C.No.a93 of 2013 before the II Additional Chief Metropolitan Magistrate, Nampally, Hyderab d, to punish the petitioner for the offence under Section 1 8 of the N.I. Act, 1881, on

22.O5.2013- Respondent No.2 d srrit in O.S.No.1O3 of 2OI4 before the District Judge, Rang Reddy District at L.B.Nagar, for recovery of Rs.8O,57,951/ - wi interest and the above said ti!.-s 11 cases are pending.

11. The record further reveals that basing on the cornplaint dated 28.08.2O23, Crime No.487 of 2Ol3 was registered for the offence r-rnder Section 42O of the IPC against tht: petitioner. The Investigating Oflicer hled a frnal report treatir-rg the matter as 'civil in nature'. Tlrereafter, respondent No.2 filed protest petition on 03.09.2015. The learned XXIII Metropolitan Magistrate, Cyberabad at Rajendranagar, rrftcr recording the statements of the cornplainant and another ll'itness and on perus:rl of clocumcnts enclosed along with the protesl pctition, passed order dated 13.11.2015 holding that the allegatrons coupled with documents are read together, rvhich goes to show that there is a prirna facie case which need to bc proceeded and accordingly cognizance was taken and issued surnmons to the petitioner.

12. The core contention of learned counsel for the petitioner that respondcnt No.2 has already initiated the proceedings under Section 138 of the NI Act ulde C.C.No.893 of 2Ol3 on the ground that the cheqr-res, which were issued by the petitioner, were dishonoured and the said case is pending before the cornpetent crirninal court and similariy, respondent No. 2 filed suit in O.S.No.1O3 of 2014 for recovery of amount against the petitioner and the said suit is pcnding before the compctent civil Court, in such circumstances, taking cognizance in rcspect of ttre very 1 sarne lsstle the learned M strate arnounts to abuse of process of law, especially the learned Magistrate has not assigned any reasons while takin cognrzance 13- Whereas, the main cont ntion of learned counsel for respondent No.2 is that the pe tioner r.r,ith a malafide intent executed the variotrs agreernents and given false prornise that he would pay the amolrnt and tak n delivery of the possession of the property and issued the che ues and the said cheques were also dishonoured. Sr.rbsequen to the same, the petitioner executed a rnortgage deed in fa ur of respondent No.2, though the said property was already m rtgaged in favour of State Bank of India. There is a dishones intention on the part of the petitioner on each state from t e date of entering into initial agreernent of sale tilI the date of ecr-rtion of mortgage deed and he cheated respondent No.2. Flence, the ingredients under Section 415 of the IPC are attrac ed against the petitioner and he is iiable for prosecution under ectior, 42O of the IPC. Hence, ttre trial Court rightly allowed the protest petition and taken cognizarlce and issr.red surnmons L4. It is trite law that rnere p ndency of the civil proceedings and pendency of case under Se tion 138 of the NI Act does not preclude the party to initiate minal proceedings under the penal provisions.

15. It is relevant to extract t operative portion of the order '1 13 dated 13.11.2015 of the learned Magistrate, which reads as follows: "'lhe complainant statement recorcled ard statement of another witness namely V-S. Sriclhar was also recordcd. The statement of tLris witness also clearly shows the accused approached the complainant for Purchasing of the house No.4O and that all the cheques issued by the accused were dishonoured and that tLre accuscd has also admitted that ttre complainant can initiate lega-l proceedings and take back thc house if Lre defaults in payment. When all these allegations cou pled rvittll thc documents zrre read together, it gocs to show that there is a prima facie case which need to be l)roceedcd and hence cognizance of lhe offence under Ser;tion 42O IPC is taken against the accused. Office to regisler the case as ()-C.No.944 of 2015 and issue summons to the accused on payrnent of process. Call on 17. 1 1 .2O 15." Thus, the above said order cleariy shows that thc learned Magistrate afler perrsal of the complaint, docurnents wLrich are encloscd, statement of the complainant and witness_d<, come to the conch.rsion that therc is prirna facie case was made out against the petitioner to take cognizance and accordingly issued the surnrnor-rs and passed the order on the protesl petition. Hence, the contention rzrised by the learned coullscl for the petitioner that the learned Magistrate without applying his mind arld without assigning any reasons passed the d.ocket order on the protest petition and taken cognizance issued the summons is not tenable under law. l4

16. In V.Y. Jose suPra, the Ho disputes which are essentially '1cle Suprerne Court held that ivil in nature should not be converted into criminal cases, as irninal law cannot be used as a shortcut to enforce a non-existe t decree. SuPerior courts have a responsibilitY under Section 48 and prevent abuse of the judici Cr.P.C. to oversee trial courts process, therebY maintalnrng the integrity of the administratlon of justice.

16. 1 . In V.P. Shriwastav^ suPr ttre Hon'ble SuPreme Court held that while the cornPlaint sed terms like "defraud" and "cheat," such mere r.rsage, with ut specific fac trlal allegatrons showing dishonest intent at the nception of the transactlon, 1s insufficient to establish cheating Referring to A11 Cargo Mowers, G. Sagar Suri, and Anil Mahaj look at the substance of the com determine if a matter essentiallY crirninal colour. Criminal Proc , it reiterated that courts must laint and relatcd documents to ciwil in nature is being glven a edings cannot be used as a shortcut for civil rernedies, and High Court must Prevent ab der Section 482 Cr'P.C., thc se of process bY quashing proceedings where no dishonest tention at the outset is skrown'

16.2.Lrt tnder Mohan Goswa Court held that the disPute w the subject of a Pending civil s criminal proceedings amounted Indihh-Qil Corpn. v. NEPC lndia Ltd' 7 supra, tlre Hon'ble SuPreme purely civil in nature, alreadY t, a.rld therefore the initiation of to an abuse of Process. Citing it reiterated concern over the 15 growing tendency to give civil disputes a criminal coiour, noting that while civil rernedies may be slower, using criminal prosecution as a tool to exert pressure in rnatters not involving a genuine criminal offence rnust be strongly discouraged.

16.3. In Vineet I{urnar suprr., trre Hon'ble Apex Court held that no medical exarnination of the cornplainant was conducted on or irnmediately after the alleged incident, despite the Investigating Officer advising it, and the eventual exarnination done nearly tu.o weeks later was irrclevarlt. Other tharr the complainant's bare assertions that al1 the accuscd had raped her, ttrere was no rnaterial to justify prosecution. While a statement r.rnder Section 164 Cr.P.C. carries weight, it rnust be assessed in tLre context of the cornplainant's antecedents and the surrounding facts and circumstances, which in this case did not support proceeding with the trial L6.4. In Suryalakshmi Cotton Mills Ltd. supra, tt,e Hon'ble Apex Court held that while, at the stage of exercising jurisdiction to quash, the High Court should generally not consider the accused's defence or enter into disputed facts, it can take into account docurnents of unimpeachable character to determine whether continuing ttre proceedings would be an abuse of process or intended merely to harass. Although many disputes are best resolved in civil courts, criminal cases are sornetimes fiIed solely to pressure the accused into imrnediate payrnent, a I6 ./ -t practice courts should discourag . At the sarne tirne, the court rnust not interfere with Proceedi and must recognise that in ce gs that are otherwise genuine ain sitr.rations, both civil and crirninal proceedings can legitima ly coexist.

16.5. In M. Saravana Porselvl upra, the Hon'ble Apex Court held that while there is no limi tion period for prosecuting an offence under Section 494 IPC, n allegations were rnade against Respondents 2 an:d 3 regarding i s commission. It held that the High Court, in exercising jurisdic on under Section 482 Cr.P.C., could rightly rely on an adrnitted ocument to assess the rnatter Since the issue involved a claimed customary divorce, determining the va,lidity of such custom was a matter for civil adjudication, not criminal Prose initiated mala fide, allowing it ution. As the case had been proceed would amount to an abuse of the cor.lrt's process.

16.6. ln M. Srikanth suPra, th Hon'ble Apex Court held that the complaint primarilY disclo d an inheritance disPute over property between the comPlaina with disagreements about Pr t, her siblings, and Accused 1, perty area, devolution, and competing claims. There was n allegation that Accused 4 (the appellant) knew Accused 1 wa not the sole heir or that he collusively entered into a lease sed on a fabricated will- While conspiracy was mentioned, no d tails of its executron were glven The record showed that the c plainant's father had hirnself l7 executed and later cancelled a development agrecment, and the disputc arose only after the lease was. executed in favour of the appellant. The Court held that the matter u':r s purely a civil dispute over inheritance, already subject to multiple pending civil proceedings, and could not be adjudic:rtcd in crirninal proceedings.

16.7. Irt Sorn Mittal supra, t!:,e Hon'ble Supremc Court clarified that the phrase "rarest of rare cases" in the context of Section 482 CrPC, rvhen read after "sparingly ald with circumspection," is meant only to stress that the power to qr- :r.:;h proceedings should be exercised camtior.rsly, not routinely or mechanically, and only u,here a clear case exists to pre\.elrt miscarriage of justice. It does not carry the same meaning as in the context of awarding thc death penalty under Section 3O2 IPC. The Court further cautioned that judgments should not be read like statutes, and words or phrascs rlust be undcrstood in their context, as judges mav Llse cxpressions for empl'rasis or stylistic flourish, and the binding principle (ratio clecidendi) rnust be derived from the judgment as a whole, not isolalecl phrases.

16.8. In M/s Pacific International Priwate Lirnited supra, t]ne Orissa High Court held that arbitrariness in administrative orders can take rnany forrns, and a key safeguard against it is ttre proper application of rnind by the authority concerned. Such application of rnind is best shown through clear disclosure of 1 , reasons for the decision, ideally corded in the order itself or in contemporaneous records. An rder lacking stated reasons is presumptively arbitrary and leg unsustainable, as it suggests the authority may not have pro rly considered the rnatter. This principlc is reinforced by Sectio s 84 and 85 of the Finance Act, 1994 read with Section 35 of the Central Excise Act, 1944, which require appellate authorities to ecide appea.ls on merits, even in ex parte srtuations 17 . Ttre above said judgmen S relied upon by the learned counsel for ttre petitioner are applicable to the facts and circurnstances of the case on t ground ttrat there are specific allegations levelled against th petitioner that he executed various agreernents and given se prornise to pay the arnount and taken possession of the pro erty and the cheques issued by hirn were dishonoured and al there is an a-llegation that on each and every stage, the p titioner shown his dishonest intention and cheated responde t No.2

18. With regard to the judgrn nts relied by Ieaned counsel for respondent No.2 in Sangeetab n Mahendrabhai Patel supra, the Hon'ble Suprerne Court held that prosecution urrder Sections 406/420 IPC is not barred m ely because the appellant had earlier been tried under Sectio 138 of the NI Act, as the two offences have distinct ingredien s and legal requirements. While Section 138 proceedings do not eqr.-rire proof of framdulent intent { 19 and carry a statutory presumption regajding the cheque,s pr-rrpose, olTences under IPC such as cheating require proof of rnens rea and have different procedttral and sentencing provisions. Thor.rgh sorne facts may o\/erlap, the nature, elements, and legal consequences of the offences arc different, and therefore, a subscquent IPC case is rnaintainable.

18.1. In V.S. Reddy and sons supra, t}:e Hon'ble Suprerne Court held that the appellants contended that the High Court wrongly stayed proccedings by treating offences under Section 42O IpC and Sectiolr 138 of the NI Act as arising from thc samc facts and thus barrcd under Section 3OO(1) Cr.t,.C. Relying on Sangeetaben Mahendrabhai Patel v. State of Gujarat (2012) T SCC 62 1, it was argued that the two offences have distinct ingredients Section 138 NI Act does not require proof of Iraudulent intent, whereas Scclion 42O IPC docs and tlrerefore, Section 3OO CrPC does not appty. The Suprcrne Court, noting that in Sangeetaben it had rejected similar reasoning by the High Court and held Section 3OO Cr.P.C_ inappli<:ab1e, found the present case to be almost identical in facts.

18.2. In V. Kuturnba Ra,o supra, the Hon'blc Supreme Court lreld that offences under Section 42O IPC (che:rr.ing) and Section 138 of the Negotiable Instrlrrnents Act (diskronour of cheqr-.re) are distinct, with different legal ingredients and stages of commission. Cheating requires proof thaL the accused ) 20 t1 fraudr. lently or dishonestly 1n ced another to part with property or act in a certarn way and such inducement must exist at the time of the transacti In contrast, Section 134 NI Act does not involve inducement; he offence arises only after the cheque is dishonoured for specifi d reasons and the issuer fails to rnake payrnent within the stat tory period after notice. Mens rea is essential for Section 42O I bl.rt not for Section 138 NI Act, where the key element is that the cheque was issued towards a legally enforceable de t or liabiiity. While facts may sometimes overlap and both offen es may bc committed, they are legally independent, and prose proseclrtion for the other und ution for one does not bar 3OO CrPC, nor do Section principles of double jeopardy, e toppel, or res judicata apply. Consequently, the petitions quashing proceedings were disrnissed.

18.3. In M/S.OPTS Marketing Ltd. supra, the Hon'ble Sr:preme Cotrrt clarified that dis onour of a cheque can give rise to prosecution under both S ction 138 of the Negotiable Instmments Act and Section 42 IPC, depending on the facts Earlier rulings had held that iss ing a cheque for an antecedent debt, later dishonoured, would t amount to cheating as there was no change in the payee's P sition. However, later decisions recognised that if, at the time of issrling the cheqtre, the drawer had a dishonest intention not t pay and the dishonour camsed 2t darnage to the payee's rnind, body, or repr-rtation, the ingredients of Section 42O IPC could be met even in cases of antecedent debts. Sectron 138 NI Act does not require proof of intention to cheat, whereas such rnens rea is essential under Section 42O iPC. The Court rejected the vierv that introduction of Section 138 replaced Section 42O IPC in cheque dishonour cases, holding that the sarne act can constitute offences under both statutes. Accordingly, prosecution under Scction 42O IPC rernains rnaintainable it the complaint allcges d.ishonest intent at issuance and resultir-rg damage, and such complaints cannot be quashed under Section 482 Cr.P.C. where the averments satisfv these rcquircments.

18.4. In Nagawwa supra, th-e Hon'ble Supreme Court held that the inquiry under Sectiol 2O2 Cr.P.C. is cxtrerlely limited, confined only to testing the truth or falsehood of the cornplaint on thc basis of the cornplainant's material, rvith no right of hearing to the accused, and the object being merely to see if a prima lacie case exists for issuance of process under Section 2O4. The Magistrate may consider inherent improbabilities but mrtst exercise discretion judicially, and neither the High Court nor the Suprerne Court can substitute their chscretion at this stage. However, an order issuing process rnay be quashed where the complaint discloses no offence, where allegations are patently absr,rrd or inherently improbable, where the Magistrate's discretion is exercised arbitraril on irrelevant or inadrnissible material, or where the complaint suffers from fundamental legal defects like want of sancti incornpetence of the complainant.

18.5. In Dell.i Race Club suP the Hon'ble Supreme Colrrt reiterated that in a sale of go ds, ownership passes to the purchaser upon delivery, and he ce there is no 'entmstment" to attract the offence of criminal reach of trust; failure to PaY consideration rnay give rise onlY a civil remedy, not a criminal prosecution. The present case fal v. Veeranna ShivalingaPPa Kon s under Category 1 of Nagawwa algi, where allegations even if taken at face value disclose no ffence. Instead of frling a civil suit for recovery, tlre comPl nt wrongly initiated criminal proceedings for cheating and bre ch of trust, and has seeminglY lost limitation for civil recovery The Court expressed concern over the continued conftrsion am ng courts and police regarding the distinction between cheatin and criminal breach of trust, despite the shift from IPC to the NS in 2024. It emPhasized that Magistrates rnust meticulouslY ssess private comPlaints, and police mtrst carefully scrrtin FIR allegations, instead of mechanically registering cases u dcr both prowisions. The Cor-rrt catr.tioned that cheating and criminal breach of trust are mutually exclusive offences, tithetical to each other, and cannot co-exist on the same set f facts, urging proPer training of a'7 police off,icers to prevent misuse of criminal lalr,. 19 . It is relevant to rnention that in the judgment of the Hon'ble Supreme Court in Sonu Gupta v. Deepka Guptal6, it was h<:ld that at the stage of taking cognizance, the Magistrate is required only to see whether a prirna facie case is made or-rt and he is not rcquired to evaluate the sufficiency of evidence or undertake a detailed inquiry into the merits. If the Magistrate, at the stage of cognizance, enters into analysis tlre er,,idence or cvaluates the defence, it would arrrount to prernature adjudication, which is impermissible in law.

20. It is pertinent to mention ttrat in l(arnal Shivaji Pokarnekar v, State of MaharashtrarT, the Hon'ble Apex Court held t hat :rt the stage of cognizance and summoning, the Magistrate is requirecl only to ascertain whether a prirna facie casc cxists for proceeding against the accused; hc is not required to evaluate the rnerits or sufficiency of the materia.[, nor to determine whether it would r.rltirnately lead to conviction. 2l- It is also relevant to rnention that in State of Gujarat v. Afroz Mohamrned Hasanfattar8, the Hon'ble Strpreme Court held that at the stage of cognizance on a police report, the Magistrate is only required to be satished that sufficient ground exists to proceed, and not to apply a strict stanclard of proof or '6 1zors1 3 scc 424) " lzots; t4 scc 350 " 12019;20 scc s39 24 consider possible defences. Inte erence by the High Court in revisional jurisdiction by exam g merits at this nascent stage was erroneotls- AccordinglY, ttre mpugned order of the Gujarat High Court was set aside and the Magistrate's order taking cogr,izance of the suPPlement charge-sheet and issurng stlmrnons was restored, with direction for the accused to appear and the trial to Proceed in accordance with law.

22. In plethora of judgmen s, the Hon'ble APex Cou.rt specifrcally held that at the s e of taking cognizance, the Magistrate is only required to be exists and to see whether a Pr atisfied that suffrcient grounds a facie case is made out for proceeding further and the Magi trate is not reqr.rired to evaluate the sufficiency of evidence or trn ertake detailed enquiry into the merits of the case and not wheth r the material would ultimatelY result in convicLion.

23. It is already stated suP that respondent No.2 made specific a,llegations against the etitioner in the cornPlaint that he executed various agreements and given false promise to PaY the due arnou.nt and taken Pos ession of the propertY and the cheques issued by him were dis onoured and on each and every stage, there is a dishonest inte on on his part and he cheated respondent No.2.

24. For the foregoing reason as well as the PrinciPles laid down try tJle Hon'ble Apex Cour as stated szpra, this Court does not find any illegality, irregularit5r or procedural impropriety warranting interference with the order dated 13.11.2O15 passed by the learned Magistrate or any ground to quash C.C.No.944 of 2015 to exercise tLre powers conferred under Sections 482 of the Cr.P.C. and thc same is liable to be dismissed.

25. Accordingly, ttre criminal petition is dismissed. 26- After pronotrncement of order, Mr. B. Venkatesrvara Rao, learned Cor:nsel requested this Court to dispense with the presence of the petitioner before the trial Court in C.C. No.944 of 20 15. I I

27. Mr. B- Pavan, learned Counsel representing Mr. G. Ashok Reddy, learned Counsel appearing on behalf of respondent No.2 has not opposed the said submission.

24. Taking into consideration of the above said submission the presence of the petitioner before the trial Court in C.C. No.944 of 20 15 is dispensed with, unless his presencc is specifically requircd during the course of trial subject to the conclition tlrat the petitioner shall represent the rnatter through his Counsel on each and every date of hearing. In case o.[ non-appearance of the petitioner on specific date so fixed by the trial/ Court, the learned triai Court is directed to proceed with the matter in accordance r.l.ith law. 2

29. It is needless to observe t any of the observations rnade in the impugned order dated

3.11.2015, as well as in the present order, are only for the ptr ose of deciding this case, and the trial Court shall decide the rn tter in C.C. on the basis of the material available on record, in accordance with law, without being influenced by any such ob rvations. Miscellaneous applications pending if any, shall stand closed SD/- P CH NAGABHUSHAMBA,, EPUTY REGISTRAR. //TRUE C Yil SECTION OFFICER One Fair Copy to the Hon'ble S (For His Lordships Justice J.Sreenivas Rao ind Perusal) rabad at Rajendranagar, Rangareddy olice Station, Hyderbad. The XXlll Metropolitan Magistrate, Cyb District. The Station House Officer, panjagutta 11 LR Copies Th-e Under Secretary, Union of lndia, M Affairs, New Delhi. T e h Secretary, Advoca teS Associatio n court Bu d n S a H Tela ngana, Hig h yd rabad. t cc to the Pubt c Prosecu tor H Two s sh Court for the State of Telangana at H yd rabad o rI one Cc to S n An U ra c Two D cop CS to sfl G As o Reddv Ad o h k lbrary, High Court for the State of istry of Law, Justice and Company ate [OPUC] oPUCI a C herU ku ft Ad C U g To, 1

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7. 8. 9. NVB HIGH COURT DATED:2210812025 (J (". * .-: 7 l-- : r.1:-_ ":-\ ' -;:''I"t, '\\ ar\ AL]i ?!25 ?,1\-,ll D": Ql ORDER CRLP.No.11159 of 2017 DISMISSING THE CRIMINAL PETITION /---" LD